Contents

1. Introduction ---------------------------------------------- 7
1.1 PESTEL Analysis ---------------------------------------------- 7
1.2 Poter’s Five Forces Analysis ---------------------------------------------- 10
1.3 Value chain Analysis ---------------------------------------------- 13
1.4 Bowman’s Strategy Clock ---------------------------------------------- 15
1.5 Strategic position of Browns ---------------------------------------------- 16
1.6 Recommendation for future ---------------------------------------------- 19
strategic direction
2. Skills required for strategy roles ---------------------------------------------- 20
References ---------------------------------------------- 23

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1 Introduction
This assignment addresses the required strategic application for browns. This is a 95 year old
family owned sport shoe business. The initial part of the study will examine the key strategic
change introduced by Michael Gordan by the application of various strategic models such as
PESTEL, Five Forces etc. This will extend to a SWOT analysis which facilitates to provide
suggestions for strategic direction using Ansoff matrix. Concluding part of this assignment will
discuss employability skills required for strategic roles available in real world shoe and sport
shoe industry.

1.1 PESTEL Analysis

PESTEL can be defined as a strategic planning tool which evaluates the impact of political,
Economic, Social, Technological, Environmental and Legal factors. This is a strategic
framework which defines the external influences on business.
Table 1: External influences on Browns
(+) Positive effect (-) Negative effect (=) Neutral effect
Dimension Key Attributes

Political(+)  Post Brexit effects.

 Open door policy for FDI.

 Reduction on corporate tax.

Economic(+)  5th largest economy.

 Depreciation of currency.

 Rising inflation.

Socio- Cultural (+)  High life expectancy.

 Increased health concerns.

 Generation Gaps.

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Technological(+)  New trends in technology.

 Proper IT infrastructure.

 R & D initiation.

Environmental(+)  Global climate changes.

 Ethical usage of raw materials.

 Sustainable production.

Legal(+)  Labor Regulations.

 Consumer protection laws.

 Legislation on intellectual property.

United Kingdom is divided into England, Scotland, Wales and Ireland. Currently country
is succumbed to terrorism fear with increased terrorist attack in the region. Moreover the
Brexit has made the prevailing conditions uncertain. Some people believe that the Brexit
is the best option while others express some element of doubt. Open door policy for
foreign direct investments in UK attracts funds for subsectors such as sports, real state,
production and technology. Browns can capitalize on the development of sport activity.
And also government policy to reduction of corporate tax with effect from April 2020
provides further opportunity for Browns to increase its operations more effectively.
UK accounts for 5th largest economy in terms of its nominal GDP. The ranking of its
ease of doing business is country was able to recover fast from early hiccups in 2008
recession. However, economy is growing in a declining rate.
Post Brexit economic effects are yet to be analyzed deeply while the sterling pound
suffers from increasing imports. However increased prices of imported goods never
compensate with wage component. Thus the increased inflation role crossed over the
monetary policy targets of Bank of England. Browns can deploy the opportunities created
from enhanced exchange rate to increase and promote domestic production more.
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UK can be considered as one of biggest consumer market population expands with
increased birth rates and decreased death rates. There is also an increase in age of
population over 65. There is a huge demand to consume promote sports accessories with
increased health concerns. Young segment of the market exhibit switching behavior.
People tend to engage more in sport activities. So there is some increased opportunity to
market sports accessories. And also population aged over 65 is well aware of the brand
of Browns is a facilitating factor to reposition Browns brand in the mind of British
people.
UK accounts for being one of most technologically sound countries in the world. The
businesses as well as consumers are tech savvy and rely hugely on technical appliances.
The firms are unable to survive without adopt into technological infrastructure. The
inherent feature of technology is its changing nature. What is invented today will
become obsolete within overnight. Browns should use the different technology based
business intelligence tools to study various market segments product innovations, market
capitalization, competition influence. Unlike the ancient times Browns should more
focus on IT based Research and Development where consumers are thriving for new
innovations.
With the increased awareness of climate issues people are tend to be more environment
conscious. Environmental friendly programmes initiated by different levels of the society
tend to minimize negative impact. Such initiatives are recycling, reducing carbon foot
print and sustainability movements. Browns as footwear manufactures should consider
their input materials as well as the byproducts they produce during the production of final
outcome. Environment friendly and sustainable initiatives are must for long term
sustainability.
UK inherits strong legal framework in terms of its framework. This legislation follows
different forms such as maternity leave, minimum wage; sick pay and equally act avoid
discrimination. Browns should consider these legal impediments and should make
arrangement to follow these rules to ensure compliance.

