Strategic Management - A Superdry Case Study

Strategic Management - A Superdry Case Study

Introduction - Strategic Management - A Superdry Case Study

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Social

Dressing up like a musician, singer, or artist is a must. As a way to distinguish the industry from the rest of the throng, the followers and media contacts would notice the industry right away. Later, the clothing and outfits worn by a certain person become the sign or brand icon for that person (Pandey et al., 2020). Casual light fashion may be defined as a combination of semi-formal and casual attire, as well as comfy shoes. However, most people either don't notice or are hesitant to embrace it as a trend.

Technological

It's convenient for some consumers to purchase online since they can simply compare items from many retailers at once. If they liked any of them, they'd add them to their cart and order those (Pandey et al., 2020). They avoid going to the mall or a store because they find it physically and mentally exhausting. The Internet has made it simple to open an online business.

Economical

The world is perceived in two extremes: high-income nations where people can afford to purchase stylish items and accessories, and low-income countries where people can't afford to buy anything at all. In nations with high unemployment and low incomes, food and water are more vital than fashion since it is a luxury they cannot afford (Pandey et al., 2020). People in the middle class or lower middle class prefer renting formal or informal clothing and jewellery because of their limited means. This business is seasonal and always evolving, as we all know.

Political

If the cost of imported goods rises due to taxes or the border tariff. In these kinds of situations, the government often encourages citizens to purchase clothing from local designers and makers (HR and Aithal, 2020). There are certain organisations like PETA who refuse to deal with firms that utilise animal fur in their goods, instead of sending orders and money to offshore companies. It doesn't matter whether it's a local or worldwide enterprise, the goal is to prevent animal mistreatment. In other words, their garments don't merely cover the body; they also serve as a means of communicating a deeper meaning.

Legal

The fashion business is no exception when it comes to respecting the law. It is subject to the same import and export limitations, labour rules, and excise tax laws as the rest of the world (HR and Aithal, 2020). When a firm or a fashion brand outsources its work to other Asian nations in pursuit of cheap labour, the whole image of the brand and the country's laws change.

Environmental

The fashion industry is no exception to the rule of law. For example, the country is subject to the same restrictions on import and export as the rest of the world (HR and Aithal, 2020). For example, when a company or a fashion brand moves production overseas in order to save money, the brand's image and the country's laws are affected. When jobs are sent overseas, it has a detrimental influence on the country's economy and the quality of life for its people.

“Analyse one of the industries where the company operates, considering the structure of competition and the competitive forces within the industry.”

Definition of the industry

From textiles and needlework to the fashion and retail sectors, textile recycling and second-hand clothing trades, as well as the textile manufacturing company, the clothing and garment industries include a wide range of activities. Some of the clothing technologies that were utilised in the production sectors, such as the loom, cotton gin, and sewing machine, signalled not only the industrialization of previous textile manufacturing processes, but also the beginning of the modern period of clothing design (Winterton and Winterton, 2019). The textile and apparel manufacturing industries.

Analysis of industry competition

Customer preferences fluctuate often due to the nature of the fashion industry. As a consequence, the fashion industry must focus on creating and manufacturing new designs and fashion trends in order to stay up with the shifting expectations and desires of its clients. With this company's subsidiaries, fashion, quality, and cost are all taken into account in the products they provide to its clientele (Ergashxodjaeva et al., 2018). Men's warehouse has a competitive advantage based on its world-class supply chain management and ability to re-engineer the clothing supply chain. Men's Warehouse was able to shorten the fashion cycle to the point that it was no longer in business because to its strategy of speed and adaptability. It is possible to acquire information on which designs are popular with clients, which ones aren't, and which designs are going to be the next big thing by using mobile devices. When it comes to the production and distribution processes, Men's Warehouse relies on cutting-edge information technology and sophisticated supply chain management systems to keep everything under tight control and integrated.

Five forces analysis

Porter’s five forces analysis of Superdry

Threat of new entrants

Product and service innovation are important. As a consequence, Superdry is able to attract new customers while also revitalising old ones. By achieving economies of scale, it is possible to lower the fixed cost per unit. They are making investments in R&D while also developing our capabilities (Varelas and Georgopoulos, 2017). When established organisations such as Superdry are continually determining the boundaries of the game, it is tough for newcomers to enter into a dynamic industry. Because the window of opportunity for new firms has been significantly reduced, new entrants to the market are discouraged from joining the market.

Bargaining Power of the Supplier

Through the employment of many suppliers, it is possible to construct an efficient supply chain. If the price of a certain raw material increases, a company may decide to transition to a new product design that makes use of a different material (Kumar et al., 2021). Developing strategic alliances with businesses that depend on the organization's performance for their continued existence. Among the lessons that Wal-Mart and Nike may impart to Superdry is how to develop third-party manufacturers whose business is entirely dependent on them, thereby creating a scenario in which these third-party manufacturers have far less negotiation power than Wal-Mart and Nike.

