sample assignment on strategic management portfolio

Strategic Management

Portfolio

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TABLE OF CONTENTS

INTRODUCTION...........................................................................................................................1

1. Organization introduction ..................................................................................................1

2. Strategies in market positioning ........................................................................................2

3. Success criteria ..................................................................................................................2

4. Strategic issues ..................................................................................................................3

5. Strategies used to attract target customers .........................................................................5

6. Target customers ...............................................................................................................5

7. Recognize as a brand .........................................................................................................7

CONCLUSION................................................................................................................................7

REFERENCES................................................................................................................................9




INTRODUCTION

The term strategic management portfolio is a decision making and analysis process

regarding with making of planned choices and investments for a business. The aim of this

process is to determine the strategies and investment priorities for the business or product

portfolio of an organization (Hill and Schilling, 2014). The present report will help to understand

the concept of strategic management portfolio. In this context, two companies namely; John

Lewis and H&M are considered. Further, this report will help to understand strategic choices and

its impact on both companies. This report also includes the concept about strategies which are

used by them in market positioning to attract target customers of UK and international market.

1. Organization introduction

Both John Lewis and H&M organizations come under retail industry. Vision, mission

and objectives of both companies are described below:

John Lewis- It is a department store which is a chain of supermarket operating in the Great

Britain.

Vision- To lead the market by enhancing the firm's position.

Mission- Fulfils the need of target customers for the happiness of customers

Objective- To provide better services, quality products and values to the customers and

for this purpose firm has made a unique promise “Never knowingly undersold” to target

customers (The John Lewis effect, 2015).

H&M- It is a multinational Swedish retail clothing company which is famous for fast fashion

clothing for person of every age.

Vision- Business operations should run in a sustainable way so that they can fulfil need of

both present and future generation individuals.

Mission- To increase the number of stores per year by 10-15% and in the same time in

comparable units as well.

Objective- To provide both quality and fashion at the best price to target customers.




2. Strategies in market positioning

For the market positioning in domestic UK market and international market, both

companies uses different market positioning strategies which are described below:

John Lewis

To run the business practices efficiently, John Lewis used partnership approach in their

strategies. In this approach, cited firm's employees are known as partners not the shareholders

and these partners also own the business of John Lewis. To meet the objectives, company has use

the price matching policy in their market positioning strategy without setting the low prices. For

positioning the brand name at the forefront of target customer's mind and to build loyalty, cited

firm has also uses the emotional branding (Klingebiel and Rammer, 2014.). The purpose of this

strategy is to create touching connection with the target customers because this is about putting

the customers and their needs first in the priority. The firm’s strategy also includes targeting the

high class customers and earners by offering them best quality of products.

H&M

Cited firm has used the product characteristics and pricing as a market positioning

strategy. Firm has promised to its target customers to provide new designer clothes in market

with the best price. Basic concept of their business is the fashion and quality of clothes at the

best price. With the help of this concept, cited firm is able to attract customers at both domestic

and international market. To maintain their promise, H&M has special team of designers. They

collect fashion designs from different fashion shows and patterns from different country's

culture. The firm always tries to create a good balance among fashion, cloth quality and best

price (Hitt, Ireland and Hoskisson, 2012). To fulfil the need of customers, H&M creates products

for men, women, kids and teenagers according to their taste and styles.

3. Success criteria

With the help of market positioning strategies, both companies are able to increase their

size of customers. They are also able to attract more customers towards their products.

Success criteria of John Lewis

By implementing the strategy, cited firm is maintaining their promise that customers will

not find quality products with better price elsewhere. To attract the customers, company is




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providing full high quality products to their customers. With the help of partnership strategy, the

annual bonus which is based on the enterprise’s performance is calculated in the form of

percentage by using employee’s wages. John Lewis always tries to satisfy their employees and

this strategy lead the cited firm as an outstanding retailer. It is also awarded as a “First clothing

retailer, 2015”. To build the positive feeling in target customers, this company offers their

products through creative advertising method. With the help of this medium, firm create

excitement in their customers to speak about the advertisement and product (Eden and

Ackermann, 2013).

Success criteria of H&M

Basically, H&M is attracted by the modern youngsters and cost conscious customers

because company is offering them new, fashionable and designer clothes in good quality with

best prices. With the help of positioning strategies, H&M is able to influence more customers

towards their product. Through this strategy, they become 21st best clothing retailer across the

worldwide. With the environmental concern, H&M is continuously working to make their

products better in quality. For this purpose, Company manufactures their products in good

working condition with the less impact on the environment. To meet the demand and

requirements of customers, firm produces variety of clothes with attractive designs and patterns.

In the context of fashion, they are inspired from the latest trends to sustainable classics through

this customers can wear clothes season after season. In the success criteria of H&M,

differentiation method helps the cited firm to separate them from the competitors. In this context,

company utilizes natural resources, offers recycling option of garments and reducing the energy

consumption in stores. With the increment in sales, company also increases number of their

stores in various locations (Killen and et.al., 2012).

