strategic management decisions

University of

Evaluation of the Company’s Strategic Management DecisionsCritical Evaluation and Analysis of the Organization’s Strategic Positions

Submitted By: 12/6/2013

2 Evaluation of the Company’s Strategic Management Decisions

Evaluation of the Company’s Strategy

Executive Summary

Strategic management is very important for the achievement of organizational goals and

different organizations are setup with different vision and mission statements. Organizations

largely depend on the strategic decisions they make and how they plan their activities

considering managerial, environmental and competitive factors they can face in different

markets and then rethink about their strategic management policies for successful growth and

satisfaction of their company’s growth in highly competitive environments.

The study carefully examines the core business management strategies of Burberry Plc., and

after carefully examining their strategic management as suggested by Ansoff’s strategic

management, McKinsey strategies and SAFS Framework, it is evaluated how they have

successfully developed their strategic policies on offering best quality products and services in

women international fashion marketing in women dressing according to the latest fashion trends

at lower costs after evaluating their competitors. In order to evaluate their strategic

competitiveness, the study further evaluates the sustainability, consistency, feasibility and

adaptive nature of their strategies. The study further elaborates that organizations should

consider adopting strategic management strategies originated and implemented by Ansoff’s

strategic management systems, McKinsey seven strategic factors including his suggested

model based on seven variables highlighting shared values, strategy, structure, systems, staff,

style and skills. Critical Evaluation of the Organization’s Strategy SAFS Framework Showing

Suitability, Acceptability, Feasibility and Sustainability is also very significant and determines

how organizations should be adaptive, feasible and sustainable in their strategic management

strategies to get competitive edge over their competitors.


Table of Content

Descriptions Page Number

1. Introduction--------------------------------------------------------------------------------------- 4

1.1. Strategic Focus of the Company----------------------------------------------------4

2. Critical Evaluation and Analysis of the Organization’s Strategic Positions----------6

3. Analysis of the Organization’s Strategic Direction----------------------------------------8

3.1. Ansoff’s Strategic Management Systems-----------------------------------------8

3.2. Analysis of McKinsey’s Strategic Management Directions---------------------9

4. Critical Evaluations of Organization’s Strategy SAFS Framework--------------------10

4.1. Suitability--------------------------------------------------------------------------------10

4.2. Feasibility--------------------------------------------------------------------------------11

4.3. Acceptability-----------------------------------------------------------------------------11

5. Conclusions and Recommendations---------------------------------------------------------12

6. References----------------------------------------------------------------------------------------13


1. Introduction (Evaluation Strategy)

In this study, Burberry Plc. is selected as the company of study was founded by dressmaker

Thomas Burberry in 1856 and they setup first London store in 1891 in 30 Haymarket. Burberry

Group Plc. Since its inception has developed and manufactured market luxury apparels and

highly gorgeous accessories for men, women and children throughout Europe, United States

and Asia Pacific. Company has successively achieved milestones in its strategic management

policies to offer best quality fashionable products at lower costs to their loyal and new

customers in outwear fragrance and beauty products such as eyewear, watches, highly

gorgeous and appealing dresses, trench coats, handbags, leather products, scarves, shoes,

jewelry and belts. The company has also licensed as the third party in manufacturing and

distributing products using Burberry trademarks. Burberry Inc. has successfully setup retail

stores and wholesale channels such as mainline stores, outlets, and digital commerce along

with Burberry franchises and prestigious departmental stores. Currently, Barberry Inc. has 206

mainland stores, 214 accessories, 49 outlets, 65 franchises and achieved considerable growth

in its 156 years successful history.

1.1. Strategic Focus of the Company

The strategy of the company was highly focused two areas in order to influence its marketing

plan include mission/ vision of the company and goals of Burberry Plc. According their mission

statement, their mission was to serve as the lifestyle apparel for men, women and children

wearing ranging from small to plus sizes with highly organized and developed services,

adaptation of fashion trends in the market, value and fitting and becoming the company to be

enjoyed as celebrating the lives and fashion images of their loyal and new customers. Company

was setup with main objectives of achieving customer satisfaction and trust through secured

personal information in their advertising and communication skills. Increasing competition in the


fashion industry with lower prices and making sure the availability of highly elegant women

fashion products to increase the satisfaction of their customers. They have acted according to

the values and standards of the European culture and followed the laws of United Kingdom with