Bargaining power of the Buyer

By developing a large number of customers. The use of this tool will be beneficial to the company in two ways. Reduces the buyer's bargaining power and enables the firm to streamline its sales and production operations, among other things. Creating new goods in a short amount of time (Kumar et al., 2021). If Superdry continues to provide new products, it may be able to weaken the bargaining strength of its consumers. As a consequence of the new offers, Superdry's present customers will be less inclined to move to its competitors' products and services.

Threats of substitute products

Businesses must come up with innovative ways to serve the same customer needs in a variety of ways in order to earn a profit. Alternative goods and services are more likely to reach the market if they provide a unique value proposition in comparison to the original. Rather than concentrating only on the product (Song et al., 2018). By concentrating on the fundamental need of the consumer rather than the product they are acquiring. This is accomplished by making it more difficult for customers to switch service providers.

Rivalry among existing competitors

The price of goods and services will fall if there is a lot of rivalry in a sector, and the overall profitability of the business would suffer. The Personal and Household Goods industry, in which Superdry competes, is very competitive in nature. This rivalry has a negative impact on the long-term profitability of the firm (Song et al., 2018). By establishing a long-term competitive edge. In order to compete more effectively, it has to grow in size. To collaborate with competitors to increase the market rather than just going it alone is a revolutionary concept.

“Analyse the resources and capabilities of the company and how they might contribute to a position of sustainable competitive advantage.”

In the UK apparel market, competition for online share is growing increasingly intense as a result of the continuous movement of spending online and the enormous investment made by bricks and mortar stores in 'omni-channel' offers. Regardless of whether or not you have a strong online presence, you should be on the lookout for organisations that have a sustainable competitive edge over their rivals in the long term. In the opinion of Berenberg, ASOS (ASC:AIM), Next (NXT), and SuperGroup (SGP) are all long-term winners that have a significant competitive edge in this regard (Mahdi et al., 2019). Berenberg has given them the following names: The AIM behemoth has been able to establish an online 'destination' website that attracts target clients while cutting marketing expenditures as a result of its leading position in the fashion business among young people aged 20 to 30. As a consequence of the company's strong brand and unique position in the industry, customers are drawn to Next.

In addition to the breadth and innovation of SuperGroup's product range, as well as the firm's potential for worldwide expansion, these factors provide the company a competitive advantage. The Superdry brand is owned by the SuperGroup Corporation. One of the retailer's “international delivery services stands out among those we evaluated,” according to Berenberg, since it “provides free standard shipping to its foreign clients within four days,” among other perks (Jones et al., 2018). Even while MKS and DEB have made substantial progress in website functionality and UK delivery, they are still falling behind their apparel-focused rivals online, despite the fact that they have invested heavily in website improvements. Due to the rapid migration of sales to the internet, the early movers in the online sales revolution saw exponential growth (Liao et al., 2017). However, investors are finding it more difficult to discriminate between winners and losers in the industry, despite the fact that conventional brick-and-mortar businesses have narrowed the gap. In 2014, according to the British Retail Consortium, the proportion of non-food online sales penetration hit a record high of 21 percent, positioning the United Kingdom as one of the world's most established non-food online retail enterprises (BRC). As the internet generation grows older, it is projected that the percentage of individuals who use the internet in the United Kingdom will continue to rise (Moravcikova et al., 2017). The profitability of a retailer's online operations will become more important as the number of online purchases continues to grow. Additionally, according to the findings of this survey, mobile devices are currently used to conduct 51 percent of all visits to retail clothes websites. As a result of this investigation, the website functioning, payment methods, shipping options, and return capabilities of clothing merchants under its scope have all been investigated.

VRIO analysis of Superdry

Valuable

Based on Superdry’s VRIO Analysis of its financial resources, the company's financial resources are critical because they allow it to invest in external opportunities as they arise. Superdry’s attempts to prevent external threats are aided by these measures. Since Superdry has a high number of locally produced food items, they constitute a major resource, according to the VRIO Analysis of the firm (Cao et al., 2019). As a consequence of this view, customers put a high value on goods and services. As a result, customers put a premium on these goods above those produced by their rivals. According to the conclusions of the VRIO Analysis of Superdry, the company's personnel are a considerable asset. Having a large portion of the workforce that is well-trained leads in more productive production. Additionally, the organisation has a good retention rate for its employees. According to Superdry, all of this adds up to a greater value for the end buyers of its products. Superdry’s patent portfolio is an important resource since it enables the corporation to promote its products without being vulnerable to competition. Because of this, Superdry generates more money. Superdry also makes money from the licencing of certain patents to other companies.

