SG7001 Managing Strategy & Operations and Partnerships Assignment Sample 2024
Introduction
Atelier Chiang Mai is a famous Thailand Base B2B company that is engaged in manufacturing clothing products. The Atelier Chiang Mia is a popular Avant-garde design textile manufacturer all over the world (Clothes Production Partner In Thailand Asia, 2021). This company follows effective strategies and operating management to make a solid clientele base. The chief aim of the company is to design fashionable clothing under the leadership of Natalie Fordeyn. The company has developed a nice trend with the Thai culture to give a robust approach to the competitors.
Assessment of the competitive advantage of Atelier Chiang Mai
The research determines Atelier current state of competitive advantages in the global market. Atelier possesses sufficient factor conditions connected to the country’s resources, which is likely to enhance the company’s competitive advantage.
RBV Framework
Resource-based view of the Atelier is based on availability of resource. The company uses this strategic framework in achieving competition advantage. Apart from various competitors around, Atelier looks within resources and potential of its own (Nagano, 2020). Fortunately, Atelier has abundant amount of assets, which makes it strong to stand in the market place. This makes the company to sustain in high competition level.
Thai is blessed with natural resources. It has diversity of human and natural resources such as land, ware, natural gas, oil, skilled and semi-skilled labors. The availability of such assets or resources contributes to Atelier assets and enables to grow as a global leader. Atelier has ideal supply of resources and its team manages to create a professional supplier network. Atelier has great supply of skillful labors who worked for the company. Atelier’s labors are diversified and well integrated. On another hand, it has the capacity in making large investments.
| Core competency | Valuable? | Rare? | Inimitable? | Organized? | Implication |
| Product quality | Yes | Yes | Yes | Yes | Competitive Advantage |
| Domestic rivalries | No | No | No | Yes | Temporary Advantage |
| Market demand | Yes | Yes | Yes | Yes | Competitive Advantage |
| Supply chain relationship | Yes | No | Yes | Yes | Temporary Advantage |
| Clustered Network | Yes | Yes | Yes | Yes | Competitive Advantage |
| Distribution | Yes | Yes | Yes | Yes | Competitive Advantage |
| Customer loyalty | Yes | No | No | Yes | Temporary Advantage |
Table 1: VRIO framework
(Source: Created by author)
From the VRIO framework, it can be identified that Atelier adopts competitiveness for analyzing the current situations and the ways to succeeding the market. This tool is effective and flexible regarding the accommodation of unique market demands. Atelier believes in coping up with the changes. This company has a different perception of the business. It thinks business is dynamic in nature. Therefore, the company cannot afford to produce many garments and let them be available unknowingly at the right quantity at the stores.
Porter’s value chain analysis
Primary activities
Inbound logistics: Atelier Chiang Mai sources raw material from environmentally credible suppliers. Furthermore, the company implements a distinct waste recycling productive system which is the most advanced among all the textile industries in Thailand (LoTempio, 2021). Atelier produces high-end quality garments and accessories like scarves and bags.
Formation of strategy in response to market demand: To have global competitiveness, any company needs to focus on its strategy that ensure agility and high-quality design. It is evident that some Thai companies have waged the agility strategic management concept that out-turns flexibility and opportune timely action in response to market demands (Feldman, 2020).
Marketing and communication: The Company directly discusses with the clientele about the clothing line position in terms of cost, quality and marketing. The company has also adopted online marketing.
Services: The Company provides many services like fabric sourcing, designing, sampling, finishing options and advice. From VRIO analysis, Atelier is one of those textile companies that follow the concept of agility and value. This approach provides Atelier with an ability to modify product offerings and strategies depending upon changes that prevail in the market (Clothes Production Partner In Thailand Asia, 2021). This is a very attentive approach of Atelier, which makes a quick response to customer demand (Feldman, 2020).
Clustered Network strategy: Thai clothing industries tend to be concentrated geographically and are deemed to be clustered in these areas. They are mainly focused in areas such as Ratchaburi, Samusakon and Petchkasem Road (Morgan et al. 2019).
Thousands of textile companies are concentrated in these districts. Thailand Ministry of the textile industry is an attempt to develop a business network concept to stimulate the country’s competitive capacity. Consequently, Atelier is benefitted from this advantage. The location provides the company benefits of the vertical cluster that involves fabric production to the final products (Howard et al. 2019).
Product quality: Atelier has a dynamic growth with high quality products. The advantages of the good quality benefit the company in enhancing products, mitigating production costs, creating a new product and making business alliances (Prashantham et al. 2020). Cluster assists the company in improving from equipment manufacture to real design manufacture and enables it to reach a real brand manufacturer.
