What is Strategy?

Strategy is the process of creating value to achieve organisation success. This is, in the sense
from a business point of view. However, strategy is not just applied to business all
individuals use strategy to achieve success, whether it’s a successful career, happiness,
wealth, being married to the one you love, having children, seeing the world, being
independent or indeed all of these. All individuals thrive on the aspiration of success in life
and this is what strategy aims to accomplish. Furthermore strategy is the process of creating
value, for example: without the value of intelligence one cannot achieve a successful
academic career. In order to reach ones goal of success, they must have tactics in place to get
there.

Due to this essay focussing on defining strategy and its elements through an organisation, my
definition of what strategy is: ‘is the process of creating value to achieve organisation
success’ not personal success. This being so, organisational success interrelates with personal
success – a successful organisation equals successful employees and vice-versa. A CEO
whose organisation is successful leads to a successful CEO. With this in mind I will progress
to my organisation EziBuy and define strategy and its elements, and the success this company
has had due to their strategic processes.

Mitzberg and Lampel mention the ten schools of thought which capture the elements of
strategy, these are: The design, planning, positioning, entrepreneurial, cognitive, learning,
power, cultural, environmental and configuration schools of thought (Mintzberg & Lampel
1999). I have based my analysis on these schools of thought because they all play important
roles in the success of an organisations strategy and highlighting the important elements that
are involved in the strategy process. To explain strategy all the elements are needed because
“In a tree, the branches are no more or less important than the roots, and the branches on
either side can not be cut off without putting the tree out of balance” (Mintzberg & Lampel
1999, p. 29). You need to look at all the elements to see the bigger picture. All the elements
are intertwined and together are important in strategy.

EziBuy

EziBuy is the largest multi-channel clothing and home décor retailer’s in Australasia. It is one
of the most successful organisations to branch out from New Zealand, due its successful
expansion into the Australian retail industry in 1992 (EziBuy 2007a). EziBuy is a privately
owned New Zealand Company that was established in 1978 by Peter and Gerard Gillespie
(Ezibuy 2007a). Peter saw the success of mail-order companies were having overseas and
saw this as a window of opportunity in the New Zealand market. Decades on EziBuy are a
multi-channel player, supply chain innovator, has one of the largest distribution centres in the
southern hemisphere and ships up to 9,000 parcels daily in the retail industry (EziBuy 2007a).

1
 Our aim is to always deliver a premier multi-channel service that provides outstanding
customer experience, quality and value. The principles of honesty, integrity, trust and
pride are fundamental to all our relationships with customers, suppliers and
colleagues.

Prescriptive

The design, planning and positioning schools are all different elements of strategy. They are
all prescriptive schools of thought and intertwine with each other and with the other schools
of thought (Mintzberg, Ahlstrand & Lampel 2005, p. 369). Prescriptive schools are formed
around conventional and direct ways of thinking, and are known for their sterility due to their
strict application. Important parts of the prescriptive school are designing, planning
objectives, budgets, programs, operating plans and analysis of an organisations position in the
market. These are all important elements in the strategy process and fit, formalise and analyse
whether a strategy will work before committing (Mintzberg & Lampel 1999). The design and
planning school both use SWOT analysis. SWOT is credited to Albert Humphrey in the
1960s and 1970’s, and has been prominent throughout applied marketing strategy. SWOT
considers an organisations internal and external environment. It aims to assess an
organisation’s core strengths in order to capture any external opportunities, while avoiding
threats and addressing any weaknesses (Wang 2007).

EziBuys strengths stem from their goals of growth, cost reduction, efficiency and flexibility
in the retail industry (EziBuy 2010). EziBuys most prominent strength in the Australasian
market is being multi-channel player. They give their customers in the retail sector the chance
to shop either by catalogue, internet, phone, or in-store when purchasing their products. They
offer their customers the value of flexibility so they can, shop when they want and how they
want, which helps reach their goal of flexibility (EziBuy 2007). Secondly, EziBuy’s
extensive investment in IT and innovation helps them reach their goal of reducing costs and
efficiency n ('Innovation award for Ezibuy' 2006). Thirdly, they are committed to growth in
their goals, and have brought Max a woman’s wear chain which has an estimated turnover of
60 million (New Zealand Herald 2008). Finally, EziBuy has made partnerships with investors
that contribute to their success such as: Direct Capital which supported the purchase of Cole
Directs database in Australia, and Catalyst who has extensive experience in the apparel retail
industry (EziBuy 2007b; Direct Capital Directions 2007). These partnerships have also
contributed to growth, flexibility, cost and efficiency goals. Weakness that was apparent at
EziBuy was the mis-communication between suppliers when they mislead the public about a
pashmina scarf in 2007, which was actually cotton and polyester. They were fined $8,500 for
false advertising (Australian competition and consumer commission 2009). This incident
contradicted their objectives of honesty, integrity and trust however, corrective action was
taken and all scarves were refunded. Recognising a weakness is important in strategy, as one
says you learn from your mistakes’ and this is a strategic process that is part of the learning
school of thought (Mintzberg, Ahlstrand & Lampel 2005). Re-examining their
communications with suppliers will help to avoid this mistake again. EziBuy’s opportunities

