How does your organization compete?
Walker et al. (2010) write, “competitive strategies are based on overall patterns of purpose, practice, and performance.” After reviewing the annual report and company website, it appears that Limited Brands Inc. (LTD) does not only have one competitive strategy. Since the firm is divided into several distinct strategic business units (SBU) with differing core competencies and available resources, as well as disparate customer and competitive characteristics it employs different strategies to create value, promote growth and profitability (i.e. Victoria’s Secret and Bath & Body Works; Walker et al., 2010).
For instance, the Victoria’s Secret SBU appears to leverage a “differentiated analyzer strategy” by “actively seeking to expand into related product markets with differentiated offerings” (Walker et al., 2010). Not only does Victoria’s Secret offer a differentiated line of lingerie, but it also has expanded its product offerings to include beauty, apparel, and accessories. These expansions are largely financed and supported by the SBU’s core business (lingerie) and its profitable, strong brand reputation.
In contrast, the Bath & Body Works SBU seems to employ a “differentiated defender strategy” (Walker et al., 2010). Its activities focus on constantly improving existing offerings by modifying products as well as processes. In addition, it also defends its market position through line extensions to help insulate and fortify the company’s position from competition.
In its annual report LTD notes “we are aggressively focusing on bringing compelling merchandise assortments, marketing and store experiences to our customers” (LTD, 2011). This implies that LTD’s overarching strategy is driv...
... middle of paper ...
...ity.
Resources:
Anderson, J.C., Narus, JA., & van Rossum, W. (2006). Customer value propositions in business markets. Harvard Business Publishing. Retrieved from http://hbr.org/
Johnson, M.W., Christensen, C.M., & Kagermann, H. (2008). Reinventing your business model. Harvard Business Publishing. Retrieved from http://hbr.org/
Limited Brands Inc. (LTD). (2011). Proxy statement and annual report. Retrieved from https://materials.proxyvote.com/Approved/532716/20110328/CMBO_86861/HTML2/default.htm
Porter, M.E. (1996). What is strategy? Harvard Business Review. Retrieved from http://hbr.org/
Treacy, M., & Wiersema, F. (1993). Customer intimacy and other value disciplines. Harvard Business Review. Retrieved from http://hbr.org/
Walker, O.C., & Mullins, J.W. (2010). Marketing strategy: a decision focused approach (7th Ed.). New York, NY: McGraw-Hill.
Thus new products/line extensions will be based on Allround brand, each one with a unique target market, delivering different value proposition to the respective customer.
The apparel industry is among the most volatile sectors in the market today. Subject to overnight changes in trends and fashion, the industry leaders must be accurate with their predictions and quick to accommodate changes. Because of these fluctuations, it is very hard to assign a competitive advantage to one company over another. While Jones Apparel Group seems to have a comparative advantage in profitability and leverage, Liz Claiborne has been historically more effective at generating revenue from its assets. While Liz is surging to eclipse Jones’ ROE numbers as of late, Jones Apparel Group holds a historical comparative advantage in return on equity and overall financial health.
Given the dominance and fiercely competitive nature of Wal-Mart and Target within the big box discount retail industry, Dollar General avoided competing head-to-head with these larger rivals by differentiating a classic generic bu...
The fewer number of products a company has to assess, the easier it is and more cost efficient to determine the performance of a product. It’s important to identify in the early stages and as soon as possible which products are attractive to the market and performing as well or more proficient than expected in the target market. Timing strategic moves is an important part of dealing with competition; especially when competitors have a larger product selection and have a significant bigger number of products or markets to focus on. By releasing new lines and focusing on 2 to 4 patterns each season, the company is driving innovation; another way the company is driving innovation that could give them an advantage over the competitors is by giving each product a specific life-cycle that way the company (Vera Bradley), is not losing its clientele that are seeking that new product each season.
The Lululemon 's top five competitors are Under Amour, ADDIDAS, Nike, Bebe Sport and Lucy Active Wear. Competition in this arena is mainly through the quality, brand image, price, and innovation. Lululemon 's rivals have substantial competitive positioning because of being more established with a broader client base and products. Another bargaining power of these rivals is having a strong power in financial and marketing strategy. Nevertheless, Lululemon distinguishes itself in the manner it markets its products and trusts it has a strong loyal client base because of its vertical retail strategy and grass root marketing. It is very paramount for every organization to develop a SWOT analysis since it is a crucial part of the strategic planning process. In this study, we will examine three questions in each component to conduct a brief SWOT
Soman,D & Marand, S (2009). Managing Customer Value: One Stage at a Time.: World Scientific Publishing. p9-14.
