Global Strategic Management

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Table of Contents

Executive Summary. 3

Introduction. 4

Task 1: Internal and External Analysis. 4

Internal Analysis. 4

Financial and Operational Overview.. 5

Furlough Scheme. 5

Brand Identity and Product Portfolio. 6

Growth-Share Matrix. 7

VRIO Framework Analysis. 8

External Analysis. 9

PESTLE Analysis. 10

Porter’s Five Forces. 11

References. 12

Figure 1 Furlough Scheme. 5

Figure 2 Growth-Share Matrix for Ted Baker. 7

Figure 3 VRIO framework. 8

Figure 4 Pestel Analysis. 10

Figure 5 Porter’s five forces analysis. 11

Executive Summary

This report provides brief insights into Ted Baker’s strategic aspect, including significant observations and some suggestions. The report also involves an internal and external business analysis employing strategic Management tools such as Porter’s Generic Strategies, the Ansoff Matrix, and the BCG Growth-Share Matrix. The two frameworks underscore these values as a well-established brand reputation, commitment to sustainability, threats such as pressure from fast fashion and the need for digital adaptation. Further, the report discusses change management strategies, with a focus on Kotter’s 8-Step Model as a way of dealing with the implementation of the recommended strategies. The aim is to outline a specific and practical plan for 2018-2020 and bring Ted Baker better positioning and more profit on the market. Specifically, recommendations have been made in areas such as further brand differentiation, broadening the online presence, and enhancing sustainability to enhance the company’s market position in the fashion industry.

Introduction

Over the years, Ted Baker evolved from a unique British clothing brand to a company experiencing significant financial and business issues (Peräkylä, 2021). Formerly positioned for its distinctiveness and luxury focus, many problems have emerged in recent years related to the company’s weaknesses at various business model levels, starting with the readiness to respond to emerging new consumer trends, changes in the role of digital platforms, and financial issues (Cox, 2020).

The purchase by Authentic Brands Group (ABG) is a critical aspect that provides a new prospect for the necessary review of Ted Baker to guarantee sustainable long-run stability and prosperity in a competitive operating environment (Grigorescu et al., 2022). This report aims to conduct a strategic analysis of Ted Baker using internal and external analyses to examine the current strategic position and identify potential brand developments. Using the growth-share matrix and Porter’s five forces, this analysis will highlight the strengths and weaknesses of Ted Baker and competitive analysis, the brand position in the global market and other growth possibilities. Industry, regional, and business macro and micro environments should be fully understood to make a strategic decision.

Market evolution has seen various retailing companies face market challenges through innovativeness and diversification, as testified by Amazon, Apple and Coca-Cola retail companies, which are lessons that Ted Baker should learn. The report will conclude with appropriate recommendations specific to Ted Baker’s resources, and issues will be provided to implement the outlined action plan regarding growth across critical areas, operational enhancement, and brand renewal during the next three years. A change management model will also discuss the expected issues and implementation processes of the postulated strategies. Further, it is possible to expose the future perspectives and current weaknesses to make Ted Baker the leader of new billion-dollar brands in the premium fashion sector and compete with worldwide giant brands while providing sustainable development.

Task 1: Internal and External Analysis

Internal Analysis

Ted Baker is a competitor in the British fashion market and faced many internal problems that affected its financial and value positions and efficiency (Jones, 2024). Internal analysis shows some urgent issues in financial management, brand image, and organisational capacities for change, as well as some opportunities that, if appropriately valued and managed, could offer the company a chance to return to its growth trajectory.

Financial and Operational Overview

The problems within Ted Baker have recently escalated regarding the company’s profitability (Eisenberg, 2019). The issue of transparency and internal control has arisen due to companies’ overstating inventory values. The record was inflated and revealed in 2019, which led to a further loss of reputation and damaged investor confidence. Such inefficiencies highlight the necessity of improved financial management (Christopher, 2022). Amazon and Apple compete particularly passionately as the former has always safeguarded its solid financial reporting discipline, and the latter has been enacting a strict financial reporting policy after being sharply criticised by shareholders for carelessness (Moles, 2023). Tactically, Ted Baker has been operating under supply chain management challenges that compound the profitability issue. Due to limited flexibility owing to its conventional retail-oriented format, the organisation fails to meet the new need for digitisation, especially in changing the retail business.