4. Strategic issues

To analyse the impact of various external factors such as country's economy, law and

culture. on the company, the strategic tool which is known as PESTLE analysis is implemented.

PESTLE analysis of both John Lewis and H&M are described below:

Political- These factors include government policies and regulation. Company has to

focus and follow the rules, regulations and policies of government in which they are




operating their business. For example, if government of UK decides to lower the

corporation tax then, it would be beneficial for John Lewis to increase their profits in

future.

Economic- Changes in rates like inflation, interest rates and costs like energy and labour

cost will also affect the business operation and practices of company. At the time of

recession, spending of customers also decreases. In this situation, customers will not

prefer to spend their money on the clothes. This situation will also influence both

companies that their prices of products have to be driven down. The financial crisis of

European Union also has a impact on the global market (PEST Analysis of John Lewis,

2015).

Social- The changes in lifestyle, trends, fashion and buying behaviour of customers gives

a huge impact on both companies. To please the customers by meeting their demand,

companies have to adopt the changes of social factors to run the business effectively. By

adopting the changes, both firms will be able to attract more customers towards their

products. To improve the customer satisfaction level, both firm have to provide better

quality product in more fashionable way (Vrande, 2013).

Technology- Both companies have to adopt new innovations in the technology because

with the updated technology, both firms will be able to attract customers towards the

company. For example, in the present time e-commerce and internet shopping is a current

trend for retail industry because it directly influence customers towards sales approach.

The advancement in technology mostly encourage customers to purchase the products

online through online outlets. With the help of technology, both companies can improve

their deigns like 3D printing etc.

Legal- Both John Lewis and H&M have to follow all laws to run the business practices

legally. In present time the national legislation becomes more stiffen for the health and

safety in respect to both employees and customers.

Environmental- This factor includes weather, pollution, ethical ad wastage issues and for

this purpose both companies have to do CSR activities for environmental concern. In

production process, renewable sources of resources like cotton and wool are used because




they are environmental friendly. Both companies can reduce the energy consumption and

carbon footprints. The changes in environmental factors may lead to the scarcity of

natural resources which are used in production (Fernhaber and Patel, 2012).

5. Strategies used to attract target customers

H&M is offering standardised clothing line products, so, customers are familiar and

aware about the various range of quality products. To increase the market share and also to

attract more customers, cited firm increase the number of physical stores. In the retail industry

H&M faces huge competition and they are also offering the common products, so, in terms of

product quality the differentiation was not considerable. For this purpose, cited firm focuses on

both quality and price. In this context, firm attracts the customers by balancing the fashion

trends, design, quality and prices. To meet the current trends of fashion, cited company

introduces their new products in every two or three weeks. To increase the awareness among

customers about the company's product, H&M penetrates in social media like Instagram and

Facebook. With this cited firm performs a significant interaction with customers. To increase the

awareness and encourage the customers about recycling of clothes, cited firm rolled out the

program at all physical store in 2013. In this program they offer the facility to their customers in

which they can bring their old garments in any condition and in return they get the voucher of

money (Turker, 2014).

On the other side, John Lewis offers better services and quality products to the customers

and for this purpose firm has made a unique promise “Never knowingly undersold” to their

customers. The company's proposition is based on the trust that company will not compromise in

the both product quality and services. Through this company's promise and product quality,

many customers are converted in loyal customers. For promoting the product, company also uses

compelling and emotional advertisements to gain the customers attention. Fro example, in one

advertisement a girl from 1925 with a modern man sharing the split screen by conveying the

message that important things of life never changes with the time and it stays same as yesterday.

With the help of this type of creative aids, customers also eagerly wait for the next company's aid

(Brand positioning- Standing out from the crowd, 2011). Through various new aids, John Lewis

convey the message which related to their promise which is never knowingly undersold.




Company never promotes the controversial promotional aids which creates any type of issue

among customers. The cited firm knows very well that how to tap the mind and heart of the

customers towards the company's product and services

6. Target customers

The target customers of both John Lewis and H&M are described below:

Target customers of John Lewis

The target customers of John Lewis are basically from the upper class and high earners.

To meet the demands and requirements of target customers, cited firm produces unique designer

clothes in best quality and also provides best services for the convenience of customers. To

attract the more customers towards the product, cited firm also provides special offers like gift

cards or vouchers. The company's target customers are high earners and they don not

compromise with the style and fabrics of the clothes. For this purpose, company always try best

to maintain their clothes quality so, their loyal customers do not switch to the other brands or

competitors who care also selling the same products in market. The target customers of cited

firm are kids, men and women in clothes products.