2
of growth in the retail industry have flourished. They have formed a partnership with Direct
Capital and purchased Cole Directs’ database, to expand to the Australian Market (Capital
Directions 2007). Threats EziBuy may face in the future are other multichannel retail
companies trying to target the Australian and New Zealand Markets. Ezibuy will have to
stand their position by designing and planning around threatening competition from overseas.
Examining a company through the SWOT process helps build company objectives, budgets,
programs, and operating plans. It is the platform for which managers work off in order to plan
and analyse their position (Mintzberg, Ahlstrand & Lampel 2005). Positioning is the last
school of thought in the prescriptive process. This is important to see how organisations are
positioned in comparison to their competitors (Mintzberg, Ahlstrand & Lampel 2005).
EziBuy has positioned themselves as a multichannel retailer and leading innovators in the
retail industry in New Zealand and Australia. This is their key to their success, because
without distinction from other companies, they are prone to imitators. However, distinction
does not last forever (Markides 1999) EziBuy invests extensively in IT and innovation, which
reduces the risk of new competitors coming in with new innovations.

Descriptive

The entrepreneurial and cognitive schools of thought shifted from the prescriptive side of
business to the visionary and broad process that tackles the mysteries of intuition. This school
has moved strategies from dogmatic designed plans and positions, to a creative broad array of
thinking (Mintzberg & Lampel 1999). EziBuys distinctiveness originated from these schools
of thought. Their leaders have looked beyond the traditional way of buying services, and
thought outside of the square. With the steady increase of on-line shopping, EziBuy are
driven to keep ahead in this market. Since the beginning of EziBuy the company has believed
that innovation is critical (EziBuy 2008). This has driven the success of Ezibuy and given
them distinctive capabilities from other retail companies. In 2006 EziBuy won the prestigious
award for innovation in supply chain and distribution technology, which highlighted the
significant contribution EziBuy were making in industry. Their multi-million dollar
distribution centre is the largest in the southern hemisphere. It uses a voice-activated
technology with a extensive conveyer-belt system and delivers more than 9,000 parcels daily
across Australiasia ('Cutting-edge technology in Palmerston North' 2006). This
implementation of the entrepreneurial and cognitive schools of thought is critical to the
success of an organisation. It build’s distinctive capabilities that are unique from other
competitors, and without EziBuys extensive investment in IT and Innovation they would not
stand out or be the successful company they are today (Markides 1999).

The powers, cultural and environmental schools of thought are also the descriptive side of
business strategy. The power school is based around the process of negotiation and leadership
(Mintzberg, Ahlstrand & Lampel 2005). EziBuys power in the market has come from their
co-operation with other organisations and collective strategies with Direct Capital and
Catalyst (EziBuy 2007b; Direct Capital Directions 2007). EziBuy has chosen companies with
the same cultural perspectives, such as an innovative and growth culture. They require

3
partnerships that will evolve to meet the rapid growth in the retail environment (EziBuy
2007b). Ezibuy have recently upgraded their systems with the implementation of SAP which
is a retail software solution. This assist’s the dynamic needs of their customer base, and will
help EziBuy as a business to adapt and grow in the market (SAP 2007). EziBuys successful
turnover that is larger than 160 million reflects the power they have in the market, along with
the successful integration into the Australian market (EziBuy 2007b). Their partnership with
Direct Capital supported the purchase of Coles Myer’s database of two million names that
targeted the same demographic as EziBuy, woman aged 20-45yrs (Direct Capital Directions
2007). This reflects the power of EziBuys partnerships in the negotiation market of business
and also reduces the conflict of EziBuy stealing Cole Myers market share in the catalogue
business. Now Ezibuy has direct access to Cole Myer’s market share which continues
EziBuys plan of growth.

The cultural school of thought is built around anthropology and is about the way companies
do things. It is the social interactions within a business which contribute to the success of a
company (Mintzberg, Ahlstrand & Lampel 2005). EziBuy’s success has been influenced by
this school of thought, where they build their company off customer orientated values and
treat their staff with respect and equality. “The company’s successful evolution over the last
30 years is attributable to the culture and customer service ethos that Peter and Gerard have
built in the business” (EziBuy 2007b). Ezibuy’s approach to their staff is important. They
believe in asking staff for their view no matter what their position or role might be, to solve
problems and generate new ideas (EziBuy 2007b). They have family orientated values where
on their 30th birthday they donated $30,000 worth of clothing to the Salvation Army. EziBuy
stressed the importance of family and its important role in helping people who are less
fortunate (EziBuy 2008).