Comparative to an efficient value chain and powerful internet sales, Ted Baker heavily depends on selling through stores, which can be unprofitable during the increase in the preference for internet purchases like those at Amazon. This approach enhances its cost structure, the flexibility of the company’s decision-making, and its capacity to adapt to the changing market environment. However, an operational restructuring is critical to re-establish supply chain management, and digital competence is essential for Ted Baker to return to its competitive status.

Furlough Scheme

The furlough scheme in the UK, which was inducted in March 2020 due to the COVID-19 crisis, also had significant effects on the economy and enterprises. The scheme also offered financial grants to employers. It helps them keep their employees by repaying up to 80% of the wages paid, helping the issue of Layoffs (Mayhew et al., 2020).

Figure 1 Furlough Scheme

(Source: Own illustration)

This support was vital in offsetting increased unemployment, and the impact was especially seen across sectors such as hospitality, retail and travel affected by lockdowns. On the economy, by ensuring incomes are preserved through furloughs, the scheme assisted in preserving consumer spending. Analysis indicates that more than millions of jobs were protected and that the hit was absorbed effectively through the scheme, so things resumed fairly quickly when restrictions were lifted. According to the OBR, total employment was down by 11 million people at the apex of the pandemic due to the furlough scheme (Pope et al., 2020).

Applying the theory gave the businesses a cushion for the first order, and in case of any incubation time, this enabled businesses to sustain during these times. However, the long-term impact varied as some operating companies relied on the scheme as a temporary protection. In contrast, others adapted the operations in the long run as destinations shifted to workplace changes, with flexibility emerging as new models of working from home and office concurrently. However, this scheme also came with very high financial costs, resulting in billions of being spent by the government, especially on wage support, thus increasing the national debt more so when the country relies on borrowing to finance its expenditures.

Brand Identity and Product Portfolio

Ted Baker’s brand communications have become one of its strengths, embracing the brand DNA, which is British and has an artistic touch and flair. However, it says that the organisation has faced many problems in defining its market position as there is a shift of customer focus towards sustainable and reasonably priced products (Cox, 2020). This is so because while the brand presents itself as a Leviatro of sorts of the premium yet affordable market, its unclear message makes it blend in and lose its creditable identity in a manner that brands such as Beats Electronics of Coca-Cola do not.

Growth-Share Matrix

The Growth-Share Matrix was developed by BCG in 1970 and, like the Experience Curve, enabled businesses to segment their business portfolios to plan strategies better properly (Candelo et al., 2019). The four categories are called Stars, Question Marks, Cash Cows, and Dogs, depending on two variables: the rate of market growth and relative market share. The aim was to help decide where to invest most (Star fields) and where not to invest more (Dogs).

Figure 2 BCG Matrix ( Source: Candelo et al., 2019)

For Ted Baker, the matrix can show which product categories or geographic markets need additional resources to be allocated to expand or which should be exited or scaled down( Fairbanks et al., 2018).

Figure 3 Growth-Share Matrix for Ted Baker

(Source: Own illustration)

Using the Growth-Share Matrix, Ted Baker can optimise its resource allocation and make strategic decisions to boost profitability and growth in a competitive market.

VRIO Framework

Jay Barney developed the VRIO Framework, and it was in his 1991 article titled “Firm Resources and Sustained Competitive Advantage published in the Journal of Management”. Originally, it was developed to assess a firm’s internal resources and capabilities for its ability to create a defensible competitive advantage (Lopes et al., 2019). The framework emphasises that for resources to contribute to sustained competitive advantage, they must meet four criteria. The four Ps of marketing is value proposition, which is in line with tangibles, innovation, the immutability of assets and resources, and McKinsey’s organisational structure (Shcherbakov et al., 2021). The VRIO (Value, Rarity, Imitability, Organization) Framework identifies Ted Baker’s strengths and weaknesses regarding the firm’s resources and capabilities.

Figure 4 VRIO framework

(Source: Own illustration)

….

