BSS050-6 Strategic Management Assignment Sample
BSS050-6 Strategic Management Assignment Sample
Introduction
This report is regarding the finding and analysis of the internal and external factors that affect a business operation directly or indirectly. This study will show a proper understanding of the implementation of different theories and models in terms of shaping a business.
Background
This report is based on the people’s analysis of the affecting factors for the retail sector of the United Kingdom, specialising in toys and garden products. As per the views of Lee and Raziff (2021), the retail industry operating in the United Kingdom is one of the leading sectors across the world. Further, the toy industry in the UK is a very significant and profitable market, which is constantly growing every year. According to Statista (2022), the revenue of the toy market grew to over 7.1 billion as of 2021. “D & G Short” is one of the leading organisations in the sector of toy retailers. They specialise in selling family toys as well as products related to gardening. Charles Short started the company back in the 1920s. It began as a small grocery store for toys and garden-related products. The company has currently expanded its business by shifting towards DIY and ironmongery in order to bring a sustainable approach.
Problem statement
The main problem statement of the current study is to analyse the different external and internal factors that shape a business organisation. Many times, these factors directly or indirectly affect the operations of a business and this makes it crucial for business executives and analysts to have a proper understanding of them. Both internal as well as external factors are capable of driving or failing a specific business (Lambert and Goh, 2021). This research study has taken into consideration one specific industry, which is the retail industry and will be analysing these factors in terms of this industry’s operations in the United Kingdom.
Main Body
Industry introduction
Structure of the industry
The toy industry in the UK is a very significant and profitable market, which is constantly growing every year. In the views of Chang et al. (2019), the organisation operating in this industry deals in retailing toys through physical stores as well as online portals. This industry has its target market as children below the age of 12 mostly and their parents.
Key drivers of the industry
The key drivers of this concerned industry are innovation and style of approach. Since the toy industry mostly targets children, therefore, there is a need for high innovation in the design of toys. In recent times, the toys that motivate kids and children to develop and share their own content with others are driving the most business in this industry.
Industry value
The total value of the retail industry operating in the United Kingdom has reached an amount of “495.71 billion British pounds” in the year 2022. Additionally, the toys and games retail industry has reached a peak of “US$6.68bn in 2023”. The market is expected to grow by 3.40% annually until the year 2027.
PESTLE analysis for the industry
| Factors | Analysis | Impact |
| Political | ● The political environment is more driven towards the restriction of the trade when the “Chinese currency developments”
● This also affects the export process from China and that poses a threat or an issue |
Medium |
| Economic | ● Product manufacturing in the toy sector mainly dependent on the Chinese manufacturing
● The industry benefits from cheap labour (Nyame-Asiamah and Ghulam, 2020) ● The undervalued currency also helps in providing an advantage to the toys and games sector |
High |
| Social | ● People are becoming technologically driven
● Children are spending more time on “social media” and the internet (Ban and Lovari, 2021) ● Almost “one out of every ten youth gamers” demonstrate enough managerial symptoms to their family, school and psychological functioning |
Medium |
| Technological | ● The UK is very much advanced in terms of technological implementations
● There is a need for innovation in the toy sector in order to keep moving forward ● The technological environment depends on launching the products to the market first |
High |
| Legal | ● The UK government has implemented strict rules for the use of materials in the making of toys (Brydges and Hracs, 2019)
● The toy sector should also be careful while outsourcing to other countries where there are loose safety standards |
High |
| Environmental | ● The toy industry is increasing concern towards the environment (Chang et al. 2019)
● Increasing customer awareness regarding the environmental concern may lead to a loss in the toy industry |
Low |
Table 1: PESTLE analysis of industry
Analysis
The above table analyses the six external factors, which are the political, economic, social, technological, legal and environmental aspects that affect the operation of the toy sector within the United Kingdom. Some of the factors have a low impact on the industry, others have a medium and the rest have a high impact.
SWOT analysis of the industry
| Strengths | Weaknesses |
| ● The toy producers make sure about the demands and choices of consumers
● Diverse sales points (Ahn, 2020) ● Availability of both online and physical stores ● Access to “cost-effective marketing channels” at the regional, local or global level |
● Less customer awareness is making it difficult for new products to break through in the market
● More time for development ● Complex demand in the winter holidays for more storage capacity (Pangriya, 2023) |
| Opportunities | Threats |
| ● The increasing reliance of parents on toys to avoid “device obsession”
● Minimised electronics costs are along manufacturers to introduce new features into toys (Lambert and Goh, 2021) ● New countries are gradually becoming better “cost-effective manufacturing centres” |
● Environmental concerns related to toy manufacturing
● Reliance on manufacturers only in China ● Increasing customer awareness regarding the environmental concerns |
Table 2: SWOT analysis of the industry
Analysis
Not only has the toy industries in the United Kingdom but also the global sector elevated in size. Various factors are directly or indivisible in the operations of the industry, resulting in its strengths or weaknesses. As per the views of Nandonde (2019), the diverse base of production of toys provides a variety of choices for customers. On the other hand, the increasing customer awareness regarding environmental concerns poses a threat to the industry.
