SECTION 1: MISSION and VISION 1.1. Write a mission and a vision statement for ASOS lc. !o" "ill t#ese statements s$%%ort t#e develo%ment of s$staina&le com%etitive advantage' ASOS lc.
ASOS Plc. is an online fashion and beauty company located in ritish. !he store has its head"uarters located in #ondon. ASOS Plc. is $ell %no$n for retailing $omens$ear& mens$ear& foot$ear& accessories& 'e$ellery and beauty products. !he company has online $ebsites targeting different mar%ets in different countries li%e the ()& Australia& (SA& *rance& +ermany& Spain& ,ussia& -taly and China. !he target audience for ASOS is young adults. !he firm sells oer /0 brands of clothing and accessories $ithin a year. !oday& ASOS sales hae declined because of increased competition from online retailers $ho are offering same products at a cheaper price. As a result& the company is facing the challenge of reiing its sales bac% to normal. Mission
Our mission is to build a family of the $orlds best and uni"ue fashion retail brands proiding appealing& cost effectie and innoatie customer e3periences that drie lasting loyalty. Vision
Our ision is to be uniersally recogni4ed as the mar%et leader in fashion and beauty brands that proide gro$th opportunities for the firm and its employees. 5o$ $ill these statements support the deelopment of sustainable competitie adantage6
Strategic Management Analysis 7 An organi4ation mission e3plains the reason for e3istence by reflecting on the alues and beliefs of the top managers operating the organi4ation. A good mission statement is important because it inspires employees as $ell as proiding focus and direction. On the other hand& ision statement proides the picture of the company in future. !he importance of ision statement is to proide inspiration by proiding a frame$or% for strategic planning. -n the conte3t of ASOS Plc& the company needs the aboe stated mission and ision statements in order to improe its operations by oercoming the recent challenges. ASOS Plc mission and ision statements support the deelopment of sustainable competitie adantage in seeral $ays. Sustainable competitie adantage refers to the edge a company holds oer competitors. -n order to remain profitable& this edge must be sustained in long run. According to the Porter8s +eneric Strategies model& a company has three uni"ue strategies for gaining competitie adantage. !he three aailable strategies that ASOS Plc can utili4e to gain competitie adantage in the mar%et are cost leadership& differentiation and focus. !he set mission and ision of ASOS Plc clearly supports the deelopment of sustainable competitie adantage in seeral $ays. !he first one is adocating for product differentiation. !he mission of ASOS Plc supports differentiation strategy by encouraging the company to proide the best and uni"ue fashion retail brands. -n order to achiee this& the retail brands should be different from the ones from competitors. According to Philip )otler& differentiation occurs through manipulation of product characteristics li%e performance& style& design& consistency& durability& reliability& or reparability. !he mission statement of ASOS Plc supports the manipulation of the company products $ith the aim of ma%ing them uni"ue and best. !his is important because it $ill help the company oercome competition to become the leader in retailing fashion and beauty brands all oer the $orld. *rom the case study& it is clear that ASOS Plc sales hae declined because of increased
Strategic Management Analysis 9 competition. -n order to $ithstand this challenge and increase sales& the company should use the aboe mission statement and rebrand the products through differentiation. Differentiating the company products by adding more uni"ue features $ill proide an edge in the mar%et. !he second $ay the mission and ision statement of ASOS Plc is supporting deelopment of sustainable competitie adantage is encouraging innoation. Product innoation plays a %ey role in maintaining competitie adantage. !he mission of ASOS Plc re"uires the company to deelop innoatie products. Deeloping innoatie products $ill help the company sustain competitie adantage by ensuring the products are aluable to consumers. -nnoation $ill also help ASOS Plc deelop products that cannot be easily obtained apart from the company stores. :hile putting innoation into consideration& the company should ensure that the products cannot be easily imitated by competitors in maintain competitie edge. !his is clearly supported in the mission of the company $hich highlights innoation as one of the pillars to succeed in building lasting loyalty from customers. !he ision of the company supports deelopment of sustainable competitie adantage by proiding inspiration to the employees. One of the elements in the ision statement of ASOS Plc is to be uniersally recogni4ed as the mar%et leader in fashion and beauty brands. !his statement proides inspiration to the organi4ation employees and the management team to $or% hard to$ards the achieement of organi4ational goals. !he ision statement proides motiation to employees by proiding a future target. As a result& employees $ill $or% hard to ensure the company achiees its target in future as the mar%et leader in fashion and beauty brands. !he $ill ensure sustainable competitie adantage by promoting consistency and creatiity among the employees. -n addition& the ision statement clearly motiates employees by proiding an opportunity for them to gro$ together $ith the compan y. *rom the ision statement& if the
Strategic Management Analysis 0 company is able to sustain competitie adantage and increase profitability employees $ill get re$ards. !he mission statement also supports sustainable competitie adantage by encouraging the company to use Porter8s +eneric Strategy on cost leadership. !here is an element in the mission statement that re"uires the company to be cost e ffectie. !his element re"uires the company set prices that are effectie. !his can be ach ieed by setting them slightly lo$er than competitors in order to ensure sustainable competitie adantage.
