Business Strategy Of Ted Baker Case Study

Introduction of Business Strategy Of Ted Baker Case Study

Business strategy means a strategic initiative which an organization pursue to build value for the company and its stakeholders to attain competitive advantage in the market. The report will state about Ted Baker, a British clothing brand established in 1988. The company offers clothing, aftershaves, accessories and perfumes for both male and female. The presentation will outline PESTLE and SWOT analysis to identify the factors that impact the business. It will also highlight some of recommendation in order to continue trading of business. Further, recommended one best option for successful operation of business.

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Task 1

Pestle analysis

PESTLE analysis aids in identify external factors that directly and indirectly impacts business operations. PESTLE factors of Ted Baker are as under:

1. Political factor: It includes rules and regulation of the government. Changes in regulation of the government directly impact Ted Baker`s operations. For instance, high tax rate of government, leads to increase cost for Ted Baker for doing business, results in affecting prices of products as well as competitiveness of the business.
2. Economic factors: It includes factors such as rate of inflation, interest, exchange and employment. High inflation decline purchasing power of customer correspondingly demands for the Ted Baker products decline, negatively impacts company revenue and profitability (Rudkowski, Robichaud and Gunn, 2024). Also, due to pandemic in 2021, company significantly affected as a result declines revenue 44.2% in retail and ecommerce sale. Company`s UK sale decline by 38.7% (Ted Baker profit/loss worldwide 2011-2022, 2024).
3. Social Factor: Social factors consist demand, preference, cultural trends and demographics. Currently, the customer preference changes as all customer shift towards sustainable and eco-friendly products as a result they prefer to purchase product and services from business that operates in sustainable manner (Baker, 2023). Therefore, it leads to Impact Company to include more sustainable product range to grab attention of wide range of customers.
4. Technological Factor: In the era off digitalization within the fashion industry use of technology increase rapidly. Ted baker focus on using artificial intelligence and other technologies to do business innovative and creative manner. Company use AI tools like machine learning and block chain technology to get real-time consumer insight (Baker, 2023. In addition, the company not uses technology for the purpose of cost-effective marketing as a result it negatively impact the business to gain good customer base in the competitive industry.
5. Environmental Factor: In the new era, environmental concern is the priority of the company. Ted Baker properly emphasis on ensuring sustainability in its operation by responsibly managing waste as well as sourcing products to control the carbon footprint from their operations.
6. Legal factor: Legal factor includes compliance of all laws of government within the business. Ted baker all laws related to the minimum wages to employees, working hour, fair pricing policies, laws related to environment as well as sustainability.

The another framework to evaluate competitive forces within the industry, Porter`s five forces is used:

1. Threats of New Entrants: There is high threat for new entrants to enter in the industry due to high capital requirement to establish business and due to existence of well-known brands.
2. Supplier`s bargaining power: In the industry there is less bargaining power of supplier as buyers is less compared to suppliers. Products are less differentiated and have low switching cost correspondingly buyers easily switch.
3. Customer`s bargaining power: Bargaining power of buyers is weak in which Ted Baker operate as suppliers are more than the number of organization produce product. It means customer have less firm to select from as a result do not have much control over price makes bargaining power low.
4. Competitive Rivalry: There is high rivalry competition among the industry as there are various large companies operate. All Saints, Reiss and Dorothy Perkins are the main competitors which make difficult for company to get competitive advantage in the market.
5. Threat of substitute: There is moderate threat of substitution to Ted Baker in the industry as several companies’ offers homogenous products. This makes easier for the customer to switch to other firms easily.

Thus, high competitive rivalry and threat of substitution impacts company in significant manner, leads to become reason to close its business.

