Introduction
BACHI Barcelona is an up-and-coming business that has excellent opportunities for succeeding in case if an appropriate strategy is put in place. Strategic management is an essential aspect of business planning as it implies the formulation and implementation of the goals and initiatives involved in the strategies to support the business. Strategic business management is a process that assists in obtaining the desired profits through a series of effective decision-making. The crucial components of the process include planning, forward-thinking, the allocation of resources, as well as the understanding of the environmental impact as well as the strengths and weaknesses that influence the business internally.
Mission, Vision, and Values of BACHI Barcelona
The combination of the vision, mission and the statement of values is intended to provide direction for all business processes occurring at organizations. The proposed mission statement for BACHI Barcelona is “Explore your unique style and be unapologetically yourself.” The recommended vision for the company is the following: “To provide high-quality, fashion-forward accessories to brighten your day and make you smile.” The suggested mission and vision statements show that the organization is passionate about what it is doing and wants to share its products with the world. As a young brand, creating strong relationships with potential clients would increase the likelihood of customer retention and increased sales.
As a brand that aims to offer affordable but fashionable designs to its customers, BACHI Barcelona may intend to have such values as a dedication to high quality and unique designs, an interest in building a community with potential customers, creating long-lasting relationships with eco-friendly suppliers, work on contributing to the Spanish economy, as well as discovering new ways to make designs and produce sustainable and environmentally friendly.
Internal Analysis
An internal analysis pertains to the exploration of BACHI Barcelona’s overall competency, the position of cost, as well as competitive viability in the industry in general. This internal analysis aims to assess the measures that would provide vital strategic information regarding the target company’s advantages and disadvantages.
Competitive Advantages and Disadvantages
Competitive advantages refer to the range of positive business aspects that put a company in an advantageous position over competitors. Such an advantage is achieved by offering customers great value either with the help of lower prices or more significant benefits compared to market rivals. The first competitive advantage of BACHI Barcelona is the fact that the company’s designs are unique and handcrafted in Barcelona. The second competitive advantage of BACHI Barcelona is that the company has stock but works on requests for limited edition designs. The third competitive advantage of BACHI Barcelona is its extensive social media presence, including Instagram, Twitter, Facebook, Pinterest, as well as an online blog.
A competitive disadvantage represents an unfavorable circumstance or condition that makes it difficult for an organization to perform well in its given industry. As a rule, disadvantages are caused by such problems as scale, quality, distribution of products, features and characteristics, costs, and others. The competitive disadvantage of BACHI Barcelona is that the brand is new and has not expanded yet to include a solid business structure. The second competitive disadvantage of BACHI Barcelona is that the company has low bargaining power of the price and shipping costs until a higher number of orders is reached.
Tangible and Intangible Resources
Assets refer to a range of resources that are owned by an organization. Tangible assets are physical, which means that they could be felt. They include any cash, equipment, transportation vehicles, buildings, inventory, or investments. The tangible resources that BACHI Barcelona currently owns include any cash, equipment, and supplies used for manufacturing the products, as well as office equipment, including any furniture, computers, and other things that assist Meritxell and Nuria in doing their everyday work producing, marketing, selling, and shipping its products.
Intangible assets do not exist in physical form and include such components as accounts receivable, expenses that have already been pre-paid, any patents, or goodwill. At this time, the company does not possess significant intangible assets because its items have not been patented. There are also no accounts receivable that apply to the company because the organization works directly with online sales and the money is being received not from third parties but its own accounts. It is recommended for BACHI to consider trademarking its designs to avoid replication from its principal competitors Zubi and Afortunadas.
VRIO Analysis
The VRIO is a framework that is used for analyzing the internal resources and capabilities of an organization intended to find out whether they serve as tools for reaching a competitive advantage in a given context. The tool indents to find the value, rarity, imitability, and organization associated with a particular organization. Value pertains to the availability of resources that would add value to customers. The value that BACHI Barcelona has is concerned with the company’s contribution to the development of local commerce and the manufacturing of unique but affordable productions that have been ethically manufactured. This opportunity should be exploited as a positive reflection on BACHI as a small but sustainable brand that values quality and the importance of contributing to the economy. Compared to larger organizations that may offer more affordable items that have been manufactured in third-world countries, BACHI Barcelona is seen as more valuable and favorable to local customers.