Strategic Management Analysis ;
SECTION (: SCENA)IOS AN* IN*+ST), ANA-,SIS (.(. y em%loying relevant data from t#e case/ cond$ct a five forces analysis of t#e fas#ion Ind$stry. W#at do yo$ concl$de a&o$t t#at ind$stry0s attractiveness' orter0s five forces analysis
!he fashion industry has gro$n to become one of the most competitie retail landscapes in the 21st century. !he industry us characteri4ed by relatiely high number of brands that are similar. !he $orst scenario is that the mar%et has gro$n densely populated despite entry of ne$ brands that are attractie. *rom the ASOS Plc case study& it is clear that the fashion retail mar%et is affected by seeral factors namely the global economy& rise of the digital& technology& and demand for fast fashion. -n this era& po$er is in the hands of consumers hence retailers li%e ASOS Plc are crafting brands that create be tter consumer e3perience in order to maintain competitie adantage. !he fie main forces influencing the fashion mar%et can be e3plained using the Porters fie forces. According to Porter an industrys nature and degree of competition depends on fie forces. !hese forces are threat of ne$ entrants& bargaining po$er of buyers& bargaining po$er of suppliers& threat of substitutes and competition among current rials.
Strategic Management Analysis <
Analysis of +nited ingdom 2as#ion Ind$stry $sing orter0s five forces
-n 210& the () fashion mar%et $as one of the most penetrated mar%ets in online retail enironment globally. As the other countries $here contemplating in the $or%ing of online fashion stores& () $as building something to attract more customers from different parts of the $orld. -n 217& 19.7= of apparel and foot$ear sales in () $ere online. :hen online retailing $as introduced in ()& some retailers had origin from bric%s>and>mortar $hile other entered the platform as ne$ retailers. !he online fashion mar%et has continued to gro$ in () because of entry of ne$ retailers and customers $ho are $illing to p urchase their products online. T#reats of Ne" Entrants 3-o"4
-n almost eery industry& there is the threat of ne$ entrants. -n Porters fie forces the threat of ne$ entrants usually refers to the possibility of ne$ competitors entering the mar%et to compete $ith preailing competitors in an industry. According to Porter& a profitable industry
Strategic Management Analysis / tends to attract more competitors $ho are determined to gain substantial profits ?:alder& 212& p.0@. -n the fashion industry& the threat of ne$ entrants is mainly a $ea% force. !he fashion industry is densely populated and ne$ brands need significant leel of differentiation in order to find success. 5o$eer& brands find their uni"ue $ays to gro$ ne$ brands. According to the ASOS Plc case study& the fashion industry in () is ery saturated $ith brands such as NB!& oohoo& Missguided& Net>a>Porter& my>$ardrobe and !opshop. As a result& ne$ entrants do not pose enough threats to the e3isting companies. -n addition& the high cost of establishing an online fashion store in () deters ne$ entrants from entering the mar%et. !his is a clear indication that ne$ entrants in the () fashion mar%et do not hae significant po$er to compete $ith e3isting firms. ASOS Plc does not face the challenge of ne$ entrants but e3isting competitors $ho are becoming stronger daily. T#reat of S$&stit$te rod$cts 3!ig#4
Substitutes are products possessing "ualities that are highly comparable to the original products. -n most cases& the threat of substitutes mainly originates from inside the industry. :ith intense competition& no brand is assured success in maintaining high number of sales. !his is because despite the products being similar consumers can substitute $ith other products. !he fashion industry in () has substitutes originating from $ithin the industry. *rom the ASOS Plc case study& the threat of substitutes in the () fashion industry is high. ery fashion brand in the () mar%et has numerous competitors and the space continues to decrease. *rom the high end up to the lo$ end segment& different fashion brands hae po pulated the () fashion landscape. Despite clothes lac%ing substitutes& customers can substitute the brands $ith
