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Essay: Blacks leisure group

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  • Published: 15 June 2012*
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  • Words: 2,073 (approx)
  • Number of pages: 9 (approx)

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Introduction

Blacks Leisure Group founded in 1861, Blacks Leisure Group leading retail of clothing and camping equipment in United Kingdom, Channel Isles and Ireland. Blacks Leisure tries to get sustainable competitive advantage. Freespirit and O’Neill are also making loss. Blacks already started 18 month turnaround plan in early 2008. Blacks Leisure is very large brand name which helps to gain sustainable competitive advantage. Blacks try to improve the product offering, expand their services. Blacks want to go cost efficient manner distribution likewise online company. If Black Leisure wants to sustain in competitive advantage, need to change their strategy.

Blacks now focus on five key operations. First Blacks try to reduce central overheads as much as possible. Secondly, optimisation of store costs of Blacks. Thirdly, Blacks can reduce range by stock clearing promotion. Forth, blacks try to improve retail standards and finally, introduce new store format in blacks.

 

PEST

Political Factor

With the globalization of the market its effect cannot be avoided. Globalization may bring about challenges as well as opportunities for Blacks groups. It will have to compete on a global scale and be capable of sourcing good quality products from around the world while taking consideration a financially viable cost. There are vast opportunities that can be tapped as well. Blacks can expand and explore new markets through joint ventures or partnership, although currently it does not have such plans.

Blacks continuously loose margin of profit because of taxation policy. Government gradually increase taxes like VAT, service tax as well as council other taxes in UK which is directly affect blacks sales and company growth.

Economical Factor

Economic instability in business world which is directly affects blacks strategy. Fluctuation in interest rates and business require more fund which is directly create financial risk in blacks. Transaction exposure resulting from purchases in foreign currencies may be hedged by forward foreign currency transaction and currency option. Blacks group’s policy aim to minimise any exposure with the intention of protecting the buying margin from fluctuation in the value of foreign currency. The recession and credit crunch may a dual impact on blacks. The credit crunch will have a direct impact on the bank as it will limit it ability to provide credit especially. The economic environment directly affect blacks group. Unemployment level, rate of interest, consumer debt levels, availability of credit and may other factor influence customer spending decision.

Social Factor

Social factor is most important factor for blacks. People are key to achieving the blacks group’s business objectives. Blacks group maintain close consultation with its employee regarding matters likely to affect their interest and is committed to involving them in performance and development. Blacks purchases goods for resale can possible supplier based in the UK and supplier helps to give good quality product and competitive lower price.

Blacks groups aim to give high quality product and service which help to improve customer satisfaction. Blacks can improve performance by practical measures, such as risk assessments, are undertake to ensure that the group’s activities and product do not pose a risk to customer, employees, contractors, sites or equipment. Blacks make a good environment by environment policies and better use of resources. Blacks involve different types of activities which help to generate community.

Technological Factor

Technology ever changing depend on market change. Discoveries and innovation in product which force to implement product in blacks. Retail shopping trend continuous in couple of years but many difference also come out like store design and display. Store design and display is more important for blacks. Blacks need key systems that upgrade and on-going investment, to ensure they meet the future needs of the business. The group is dependent upon the availability and integrity of key computer system. Each business must record and process substaintial volumes of data in a timely and accurate manner. The group expects that key system will require continual upgrade and ongoing investment, to ensure they meet the future needs of the business.

 

Industry

Porters five forces

The porter’s five forces are as follows

Threat of rivalry

Blacks needs to worry about this generic force because the leisure industry is highly competitive. Entry barriers are not very high. Additionally, investors have high stakes if they leave. As if this is not enough, capital costs are also strenuous. The overall effect is frequent advertisement battles, product introductions and frequent price battles. In order to stay ahead of it competitors, Blacks needs to become very aggressive. There is very fierce rivalry in this industry and only the most vigilant company garner enough support.

Threats of new entrants

In the leisure industry, it is relatively easy to enter into the industry. The reasons for this is that capital cost requirements are not as high as they are in other industries like aviation. Additionally, patent requirements in the leisure industry are not that high too. This means that Blacks has to be ready for intense competition. The company ought to look for a unique selling point in order to sustain competitive advantage. (Porter, 1985)

Threats of buyers

Owing to the fact that the Leisure industry is highly differentiated, then the company has potential to do well because they can offer their services in a superior manner to their clients. However, it is relatively easy to switch from one leisure company to another, this gives the buyers a higher advantage, Blacks Leisure Group should tackle this moderate buyer strength by offering superior quality products that the consumers cannot reject.

Threats of suppliers

The company operates in an industry segment that has many substitutes for the products consequently, suppliers do into have a lot of bargaining power. One of the actions that the company can make to cope with the threats of suppliers is by teaming up with other leisure groups to be more influential in their respective market.

Threats of substitutes

There are numerous substitutes in the leisure industry. Therefore, Blacks should invest in research to forecast some of this future threats.