Task 2

SWOT analysis

SWOT analysis framework aids in identify strengths, weakness, opportunity as well as threats within the business. Following is the SWOT analysis of the Ted Baker:

Strengths

• Global Presence: Ted Baker one of strength is its global presence in several markets and countries. This aids the company to offer its product and services to large number of customers as well as allowed to attain high level of experience via exposure.
• Financial stability: the company enjoys high financial stability due to its high profit margins, effective cash flow and high ROI. The strength helps the business to further optimize its marketing operations for the objective of expansion and business development.

Weaknesses

• Lack of advertising: One of weakness of Ted Baker includes it is not focus on advertising its products. In digital era, company lack of emphasize on social media marketing as well as other forms of marketing correspondingly makes difficult to grab more customer in the competitive environment (SWOT analysis of TED baker, 2024).
• Lack of market research: One of the weakness of Ted Baker is lack of focus on market research, make business unable to offer products according to the consumer needs and preference. This weakness is reason for loss of the business in January 2022 around 35.6 million British pounds (Covid-19 hits Ted Baker's full year results, loss widens, 2024.).
• No teenage range: One of the weakness of Ted Baker is only offer clothing products for the make and females. It not provide cloths and related items for the teenagers. It makes company confined to limited target audience.
• Insufficient diversification: Ted Baker has made enough investment in developing new products instead it fails to market its broad portfolio. Correspondingly, business suffers from restricted diversification as the organization offerings as well as portfolio only emphasis on selected range of offerings in most market.

Opportunities

• Emerging markets: Ted Baker has opportunity to expand in new markets where individual have greater disposable income and increasing consumer demand. This opportunity helps business to grow and develop it business (Velu, 2021).
• Increasing teenage and sportswear product range: Currently, consumer prefers to be remain healthy as a result demand for sportswear increase. Ted baker has opportunity to increase its product range by focusing on offering teen age cloths and sportswear, it aids in increase customer base and revenue in competitive market.

Threats

• Intense competition: High competition is one of the threat of Ted Baker. Main competitors of company are Dorothy Perkins, Reiss and All Saints. It make difficult for the company to attract wide range of customers as all companies use effective marketing to grab customer attention (Rose, 2020).
• Market saturation: Higher number of competitors and players in the market makes saturated market for the Ted Baker. It means there is no space for the company to grow as well as develop further.

VRIN model is used to effectively understand the valuable resources of the Ted Baker and to know whether the resources have sufficient advantage over resources of competitors. VRIN analysis of Ted baker is as under:

• Valuable: Company`s patent are valuable resource aids to sell products without any competitive intervention aids in generate revenue from granting license to other manufactures.
• Rarity: Effective distribution system is rare resources of Ted Baker it aids the company to remain competitive in market as other competitors needs large investment to have greater distribution network.
• Inimitability: Patents of Ted Baker are hard to imitate as well as effective distribution channel also imitable as it develop after smooth operation of several years.
• Non-substitutability: Effective distribution channel and patent resources are non-substitutable, leads to provide competitive advantage to Ted Baker.

Task 3

Recommendation to continue trading

Following recommendation is crucial for the Ted Baker to continue its trading in effective manner:

• Ted Baker should focus on market research to effectively identify the preference and requirements of the customers, so that able to offer accordingly. Presently, customer become eco-conscious therefore it is advised to Ted Baker to conduct business in sustainable manner by decline wastage and offering more organic products.
• It is suggested to Ted Baker to emphasis on product diversification using Anosff matrix model by including more new line of products such as teenage cloths, sportswear and so more, it helpful in increase customer base and continues trading of business.
• There is high competition in fashion industry of UK correspondingly company is at saturation point where it is can`t able to grow. Therefore, to continue trading it is important for the company to expand business to emerging market via partnership, helpful in increase market share.
• It is recommended to company, to effectively focus on the digital marketing or content marketing to grab attention of potential customer in the competitive environment in cost effective manner, helpful in continuing trading of Ted Baker (Evans, Bratton and McKee, 2021). It aids the company to flourish in competitive market.
• Ted Baker should invest in technologies to get comparative advantage in cost and doing business in sustainable manner, aids in increase company`s profit margin.