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1.2 Porters Five Force Analysis
This is a framework which evaluates the competitive position of an organization. This
depicts five forces which determine the competitive intensity and attractiveness of the
market which can be used to identify areas of strength and to minimize the weaknesses.
Table 2: Five Forces Analysis –Browns
(+) High Impact (-) Low Impact (=) Moderate
Dimension Key Attributes

Potential Entrants (-)  High initial investment.

 Established large players such as Nike, Adidas.

 Patent protected brand images such as B logo.

Threats of substitutes(-)  Casual wear and shoes.

 Declining market trends.

Bargaining power of Buyers(+)  Variety of consumer preferences.

 Less switching cost.

 Necessity of Ecommerce applications.

Bargaining power of suppliers(+)  Rise of global leather prices.

 Declining cattle population in US and India.

 Non leather based raw materials.

Competitive Rivalry(+)  Declining local market share from 30% in 1985 to

4% up-to-date.

 Declining global market share from 8% to 4%.

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High impact Dimensions for Browns
According to Gordan average selling price of 57 pounds is already above Browns
competitors. And also number of established and emerging competitors is high. With the
Browns limited online promotions tech savvy customers tend to draw away from them.
Unlike old days customers are well aware of the quality of the product & prices. And also
the feminine segments in 20s are increasingly participating in sports activities. With vivid
tastes and preferences of various genders and generations the requirements are complex.
Therefore one size fit all models won’t survive. Therefore buyers influence for browns is
high.
New CFO of the company was able to reduce 20% of operating cost retaining the local
manufacturing as well as the quality of the product. However many industries including
fashion require same material for the production process. Nevertheless the suppliers in
developing countries engage in producing the required raw material in large scales. Since
there are many such countries bargaining power is relatively low.
In terms of UK market Browns trails behind the brands Nike, Adidas, Convenes and
Vans. Other emerging brands are New balance, Puma, Onitsuka Tiger, Superga,
Skechers, Lacoste & Fred perry. In terms of online promotions Browns lag behind its
competitors due to its limitation in the area of customization, speed delivery and variety.
In order to remain competitive Browns required to invest more on technological aspect.

Low impact dimensions for Browns

The potential investor should invest huge capital in order to start new sports footwear
business. To remain competitive that firm need to identify the profitable segment which
they can cater will than competitors. This involves high research and development cost.
Finding a profitable segment is also a challenging task since competition with established
entities such as Nike and Adidas is tight. Repositioning of Browns in the title of “As
British as Browns” ensures its core competency factor being purely British for a period of
95 years. This factor further makes new firms unattractive to existing customer.
The footwear products such as Havaunas, Fit flops, Crocs & Bikenstocks for sunny days
or Dr. Martens, Timberlands, uggs & kickens for cold have lost their grounds. And also

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 some feature of sports shoes are copied into formal school shoe as well. In terms of
professionals of sports shoes as well. And also in terms of professionally in athletic
shoes there are no substitutes. As a result, threat of substitute is low.

1.3 Strategic Grouping

Strategic grouping is a concept where group of companies within an industry are
positioned into several strategic groups based on the business model or combination of
strategic attributes.
Figure 1: Position map of sportswear brands in UK market
High Price

TOM FORD

CELINE
CHANNEL

BROWNS

NIKE
ADIDAS
High quality

TOMS CONVERSE
VANS

Low price

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 Above figure elaborate some of the sportswear brands in UK market based on the two
perceptions. X axis represent the quality while Y axis represents the price. According to
Gordon average selling price of £ 57 is above than many of their rivals. The brands such
as Tom Ford, Channel, and Celine lay in the top amounting £ 600 a pair. However they
can cater into small niche market of 0.1%. If Browns can maintain their trend of
operation cost reduction while preserving Quality, Company can easily cater the trainer
segment of 25-34 which accounts for highest purchase rates.