Within the framework, rarity implies controlling scarce resources and capabilities, which means that an organization owns something hard to find somewhere else but still is in demand. The rarity of BACHI Barcelona pertains to the fact that all of the products are unique and are handcrafted in Barcelona. The company works with eco-friendly suppliers that are based in Spain, which points to a positive contribution to the sustainability and progress of local commerce. However, to stay competitive, the organization must tap into product innovation to be ahead of trends while also sustaining value and quality.
Imitability refers to the opportunity of competitors to duplicate the capability or resources that are available to an organization. At this time, due to the wide availability of resources in the fashion industry, the imitability of BACHI Barcelona products is high. This means that the company has a temporary competitive advantage, only in cases when unique products are available. Therefore, the company should work on finding new and reliable suppliers that do not work with other Spanish manufacturers of accessories. The issue of rarity should also be reconsidered because of the need to have valuable and differentiated resources that are not available to competitors.
The final component of the VRIO framework is an organization, which encourages a company to facilitate the productive interplay of management systems, structure, culture, and processes that help to capitalize on resources and capabilities. While the company is very young, it is working on developing appropriate systems and structures intended to help BACHI Barcelona to function as a successful organization with a positive interplay of relevant procedures. In addition, the company has external consultants in such areas as web positioning, marketing, accounting, photography, and other regions to facilitate the organization’s functioning.
Strengths and Weaknesses
The main strength of BACHI Barcelona is that the business is passionate about making fashionable products, which means that it will continuously invest in the development and manufacturing of new items. The company has a user-friendly website and a quick delivery service, with customers being able to receive their orders within 48 hours. The consistent social media presence is also a positive aspect because it allows the company to get closer to its customers. In addition, the company has close connections with 20 suppliers that provide different components for the bags that the company is producing. The weaknesses of the company pertain predominantly to the fact that it is very young and has not reached the same levels as its competitors. Also, the company works with advisors and does not employ workers that would work with customer support, sales, and other areas.
External Analysis
An external analysis pertains to the objective and honest assessment of the changing environments within which a company operates. The analysis aims to have an early warning system that would help the company identify the opportunities and threats that are relevant to the organization. This external analysis of BACHI Barcelona’s environment will include a PEST analysis, the analysis of Porter’s five forces as well as the identification of the opportunities and threats to which the company is exposed.
PEST
PEST (political, economic, social, and technological) analysis refers to a strategic tool for discovering, evaluating, and organizing macro-economic factors that influence the business. The political factors that affect BACHI Barcelona include the complicated political situation in Europe. The influence of this factor is moderate because the organization does not rely on politics as a driving factor for success. Economic factors such as the declining economy, unemployment, and decreased disposable income of consumers all negatively affect the success of BACHI. The influence of economic factors is strong. Social factors that are relevant for the organization include media views, consumer opinions, and attitudes, buying patterns, as well as ethical issues. The impact of such factors is high because BACHI relies heavily on the attitudes toward the brand on social media as well as the likelihood of customers purchasing their products due to the ethical advantage of sustainable production. The technological factors that impact the organization include information technology and manufacturing technologies, but their influence is moderate.
Porter’s 5 Forces
The five forces analysis is a model intended for identifying and analyzing five competitive forces shaping every industry. The five forces include industry competition, the risk of new entrants to the industry, the power of suppliers, the power of customers, and the threat of substitute products. The power of competitors is moderate for BACHI Barcelona because the company has only two key competitors in its industry. The power of new industry entrants is also average because the complex economic conditions in Europe currently make it hard to establish a new business in the clothing-accessories industry that would be sustainable. The power of suppliers is high for the company because the company works with sustainable and eco-friendly suppliers that offer unique resources to the company. If some of the BACHI’s suppliers stop working, the company will have to look for other suppliers that would provide the same quality as others. The power of customers is also high because the market for clothing and accessories is highly saturated. If the customers choose any other brand that is more attractive to customers, BACHI will experience a decline in sales. The threat of substitutes is moderate because the company works on unique designs that are also sustainable. However, the company’s competitor Zubi offers similar clutch bags with prints.
Opportunities and Threats
The opportunities of BACHI Barcelona can focus on expanding the company’s focus on sustainability in its production. In the complex economic environment, the brand needs to create a specific differentiation strategy to attract new customers. Continuing to work with local suppliers as well as finding sustainable partners internationally is an opportunity that would allow the company to broaden its horizons and set itself apart from the competition (Sarkis 745). Doing so will be hard as ‘the road less traveled’ is more complex, but the rewards that the organization is expected to achieve will be worth it.