Value chain analysis

Inbound logistics; this involves, transportation, material handling material storage, communication, testing and information systems that are related to the supplier. Outbound logistics refer to all the latter that are related to the consumer. Black Leisure Group needs to consider how it can outsource its information systems which can be improve performance here. Marketing and sales technologies; refer to all media, audio and communications involved in selling the product. The company should consider incorporating technological system in service operations. Operations technologies; refer to the process and materials involved in the service offering of the company. Blacks Leisure Group should consider merging some of their business units to sustaining competitive advantage (Thompson & Strickland III, 1992)

 

Market

Marketers consider competition in a different light. However, they define competitors as any company or entity that meet the same consumer need. Consequently, even if the services under consideration may not seem related, they may qualify as competitors. These competitors can be divided d into various categories depending on how closely relate their commodities are.

Taking the example of Blacks Leisure Group, the company cannot ascertain that its only competitors are the ones that offer similar leisure service. While these companies may actually fall in eth same category as Blacks, one cannot under look the diversity of the Leisure industry. Some of the closely related companies include hotels, camping guides and tour operators. However, other leisure products still meet the same consumer need and these include, television show companies, movie companies, video games, music or radio companies, fitness centres, night clubs, casinos, tennis operators and many others. Consequently, it is very advisable for company to shift from defining competitors in a conventional way as the marketing environment has changed. Those companies that seem to come from a totally different industry may end up being the most influential in that respective industry . It is therefore necessary to ensure that one frequently monitors these different competitors because they could take first place.

After identifying all the competitors that fall in the same category, then it is necessary to asses the strategies, objectives and strengths needed to sustain competitive advantage within ones’ domain. (Barney, 1991)

When analysing competition, it is necessary to determine which companies are following the same strategic path as Black Leisure group. The company could look at any of the following items; whether the competitor under consideration has a wide or narrow line compared to Blacks. A larger line always possesses greater competition than a narrower line. On top of that, the company could analyse the manufacturing costs of its competitor, if they have the same costs, then the company ought to watch out for it. This should then be followed by an analysis of service offering. If the company offers a high quality then it is definitely a force worth reckoning. This should be followed by a consideration of the kind of price on offer. Those companies that have the same features as the company under consideration in terms of the latter four factors will fall under the same strategic group.

After doing an analysis of the strategies used by its’ competitors then the company should look out for the objectives of their competitors. Some companies are driven by the need for growing their market share, others place more precedence on increasing their profitability, alternatively, other companies need to be service leaders while others need to develop their technologies. Blacks then needs to look at their competitor’s strengths, this refers to how large their share of the market is, they should also look at the level of support which the company has garnered in terms of support for their products. By examining all the latter issues, Blacks can identify some loopholes among its competitors and establish itself in the market. (Benter and Booms, 1981)

 

Resources

Blacks group make outdoor clothing and equipment brands while The Freespirit and O’Neil stores are aimed at customers with a passion for high adrenaline sports including water and winter sports. These store offer a comprehensive range of iconic brands such as Mambo, O’Neil, Animal, Oakley and Ripcurl. Blacks confuse about target group because blacks do not know there target group.

Blacks have made further progress with development of executive brand product areas through a more focused approach and 10% reduction in options across business. Peter storm clothing range broad ranging as it encompass both outdoor wear and lifestyle product that appeals to the value conscious Millets customer.

The Technical clothing range in blacks continues to perform well, as does the one Earth organic cotton t-shirts range. In 2009 Blacks group is introducing the third generation of the Blacks constellation tent, LED lighting system, the tents are designed to stay cooler by day brighter at night. Blacks group is determined to continue providing customers with product they want.

 

SWOT

Blacks groups Boardware division Freesprit and O’Neil not doing well so company make programme to stores upgrading by converting store broadware to outdoor. Blacks also suffering from the cash and liquidity problem. It can be possible by selling loss making stores and upgrade existing store to attract more customer. Blacks group try to re treat to core product range which will give positive image to customer. Blacks try to liquidate all the slow product so money can generate by this idea and this money can use in rebuild the product range. Blacks need to reduce cost base and try to reduce working capital. O’Neil product range operating loss in boardware division. Blacks try to compete their product range with competitor by introducing change in O’Neil store.

Customer want quality products at competitive prices. Blacks group should continue develop its product to meet customer expectation. Blacks try to make product which is directly depend on weather pattern and product make good quality and competitive prices. Blacks expectation is always high get good quality product in competitive price.

Blacks can reduce margin that reflect the strategic decision to increase promotional activities to drive sales growth. For blacks groups this strategy is more suitable. Blacks can rebuild product by changing their style and fashion trends. Blacks get more encouraging result by giving new to their customer. Blacks can increase liquidity by close the loss making store or loss making store like freespirit and O’Neil product are not satisfied customer needs. Blacks can conduct change in O’Neil strategy to promote more online purchase offer and free home delivery with customer get more satisfaction to buy product of blacks group.

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