Strategic Management Analysis other similar brands. *or e3ample those $ho canno t afford lu3ury fashion brands can substitute $ith brands that are aailable at lo$er prices. As a result& ASOS Plc faces high threat of substitutes from brands $ithin the industry since consumers can substitute the company products $ith those ones from competitors. argaining o"er of S$%%liers 3!ig#4
-n almost eery industry& suppliers are considered po$erful if their releant products are highly differentiated or if the supplier ma%es it hard for for$ard integration. -n addition& if the mar%et is dominated by fe$ suppliers then the suppliers are po$erful because the s$itching cost to another supplier is ery high. *rom the ASOS Plc case study& suppliers hae no significant force in the fashion industry. Suppliers are po$erful $hen the ra$ materials supplied are scarce. -n the () fashion industry& suppliers entail endors proiding ra$ materials li%e cotton $hich act as ra$ material for apparels. !he mar%et is characteri4ed by fe$ suppliers resulting to high cost of ra$ materials. Most suppliers in the () fashion industry use traditional approaches $hich increases the cost of products ?)arra& 2/& p.2<@. !he ASOS Plc case study sho$s that suppliers hae high bargaining po$er in the () fashion industry. As a result& ASOS Plc faces the problem of increased cost of ra$ materials. )ivalry among E5isting Com%etitors 3!ig#4
!he leel of competition in an industry is greatly determined by the number of competitors. !he fashion industry is %no$n for its intense rialry because of many retailers $ith similar brands. !he aailability of brands $ith similar offering renders the competitie rialry intense.
Strategic Management Analysis 1 *rom the ASOS Plc case study& () fashion industry is characteri4ed by large number of big players li%e ASOS& NB!& oohoo& Missguided& Net>a>Porter& my>$ardrobe and !opshop. !hese companies hae formed a formidable brand image $ith impressie product line targeting young adults. As a result& the leel of competitie rialry bet$een these firms is high. !he competition bet$een these firms has had great impact in the () fashion industry. !he leaders in the industry hae formulated and differentiated their products to attract customers. *rom the case study it is clear that ,ialry among 3isting Competitors has played a %ey role in the do$n fall of ASOS Plc. -ncreased competition in () has forced ASOS Plc to e3pand its operations to other counties li%e china. argaining o"er of $yers 3!ig#4
According to Porter ?2/& p. 19>191@& the po$er of a buyer is al$ays high in three conditions namely if the buyer can purchase large olumes& there are seeral alternatie firms to purchase from& and if the s$itch costs are fe$. *rom the ASOS Plc case study& it is clear that () fashion mar%et is characteri4ed by large number of competitors. !he presence of many competitors offering similar products puts buyers in the driing seat because they hae seeral brands to select from. *ashion brands are competing to attract and retain customers hence increase in mar%eting. Companies hae started to proide discounts and other promotional gifts in order to attract and build customer loyalty. As a result& consumers in the () fashion mar%et hae high bargaining po$er. Ind$stry attractiveness
!he () fashion industry has become one of the most penetrated online retail mar%ets globally. !he industry is gro$ing steadily ma%ing it attractie. () fashion industry can be
Strategic Management Analysis 11 considered attractie based on Porters fie forces analysis $hich sho$s fashion companies en'oy lo$ bargaining po$er of suppliers and lo$ threat for ne$ entrants. 5o$eer& the threat of substitutes& bargaining po$er and competitie rialry can be detrimental to the companies.