Task 4

One appropriate option

If I was chairman of Ted Baker, then I selected option of effective market research to offering products according to customer demand and preferences, because lack of products according to customer requirements is one of the reason of closing of several stores of Ted Baker (Kuncoro and Kusumawati, 2021). Currently, the customers taste and preference change as they prefer to purchase cloths that are made of organic fabric. According to Ansoff matrix, Ted Baker must focus on product development to meet the requirements of the customers. When company offer as per needs and requirements of customers, it automatically attracts customer towards the company even the competition is high in the industry. In addition, Ted Baker via cost-effective social media marketing must advertise its product range, helpful in attracting wide range of customer as well as trading of business. In addition, according to the (Rane, Achari and Choudhary, 2023), offering products and services according to the demand of customer that is more sustainable offerings via market research aids the company to effectively continue their trading and aids in increase customer base and revenue. Thus it is a suitable option for Ted Baker.

CONCLUSION

As expressed, effective business strategy aids to grow business in the competitive environment efficiently. The report based on Ted Baker that suffers from closing of various stores. The report outlined external and internal factors via PESTLE and SWOT analysis that impact Ted Baker to close its business. The factor includes low customer demand due to economic factor, change in customer taste and preference, lack of use of technology, inability to offer products according to customer preference and high competition. Further, some recommendation suggested like focus on market research, advertising via social media and so more.

REFERENCES

Books and Journals

• Baker, G., 2023. American Breakdown: Why We No Longer Trust Our Leaders and Institutions and How We Can Rebuild Confidence. Hachette UK.
• Baker, N., 2023. The seven faces of consumer sustainability, and what they mean for brands. Journal of Brand Strategy, 12(2), pp.139-154.
• Evans, D., Bratton, S. and McKee, J., 2021. Social media marketing. AG Printing & Publishing.
• Kuncoro, H.A.D.P. and Kusumawati, N., 2021. a Study of Customer Preference, Customer Perceived Value, Sales Promotion, and Social Media Marketing Towards Purchase Decision of Sleeping Product in Generation Z. ADVANCED INTERNATIONAL JOURNAL OF BUSINESS, ENTREPRENEURSHIP AND SME'S (AIJBES), 3(9), pp.265-276.
• Rane, N.L., Achari, A. and Choudhary, S.P., 2023. Enhancing customer loyalty through quality of service: Effective strategies to improve customer satisfaction, experience, relationship, and engagement. International Research Journal of Modernization in Engineering Technology and Science, 5(5), pp.427-452.
• Rose, N., 2020. Will competition be another covid-19 casualty?. The Hamilton Project, Brookings, pp.2020-15.
• Rudkowski, J., Robichaud, Z. and Gunn, F., 2024. SMEs COVID-19 Experiences through a Liminality Lens. In Crises, Creativity and Innovation (pp. 271-295). Cham: Springer International Publishing.
• Velu, A., 2021. Marketing Analytics–A Comparative Study of Practices and Techniques. Journal of Emerging Technologies and Innovative Research.

Online

• Covid-19 hits Ted Baker's full year results, loss widens. 2024. Online. Available through: https://fashionunited.com/executive/management/covid-19-hits-ted-baker-s-full-year-results-loss-widens/2021061440437
• SWOT analysis of TED baker. 2024. Online. Available through: <https://creately.com/diagram/example/j1xgqfg3/new-swot-analysis-of-ted-baker-classic>
• Ted Baker profit/loss worldwide 2011-2022. 2024. Online. Available through: https://www.statista.com/statistics/505939/ted-baker-profits-worldwide/

Author Bio

Jordan Smith   7 years | MBA

I have completed my MBA in Management from the University of Manchester. I have started my academic writing around 7 years ago. Students can connect with me for any type of management task for their academics. I pay attention to every detail provided by students and give them the desired results.