Six years after deciding to be an independent public company in late 2000, Coach Inc.’s net sales had grown at a compounded annual rate of 26 percent and the stock price had increased by 1,400 percent due to a strategy keyed to a concept called accessible luxury. Coach crafted the accessible luxury category in women’s handbags and leather accessories by differentiating themselves on price, but matching competitors on styling, quality, and customer service. The accessible luxury strategy mirrors a focus (or market niche) strategy based on low costs. Coach concentrates on a narrow buyer segment and outcompetes rivals by having lower costs than rivals and thus being able to serve niche members at a lower price. Management believed that new products should be based on market research rather than on designers’ instincts. Coach utilized extensive consumer surveys and focus groups to gain insight in the market, and ultimately a competitive advantage over competition. Coach’s $200-$500 handbags appealed to both middle class consumers who now were able to afford a taste of luxury, as well as affluent consumers with the means to spend $2,000 on a handbag on a regular basis.
They effectively advertise their brand, quality, style and elite products, creating a useful image of confidence, sexiness and desire to its consumers, enticing both the female and male market segment. Knowing the exact approach it needs for the purpose of increasing sales and dominating its market. Victoria’s Secret is cleverly using its marketing tactics to keep its consumers engaged with the company and its products. Not all of the same products are offered in each outlet which will require its consumers to visit the store, review the catalog, interact on its social media and visit its website to stay on top of sales and
Nevertheless, it must “defend” its current market share if not increase it, by maintaining premium quality and develop innovative products. The marketing mix strategies will effectively achieve targeted revenue and profitability in the near future.
All of those factors give a clear idea of how to effectively reach and serve the customer; also, it helps consumers to decide which store the will prefer. Ulta Beauty’s target market is baby boomers, since a lot of their products are related to anti-aging crème. At the same time, since they have drugstore make-up in stock, they attract make-up beginners, who wants to try on make-up, but don’t want to spend a lot of money on it. “Ulta’s sales have risen 82.5% since fiscal 2012 and are expected by analysts to hit $3.8 billion this fiscal year. Nor is Ulta running out of steam: The first quarter of 2015 saw it post its best same-store sales performance in three years, while online sales rose almost 50%” (Wahba, 2015). Even though Sephora has a bigger a customer base and has more stores in general, Ulta is still making a decent amount of money in order for it to stay in business. By doing SWOT analysis of Ulta Beauty, the main strength is that the company offers both high-end and drugstore make-up products
Retailers should never use a “one size fits all” corporate Private Label strategy. Shoppers’ needs should be considered in all category management decisions, including which products to carry, how to shelve, price and promote. Retailers need to be just as strategic about their Private Label brands by:
Tanner and Raymond (2014) describe branding activity as “strategies that are designed to create an image and position in the consumers’ minds” (c.6). When branding messages coincide with its offerings’ characteristics, it establishes consumer trust, and brand strength. For example, when first introducing Dove brand in 1957, by labeling its product as a “beauty cleansing bar . . . [with] ¼ moisturizing cream, that rinses cleaner than soap” (Unilever, 2016), we can see that marketers associated the brand to moisturizing and beauty, and disassociated the brand from common soap. Over the years, this consistent message coinciding with product performance has strengthened the Dove brand. Strong brand equity is derived from consistent, strategic branding that establishes perceived quality and emotional attachment (Entrepreneur, 2016); therefore, consumers are more likely to pay higher prices, as well as purchase new offerings connected to the
Unilever’s Dove is part of the consumer goods company’s many brands which have historically lacked global identity amongst its many products. The lack of global identity resulted in issues such as diverse marketing standards, varied product development, and lack of brand recognition by consumers worldwide. Unilever’s solution to this problem was to group similar product lines under a few recognizable umbrella corporations. This initiative gave birth to the one of the most controversial marketing strategies in the history of business.
Business strategy is the means by which firm’s plans to achieve its goals and objectives. It can also be termed as organization long-term planning. The strategy covers periods between 3-5 years and sometimes longer. Businesses use two major types of strategy, general or generic and competitive strategies. The overall strategy involves strategies of growth, globalization and retrenchment. The competitive advantage includes low pricing, product and customer differentiation. We will look at the business strategy used by Marks and Spenser (Cole, 1997). The company is a British multinational located at Westminster London and specializes in clothes and luxurious food products.
Wiersema, M. T. a. F., 1993. Customer Intimacy and Other Value Disciplines. Harvard Business Review, p. 92.