The traditional UK high street is being subject to pressures it has never known before.
Retailers both large and small have been closing their doors for the final time. Wellknown names like
BHS, and ToysRUs, major retailers that managed to survive
significant recessions in the 80’s 90’s and 2008, have ceased to trade. The most
evident reason for these closures is the changing shopping habits of consumers in the
UK. As of 2015 the UK was the third largest e-commerce market in the world, with 80%
of internet users doing their shopping online, with estimates of online retail sales of £60
billion in 2016. However, it is not just because consumers are turning to the internet
for purchases, it is also changes in consumer habits and lifestyle that is resulting in the
exodus from the high street. Social media, travel, eating out, and technology itself are
where consumer spending time and money which in the past was time and money
spent on the high street.
It isn’t just high street retailers that are feeling the brunt of the change in consumer
spending and shopping habits. Major UK supermarkets are looking for other retailers
to use the space no longer required in their out of town stores, as the buying behaviour
of shoppers have changed to buying food locally and more frequently, buying the larger
food shop online for collection or delivery if required.
However, it’s not all doom and gloom. There is a small but significantly growing market
segment in the food and beverage industry. Coupled with consumers purchasing their
food shopping locally and more frequently, has been the growing consumer interest in
the quality of the food they consume. The organic food and beverage market has had
significant growth in recent years, which does not appear to be faltering.
For the purposes of the assignment you are a newly appointed strategist for a small
chain of independent health food stores, based in the UK, with a small but growing
domestic and international internet business retailing organic products online, you
realise the business is at a crossroads. Does the business continue the high street
presence albeit in selected towns and cities in the UK, and look to having a physical
presence in international markets, via e.g. franchising, to support online sales? Or,
focus only on online sales and divest the stores currently owned, to invest in the internet
business. In addition to this, some consideration has to be given to the range of
products the business stocks, priding itself in sourcing fresh local organic food,
therefore sourcing, and distribution logistics can be a challenge.
You are asked to provide a report for the senior management team (SMT) which will
answer the following:-
Question 1
a) Distinguish between intended, emergent and realised strategies. Utilising
appropriate business analysis tools, undertake an external and internal
environmental analysis on the organisation (reasonable assumptions can be
made).
b) What major opportunities and threats can you identify for the organisation in the
short to mid-term range? Identify a number of critical success factors for the
organisation.
c) Your organisation has placed great value in the past on customer intimacy (building
and creating value for customers – raising their expectations and delivering on
these – see course notes). Considering the changes in external environment, what
issues do you foresee if you decide to seek growth through international markets?
Could these be overcome?
d) What strengths would you need to have to overcome identified weaknesses? You
will need to justify your use of tools and techniques chosen to undertake this.
(1600 Words)
Question 2
a) Taking a resource based and market based view towards strategy, what would you
be considering when determining whether it would be a good idea for the
organisation to i) increase outlets in UK and/or ii) start establishing outlets
internationally
b) Would any of Mintzberg and Lampel’s Ten Schools of Strategy Formulation offer
any further considerations?
(1200 Words)