1.4 Value chain Analysis

Value chain is a predefined activities that an organization operating in an industry
perform in order to deliver value added product or service. The concept of value chain is
effectively used as decision support tool.

Table 2: Five Forces Analysis –Browns

Dimension Key Attributes

Inbound Logistics  Manufacture process executed in UK.

 Usage of quality raw materials.

Operations  Reduction of 20% of operation cost.

 Need R & D for process improvements.

Outbound logistics  Reliance on third party retailers.

 Board approval for invest in IT infrastructure which

strengthen the information flow.

Marketing & Sales  Marketing campaign “As British as Browns”.

 Online marketing including social media.

Services  Uninterrupted online service.

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  Facility to obtain customized products.

Procurement  Control of cost of goods acquired from external

sources.

Technology  Slow online delivery.

 Less adaptation to market trends.

 Investments in IT infrastructure.

Human Resource  Replacement of half of most senior employees.

 Hiring of new CEO.

 Experienced staff with less innovation.

Infrastructure  Should facilitate the core activities of the business

Local manufacturing of products by Browns ensure the ethical standards and quality by
the customers. Company should concentrate on reducing production cost while focusing
on changing pattern of demand. Browns had only two retail shops of their own and highly
reliant on third party retailers. Browns should concentrate to deploy effective distribution
channels both in B2B and B2C. Further there should be sound online applications which
cater various customer requirements.
Investments in online promotions are required to reach a massive crowd utilizing the
technology. Celebrity endorsement is vital to growth perspective similar to Nike or
Adidas. In order to increase the brand awareness restructuring of B logo is vital.
Online application should be developed to cater the customization and speedy service.
Since there is lack of creativity and innovation within the workforce changes are required
to restructure the workforce. Browns should identify the gap between required and
existing skill of workforce and to recruit suitable personnel to fill any gap. Browns
should utilize the fresh knowledge acquired through recruited employees and new CFO.

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1.5 Bowman’s Strategy clock
Bowman’s strategy clock is a model that depicts the option for strategic positioning based
on two dimensions namely price and perceived value to the customer. It is invented by
Cliff Bowman and David Faulkner. We hereby analyze how Browns sports footwear
product should be positioned to achieve highest competitive position in British market.
Bowman strategy clock is divided in to 8 quadrants based on the price and perceive value
to the customers.

Figure 2: Bowman’s Strategy Clock

In order to achieve highest competitive position Browns should be placed on position 5.

This is the focused differentiation quadrant. Browns is a pure British brand known as ‘as
British as Browns’. In its glorious history of 95 years Browns has sustained unique
quality while charging a price premium over the rivals. It was the number one trainer
brand worn by sports star to members of royal family. Browns have got uninterrupted
customer loyalty with local manufacturing blended with ethical operation and
sustainability.

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1.6 Strategic position of Browns
In order to summarize the strategic position of the company we use the SWOT analysis.
This technique helps to identify strengths, weaknesses, opportunities and threats related
to Browns Business operations.

Table 3: SWOT Analysis –Browns

STRENTHS WEAKNESSES

 Once the top British name in  Limited online access to clients.

rubber sports shoe, sneakers &
 Unavailability of popular stocks.
trainers.
 Poor research and development.
 95 year old family owned business.
 Failure to exploit the growing
 Local production.
market such as women wear sector.
 Usage of quality material.
 Lack of employee creativity and
 Ethical operations. innovation.

 Third party reliance for distribution

channels.

 Reduction of local and global

market share.

 Lack of customization.

 Lack of concern for core products.

 Less concern for customer feedback.

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 OPPORTUNITIES THREATS

 Growing awareness of healthy and  Face the competition of big

active lifestyle among community.
 High disposable income.
 Support extended by UK government to
reduce obesity rates.
 Legislative provisions which mandate
the sport activities.
players such as Nike and
Adidas.
 Rapid changes in consumer
tastes and preferences.
 Less consumer switching cost.
 Increase of global leather cost.