The main threat that BACHI Barcelona faces is concerned with the competition in the Spanish market from companies such as Zubi and Afortunadas. Both of the companies provide an array of accessories that are similar in style to BACHI Barcelona. For example, the printed clutch bags by Zubi are identical in style to those on BACHI’s website. Because of the similarities, there is a threat of substitution for the company’s products. The threat of substitution is important to address for BACHI through enhancing product uniqueness and the development of new designs that the competitors do not have.
Defensive Strategy
A defensive strategy is a marketing tool that is intended to help organizations get new customers that can be taken away by competitors. Therefore, it means that BACHI Barcelone should be prepared to protect its business from attacks on the part of its competitors. The strategy to defend the company is recommended to be highly active because of the need to overcome the competition from Zubi and Afortunadas. For example, BACHI can reduce prices on its products or provide offers with discounts for buying more than one item from the website. Increased investment in social media advertising is needed to bring the attention of potential customers to the brand.
Offensive Strategy
An offensive business strategy implies taking active or often aggressive action in a given market. Such actions may be aimed directly at competitors or at securing the market share regardless of the actions taken by rivals. The offensive strategy recommended for BACHI to take is to participate in influencer advertisements that can capture online audiences in Spain specifically. Collaborating with Spanish influencers is a way of making the brand known in the local market as well as appealing to younger generations who use social media regularly and follow popular media influences. BACHI can pay for online posts on social media advertising the products gifted to them.
Survival Strategy
In a complex economic climate characterized by the global financial crisis, having a survival strategy is essential for BACHI Barcelona as a small business. The step recommended for the company to take includes internationalization. Internationalization refers to the approach associated with taking steps to increase the coverage of an organization outside its home country and broaden into international markets. With the help of online marketing and online sales through the website, it is possible to advertise the benefits offered by BACHI to a worldwide audience of potential customers.
Reorientation Strategy
A reorientation strategy implies changing the focus of the business that would be distinctly radical. For BACHI, the reorientation may include working with companies-partners to manufacture merch items such as tote bags, t-shirts, and other items with the logos of companies. Such a strategy refers to private labeling and will encourage collaboration between local organizations in Spain and the manufacturer that has experience making clothing and accessories.
BSC Matrix
A BSC Matrix is intended to help organizations with long-term strategic planning as well as decision-making associated with growth opportunities by reviewing the portfolio of opportunities. Based on the level of the market growth rate and the relative market share, there are four categories of products: dogs, question marks, stars, and cash cows. Dogs represent products that have low market share and growth, stars are products with high growth and high market share, cash cows have high market share with low growth, while question marks have high market growth and small market share. The BSC matrix for BACHI Barcelona and its competitors is the following:
Strategy in Cost Leadership
Cost leadership represents a strategy for establishing a competitive advantage through having the lowest cost of operation within a given industry. For BACHI, cost leadership should be connected to reducing operational costs when producing its products. Due to the relatively small size and scale of the organization, it is possible to reduce operational costs to achieve cost leadership compared with the competition. In addition, cost leadership should be supported by excellent customer service and product leadership.
Differentiation Strategy
In the context of what BACHI Barcelona is doing, differentiation implies identifying and communicating the unique qualities of a company’s offerings while underlying the core differences between its products and those available in the market. Sustainability and the fact that the company is a small business should be the emphasis of the differentiation strategy. The brand’s marketing should communicate the message that supporting local brands is good for the economy while also important for creating a sense of community around the products that are being manufactured in their home country.
Focus Strategy
A focus strategy pertains to the marketing process in which a company intends to concentrate on its specific resources to enter or expand in a unique market of the industry. For BACHI Barcelona, the narrow market is making and marketing unique accessories produced ethically and sustainably by a local Spanish manufacturer. The niche market for the brand includes customers who follow BACHI online and share the same vision and taste in accessories as the company’s founders, Meritxell and Nuria. The brand needs to focus on creating an online community around the products and promoting them by appealing to trusting and friendly relationships with customers.
Work Cited
Sarkis, Joseph, and Qingyun Zhu. “Environmental Sustainability and Production: Taking the Road Less Travelled.” International Journal of Production Research, vol. 56, no. 1-2, 2017, pp. 743-759.