devotions and according to the demanding needs of their customers. Burberry Plc. shifted sales

and mixed their profits to higher operating channels and used their newly launched catalogue at

e-commerce and business platforms for better services and growth in their customer base. They

operated their business with a focus on the cash flows generation to maintain their financial

stability with appropriate liquidity arrangements (Annual Review, 2013). Moreover, analytical

tools are very helpful in determining the consistency in the strategic management of an

organization such as the tools used to answer the questions an organization can ask. The tools

will also define the necessary and actionable tasks along with benefiting from inputs and

collaborations with other people, external functions and even the organizations. Proper

utilization of tools can be time consuming but it is important to make sure key stakeholders are

on board and senior management and directors of the company departments are well aware of

these tools necessary to complete the analysis (Downey, 2007).

In their company’s strategy, Burberry Plc. focused on improving their marketing intentions and

created excitements within markets with amazingly developed and fashionable women products

to get new heights. They developed strong customer relationships with new customers who

have never shopped before with their retail and wholesale stores in UK but enjoyed their

shopping with them this time. Burberry Plc. is focused on targeted marketing with deeper insight

of their consumers due their changing spending patterns at the market level. Highly competent

and strategic policies has motivated their teams to increase their brand presence in high profile

outdoor and travel oriented locations along with experimentation of their latest digital venues

contracted on real-time venues. The Group has also strategically focused to increase their

efficiency through controlled inventory managed at all stages of their sales process. They have


also expanded by separating their physical and digital channels with the ultimate vision to serve

their clients at any platform in any geography. In this regard, Burberry Plc. has opened London

flagship at 121 Regent Street in their most prestigious efforts and they restored partnership with

traditional British craftsmen and completed their product assortment, RFID technology in

triggering multimedia content and projected brand imagery through digital screens. In their

additional integrated activities, they expanded their strategic marketing policies to iPads to

enhance inventory availability and continuously upgraded their retail theatre throughout the

store base to make sure their synchronized delivery of brand awareness to their consumers and

experimented with new payment systems for streamlining their buying experience with Burberry

Plc. retail and wholesale stores (Burberry Annual Review, 2013).

2. Critical Evaluation and Analysis of the Organization’s Strategic Positions

Burberry brand has successfully promoted their vast range of products through key strategic

activities and adopting innovative products in opening price points in the leather goods and

heritage rainwear categories. Cost in terms of sales, it is consistent with brand positioning and

Burberry Plc. has always responded to their consumer demands and continued investing in the

upper tiers of product pyramid with their gorgeous Prorsum and London labels. These brands

have increased their share in retail sales and got considerable reputation among potential

buyers of this unique brand of fashionable clothing. Burberry Plc. has also emphasized to create

innovation and excellently designed products for their men, women and children categories.

They tailored with broader assortments and expanded their distribution network throughout UK

and given key importance to in-store timings of seasonal merchandise to increase the relevance

of their offered products. Burberry Plc. setup first fully dedicated men’s store in London in

October 2012 and successfully achieved 13% revenue growth and also got the reputation of

fastest growing product division in the year. In outside Asia, Burberry Plc. continued to develop

in other markets and they have successfully operated in India, Middle East, Latin America, and


they have also opened six mainline stores with excellent response from their buyers. They have

also operated through their franchise partners such as Russia, Turkey and Eastern Europe by

opening eight stores with expansion to five new markets including Georgia and Jordan. They

have also signed new franchise agreements in Colombia and Chile. Burberry Plc. has also

expanded their flapship stores in Chicago, Milan and Hong Kong and in total group has opened

14 new mainline stores, five outlets and six concessions and their average sale increased to

13% in the recent year’s growth (Burberry Annual Review, 2013).

In critically evaluated and analyzing the strategic position of an organization, the general

principles of strategy should be evaluated to find out whether or not the organization is growing

in the right direction. It is very impossible to determine and demonstrate that the particular

strategy of a business is very essential for an organization but it can be tested for critical flaws.

Out of many tests in order to determine the critical and analytical strategy of an organization,

most of them will fall within these criteria including consistency, consonance, adaptability and

the feasibility of the strategy to maintain competitive advantage in the selected areas of their

activity (Richard, 1993).