Porter’s Five Forces analysis for industry
| Factors | Description | Impact |
| Competitive rivals | ● Competition is very high in the toy sector as well just like any other retail sector
● Toys are all about looks and features and therefore, customers do not depend on only one brand |
High |
| The threat of new entry | ● The barrier for new entrants into the toy industry is very low
● Many well-known brands are investing in this market now (Brydges and Hracs, 2019) |
Medium |
| Bargaining power of suppliers | ● The retailers in the toy industry rely majorly on the manufacturers in China
● Manufacturing of toys requires high amounts of raw materials, which come from the suppliers |
High |
| Bargaining power of buyers | ● The toy industry in the UK is very concentrated, which leaves a low bargaining power for the buyers (Lazoriková, 2021)
● The increasing level of online sales and purchase have also adhered to the low bargaining power of buyers |
Low |
| Threat of substitution | ● The threat of substitution is very high in the United Kingdom when it comes to the toys and games industry
● Firms shave to incorporate more technological innovation ad features within their toy products in order to have a “unique selling point” |
High |
Table 3: Porter’s five forces analysis of industry
Analysis
The above table shows a tabular representation of the five threats that the toys and games industry may face in the United Kingdom. The table shows that the intensive competition in the toys sector is very high as customers are not loyal to only one brand in the sector. Additionally, the barrier for low entry into the market is high and thus it can create a good amount of impact on operations. Further, the power of suppliers and buyers is high and low respectively (Bessière et al. 2019). The threat of substitution is high as customers look for better features in toys.
Key trends of the industry
In recent times, the toys that motivate kids and children to develop and share their own content with others are driving the most business in this industry. In the opinion of Isiramen and Elaho (2021), the toy industry seems to be investing in the comfort that “nostalgic toys” brings to parents. The experts in the toy industry have assumed that these toys will be able to make up for the loss that the sector has faced when kids turned to video games more. Moreover, recently the youth has been very much addicted to unboxing videos, which is making YouTubers and influencers buy new items like toys.
Cone of plausibility
“Cone of plausibility” refers to the method generated from a scenario that helps in guiding the comprehensive situation that could change depending on several key factors. The firms in the toy retail sector should keep in consideration the future changes that can happen. The understanding of the future assumptions that can happen and affect the operations or finance of the toy industry in the UK is plausible (Ban and Lovari, 2021). The global crisis along with the socio-economic scenarios is another concerning factor for this industry.
Current strategic position and tactics of the organization
In light of the significant assignment, in order to explore the effectiveness of strategic management associated with the company, it is highly essential to unveil the present strategic tactical and position of “D&G Shorts”. Through undertaking an acute evolution of the organization’s operational activities, it has been observed that, the company initially started as a “Greengrocers” later “D&G Shorts” identified itself as a seller of garden products and toys (Locksmiths.co.uk, 2023). Hence, it can be easily comprehended that the company utilized “Product Diversification Strategy” where it diversified its products from “Gardening Products and Toys” to “Key Cutting and Locksmith Services” (Dandgshort, 2023). The company in order to make its market position stable has applied “Focus Strategy” where it focused on “Key Cutting and Locksmith Services” for targeting a certain buyer persona. Hence, the application of such strategies has assisted the company to gain a competitive advantage in accordance with its industry.
Porter’s value chain analysis
| “Primary Procedures” | “Capabilities” | “Initiatives” |
| “Inbound Logistics” | ● Maintaining of the manufacturing machineries and instruments
● The well proportioned connection with the “ |
a low priced dynamism by the side of collaboration with “The Master Locksmiths Association” |
| “Operations” | ● Composing a wide range of products such as Locksmith, Gate Automation and Security Equipments” Window locks, Digital locks, panic bars, door closers, Master Key system, Steel security Doors and CCTV Systems (Locksmiths.co.uk, 2023).
