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An assignment on MOD001074- Strategic Management Analysis, cover the four main thematic areas for research

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MOD001074- Strategic Management Analysis

Write a mission and a vision statement for Mango Plc. The statements supporting the development of sustainable competitive advantage

The mission statement of mango plc is stated below

• The primary mission of the company is to make the communication channel better for the changing market scenario.

• To always change and adapt in order to achieve the vision of the company. 

Mango Company wants to be the global leader when it comes to fashion. The mission of the company can change from time to time as per the vision of the company but it can take place the other way around. They are engaging in methods that can satisfy the needs and desires of the consumers better than the competitors can. Innovative design along with better management system will be their greatest weapon for achieving the goal of becoming a global leader. They are also hoping to become more caring and better organized in the industry for the business partners and stakeholders. It will not only keep the investors happy but also keep the consumer, employees, corporate citizen and much more satisfied (Activesourcing.org. 2018).

The vision statement of Mango Plc is listed below 

The vision of Mango plc has the above-listed elements

• Ginning consumer loyalty

• Becoming a world leader in the fashion industry

• Get a bigger portion of the fashion market

Gaining consumer loyalty is one of the most important goals for the company. It is looking for many different ways to provide a little extra with the limited consumer money. In simpler terms, it is trying to provide consumers with the best value for their money. Loyalty can only be created if the brand value of a product or service is there. The mango has been performing very well since the last decade and hopes to improve it even further. Even though some of its managers think that the area of expansion is limited others are very much optimist. When a successful relationship is created between the consumer and the supplier, it is highly unlikely that the consumer will go to any other supplier for the same type of product (Kolowich, 2018). The company is hoping to take it even further by providing many different offers to the consumers. The consumer loyalty to the mango brand provides a sense of security to the company. It ensures the producers about the success of the product and hence providing the manufacturer to conduct experiments in order to come up with new and innovative products. Besides, becoming a leader in the industry means that every competitor will follow the Mango Company and look up to its products and marketing strategy. It will also provide the company an additional publicity in the market and ultimately resulting in the attraction of more consumers into the domain.

It is very important for any company to have a sustainable competitive advantage in order to be successful in the market. It can either be achieved through low-cost products or by becoming a powerful brand. Although there are more methods such as having the power to influence the market price, barriers to entry, strategic assets and many more having the above two competitive advantage is most desirable for any company in the market. Besides, the above two are the only place where the company is lacking and can have the upper hand on its competitors. Becoming the global leader and gaining consumer loyalty is perhaps one of the best motives for the company to make these as the company’s goal. It will not only ensure more profit for the consumer but also ensure more productivity for the company. It will create new competitors and make good use of the research and development team to come up with better products. 

 

By employing relevant data from the case, conduct a five forces analysis of the fashion Industry. Conclude about that industry’s attractiveness

 

The 21st century, the fashion industry has evolved drastically and became more competitive in nature (Pratap, 2018).  There are many brands in the industry selling somewhat similar products in the market. Even though the presence of densely populated brands can be found in the industry, there are still new brands that are entering into the market with innovating ideas to the product. There are many factors starting from the development in the technology to the change in the taste of consumers can influence the fashion industry. In the perfectly competitive market, the consumer has the highest power in their hand. Therefore, the competitors are forced to make the product more appealing and attractive for the consumers. The following discussion concludes five forces for the fashion retail industry and it is based on Porter’s five forces model. 

The power of negotiation in the hands of the consumer- in the fashion retail industry, a single consumer does not hold the power to change the market completely. However, many different factors can make a group of consumers to become an unpredictable force. The power of a product’s success mostly depends on the hands of consumers, hence making a brand to work hard on the overall experience of the product. The evolution of the 21st century’s technology and telecommunication process has helped the consumers to choose from a different product. It also helped them to switch from one product to another easily (Stark, 2015). Overall, the 21st century has given the switch to the consumer taking the power from the producers (Fernie et al., 2015). The consumers’ task of choosing a product has become easy due to the availability of many different producers in the market. Some of the important brands is practicing consumer retention strategy in order to grab a little bit of more market. These strategies can be of providing discounts or offers. Sometimes even if the consumers make no direct influence on the brand, they can do so through the indirect channel.

Supplier’s bargaining power- when it comes to a fashion retail industry the suppliers do not hold any significant force. The suppliers mostly come from a third world country and they have to follow the number of rules that are enforced by the buying brands. Switching from one supplier to another has become very easy and a brand can do so with ease. Some of the brands use their financial clout to have some advantage of the price.  