In evaluating the strategic position of an organization, it is relative to determine its positioning

strategy with the image of its rivals in a correct way. Business must determine its position for its

products launched at the markets at that point, and it must look forward for the combination of

advantages the company has offered to its customers that are still lacking by competitors but

they are highly desired to target the market. Customers will only be affected by the emphasis of

buying the company products due to their effective positioning strategies, not by their

competitors. But if the company does not do the product positioning strategies on time, it can

never get the customer attention and always be counted as followers with lower sales volume

and lower productivity. Ries and Trout’s in their positioning approach, has pointed that without

taking into considerations the position of competitors the war of marketing warfare can never be


won. Another assumption of the positioning approach is that some products are even evaluated

and perceived by other competitors. The concept of positioning has emerged in the recent

markets and communication applications and academic circles are considering it very important

in achieving their marketing objectives (Mustafa, 2009)

3. Analysis of the Organization’s Strategic Direction, Methods of Organization

Strategies with Ansoff, BCG and GE/ McKinsey

3.1. Methods of Organization Strategies with Ansoff’s Management Systems

Ansoff’s strategic management systems are also determined by Brews and Hunt (1999) and

they further validated the study by establishing the fact that “planning” is the main driving force

in the strategic process that an organization adopts. In strategic formulation, formal set of

processes are adopted which derives a situational analysis for formulating the appropriate

strategy. But critics of this approach say that after adopting Ansoff’s strategic management

systems, firms become too static and there is always a risk associated with managerial

groupthink. Additionally, organizations can never predict the concerns of environmental factors

that should be considered in strategic decision making. Strategic planning in the organizations

should be long-term planning when environmental conditions are highly changing and

discontinuous in nature. Organization may face these conditions due to issues of market

saturation, new technologies develop, regulations posed by governments and sudden entrance

of new market players into the market. In the first step of strategic planning, method needs the

analysis of the senior management of the firm which is considered as the key players in

determining firm’s trends, opportunities, threats and breakthrough events. In the second step of

strategic planning initiated by Alsoff is the management responsibility to perform a competitive

analysis after defining its improved performance position and determining if it is successful in

enhancing the competitive strategies. Management must be focused on operational control of


the organization in its long term planning with proper budgeting, goals and programs

implemented by units and profitable plans. (Dan & Alfred, 2009)

3.2. Analysis of McKinsey’s Organization Strategic Directions

Strategic planning is very crucial for the success of any organization. McKinsey’s strategic

direction for organizations is based on 7-S management model that the organizations should

comply to get success and continuous growth in the operations. The model of seven variables is

based on shared values, strategy, structure, systems, staff, style and skill. These seven factors

are interrelated to each other and organizations much give them proper attention to all these

factors and if one of them is not given proper attention other factors can be badly affected.

Strategic implementation is an integral part of every successful organization and it can be

examined through the formulated strategy in the series of actions to make sure the vision,

mission and strategic objectives an organization can adopt to successfully achieve its plans

(Fourie & Jooste, 2009).Survey conducted on evaluating the McKinsey techniques determines

company’s board of directors should be highly focused on few roles in the planning strategy.

Boards should be very active in the development process of an organization and in the process

of approving final strategy. In the survey, most of the respondents showed satisfaction of their

board of director’s performance by improving their company’s strategic planning (McKinsey

Quarterly Survey, 2006).

Figure: Showing Interrelation of Organization Strategic directions originated by McKinsey.


Shared values within organizations are determined by organization stands for and its beliefs and

in its long term vision it setup the destiny of the organization and the core attitude develops

within that organization. In strategy, every firm has scheduled a strategic action in response to

the upcoming events or by anticipation. In structure, it shows the way by which the units of an

organization are well connected to each other and shows how people, activities or tasks are

organized within that organization. Systems are also very important within an organization and

they determine procedures, and routines that connect the company together and characterizes

how all the set tasks should be organized. Staff indicates the human resources of the

organization developed with number and type of the personnel holding key positions in different

departments and playing their role in making the organizations productive and successful at the

market level. In Style, the behavior of the leader of the organization is identified how the

company achieves its already set goals. In skills, distinctive skills and attributes are needed

within an organization as a whole (Luxinnovation, 2008)