Rare

In the VRIO Analysis of Superdry, it was discovered that the company's employees are in high demand. These personnel, in contrast to their colleagues at other organisations, have received extensive training and expertise. In order to retain these employees, the corporation offers them more wages and a more favourable working environment (Cao et al., 2019). The Superdry VRIO Analysis indicated that the company's patents are a valuable asset in a competitive market. Patents like this one are rare to come by, and none of our competitors have any in their possession. As a consequence, Superdry is allowed to continue to employ them without being interrupted by its rivals. It has been determined via a VRIO analysis of Superdry that the distribution network of Superdry is a highly valuable asset. Because it requires a significant investment of time and money, Superdry’s distribution network outperforms those of its competitors. Furthermore, these skills are only available to a small number of organisations in the industry.

Imitable

Financial resources are too costly to recreate at Superdry according to the VRIO Analysis of Superdry. Over time, the company has been able to build up this stockpile via profits. New entrants and opponents would have to earn the same amount of money over a long period of time in order to attain these amounts of money (Cao et al., 2019). The VRIO Analysis of Superdry shows that the employees of Superdry are not prohibitively costly to recreate, as indicated. Due to the fact that other organisations may also be teaching their employees how to improve their skills. In order to lure people away from Superdry, these organisations may offer them greater wages, work conditions, bonuses, and growth opportunities, among other things. Workers at Superdry are now a resource that may be leveraged to obtain a short-term advantage in competition. The competition may have access to these in the future. The VRIO Analysis of Superdry showed that Superdry's patents are very difficult to copy or replicate. This is owing to the fact that copying a patented product is illegal. Developing and getting a patent for such materials is also a lengthy and costly undertaking.

Organisation

The financial resources of Superdry are arranged in such a way that they capture value based on the VRIO Analysis of Superdry. These resources are used properly in order to invest in the appropriate areas, taking advantage of opportunities and avoiding hazards, among other things. In other words, Superdry's resources enable the company to sustain a long-term competitive advantage over its competitors (Cao et al., 2019). It is determined that Superdry's patents are not efficiently organised according to the results of the VRIO Analysis of Superdry's Patents. According to this, the corporation isn't making full use of its patent portfolio. If Superdry starts selling patented things before the patents expire, the company will have a long-term competitive edge over its competitors.

The distribution network of Superdry has been classified based on the results of the VRIO Analysis conducted by the company. Superdry makes use of this network in order to reach out to its customers and to ensure that its products are available at all of its locations worldwide. In other words, Superdry's resources enable the company to sustain a long-term competitive advantage over its competitors.

References

Cao, G., Duan, Y. and Cadden, T., 2019. The link between information processing capability and competitive advantage mediated through decision-making effectiveness. International Journal of Information Management, 44, pp.121-131.

Ergashxodjaeva, S.J., Kyvyakin, K.S., Tursunov, B.O. and Ahmadovich, H.Z., 2018. Evaluation of textile and clothing industry clustering capabilities in Uzbekistan: based on model of M. Porter. Int J Econ Manag Sci, 7(439), p.2.

HR, G. and Aithal, P.S., 2020. Organizing the Unorganized Lifestyle Retailers in India: An Integrated Framework. International Journal of Applied Engineering and Management Letters (IJAEML), 4(1), pp.257-278.

Jones, T.M., Harrison, J.S. and Felps, W., 2018. How applying instrumental stakeholder theory can provide sustainable competitive advantage. Academy of Management Review, 43(3), pp.371-391.

Kumar, V., Sandhu, G.S., Harper, C.M., Ting, H.H. and Rihal, C.S., 2021, January. Analysis of the changing economics of US hospital transcatheter aortic valve replacement programs. In Mayo Clinic Proceedings (Vol. 96, No. 1, pp. 174-182). Elsevier.

Liao, S.H., Hu, D.C. and Ding, L.W., 2017. Assessing the influence of supply chain collaboration value innovation, supply chain capability and competitive advantage in Taiwan's networking communication industry. International Journal of Production Economics, 191, pp.143-153.

Mahdi, O.R., Nassar, I.A. and Almsafir, M.K., 2019. Knowledge management processes and sustainable competitive advantage: An empirical examination in private universities. Journal of Business Research, 94, pp.320-334.

Moravcikova, D., Krizanova, A., Kliestikova, J. and Rypakova, M., 2017. Green Marketing as the Source of the Competitive Advantage of the Business. Sustainability, 9(12), p.2218.

Pandey, S., Pandit, P., Pandey, R. and Pandey, S., 2020. Marketing Strategies for Upcycling and Recycling of Textile and Fashion. Recycling from Waste in Fashion and Textiles: A Sustainable and Circular Economic Approach, pp.253-275.

Song, Y., Wang, H. and Zhu, M., 2018. Sustainable strategy for corporate governance based on the sentiment analysis of financial reports with CSR. Financial Innovation, 4(1), pp.1-14.

Varelas, S. and Georgopoulos, N., 2017. Porter’s competitive forces in the modern globalized hospitality sector–the case of a Greek tourism destination. J Tour Res, 18, pp.121-131.

Winterton, J. and Winterton, R., 2019. De-regulation, division and decline: the UK clothing industry in transition. In Rethinking Global Production (pp. 18-40). Routledge.