The possible threat of new entry into the market- Entry of a new company into the business does not possess any threat in this industry as because of its density. In order to make the business successful, the new company have to do something innovative yet will not have any certain advantage in the price of the product. Perhaps one of the biggest barriers for this industry is an investment (Fernie et al., 2015). A company need to invest a lot in order to make the breakeven point possible for itself and the popularity of fast fashion is proof of the fact. Therefore, making it very difficult for any new company to enter the market with significant threat force into the fashion industry. 

Possible of substitute threat- the fashion industry itself creates the substitute for a product. For any other industry, there are products that may or may not belong to the same platform. For example, in the case of the coffee industry if the price of coffee goes high people shift from coffee to tea. When it comes to the fashion industry, if the price of one particular product goes up people can shift from one brand to another or they may choose different materials for the same product. Therefore, even if the cloth industry does not have any substitute, the brands have many.

Competitive rivalry in the industry- in a fashion industry the rivalry is intense. It is mostly due to the highest number of companies offering mostly similar products on the market. Some companies drive the loyalty of the consumers based on the quality of the product as well as the features. Leaving the fast fashion on one side rest of the areas of the fashion industry has become densely populated for the companies (Fernie et al., 2015). Higher brand image is helping the brands to charge a higher price from the consumers. 

 

Mango Plc resources and capabilities by utilizing the value chain framework. The company creating value and Discussion on the company develop and improve further in respect to this

The value chain analysis is done to point out primary and support activities of an organization to evaluate connection between systems and activities exist within the company and what influence it has on the profit and costs.

Primary activities of Mango Plc 

• Logistic management: As per the current activities and organizational capabilities of Mango Plc, it could be said that their logistic management is based on three main systems. One is speed, second is intensive application of technology and capability to manage the inventory in a global level (press.mango.com, 2018). These three systems and activities are establishing the fact that, Mango Plc is capable to holding a production planning that will help them to capture Zero stock. All the orders are managed centrally by the head office at Palau de Plegamans. Moreover, the logistic department is able to analyze demand of their customers and supply goods in right time to them. 

• Operations: This Company has no manufacturing plant of its own. All the manufacturing activities are managed by other organizations in various geographic locations across the globe. Each season, the management tends to find out new potential suppliers to collaborate with then. Selection process of the suppliers are unique depending on the timeframe of the production, costs of the clothes, capacity of procurement, technology and global experience (press.mango.com, 2018). Making good relationship with the suppliers is the key to manage tis type of international manufacturing system with no interruptions. 

• Sales: Apart from the traditional methods of sales and marketing, the communication department in Mango Plc is responsible for developing the corporate image each season for international media planning and overall increasing customer loyalty. The publicity cost is managed by investing 4% of the organizational turnover, which is higher than their market competitors (press.mango.com, 2018).

• Service: As stated above, manufacturing process is not done by the company itself but the design of the materials to be used in the products. This is an excellent approach to provide products to the customers as per their preferences. Design of products is made as per the market demand and choices of their customers through using survey and the manufacturing process goes on internationally. This makes easy to manage and develop a customized production effectively. 

Support activities of Mango Plc

• Infrastructure: The management and infrastructure of this company is well-constructed to manage all its global distribution capacities with taking care of the legal and regulatory provinces that could affect the company’s reputation. In this respect, this support system for its other operations is effective enough to help it to achieve all objectives. 

• IT support: The software system present in Mango Plc is effective enough to monitor progress in design, manufacture, and supply, sales and after sales services from their head quarter. On the other hand, the interactive IT system is also effective enough to communicate with suppliers, quality teams and others (press.mango.com, 2018). These fully automatic and latest IT supports help this company to overcome all communication barriers on a global scale and help in applying more integrated approach to international business management. 

• Human resource management: The organizational culture in Mango Plc is based on developing and managing human interactions. Organizational management is dedicated in building up a team that is capable of adapting change, motivated and contribute their creative ideas for organizational profits. Employees in this company get the chance to directly communicate with shareholders and administrators. Bonuses are given twice a year and the company held continuous training process for all their workers. The “error culture” practice is also helpful in pointing out weaknesses and what could affect the company in future in respect of managing human resources (press.mango.com, 2018). These activities are an example for managing global organization standing upfront against changing landscapes of international HRM.

Analysis of company’s value creation 

From the above value chain analysis, it has been realized that all the support activities of this company are developed keeping in mind the relationship of internal organizational environment and its external results on the external relationship with suppliers and customers. Though, it could be said that certain points could be developed in future. However, through a global chain of communication, this organization is setting example of business management against its leading market competitors. As stated above, Mango Plc is creating value through global franchise system for the EU and main capitals. Their marketing and communication system are also focused to increase global image of the company by examining new niche markets for better distribution process and increase in sales. Launch of E-business is also helpful for developing sales and proportionately increasing the sales. All these activities are jointly channelized through a strategic management process. All these activities are helpful in sustaining profits except the costs of production and administration as well as developing consumer base day by day against the ups and downs in textile industry. 