External Analysis

Industry forces are factors beyond the company’s domain that affect organisational operations and business strategies, including economic conditions, configured technologies, legal aspects, and competitors (Teece, 2020). Understanding these factors enables firms to change such strategy where necessary in response to opportunities or threats. Concerning this, for Ted Baker, it is crucial to look externally to capture and adapt to pressures from more fast-fashion-orientated competitors and changes in the customers’ demands or in technologies and environments in which the brand is being sold. From this perspective, the company can monitor the environment to adapt quickly to the influences, thus enabling it to adjust its product portfolio, selling strategy and business processes to ensure growth.

PESTLE Analysis

PESTLE analysis is a business analysis tool focusing on the political, economic, sociological, technological, legal, and environmental factors affecting organisations. PESTLE business environment analysis tool was first defined by Francis Aguilar in 1967. Since then, it has become a powerful asset when considering factors beyond an organisation’s control that can impact its business and development (Çitilci et al., 2020). The use of PESTLE is necessary given the nature of the UK fashion industry, which tends to be volatile in trade policies, consumer behaviour, and technologies.

Figure 5 Pestel Analysis

(Source: Own illustration)

Porter’s Five Forces

Porter’s Five Forces is a framework to assess industry competitiveness by analysing five factors: the hazard of rivalry among existing competitors, the threat of entry into the industry, the threat of suppliers’ power, the danger of buyers’ power, and the threat of product substitution. The original model was developed in 1979 by Michael Porter; it analyses industry to dare determine who holds the power, enabling businesses to evaluate the industry attractiveness of the environment and make strategic choices (Zimmerman et al., 2017). For Ted Baker, the environment populated in the UK fashion industry is particularly competitive and driven by digital trends, wherein Porter’s Five Forces provides efficiency. It enables the brand to monitor challenges from the competitors and customer demands that must be met to retain business and make proper changes to increase its value to the customers.

Figure 6 Porter’s five forces analysis

(Source: Own illustration)

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Cox, M., 2020. The business case for love: How companies get bragged about today. Springer Nature.

Çitilci, T. and Akbalık, M., 2020. The importance of PESTEL analysis for environmental scanning process. In Handbook of research on decision-making techniques in financial marketing (pp. 336-357). IGI Global.

Candelo, E. and Candelo, E., 2019. Marketing progress: A never-ending story. In Marketing innovations in the automotive industry: Meeting the challenges of the digital age (pp. 67-78). Springer International Publishing.

Christopher, M., 2022. Logistics and supply chain management. Pearson Uk.

Eisenberg, P., 2019. Financial Analysis of Primark Stores Ltd. with regard to a Stock Exchange Floatation (IPO). International Journal of Management, 7(1), pp.91-112.

Fairbanks, S. and Buchko, A., 2018. The strategic market portfolio matrix tool. In Performance-based strategy (pp. 101-119). Emerald Publishing Limited.

Grigorescu, A. and Ion, A.E., 2022. Qualitative analysis of sustainability and innovation within the luxury business sector. Journal of the knowledge economy, 13(4), pp.3150-3171.

Jones, P., 2024. Sustainability and the UK’s Leading Clothing Retailers. Athens Journal of Business and Economics.

Lopes da Costa, R., Geraldes, R. and Geraldes, J., 2019. VRIO: Static or dynamic?. Proceedings of the 2019 European Academy of Management:(EURAM 2019).

Mayhew, K. and Anand, P., 2020. COVID-19 and the UK labour market. Oxford Review of Economic Policy, 36(Supplement_1), pp.S215-S224.

Moll, L., 2023. A Financial Analysis of Accounting through Case Studies.

Peräkylä, E., 2021. ” Wear your greens”: Ted Baker’s allusive humor in fashion marketing in Instagram (Master’s thesis, Itä-Suomen yliopisto).

Pope, T., Dalton, G. and Tetlow, G., 2020. The coronavirus Job retention scheme. Institute for Government, 22.

Shcherbakov, V. and Silkina, G., 2021. Supply chain management open innovation: Virtual integration in the network logistics system. Journal of Open Innovation: Technology, Market, and Complexity, 7(1), p.54.

Teece, D.J., 2020. Fundamental issues in strategy: Time to reassess. Strategic Management Review, 1(1), pp.103-144.

Zimmerman, A. and Blythe, J., 2017. Business to business marketing management: A global perspective. Routledge.

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