Environment and Configuration schools of thought are also important in the strategic process.
The Environment is a reactive process that is opportunistic and unpredictable. Configuration
is an adaption and transformative process (Mintzberg, Ahlstrand & Lampel 2005). EziBuy
uses their innovative approach to hinder against unpredictable conditions in the environment
and adapts and transforms with these innovations. EziBuy’s has partnerships with companies
that have the ability to grow with EziBuy (EziBuy 2007b; Direct Capital Directions 2007).
This gives them the opportunity to work with their resources to develop new innovations to
help prepare for the unpredictable environmental changes, and the ability to adapt to new
environments. EziBuy is transitioning from a historical call centre to a multi-channel web
savvy contact centre, the implementation of SAP a retail software solution is contributing to
this success. They are aware of the dynamic ever changing environment and have
acknowledged the impact the internet is having on buyer behaviour (Telecommunications
Users Association of New Zealand 2006).

4
Conclusion

EziBuy’s success lies in the elements of strategy, from integrating the direct and conventional
way of thinking in the prescriptive schools of thought. By applying business models to
design, plan and analyse themselves in the market. To descriptive, that captures the true
essence of EziBuys success. Their vision to grow and think outside the box has given them
distinctive capabilities. EziBuy’s innovative focus, customer and staff culture, partnership
power, awareness of the environment and ability to transform and grow has helped them
become the success they are today.

5
 References
Australian competition and consumer commission 2009 ‘ Ezibuy Limited (New Zealand)’
[online], available: http://www.accc.gov.au/content/index.phtml/itemId/839287
[Accessed 13 March 2010].

Direct Capital Directions 2007, ‘A Real Private Equity Story Direct Capital and EziBuy’
[online], available: http://www.google.co.nz/search?
hl=en&q=a+real+private+equity+story+ezibuy+direct+capital&meta=&aq=f&aqi=&a
ql=&oq=&gs_rfai= [Accessed 13 March 2010].

Cooper, M 2006 ‘Devine Intervention’, Unlimited Inspiring Business [online], 5 Oct,

available: http://unlimited.co.nz/unlimited.nsf/growth/devine-intervention [Accessed
13 March 2010].

'Cutting-edge technology in Palmerston North' 2006, Electrical & Automation Technology,

pp. 24-.

EziBuy 2007, ‘New EziBuy Retail Store Opens In Sylvia Park’, [press release], 28 Jun
available: http://www.scoop.co.nz/stories/BU0706/S00469.htm [Accessed 13 March
2010].

EziBuy 2007a, ‘EziBuy Opens its Doors in Wellington’, [press release], 1 Mar, available:
http://www.scoop.co.nz/stories/BU0703/S00001.htm [Accessed 13 March 2010].

EziBuy 2007b, ‘New Partnership for EziBuy’, [press release], 2 Feb, available:
http://www.google.co.nz/search?hl=en&q=Media+release
%2C+Friday+2+February+2007+EziBuys+press+release&meta=&aq=f&aqi=&aql=
&oq=&gs_rfai= [Accessed 13 March 2010].

EziBuy 2008, ‘EziBuy Celebrates 30 Years’, [press release], 9 June, available:

http://www.scoop.co.nz/stories/BU0806/S00146.htm [Accessed 13 March 2010].

EziBuy 2010, ‘About Us’, [online], available: http://www.EziBuy.co.nz/Information/5009

[Accessed 13 March 2010].

'Innovation award for Ezibuy' 2006, Electrical & Automation Technology, pp. 7-. bth
database.

Markides, CC 1999, 'A Dynamic View of Strategy', Sloan Management Review, vol. 40, no.
3, pp. 55-63.

Mintzberg, H, Ahlstrand, B & Lampel, J 2005, Strategy Safari, Free Press, New york.

Mintzberg, H & Lampel, J 1999, 'Reflecting on the Strategy Process', Sloan Management
Review, vol. 40, no. 3, pp. 21-30.

6
New Zealand Herald 2008, ‘Australia promises Ezi path to higher sales’, 18 Apr, Overview
[online], available: http://www.nzherald.co.nz/news/print.cfm?objectid=10504849
[Accessed 13 March 2010].

SAP 2007, ‘The Right Fit for EziBuy’, [press release], 8 Oct, available:
http://www.scoop.co.nz/stories/SC0710/S00013.htm [Accessed 13 March 2010].

Telecommunications Users Association of New Zealand 2006, ‘EziBuy’, Overview [online],

available: http://www.tuanz.org.nz/content/cc96d62b-cb41-4e7a-a3d6-
780d754103ad.html [Accessed 13 March 2010].

Wang, K 2007, 'A Process View of SWOT Analysis', 51st Annual Meeting of the ISSS2.