Strategy: choice and changes

DeLL
[Company name] [Company address]
Contents

INTRODUCTION...........................................................................................................................2

STRATEGIC MODELS..................................................................................................................2

PESTLE Analysis........................................................................................................................2

Value Chain Analysis...................................................................................................................4

Porters Five Forces.......................................................................................................................5

SWOT Analysis...........................................................................................................................6

RECOMMENDATIONS.................................................................................................................8

References......................................................................................................................................10

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INTRODUCTION

Browns Sports Footwear is the number one in selling its rubber sole sports sneakers, shoes and
trainers which are a family owned brand. The brand is still competing with other brands like
Nike and Adidas as they are back by them in the competition. In the late 80s, the brand was worn
by high profile celebrities Madonna, Princess Diana and Prince William in his school days.

The report is based on Browns Sports Footwear by analyzing its strategies and models top get an
in-depth insight of the organization. The performance can be even better in all aspects by
creating demand for the company by recommending future strategic actions taken (Bhushan and
Rai, 2004).

STRATEGIC MODELS

The various strategic models used in Browns are given below:

PESTLE Analysis

Political

In the year 2010, it was seen that the footwear industry was accounted for 5.4% of total
household expenses and that raise to 5.7% in 2014. This result shows that UK footwear market
has grown by 24% in the last five years from £1.3billion in 2010 to £1.7billion in 2014. This
increase resulted due to raising concerns about being fit and healthy. In the year 2014, the
amount £1.7billion spent from that it is seen that 19% was on running shoes and 35% was made
for general use. The age group between 25-34 years brought trainers 49.7% in the last 12
months. One of the highest purchases made in this section and age group between 15-54 years
this can be said that 40% of the individuals have brought trainers. The above information is
generated from the table given below:

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Economical

Browns invested a huge amount which can be seen in the late 90s and in the year 2002 recession
took place. This results in the brand in closing down its shops and making use of the third party
for selling their products like Foot Locker and Schuh. At present Browns, have only 4% of UK
footwear market, and globally it can be evaluated the fall has reduced from 8% to 2%.

Social

The consumers prefer celebrity endorsed brand footwear such as Catwalks and various designers
such as Channel, Tom Ford, etc. Celina promoted sneakers for £600 a pair and stars like
Michael Jordan, Pharrell Williams made promoting of brands Nike and Adidas. The younger
generation of people is changing their purchasing habits by preferring latest footwear available in

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the market (Birkinshaw, 2004). The female market has increased for sports shoes, and the
company has to be socially responsible to the community.

Technological

In the UK, most of the manufacture makes shoes from leather and suede as it depends on the
availability of raw materials. This has increased the cost of production in the last five years as the
cost of leather has increased in the global market. The product manufactured by Browns has to
be developed in technology by using innovative footwear.

Legal

The staffs are excess in Browns so to preserve the company has cut down its cost and they are an
ethical company, so they follow the rules as per UK footwear market.

Environmental

The products used for manufacturing the footwear are environmentally friendly as the
technology used for making is leather and suede it is affecting the market (Chung et al., 2007).
The cattle production has reduced due to effect from both sides of demand and supply.

Value Chain Analysis

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[Source: www.affino.com]

Value Chain Analysis is the process by which organizational functions and activities are
examined. This can be achieved by creating customer value (Jeyarathnam, 2008).

Porters Five Forces

It is used by the organization to judge the profitability of an industry which can be evaluated by
the competitive pressure (Powell, 2014). The five forces are as follows:

Competitive Rivalry

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The brand is facing rivalry from many strong competitors such as Nike; Adidas etc. as in the
footwear industry have grown over the years. The customers are loyal to the brand by having to
engage the masses through online selling.

Threat of Substitution

The growing of substitute products in the section of casual footwear products such as Havaianas,
fit flops, Crocs and Birkenstocks on sunny days. In cold days one can use Dr. Martens,
Timberlands, Uggs and Kickers have lost fashion from trainers and fashion sneakers. Trainers
have filled the gap of traditional formal footwear in classrooms where sports shoe and the formal
shoe has kind of been abolished.

