Task 1: Situation Analysis
Office is a high end market retail chain of shops that deals with shoes. The shop dates back in 1981 when it was founded in London in the shopping Mecca. The retail shop did not take long to establish itself in the market that was no so competitive back then and after just 3 years of trading, it opened its first stand alone Office store. The store was located on Kings Road which is indicated among the top shopping destination in London. This formed the foundation of what would become an international retail chain with several other affiliates key among them being Offspring (sports wear), Poste (men’s footwear boutique) and Poste Mistress (Ladies footwear boutique). The retail chain expanded its operations to Emerald Isle between 2004 and 2010 and has a total of 91 stores in UK and Ireland with concessions in New York City, Chicago and Las Vegas.
Office has made tremendous strides in a quite competitive market and it doesn’t seem to slow down any time soon. The acquisition of the retail chain by Silverfleet Capital which specializes in mid market buyouts opened a third phase for the retail chain. Having been bought by Sir Tom in 2003, the retail shop is expected to grow further under the management of Silverfleet capital. After the buyout one of Silverfleet capital partners Gareth Whiley indicated there will be opening of more stores in UK and overseas (Hall, 2010).
The retail chain stands at a strong financial position especially after the acquisition of Silverfleet. Not only does it give the retailer a bigger financial capacity but it also provides more expertise which essential in the current market. Under porters five forces model the only challenge is competitive rivalry. The model assumes that the competitive power of a business is determined by five main forces which are supplier power, competitive rivalry, buyer power, threat of new entry and threat of substitution (Manktelow, 2012). Though the high end shoe market is a new phenomenon, Office is not rated among the top 10 retail stores in London (Dorran, 2011). The buyers’ power is quite high while the supplier power is able to meet the demand. Being an already established business, Office does not consider new entry as a major threat. The threat of substitution is quite high; however this threat is solved by the creation of a brand name and customer loyalty. It is important to note that the strength of these forces means that Office cannot use prices as a competitive tool (Hill & Jones, 2008).
Task 2: Goals & Objective
The shoe fashion is an emerging trend in the UK and has the potential to grow and become a major trend in the near future. Therefore the main goal of the retail chain is more growth. This is in agreement with Silverfleet capital partner Gareth Whiley who indicated that after the acquisition, Silverfleet would expand the number of stores both in the UK and oversees (Hall, 2010). Silverfleet’s presence in a number of countries poses a great potential which Office can exploit. The success of concessions in USA also indicates a potential opportunity which Office should take advantage of and expands its stores number.
Under the leadership of Sir Tom, the retail chain grew from a simple 23 store retailer chain to a 75 store dominant UK fashion footwear retail chain. The revenues of the retail chain also grew tremendously to the £146m mark indicating tremendous growth. The acquisition by silverfleet which has over £600m of investment money at their disposal forms the next phase of development. The retail chain should take advantage of the emerging trend and open concessions such as the Selfridges concessions. The goal should be to open 50 new stores in UK and Ireland and 5 stores in other European countries where Silverfleet has its operations.
Task 3: Target Market
Market segmentation is long and complex process as it involves various variables which may be a source of segmentation which also have subdivisions. Retail fashion market can be segmented into broad categories which have subdivisions. These segments include; gender related segments, age related segments, geographic segments, behavior rel
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