● Ensuring the quality of the machinery is appropriate, making sure the automated doors and locks work well and are ready to utilize. |
A mixture of sustainable approaches with a low budget |
| “Outbound Logistics” | ● Managing the flow of supply chain to ensure that the products and services reaches the client in time
● Making sure that the distribution of the products are expanded and managed within all over the United Kingdom (De Silva et al. 2020) ● Making it, certain that dispense of the raw components for the manufacturing are fulfilling the ever-changing demand. |
An approach of low budget with the supply chain management procedure |
| “Marketing and Sales” | ● Developing an appropriate marketing plan for accomplishing the core effectiveness of the marketing strategy and ensuring that the process runs without any hassle (Ferrell et al. 2021)
● The formation of an acute strategy for the promotion and branding of the .aforementioned brand |
There are possible chances to develop digital marketing strategies. |
| “Services” | ● Making it certain that the ways to communicate the company are available, such as through a website having a valid contact number and email
● Developing visionary to improve product quality and drive consumer satisfaction |
The possibility to develop one “Custom Relationship Management unit”
|
Table 4: Capabilities Table related to the Primary Processes regarding Porter’s Value Chain Analysis
(Source: Self-Created)
| “Secondary Procedures” | “Capabilities” | “Initiatives” |
| “Procurement” | ● The company ensures regional supply of its products and services (Dandgshort, 2023)
● It also focuses on incorporating CSR activities and environmental sustainability |
Possibilities to initiate and offer products that are advanced in technology |
| “Human resource Management” | ● An appropriate format for career management
● Continuous recruitments ● Development of training programs |
Potentiality to selected more knowledgeable workers and development of skills |
| “Infrastructure” | ● Motivating for the future management planning
● Developing adequate capability to offer further monetary support for future locksmith’s projects (zoominfo, 2023) |
Possibilities to compose suitable strategies for infrastructure |
| “Technological Development” | ● Increasing investment on the “Research and Development Wing”(Yagci, 2021)
● The technology integration and application of innovation |
Developing appropriate strategy to save the production expenses |
Table 5: Capabilities Table regarding to the Secondary Processes related to “Porter’s Value Chain Analysis”
(Source: Self-Created)
Resource based view
The “Resource Based View” theory proposes that the internal resources of an organization enables competitive advantage and thus its application can help “D&G Shorts” through offering an appropriate opportunity to develop strategic capabilities against their rivals.
| “Resources Types” | “Owned Resources” | “Capabilities” | |
| “Tangible Resources” | “Physical” | ● Production facility
● Machinery ● Logistics (Margiono, 2021) ● Core components |
● Supply Chain
● Product Inventory ● Human Resource Management
|
| “Financial” | ● “Capital of shareholders”
● “Bank Overdraft” ● “Working Capital” ● “Creditors” ● “Bank loans” ● “Cash Balances” |
● “Government”
● “Stocks” ● “Suppliers” ● “Debtors”
|
|
| “Intangible Resources” | “Reputation” | ● Company reputation
● Competitive Edge ● Market positioning |
● “Resource-based view” |
| “Properties” | ● Innovation
● Consumer list ● Technological Benefits (Zvyagintseva et al. 2020) ● Copyright and patents ● Consumer experience ● Intellectual property |
● Consumers
● Business associate ● Database ● Internet connectivity |
|
Table 6: Resources based view of D&G
(Source: Self-Created)
| “Core competencies” | “Valuable(V)” | “Rare(R)” | “Imitable(I)” | “Organized(O)” |
| “Brand Image” | “Yes” | “Yes” | “Yes” | “Yes” |
| “Customer experience” | “Yes” | “No” | “Yes” | “Yes” |
| “Market position” | “Yes” | “Yes” | “No” | “Yes” |
| “Innovation” | “Yes” | “Yes” | “Yes” | “No” |
| “HRM” | “Yes” | “No” | “No” | “Yes” |
| “Product Range” | “Yes” | “No” | “Yes” | “Yes” |
Table 7: VRIO analysis of D&G
(Source: Self-Created)
Organizational competitor analysis
The competitor analysis of an organization assists in developing a profound understanding related to the prevailing competitor for a specific company in its preferred industry. The incorporation of “Porter’s Five Forces” framework has highlighted who could be the possible competitors for the company “D&G”(Isabelle et al. 2020). Through undertaking a quick evaluation connecting the findings accumulated from the “Porter’s Five Forces” analysis it has been noted that, in the industry for toys and garden products in the UK, there is a threat of new entrants as lower costs can be attained by incumbent players through mass-standardization and production of the procedure. The competitors of the company are “Anytime Locksmiths, Anytime Locksmiths Wigan and Locksmith Bexley” (zoominfo, 2023). Even “Limited Upfront Capital Investment” can help a small player to merge in the market and grab a good market share. However, a long time is required to develop a sustainable brand name and connect with powerful suppliers. On the other hand, the recent crazes of online and virtual games have reduced children’s interest in toys, who are the target customer for this industry segment.
Conclusion
Based on the overall evaluation there are many interesting facts related to the strategic management that has been uncovered. The assessment concerning the background of “D&G” has unravelled their area of expertise and the industry it works in. In addition, the quick evaluation of the industry has developed a deep sight related to the industry value, its structure and key drivers. The condition of the external environment of the company and the elements affecting the industry has been comprehended through the PESTLE framework. The SWOT and the “Porter’s Five Forces” evaluation have helped in the identification of probable completion, strength and weakness of the industry. The strategic positioning as well as the key trend within the industry has been successfully undersigned through this report. The final phase of the report has highlighted the possible competitors for the organization in its respective industry, so that understanding the competitors’ strategic movement new strategic measurements can be developed to gain a competitive edge.
Reference
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