Secondary activity
For each of the procurement, Human Resource Management and technology development activities recognise the subactivities which create value for the primary activity (LoTempio, 2021). Thai is bestowed with skilful labour and infrastructure which highly lubricants the secondary activity of the Atelier. The craftsmanship, fabric availability, technology and infrastructure facility enables to maintain business operations from procuring raw materials to final product for the customers.
Domestic rivalries strategy: Internal rivalries are fierce in the textile business. This intensive competition, however, drives forces to fulfill increasingly consumer demand in response to time. Compared to other textiles industries, Atelier better understands local consumers’ demands that help cater to the demand effectively (Xie et al. 2020). Thus, domestic rivalries strategy in building strong relationships with consumers ensures customer loyalty.
Customer loyalty: It is one of the core competencies of any company. Atelier has temporary advantages in this context (Yang et al. 2017). The governments strongly support textile industry or Atelier. Thus, it brings a competitive advantage to the Atelier to attain sustainability.
The presence of economic agents has affected the Atelier competitive advantage as well but where the advantage exists invites the issue and creates the barrier to achievement. Hence, like another textile industry, Atelier also suffers from issues due to the nature of the environment, climate and culture (Prashantham et al. 2020).
Issues and developing corporate strategies
Issues related to integrating services: Atelier provides many services such as fashion design, fabric sourcing, sampling, pattern making, fashion advice, many finishing options and much more. These all services are extended to a large cycle chain and need good management and an accurate operating system to integrate all services well (Carroll and Brown, 2018).
Issues related to integrating different cultures: Atelier inhibits different people from the different environments to promote employment and enables the services of different languages to the customer such as Dutch, English, French, Italian, Spanish and Thai to enlarge its productivity (Carroll and Brown, 2018).
Issues related to supply of raw material: Atelier believes in making environmental-friendly goods thus, it sources raw materials, which are completely eco-friendly. Sometimes, too much dependency on friendly raw materials increases the cost of raw materials and the shortage of raw materials because the many textile industries rely mainly on environmentally raw materials, leading to high demand and supply becoming low (Feldman, 2020).
Issues related to meet social and environmental norms: Atelier uses machinery that is responsible for creating noise and air pollution on the other hand Atelier practices sustainability thus it uses natural resources such as water and plants that over-usage disturbs and depletes ecological balance (Carroll and Brown, 2018).
Issues related to infrastructure bottleneck and uneven regional distribution: Thailand has essential infrastructure facilities in the form of highway networks and well-connected roads across the country. Moreover, to boost the infrastructure facility, the Thai government is planning to build big motorways within the country (Claxton and Kent, 2020).
RACES Framework
| Factors | Strategy | Effect |
| Resources | · Every design production line must cross several steps such as Designing; sourcing of raw material; pattern making procedures; quality; packaging; samples production; quality control and shipment worldwide (Ræbild, 2020). These processes allow the company to optimise the production process. | Most of the textiles companies of Thailand are not properly structured hence causing several problems such as quality problems, production delay, packaging mistakes and custom clearance. For the Atelier every clothes should be produced in a systematic way via resources easily obtained (Belo et al. 2020). |
| Acceptability | · Acceptability is most important for any business to initiate the production process, it belongs to internal and external stakeholders’ involvement for the work. Teamwork provides great assistance in accomplishing tasks. | The team of Atelier consisted of a diversified nature. Thus, great communication and motivation strategies are needed to build a strong clientele base as well as to keep the workforce intact.
. |
| Consistency | · One of the major barriers to the significant growth of the clothing industry is the inability of delivering consistent quality products at a cheap rate. | In Asia, consistency of quality is a problematic issue faced by textile companies (Henninger et al. 2017). For the Atelier, the standard and efficient process must be applied to optimise the production process. This will ensure that its customer will get exactly which they paid for. |
| Effectiveness | · A strategy is found to be effective when the resources are allocated according to the plan and delivered to the expected results. | The company must tie to its strategic objectives. This will include some metrics such as revenue, profit and cash flow. To bring effectiveness, it should be simple and not overload (Belo et al. 2020). |
| Sustainability | · Sustainable business is that enterprise that has a low negative impact on the environment. | Nevertheless, green evolution enables humans to produce eco-friendly goods (Ræbild, 2020). Atelier needs to look upon the effective usage policy of reuse, recycle, and reduce policy to attain a high level of sustainability. |
Table 2: RACES framework
(Source: Created by author)
Strategic direction
The company directly discusses with the client the positioning of the clothing line in terms of quality, price and marketing to create close relation to the clothing brand and thus, generates chaos of confusion to deal with and taking all the customer needs on one track. This has enhanced their knowledge towards customer handling as well as keeping the customer intact within the company (Belo et al. 2020).
