Strategic Report For Moss Bros Group Plc

Background

The story of Moss Bros. Group PLC can be seen as inspirational as well as influential to the budding entrepreneurs. An institution which grew from just one single stall at Covent Garden in the year 1851, at the very present has over 129 stores around the United Kingdom which facilitates quality tailoring solutions to men(Selby, 2017). The company which was pivotal in providing the Officers Uniform during the WW1 & 2 has been quick in adapting to the changing trends in fashion (Ross, 2017). Mos Bros is an aspirational company and wants to become the first choice for Men’s tailoring. The aspirations of the company are based on its three most important strategic goals, developing and growing the brand, ability to achieve complete Omni channel capability and to consistently provide an outstanding customer experience to all(Bos, 2018).

Over the last couple of years, Mos Bros. has consolidated its position and has outsmarted any of the existing competition. The company has developed capabilities and expanded into store estate, growth in online capabilities and the development and repositioning of the Mos Bros. product offering (Matheson, 2015). The company stands right next to the likes of luxury brands such as DKNY, French Connection, Canali, Zegna and many others. Mos Bros. is extremely popular amongst the grooms, families and friends (Shrimpton, 2014).

The purpose of the report here is to provide a strategic report to the CEO of the business organization. The report will entail the 3 key strategic issues which are facing the organization, understanding the resources and the capabilities of the organization along with its USP. Along with this, a critical analysis of the organizations competitive strategy will be conduct and its impact on managing the strategic issues of the organization. A set of recommendation will follow in the end to alleviate the strategic issues at hand.

Despite the fact that Mos Bros. is showing solidarity in its growth, there are certain strategic issues which the company has to focus upon:

• Integration of Online activities into offline store.
• Community Building
• Increased use of technology to scale up its operations.

The section will now analyse, how these issues are of strategic importance to the organization and needs to be assessed at the earliest to ensure sustainability in the business model.

PESTLE analysis is a strategic tool used for analysing the macro environmental factors which might have an impact over the business organization. The strategic tool is used to assess the impact of Political, economic, socio-cultural, technological, legal and environmental factors over the business organization.

(Source: Nixon, 2016)

Thus, the PESTLE analysis points towards two strategic issues which are:

• Impact of Brexit and the falling value of Pound.
• Need for better integration to provide the best in store and web experience to the customers.

Porter 5 forces are a popular strategic framework which helps in determining the attractiveness and the profitability of the industry on the basis of study of the market forces. The five tool framework is used by the organization to assess the impact of the strong and weak forces on the business organization.

Thus the critical analysis of the Porter 5 forces model reflects that the organization has to sustain its position of competitive advantage to maintain its profitability. In order to do so, the firm has to bring a lot of differentiation and follow the current trends in the market.

Strategic Issues

SWOT analysis is a micro-environmental analysis which helps in identifying the strength and weakness which are internal to the organization. It also gives an indication of the opportunity and threat which are external to the organization.

• Extremely high level of customer satisfaction.
• Very strong dealer community.
• Extremely strong cash flows.
• Successful record in creation of new product and innovative designing.
• Successful record into integration of various firms in Mos Bros Plc.
• Highly skilled workforce with plenty of experience in the industry.
• The company uses automation to integrate its various activities and expedite its business operations.
• Over 165 years of enriched experience in the industry.
• Fairly strong brand portfolio which also paves the way for the company to diversify its business operations (Roberts, 2014).

• There is an inherent need for the organization to invest heavily in technology in order to invest in other locations and integrate the process across the board.
• The company has not been in a position to manage the challenge posed by smaller players. Due to which the company has lost some of the market share in the niche categories.
• The company is not able to manage its finances properly, and its financial statement is an indication that it can utilize and spend more cash than it is doing at the present.
• The company has consistently failed in its demand forecasting, this leads to lacunae in its sales strategy.
• The product range of Mos Bros. is limited, which implies that there is a good chance that customers might move to other players in the industry (Roberts, 2014).

• Lower Interest rate ensures lower rate of credit to the customers of Mos Bros.
• There has been an increase in consumer spending over the last decade, which is good opportunity for the company.
• New environmental polices ensures a level playing field for all the players in the industry.
• New markets are being opened up showing opportunity for the organization.
• Reducing cost of transportation bring down the cost of shipping, which in turn ensures cheaper products.
• Growth in technology and Usage of CRM can help Mos Bros. build a large and loyal audience base of its customers.
• The company has invested huge sum of money in its online platform, this will definitely be a money spinner for the organization in the coming times (Pinkhasov & Nair, 2014).

• Mos Bros. business model is a physical infrastructure driven supply chain model which has a major threat from the consumer spending on the online channels.
• There can be limited threat after the Paris climate agreement (2016) on some of the existing product categories.
• Demand of the products is seasonal, which impacts the profitability of the organization.
• The cost of raw material is on a high spree, thus affecting the profitability of the business organization.
• The new trend in the economy is pointing towards isolationism; this might impact the international sales of Mos Bros.
• Imitation of the original product and counterfeiting are some of the major threats to Mos Bros (Roberts, 2014).

Thus, using all the strategic tools, some of the identified issues at the hands of Mos Bros. are:

• Usage of technology in its business process and operations to expedite the process and maintain consistency across the board.
• Usage and growth of online platform into an online channel of sales.
• Focus should be on building a strong loyal customer base, preferably a storing community (Atkinson, O’hara & Sturgeon, 2014).

The section here will focus about the industry and its critical success factors, unique resources and unique capabilities linking to its advantage.