4. Critical Evaluation of the Organization’s Strategy SAFS Framework Showing

Suitability, Acceptability, Feasibility and Sustainability

4.1. Suitability

According to Johnson and Scholes, suitability determine if the strategic choices made within an

organization are suitable and compatible within the organization’s current and expected external

environment. For example, if the industry is exploiting high pollution due to excessive use of

coal fire in their main source of energy in operating the plant, it might be contrary to what is

perceived as suitable within the social, political, legal and the environmental aspects of the

organization. In the best way to approach the suitability of an organization, it is best to evaluate

if the strategic alternatives can help the firm to exploit opportunities and to overcome the threats

in the environment. In suitability analysis, there are different internal models for analysis are


available including money, machinery, manpower, markets, materials and the makeup. In

money, it is determined if the financial resources available to the organization for each strategic

choice. They are in the form of finance available to the organization, the cost of the financing,

and the repayment capacity of the strategic choice. Manpower determines the existing

employees and management working for the organization have the required knowledge and

skills set. In materials, the supply of vital inputs is determined for an organization to make sure

its strategic choice. Makeup aspect considers two main areas including organizational structure

and the culture of the company (Thomas, 2010)

4.2. Feasibility

Feasibility is focused whether or not the organization has the resources to pursue its strategic

choices to make sure it is on the path to achieve its strategic goals. Feasibility is the evolution of

the internal capabilities of the organization and management should determine if the

organization has the availability of the resources to pursue some of the strategic choices within

an organization.

4.3. Acceptability

Acceptability is highly focused on two main areas made in strategic choices including financial

aspects and the stakeholder aspect. The financial aspect within an organization is highly

focused on achieving the successful financial status with return to risk profile of each alternative.

The stakeholder aspect is focused on the enhanced interaction in between the stakeholder

reaction and the strategic choices made within that organization. The financial aspect in the

strategic decision making of an organization determines the expected return and the risks which

are associated in each strategic choice. In stakeholder aspect, the acceptability analysis

evaluates how the strategic choices are being made within an organization and how they are

associated in affecting the stakeholder choices and their reactions. It is quite qualitative and


holds its importance because new strategy adopted can only be successful if the stakeholders

are offering complete support (Thomas, 2010)

5. Conclusion and Recommendations

This study examined the critical evaluation of the organization’s strategy adopted to get the

achievement of its set goals. To examine the case, Burberry Plc. was selected as the

organization to evaluate how this small organization achieved considerable growth and success

after adopting successful strategies in two main areas to achieve its missions with highly

organized and developed services by offering best quality fashionable brands at lower costs. In

their marketing strategy, Burberry Plc. was highly focused on improving their marketing

intentions after penetrating into new markets and offering their best products and services at

affordable prices after identifying the potential markets throughout the world and opened their

mainline stores and franchises in participation with other local brands.

In order to examine the critical evaluation of the organization, it is important to determine in

which direction the organization is progressing. In testing the critical and analytical strategy

consistency, consonance, adaptive and feasibility of the organization is determined. In order to

determine the Ansoff’s strategic management systems the theory is focused on planning which

is considered as the main driving force in the strategic process and it is evaluated by the top

level management of the organization. Strategic planning should be long terms and

management of the organization should determine whether it is getting competitive edge over

others or not. In McKinsey’s analysis of the organization strategic directions, seven factors are

determined including shared values, strategy, structure, systems, staff, style and skills. In critical

evaluation of the organizational strategic measurement, an organization should be highly

focused on suitability, feasibility and acceptability. In suitability different models are examined

including money, machinery, manpower, markets, materials and makeup. Feasibility determines


whether or not the strategic choices feasible for an organization on the basis of its internal

capabilities. Acceptability is highly focused on the financial aspects of the organization and the

stakeholder aspects. If the organizations want to be highly successful in achieving their set

goals and targets, they should develop their strategic management plans according to their

organizational structure and the market in which they are going to penetrate. Organizations can

be successful in their mission and vision fulfillment if they adopt all the discussed strategic

management strategies including Ansoff’s strategic management systems, McKinsey seven

strategic directions, and suitability, feasibility and acceptability aspects.

References

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Principles for Small and Medium Sized Firms” Journal of Management Research. Vol. 1,

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5. LUXINNOVATION. (2008). G.I.E, 7-S McKinsey = Management Model with an

Organizational Diagnosis. Luxembourg: The National Agency for Innovation and

Research in Luxembourg.

6. Thomas, W. (2010) Strategic Choice – Johnson and Scholes Suitability, Feasibility and

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