Target customers of H&M

The middle class customers are the basic customers of the company because cited firm

provides good quality cloth products in affordable prices. The main customer of cited firm are

more trendy and fashionable and they look shopping as a social activity. Through this shopping

activity of company's product they feel pleasure in their daily life. The cited firm also proves to

be producing the products which matches the current fashion trends and patterns in the best

prices. With the help of this differentiation, cited is able to create a big brand name and also able

to attract more customers towards their clothes. The company uses the unique selling proposition

to compete their competitors. Through the company uniqueness, more customers are satisfied

with their new design patterns in clothes (Wüstenhagen, 2012). Cited firm offers variety of

product ranges for the broad range of target customers which helps company to increase their

productivity and profits. The customers of H&M are cost concious but more fashionable and they

want to follow current fashion trends without investing or spending lot of money in garments, so,




they prefer cited firm as a first choice because they get best quality products in their budget.

Cited firm produces products for men, women, teenagers and kids.

Basics John Lewis H&M

Price The prices of products are

according to the quality of

products.

Prices are low as compare to

the John Lewis.

Product Both companies provide best quality products with the current

trends to the target customers. But H&M launches new clothes

stuff in every two or three weeks.

Place Both companies uses both physical and online outlets to sell

their products (Martínez and et.al., 2015).

Promotion To promote the customers,

cited firm uses the emotional

advertisement method to gain

the attention of target

customers.

Company uses the social

media like Facebook and

Instagram to build a strong

connection with their

customers.

Customers The target customers of John

Lewis are high class and high

earners.

The target customers of H&M

are cost conscious and middle

class customers.

7. Recognize as a brand

The first store of John Lewis was opened in mid 1864. The company slogan “Never

knowingly undersold” is in use since the 1925. Year by year company increases their customer

size and also enhance their stores throughout the UK and across the world. The research and

innovations in fashion design of clothes attract many loyal and high class customers such as

Elizabeth ll (John Lewis Marketing Plan, 2012).

In 2011, H&M was the first company who sis a contract relates with fire and building

safety in their international market of Bangladesh. In order to convince the company's partner to

provide the best working conditions for the employees, cited firm initiated a project in




Bangladesh and named it “social dialogue project”. With the help of all strategies which are

mentioned above are key points to make the company successful.

CONCLUSION

With the help of this it is evaluated that strategic management portfolio plays a important

role in the company. The process of strategic management portfolio helps to determine both

strategies and investment priorities for the business operations and product portfolio of an

organization. In this report strategic choices of two companies such as John Lewis and H&M are

described. Further this report includes the issues which affects the business practices of both

company.




REFERENCES

Books and Journals

Hill, C. and Schilling, M., 2014. Strategic management: theory: an integrated approach.

Cengage Learning.

Hitt, M., Ireland, R.D. and Hoskisson, R., 2012. Strategic management cases: competitiveness

and globalization. Cengage Learning.

Klingebiel, R. and Rammer, C., 2014. Resource allocation strategy for innovation portfolio

management. Strategic Management Journal. 35(2). pp.246-268.

Eden, C. and Ackermann, F., 2013. Making strategy: The journey of strategic management. Sage.

Killen, C.P. and et.al., 2012. Advancing project and portfolio management research: Applying

strategic management theories. International Journal of Project Management. 30(5). pp.525-538.

Vrande, V., 2013. Balancing your technology sourcing portfolio: How sourcing mode diversity‐

enhances innovative performance. Strategic Management Journal. 34(5). pp.610-621.

Fernhaber, S.A. and Patel, P.C., 2012. How do young firms manage product portfolio

complexity? The role of absorptive capacity and ambidexterity. Strategic Management Journal.

33(13). pp.1516-1539.

Wüstenhagen, R. and Menichetti, E., 2012. Strategic choices for renewable energy investment:

Conceptual framework and opportunities for further research. Energy Policy. 40. pp.1-10.

Turker, D. and Altuntas, C., 2014. Sustainable supply chain management in the fast fashion

industry: An analysis of corporate reports. European Management Journal. 32(5). pp.837-849.

Martínez, S. and et.al., 2015. Clothing Industry: Main Challenges in the Supply Chain

Management of Value Brand Retailers. In Enhancing Synergies in a Collaborative Environment.

Springer International Publishing. pp. 69-76.

Online

Brand positioning- Standing out from the crowd, 2011. [Online]. Available

through:<http://www.thestrategydistillery.com/news/strategy-news/brand-positioning-standing-

out-from-the-crowd/>. [Accessed on 27th January 2016].




John Lewis Marketing Plan, 2012. [Online]. Available through:<http://research-

methodology.net/john-lewis-marketing-plan/>. [Accessed on 27th January 2016].

PEST Analysis of John Lewis, 2015. [Online]. Available through:

<http://www.businessteacher.org.uk/guides/business/pestle/pest-john-lewis.php>. [Accessed on

27th January 2016].

The John Lewis effect, 2015. [Online]. Available

through:<http://www.accaglobal.com/uk/en/discover/cpd-articles/business-management/john-

lewis.html>. [Accessed on 27th January 2016].




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