 24% growth of UK sport footwear  Declining of cattle population in

market. India and US.

 Increase of clothing and footwear

expenditure as a percentage of total
expenditure from 5.4%-5.7%.

 Trend towards wearable technology.

 UK base ethical manufacturing.

 High demand from developed and

emerging markets.

 Local and global fondness for British

brands.

 Demand for second hand 80s model.

 Fashion trend towards unisex clothing.

 Declining of substitute products.

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Browns have achieved the brand image along with its B logo in the mind set of British
people for 95 years. Browns being a purely a British brand focus on quality, comfort and
durability. Good quality raw materials provide unique competitive advantage.
Browns at the peak of its success made a huge investment mistake. Instead of investing in
its core product Browns invested in Sinclar CJ and De Lorean cars. In the downfall of its
market share from 30% to 4% Browns never analyzed the market trends or its root cause.
Although the employees are well experienced they lack innovation or strategic direction.
The limited products offered online were delivered slower and popular sizes were out of
stock. Further company is highly reliant in third party sellers for distribution.
With the increased trend among people relating to concern of health people are moving to
sports sector. Female participation to sports events and gym activities has risen. The
footwear market of UK is also at its peak. With the decreasing trend in substitute the
demand for sportswear is high.
Browns have the opportunity of reaching global market through online application. Tech
savvy approach of business and demanding innovation in sports footwear market is
boosted. Celebrities and public figures demand for more personalized and customized
products. This footwear is sought to cater fashion purposes as well. As a result market
participants embrace celebrity endorsed products. Thus Browns has the potential of
reaching huge online market.
Competitors such as Nike and Adidas adopt high tech innovations and the competition is
very high. Moreover rivals heavily invest in research and development to cater into new
trends in the market. Following conventional methodologies for marketing is a
disadvantage for Browns. Possible shortage of raw material could occur with increasing
concern for nature. Heavy dependent on third party for distribution could prove to be a
great risk. Limited expertise in online application could also become a disadvantage for
the Browns.
Detail analysis of these factors help to identify the factors that are ‘for’ and ‘against’ the
objectives that are planned to achieve in future direction of Browns.

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1.7 Recommendation for future strategic direction
In order to make recommendations we use the tool Ansoff matrix. This can be used as
strategic tool that provide a framework for Browns to devise strategies for future growth.

Table 4: Analysis of Growth Strategies –Browns

Growth Strategy Key Attributes

Market Penetration  Information on market key trends.

 Market intelligence to monitor rival movements.

 Usage of online distribution channels.

Market Development  Explore new market opportunity created by

female segment.

 MOU sign with corporate entities/sports clubs.

 Exploration of emerging markets such as

Indonesia.

Product Development  Investment in Research and Development.

 Obtain patent for new designs.

 Identification of needs of niche markets.

Diversification  Facilitation of customized products through e

commerce application to globalized customers.

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 When considering the trainers Browns could focus on market development. This can be
achieved from effective application of information technology and operations in online
media. Most of the existing modern organizations operated virtually in IT platforms.
Modern consumers are conversant in IT applications. Speedy delivery with customized
application is essential attribute. Active participation of feminine gender is very high. As
a result they seek fitness in parallel with fashion requirements. In order to cater this
Browns should engage more on Research and development. Diversification would be
ideal to through their customized online applications.
Further Browns should limit the reliance on third party for the distribution. The
repositioning of B logo with different market campaign is required to embed it to the
mindset of people. These distribution channels should reach the global emerging markets
and developed markets such as US, Japan, Brazil, India, and Singapore. They can easily
penetrate into existing market in US and China and increase their global market share up
from 2%.
While entering into global markets Browns should consider its operations to be ethical in
the form of eco sportswear developed environment friendly. They can further diversify
some of their products to yoga pants, B logo T shirt etc. However risk of moving away
from core business should be addressed. To increase local and global market share quick
adaptation to changing trend is vital.
Browns should make arrangements to restructure the bureaucratic hierarchy of the
company. Downsize of the staff and creation of flatter organization is essential. The
employees should be vested in strategic direction of the organization. Operation cost
should be reduced and more investments should be deployed to IT infrastructure and R &
D. Adoption of these strategies could create long term success for the company.

