Types of Business Strategies (Essay Sample)

Business Strategy
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Case Study Analysis
Browns Sports Footwear is one of the burgeoning companies in competing brands industry. This 95 year old family owned corporation has great share in UK market where it is ranked after Adidas and Nike, as well as Vans and Converse. Brown sports footwear has been leading brand worn in the late 80's, time when there was no social media. Therefore, this company was a victim of its triumph since they did not recognize the need of incorporating advertising or new technology in their marketing strategies. Thus by 2000, the brand was swiftly losing to their competitors such as Adidas and Nike. By year 2010, their competitors had attacked this brand from all sided. The rationale of this paper is to analyze Browns case by applying suitable strategy models. Lastly, I will use SWOT analysis to summarize Browns strategic stance hence make recommendations for this brand prospect using my analysis as well as Ansoff matrix.
STRATEGY MODELS
PESTEL analysis
This is a tool or structure used by marketing team to evaluate and monitor the macro-environmental aspects that have an influence to a firm. PESTEL analysis includes:
Political factors. These are the factors regarding the extent of government intervention to the economy. They include tax policy, trade restrictions, labor law, foreign trade policy, government policy among others. Browns is able to respond to the prevailing and projected future legislation. In addition they are able to amend their marketing strategies accordingly ("Porter's Five Forces Model | Strategy framework," n.d.).
Economic factors. These aspects affect business operations as well as their profitability. They include interest rates, inflation, economic growth, exchange rates among others. Browns design squad was late to significant trends such as skater styles and inspired trainers.
Social factors. They are also referred as socio-cultural aspects. They encompass people's shared attitudes and beliefs. They include age distribution, population growth, health consciousness among others. These aspects have direct impact to marketing since they determine how marketers understand clients and their motivation. For instance, Browns Sports Footwear Company failed to focus on growing sectors such as womenswear sector.
Technological aspects. Technological factors determine how companies market their services and products. Technological aspects affect distribution, production, and communication with the target markets. The Browns website also faces major critics due to its slow delivery, habitually out of stock of popular sizes, and a clunky returns process.
Environmental aspects. These factors focus on ethical and sustainable production of goods and services. They include aspects of pollution, scarcity of raw materials, among other factors.
Legal aspects. They include advertising standards, equal opportunities, product safety and product labeling, health and safety, consumer rights and laws and so on. Browns should understand legal factors in order to carry out their operations effectively. However, since a Browns operate internationally, it is likely to face difficulty since every nation has different set of regulations.
Value Chain
It is a procedure where a company like Brown sports footwear identifies support and primary activities that are beneficial to its ultimate product and thereafter examine those activities to increase differentiation or minimize expenses. Value chain analysis is essential in Browns since it will help them to identify their competitive advantage and disadvantage and hence make necessary amendments (Williams, 2009). Brown is a brand company hence it should concentrate on differentiation advantage in order to overcome stiff competition from Adidas, Nike, Vans and Converse. Brown sports footwear can earn high profits by producing superior goods or producing goods at lower costs. Generic value chain was a model introduced by Michael Porter in 1985 ("Value Chain Analysis | Strategic Management Insight," n.d.).
Value chain comprises of primary undertakings that improve value to the end produce directly as well as support undertakings which increase value indirectly ("Marketing Theories - PESTEL Analysis," n.d.). The following is a VC model.
Five Forces
This model was introduced by Porter to help corporations evaluate the form of an industry's competitiveness hence develop suitable corporate strategies. This model is very crucial to Browns sports footwear since it will help them to recognize and evaluate significant forces that govern industry profitability. These five forces affect all industries and any market. These five competitive forces control the level of competition in the market and thus the attractiveness and profitability of the market where a firm operates. Via appropriate corporate strategies, Browns sports footwear should fashion these forces to their advantage to solidify their position in brand industry (Safko & Brake, 2009). An outstanding industry is one where a proper combination of the five forces increases profitability prospective. The five forces include:
1 Competitive Rivalry
One significant force that Porter expounds is the extent of competition between prevailing firms in the market. Browns sports footwear continue to face stiff competition from Van, Converse, Adidas and Nike. This implies that profits, strategy, and prices will be guided by the competitive pressure between them. Browns have little power in brand industry since other companies such as Adidas and Nike have an assortment of quality products.
2 Threat of new entrants
The competitive threat to Browns sports footwear might not be from prevailing players in brand industry, but also from impending new players into the industry. Brand industry is known to be attractive and profitable thus it attracts new players. The economics of brand industry will dictate entry of new players in the market.
3 Threat of substitutes
According to Porter, substitutes are the goods that are available in another industry, though they can be used to meet similar needs. Availability of more substitutes implies increased competition and reduced profits. Substitutes affect firm's capacity to set their desired prices. Brown sports footwear can be substituted with casual footwear such as Fit Flops or Birkenstocks during sunny days, or Timberlands or Dr Martens during cold season.
4 Bargaining power of buyers.
When customers have capacity to influence prices, then it becomes a crucial aspect to be considered. However, company can set its price if it has created brand reputation (Jeffs, 2008).
5 Bargaining power of suppliers
Suppliers provide necessary raw materials to Browns sports footwear, thus it is necessary to maintain stable rapport with the suppliers. Suppliers have capacity to control availability timelines, set prices and terms depending on the type of industry.
Summary of the strategic stance of Browns
SWOT analysis will be appropriate to summarize the strategic stance of Browns ("SWOT Analysis (Strengths, Weaknesses Opportunities, Threats”). This encompasses recognizing company's strengths, weaknesses as well as identifying available opportunities and likely threats (Cook et al, 2004).
Strengths
Browns have an advantage since it is already established as a brand industry. In the 80's, Browns was the leading trainer brand worn by almost everyone so it has a good foundation (Creative Educational Video Inc & Insight Media (Firm), 2009).
Weaknesses
* The company failed to invest in advertisement and new technology.
* Browns lag behind in online sales compared to its rivals. The company offered limited variety online while its rivals utilize online media to promote their products.
* Browns website face major criticism due to habitual running out of stock, slow delivery, and an awkward returns procedure.
* Browns design squad took long to produce key trends.
* The company also failed to concentrate on burgeoning sectors such as the womenswear sector.
Opportunities
Browns have an opportunity to get back to the top as the most selling brand in the industry. They can achieve this by investing in online media and new technology. Browns were the leading brand company in 80's a time when there was no social media; only magazine and television coverage (Lavinsky, 2012).
Threats
* Browns face major competition from Adidas and Nike among other companies.
* Availability of substitutes is another threat to Browns.
* Stiff competition from new entrant since brand industry is an attractive and profitable industry.
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