Threat of New Entry

This risk is low in case of Brown's footwear market as the investment required is huge for this
market. The brand is innovating and creating new designs to attract more customers (Sadler,
2003). What the brand is making is the appearance in public my marketing on social media,
online sites, etc. for making its presence felt.

Bargaining Power of Suppliers

The raw materials used are leather, rubber, and cotton which are easily available from many
suppliers. It is abundant in the market, so it is low in case of suppliers.

Bargaining Power of Buyers

The buyers belong to age group between 15-54 years in looking for trainers as they are the
customers. The product used need to be developed as in the late 80s the brand was preferred by
many individuals. The price of the products has to be by the needs of the buyer, so it is high for
them (Saloner et al., 2001).’

SWOT Analysis

Conducting the SWOT Analysis of Browns Sports Footwear company, there are many strengths
that the company possesses and they include a global brand name the company has been able to
build because it has been in the shoe industry for quite some longer time and this enables it to

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create that customer loyalty. However, the weakness it has is its inability to adopt technology at a
faster rate like its competitors, the high price of its footwear products as compared to its
competitors. The company has an opportunity of diversifying its products to the African market
more at an affordable price so as to increase its customer base. Despite the existing opportunity
that the company has the major threat that it faces is stiff competition from other companies
offering similar footwear products including Nike, Adidas, and many others. This brings the risk
of being pushed out of the market because of the lower competitive prices that rival companies
are offering.

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From the various models used in the Browns footwear in the UK, it can be said that the strategy
followed by the brand is from its heritage. According to him, people are looking back in their 80s
for fashion, and the eBay stock is selling them at higher prices. He states that average selling
price is £57 which is ahead of its competitors. He adopted the strategy of inventing man size
shoes starting from 5 to 6 as women are purchasing it frequently. He repositioned the brand by
giving the look of retro and heritage feels of the late 80s. The brand is making an online presence
in the market by selling more innovative and heritage products which are the uniqueness of the
brand. As the competition is high in the market it is impossible for new investors to start a new
business of footwear in the UK (Stoney, 2001).

RECOMMENDATIONS

I would recommend that the company adopts the latest technologies in a more faster way than it
did before so that it can gain the first mover advantage and compete in a more effective and
efficient manner in the market.

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There are four strategies for the growth in the matrix strategic tool for the market penetration
where the main focus of the firms should be on selling the existing products into the existing
markets, and in the market development the intention of the firm is to sell the existing products
into the new market and new improvements are made in the product development and the
products are sold in the existing markets and diversification where a business markets new
products in new markets (THOMPSON 2001). As per Ansoffs Matrix, the strategy used by
Browns in each level are different. The footwear brand can enter into the market by selling the
heritage products. At this level, the company can increase their consumer base by existing in the
market. This can be achieved by judging the geographical or psychographic segments by
expanding sales.

The product development can be done by R& D department by using public relations, investment
measure, etc. The use of IT software for better product development by using touch screen
models by helping the customers in choosing their footwear design (Warner, 2010). The market
developments can happen by making its presence felt outside the UK by focusing on other
regions for attracting customers The diversification of Browns can happen by the brand by
introducing sportswear section of T-Shirts, Yoga Pants, Track pant, etc.

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References

Bhushan, N. & Rai, K. (2004) Strategic decision making. London: Springer.

Birkinshaw, J. (2004). Strategic management. Cheltenham, UK: Edward Elgar Pub.

Chung, W., Tan, K. and Koh, S. (2007). Modelling strategic business decisions. [Bradford,
England]: Emerald.

Foss, N. (2007). Strategic belief management. Strategic Organization, 5(3), pp.249-258.

Jeyarathnam, M. (2008). Strategic management. Mumbai: Himalaya Pub. House.

Powell, T. (2014). Strategic management and the person. Strategic Organization, 12(3), pp.200-
207.

Sadler, P. (2003). Strategic management. Sterling, VA: Kogan Page.

Saloner, G., Shepard, A. and Podolny, J. (2001). Strategic management. New York: John Wiley.

Stoney, C. (2001). Strategic management or strategic Taylorism?. International Journal of Public

Warner, A. (2010). Strategic analysis and choice. New York: Business Expert Press.

THOMPSON, J. L. (2001). Understanding corporate strategy. London , Thomson Learning

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