Future development 

For future development of Mango Plc, it could be said that higher manage should take steps for managing inbound logistics at a local level also. For an organization that thrives for more global growth, local logistic management as well as local operations are one of the strong backbones to support the international activities more (Lasserre, 2017). On the other hand, managing all the activities through headquarter administration could be little tough when the branches will develop in the future all over the world though it could be seen that the IT infrastructure is strong enough in this company. On the other hand, starting own manufacturing process could help in limiting the cost and could help in minimizing complexities in managing global manufacturing process in the future. 

 

Suggestions could you make to Mango Plc Senior Management team to support their position in achieving sustainable competitive advantage in the fashion industry

From what has been identified in the case study it can be said that, Mango is one of the prominent companies in the fashion world, implying that they have substantial amount of market dominance in this particular industry. The company is known for popularizing fashion and make it accessible on a global context. It allows the company to ensure that they are able to maintain a sense of competitive edge in the market and at the same time focus on gaining their profit margin that has been estimated at the initial stage of the formation of their plan. The company has managed to gain sustainable growth in the past decade but there is still certain crucial front of certain aspects of the company that holds them back from being one of the biggest and prominent brands of all time. It can be said that the company is incurring some differences and difficulties in terms of their logistics system, their workplace culture and the technology that is being used by them. It is essential that the company has been able to acquire a solid base in the modern competitive market and make sure that they are able to focus on their ability to gain substantial amount of profit in the market. They also require the use of an innovative management model to make sure that they are able to compete effectively in the modern competitive scenario with thousands of brands increasing their proficiency to gain market dominance.

The following suggestions can be considered by the company to make sure that they are able to garner the interests of the customers while maintaining their competitive edge in the market at the same time:

Production Distribution Department 

Since, this particular department is mainly associated with conducting research on what prompts a customer to not make purchase of a product even after the consideration that it would probably go on with their wardrobe, the officials can go on and interview people to know about their opinion on the clothing of the company. At the same time, the company can initiate the idea of lucky draws to provide a little detour of the company to a group of people and identify the reasons of not purchasing their product.

The Manufacturing Units of the company

As described in the case study, it has been identified that the company does not have its own manufacturing unit and is rather concerned with the designing of the clothes and other prominent accessories. It has been identified that the people are able to ensure that they have the tendency to make required changes in case of any mistakes if their production units are nearby. So, it is essential to consider that the company might think of having their own production unit rather than getting their clothes manufacture from China, Vietnam, India or any other Asian countries. Having their own production unit would enhance their market value and strengthen their base in the fashion industry. 

The Logistics of the company

It has been identified earlier that the logistics of the company has the tendency to fuel their growth and enhance their market dominance. Thus, it can be said that the company is integrated towards the application of various models and enhance their strategic alliances with some of the prominent companies to make sure that they are able to reach out to the customers within their prescribed time. It can be said that the company can implement their idea of avoiding test runs at Barcelona with other countries where they have their production system as well. The direct delivery logistics system can be considered applicable in every country they have their operations spread out in. Thus, indicating that the company has a substantial amount of possibility to enhance their functioning and make sure that they are able to make their distribution happen faster than the time that had been estimated earlier.

Ensuring the application of IT systems based on the requirements of the respective countries 

It has been identified that the company focuses on having their technological advances only in Barcelona. With a team of 200 members, it can be said that the company changes their technological procedure after every 2-3 months but at the same time ensures that the people are able to ensure the applicability of the advancements based on the design and structure of that particular place. It can be said that the officials might consider having technological advancements in the countries where they have initiated the development of their branches, implying that they are able to understand the demands and requirements of that particular place and speed up the distribution process that has always been their priority.

Advancement of the HR policies

It has been identified that the company is encountering issues with the training and development of the employees and at the same time, they have also ended up focusing on the remuneration process of the company rather than their idea of continuous developing process. It can be said that the company requires substantial amount of attention with regards to the changes in the current policies and make sure that the employee turnover is exactly what that had been anticipated earlier. The idea of maintaining the employability, motivation and health aspects of the employees would allow the company to make sure that they are able to conduct their operation in a convenient manner and that they are able to achieve the outcome that has been anticipated by them for a substantial amount of time. Providing the people with flexible work opportunities and ensuring that they would be able to gain the idea of employee development would allow them to ensure the proper growth and advancement of the organization as well.

The suggestions recommend above can be used by the organization to make sure that they are able to maintain their market dominance and perform as fashion icons of the industry. It is also important to consider that the suggestions presented above can also be used as strategic measures by the company to promote the idea of continuous growth and development. 

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