This helps the customers to stay engage within the company and enhance the clientele base of the Atelier Chiang Mai. Indeed, the famous fashion brand Atelier has been producing clothing lines for many years. This company always had quality problems with goods. The garments, which the company makes, are very expensive and poor in quality (Clothes Production Partner In Thailand Asia, 2021).
Atelier is competing with local brands, but over the past few years, this company is also competing with foreign markets such as Walmart, IKEA, and FedEx, hence managing its survival. The company has brand recognition and brand identity among Thai people, which is quite fortunate.
Atelier depends on consumer loyalty when they become their customers by continuously enjoying staying at stores and offering several benefits. This company always tries to improvise and remain at the top. On the other hand, the so-called rivalries of the company enable the boosting factor in the high performance of the company at a high level.
The company always wants to win the government’s expectation by paying tax and ensuring legal practices of the production activities (Ræbild, 2020).
Defending the strategic directions
Corporate strategy is a hierarchically highest strategic plan of any organisation that defines corporate goals and accurate directions and the ways the company will achieve strategic management activities. It is a long-term and clearly defined vision of the company.
Marketing strategy: This strategy refers to the business total game plan in reaching consumers’ perspectives. A marketing strategy inbounds the company’s value proposition and branding messaging. The marketing strategy helps to create analytical information needed for making business plans (Heath, 2018). The marketing strategy which the company follows is place, promotion, products and people strategy this ensures companies optimum utilisation of resources. The availability of resources and facilities and the company’s potential cash flow support liquidity and long-term viability.
Nathalie Fordeyn is responsible for leading, designing strategic planning, and ensuring the best maximisation of resources and skills for deriving a competitive advantage. However, the drawback for the leader in applying resources can be gained with the production of high cost and poor quality of products. Thus, resources are necessary to measure performance and meet objectives.
The company must ensure adequate resource availability so that it will meet the strategy and objectives (Heath, 2018). The availability of resources enables the company to actively cross all the stages of the production process effectively, remove problems such as quality, and delay in the production process.
Clustered network strategy: To flourish any resource and business, it is necessary for any business to create clustered network strategy that will be created by value for stakeholders so that its acceptability in the environment will be determined. Create value for customers:
Company business model must allow customers the best garments and accessories at the best possible prices which they select to buy from the company (Mohiuddin et al. 2018). As this business will continue to strengthen the value of customers, it can further reinvest the competitiveness and will improve customers’ experience.
Create value for suppliers: Suppliers are the provider of resources to the company hence, the company’s main focus should be on great communication and building relationships with the suppliers So the company main focus should be on delivering great value and quality products to the customers by a strong relationship. When this is done, the business grows rapidly also with the suppliers.
The strong partnership with suppliers will enable the company’s customers to get quality products. Create value for shareholders: Shareholders are the leaders of the company, so the company model must allow delivering work which in turn leads to significant profit that will create the value of the shareholders (Mohiuddin et al. 2018). The acceptability of shareholders of the company will underpin value, loyalty and potential capital discipline.
Rivalries strategy: The intensity of rivalries among the competitors in a business field refers to the extension to which the company in an industry pressurises one another and limits each other’s profitability. When the rivalry is fierce, the competitors try to cover profit and take over a large market share. The rivalry strategy is necessary to cope up with the competitors’ ability and stand in the market well.
Two principles are specifically important from a rivalry perspective (Mohiuddin et al. 2018). A powerful strategy utilised by one company that intensifies the competitive pressures on other companies and the second in which the rivals merely employ several competitive weapons to outmanoeuvre the principles of competetion.
Government strategy: The government strategy is important for any business sustainability, it is necessary for any business to win the heart of government to earn trust. The major strategy should involve major legal practices and sustainable use of resources. The governments are the sole responsible in facilitating trade and business (Mohiuddin et al. 2018). Also, the company which needs high access and easy transportation facility is only gained by the government. So the strategy is taken to increase the company’s productivity by following government guidelines such as paying of taxes, donations and practicing the consumer protection Act.
Conclusion
It can be understood from the above report that the Atelier Chiang Mai has developed a strong position in the marketplace through competitiveness advantage. The company has many issues occurring in the production process in spite of being able to stand in the global market. The conducted study highlighted the strategy that will enhance the growth of the company.
The company, strategic management concept, enables its workshop to be creative and professionals in the line of production process. The technological advancement of the company will help to adopt a strong clientele base.
References
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