Mos Bros operates in the Clothing retail and hire industry and makes most of its revenue via retail and online channel, however there is most definitely a requirement for the company to up its online sales.  The clothing apparel and footwear market in the UK has been showing solid growth over the last 5-6 years. It is expected that by end of the year 2018, the industry will be inching towards the mark of GBP 62 Billion. The sales are dominated by women, whereas men account for only half of the purchase made by the women (Castelli & Sianesi, 2015).

The industry in itself has a lot of big players such as Primark, Next, New Look, Mos Bros and other online shops such as the ASOS. It has been estimated that majority of the sales will be dominated by the online stores and the retail stores will take a backseat. But this does not necessarily mean that the UK customers are not inclined towards physical stores, and almost 66.3% of the population shops offline. The industry though can be seen struggling with reducing margins due to the growth in online stores. The need of the hour is to provide a seamless integration between the offline and the online channels. The focus should rely on providing the in-store experience to the clients, exclusive deals and build loyalty with them (Chan, Ngai & Moon, 2017).

Critical success factors are extremely important while identifying the element needed for the success of the industry, project or an organization. The Critical success factors can also be visualized as the factors which are must and should for the success of the business organization. Based on the understanding of the industry and secondary study, some of the CSF identified is:

• Unique brand positioning and the products have to be exclusive to the extent that they are available only at the store or company’s online channel (Macchion et. al., 2015).
• For many customers the in store shopping experience counts the most, thus it is one of the most important CSF for the industry.
• Perfect demands and sales forecasting with the objective of inventory control.
• Build a personal touch with its customers.
• Focus on the technology and the supply chain.
• Sustainability and innovation.
• Seamless experience on offline and online channels.

Some of the resources unique to the group which has made it possible for Mos Bros to post strong profits are its physical, human and financial resources which it has accumulated over the period of time.

Human Resources-The Company has a staff which has great number of years in the industry. Moreover, the staffs at the store value the company and have a long term relationship and association with the brand.

Physical Resources-In terms of physical resources Mos Bros has a number of fine stores across the UK. The company’s stores are luxurious and poignant in appeal, and are providers of excellent customer services.

Financial Resources-The Company has an experience of over 165 years and has accumulated a lot of funds. It earned revenue of GBP 112 in the year 2016, and the company keeps some of its funds aside for infrastructural improvement, digital platform and diversification (Paras, Pal & Ekwall, 2018).

PESTLE Analysis

As mentioned and identified above the unique resources and capabilities of the organization, these are the prime elements in contributing the success of the business organization. Mos Bros has a good technical know-how, spending its money in the right direction, special focus on the in store experience, employee motivation and empowerment, all these elements are pivotal in creating a sustained competitive advantage for the company. The only need is to stay focussed on the threats and create strategies to overturn them.

This section will assess the extent to which the competitive strategy of the organization will help in addressing its strategic issues and to suggest any improvements if any;

As mentioned in the earlier section Mos Bros does not operates in an industry which has significant impact on the environment. The process and the activities of Mos Bros are in sync with the environmental policy of the country, and it does not have any negative implication on the environment. Also, the organization is committed to facilitate if need be, to ensure a healthy environment for all. Thus, the strategies issues identified in the case has nothing to do with the environmental bit, hence the company can focus on tackling the issues.

Business organization has a responsibility towards its stakeholders, which is to maximize their investments and provide them a good Return on Investments. The organization has always ensured that it builds a relationship of trust and faith with the shareholders and involves them whenever required.  The company in its tenure of over 165 years have raised sufficient capital for its business operations and its diversification strategy (Marcella & Rowley, 2015).

Feasibility here will discuss about the strategic issues and how these issues can be resolved by the financial, human and physical resources of the business organization. For instance the company is already spending money towards its digital thinking, and how it can provide a seamless experience to the customers, thus the strategy is on the path of resolving the issue. The second issue here is that the need of the hour is to build a strong community both online and offline for Mos Bros. In order to do that the company is exploring its options of loyalty programs and using CRM at its disposal. The vision of the leadership is progressive, and it further wants to expand its manufacturing line and improve its supply chain ecosystem. In order to do this, the organization has to put up a pedestal on the tech innovation.

Despite the efforts of Mos Bros which are in the direction of improving the current state of the company, and focus on achieving the goals of business sustainability. It does make sense to clearly identify the improvement in the present strategy and feasibility

Retail in the next few years will be under great depression, especially owing to the growth and sales from the online channels. It will get difficult for the brands to get the customers in the store; this is valid even for the high end luxury brands. Additionally, there will be price wars, which would further make the online channel more attractive. Thus, in order to stay away from the threat of online channels and keep its competitive advantage, MOs Bros have to focus on providing a delighted in store customer experience.  This can be ensured by the virtue of providing uniformity in terms of products and service on both the online and offline channels. A streamline integration of both the online and offline activity will help in solving the strategic issue as identified with Mos Bros.

Porter 5 Forces

It is a known fact that the cost incurred towards acquiring new customers is always higher than the amount incurred in retaining the customers. Thus, it is extremely important for Mos Bros to engage in the act of community building by providing customized deals to its loyal customers, loyalty card, engaging them on social media platforms, request for feedback, and ask them about their choices and many more. All this activity will ensure a loyalty of the customers towards the brand, which will then promote the organization among their circles. This will help in reducing the costs of the organization, and it can be then passed onto the end customers.

Conclusion

Mos Bros is 165 year old Clothing retail and Hire brand which is also known for providing uniforms in WW1 and 2. The company which is based out of the UK has been doing fairly well, but it still has to work towards improving its revenue and profit margins.  The organization has to also ensure that it provides for a seamless integration between the online efforts of the company to pull the customers to its store. The ability of the organization to focus on its supply chain tools, technology and online integration will help in reducing the cost of production, whilst provide a great in –store experience to the customers.

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