2 Strategy related jobs in shoe and sports shoe industry

There are many strategy related jobs in the shoe and sports shoe industry. In order to
obtain the employability there are specific factors that should be considered.(The Balance
Careers, 2019)

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Head of Human Resource
The role of head of Human Resource is to drive the Human Resource team to deliver
effective HR services across the organization. They are responsible for formulation of
Human Resource strategy that assist the objectives of shoe and sport shoe industry. These
strategies should support the line managers to implement their business and operational
strategies. Head of Human resource should act as change agent in four dimensions
namely transformational change, Incremental change, HR vision and HR expertise.
Head of Human Resource of Sport shoe industry should inherit the skill of understanding
the Business or operation strategy and formulate performance drivers to implement the
same. They should also diagnose the root cause of organizational problems and its effect
on performance drivers. Head of HR should formulate action plan in commemorate with
line managers and employees. Further periodical review of policies and practices are
essential.
Head of Marketing
Head of marketing is a key position in shoe and sports shoe industry. Head of marketing
should ensure that customer needs are met while maximizing the profits of a company.
Sound analysis of company objectives, size, structure, industry segment should be
deployed. Main duties include monitoring of industry trends and detailed analysis of
competitor products. Further existing product should be enhanced with augmented
features. Profitable target market should be explored both locally and internationally.
Proper distribution channels should be deployed to reach the target market. More
importantly e commerce facilities should be implemented with the usage of effective
search engine marketing strategies.
Core competencies of Head of Marketing include sound knowledge of wide range of
marketing techniques and concepts, excellent communication abilities, ability to cope
pressure, creative thinking etc. Moreover Head of Marketing should be conversant in
implementing e commerce tools in the company and analysis of market information
received by the same such as customer visits, ratings, preferences and competitor data.

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Chief Operation Officer
Chief Operation Officer is the Head of Operations management function in shoe and
sport shoe industry. They further hold the responsibility in transformation in terms of
people, process and bottom line. Core functional areas can be described as planning,
directing and coordination of activities while reducing unnecessary costs. Chief
Operation officer should consider several facts while transforming company’s mode of
operations. Formulation of proper operations strategy is a must for any organization.
Effectiveness and efficiency in operations should be gauged in line with organizational
corporate strategy. Various elements of business process should be identified and
received by periodic benchmarking and Total quality Management. Work for each
individual should be assigned using structured problem solving and forecasting
techniques.
The scope of Chief Operation Officer of sport shoe industry is complex. The one size fits
all competencies are hard to define. However effective leadership qualities, resource
allocation abilities and ability to adapt into corporate and external environment are
needed.
Head of Research and Development
Head of Research and Development in a shoe and sport shoe industry is a key position
which responsible for utilizing R & D knowledge which yields great value for the
company. In order to achieve this, an environment for R & D knowledge creation should
be designed. Employees’ fear of R & D should be eliminated and R & D culture should
be inculcated among staff. The elements of IT infrastructure such as intranet, application
software, email should be developed. Research and Development database management
is a key tool where authorized employees are eligible to retrieve, share and apply relevant
data when required.
Head of Research and Development should inherit competencies such as leadership
skills, communication skills, result orientation etc. Person who holds this option should
be self-motivated and be able to motivate the fellow team. Strong analytical skills should
be backed by innovation and creativity in the areas of new product development, new
material usage and technology usage.

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References
Ansoff, I., 1965. Corporate Strategy. New York: McGraw-Hill.

Faulkner, D. & Bowman, C., 1995. The Essence of Competitive Strategy. 2nd ed. New
York: Free Press.

Johnson, G., Scholes, K. & Whittington, R., 2008. Exploring Strategy. 8th ed. Harlow:
Financial Times Prentice Hall.

The Balance Careers, (2019) Top 10 Best Job Websites. [online] Available at
<https://www.thebalancecareers.com/top-best-job-websites-2064080.>. [Accessed 6th
April 2019].

Keller, K., 2003. Strategic Brand Management. New York: McGraw-Hill.

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