Module: Unit 7 Business Strategy

CONTENTS
1. INTRODUCTION, AIMS AND OBJECTIVES

2. MODULE OUTLINE AND TEACHING METHODS

3. READING AND COURSE PREPRATION

4. LECTURE WITH DETAILED COURSE PROGRAMME AND OBJECTIVES

5. ASSESSMENT DETAILS

INTRODUCTION, AIMS AND OBJECTIVES

INTRODUCTION
One of the aims of this unit is to build on learners existing knowledge of the
basic tools of business analysis such as PESTLE and draw it together so that the
learners think strategically.
Learners will be introduced to further analysis tools needed for the process of
strategic planning. They will be able to explain the significance of stakeholder
analysis and carry out an environmental and organisational audit of a given
organisation.
Learners will learn how to apply strategic positioning techniques to the analysis
of a given organisation and prepare a strategic plan based on previous analysis.
They will also learn how to evaluate possible alternative strategies (such as
substantive growth, limited growth or retrenchment) and then select an
appropriate future strategy for a given organisation.
Finally, learners will compare the roles and responsibilities for strategy
implementation and evaluate resource requirements for the implementation of a
new strategy for a given organisation. Learners will then be able to propose
targets and timescales for implementation and monitoring of the strategy in a
given organisation.

Aim
The aim of this unit is to give learners the knowledge and understanding of
how a business unit can strategically organise and plan for likely future
outcomes in order to be successful.

Learning Outcome
On successful completion of this unit a learner will:

Understand the process of strategic planning

Be able to formulate a new strategy
Understand approaches to strategy evaluation
Understand how to implement a chosen strategy.

Learning Outcomes and assessment criteria:

On successful completion of this unit a learner will:

LO1 Understand the process of strategic planning

1.1 Asses how business missions, visions, objectives, goals, core competencies
inform strategic planning
1.2 Analyse the factors that have to be considered when formulating strategic
plans
1.3 Evaluate the effectiveness of techniques used when developing strategic
business plans
LO2 Be able to formulate a new strategy
2.1 Analyse the strategic positioning of a given organisation by carrying out an
organisational audit
2.2 carry out an environmental audit for a given organisation
2.3 Asses the significance of stakeholder analysis when formulating new
strategy
2.4 Present a new strategy for a given organisation
LO3 Understand approaches to strategy evaluation and selection
3.1 Analyse the appropriateness of alternative strategies relating to market
entry, substantive growth, limited growth or retrenchment for a given
organisation
3.2 Justify the selection of a strategy
LO4 Understand how to implement a chosen strategy
4.1 Asses the roles and responsibilities of personnel who are charged with
strategy implementation
4.2 Analyse the estimated resource requirements for implementing a new
strategy for a given organisation
4.3 Evaluate the contribution of SMART targets to the achievement o strategy
implementation in a given organisation
Knowledge and Understanding:
Explain the role of strategy and key terminology used in strategy
Know what is meant by strategic thinking
Examine various planning systems and strategic planning issues
Identify strategic planning techniques
Analyse the significance of stakeholders
Analyse major changes in the external environmental impacting on
strategy
Evaluate strategic the Strategic positioning of an organisation
Identify alternative strategies relating to substantive growth, limited
growth or retrenchment

Know how to evaluate alternative strategies and to select the best

strategy for an organisation
Know how to communicate strategic plans to various stakeholders
Identify of team and individual roles, responsibilities and targets;
Identify benchmark targets at differing levels of the organisation
Know how to allocate resource to achieve strategic goals and objectives
Discuss timescales for achievement of a given strategy in a given
organisation

Unit content

1
Understand the process of strategic planning
Strategic contexts and terminology: role of strategy; missions; visions; strategic
intent; objectives; goals; core competencies; strategic architecture; strategic
control
Strategic thinking: future direction of the competition; needs of customers;
gaining and maintaining competitive advantage; Ansoffs growth-vector matrix;
portfolio analysis
Planning systems: informal planning; top-down planning; bottom-up planning;
behavioural approaches
Strategic planning issues: impact on managers; targets; when to plan; who should
be involved; role of planning
Strategic planning techniques: BCG growth-share matrix; directional policy
matrices; SPACE, PIMS
2
Be able to formulate a new strategy
Stakeholder analysis: stakeholder significance grid; stakeholder mapping
Environment auditing: political, economic, socio-cultural, technological, legal and
environmental analysis (PESTLE); Porters 5 force analysis; the threat of new
entrants; the power of buyers; the power of suppliers; the threat of substitutes;
competitive rivalry and collaboration
Strategic positioning: the Ansoff matrix; growth; stability; profitability; efficiency;
market leadership; survival; mergers and acquisitions; expansion into the global
marketplace
The organisational audit: benchmarking; SWOT analysis; product positions; valuechain analysis; demographic influences; scenario planning; synergy culture and
values
3
Understand approaches to strategy evaluation
Market entry strategies: organic growth; growth by merger or acquisition;
strategic alliances; licensing; franchising
Substantive growth strategies: horizontal and vertical integration; related and
unrelated diversification
Limited growth strategies: do nothing; market penetration; market development;
product development; innovation
Disinvestment strategies: retrenchment; turnaround strategies; divestment;
liquidation

Strategy selection: considering the alternatives; appropriateness; feasibility;

desirability

4 Understand how to implement a chosen strategy

The realisation of strategic plans to operational reality: communication (selling the
concepts);project teams; identification of team and individual roles,
responsibilities and targets; programme of activities; benchmark targets at
differing levels of the organisation
Resource allocation: finance; human resources; materials; time
Review and evaluation: an evaluation of the benchmarked outcomes in a given
time period in relation to corporate, operational and individual targets.

Programme Specification
Accrediting Body: EDEXCEL
Course: BTEC HND IN BUSINESS
Unit: 7 Business Strategy
Wk Lecture Schedule

Introduction to the module

Strategic contexts and terminology: role

of strategy; missions; visions; strategic
intent; objectives; goals; core
competencies; strategic architecture;
strategic control
Strategic thinking: future direction of the
competition; needs of customers; gaining
and maintaining competitive advantage;
Ansoffs growth-vector matrix; portfolio
analysis

Outcome of session

Activity/seminar and
formative
assessment
Background of the
expectations of the
awarding body

Resources

Explain strategic contexts and terminology

Case study
addressing the
learning outcome 1.1

Module handbook
Power point slides
Lecture notes

Review the future direction of the competition ,

needs of customers
gaining and maintaining competitive advantage;
Ansoffs growth-vector matrix; portfolio analysis
using a case study

Case study on
strategic thinking

Power point slides

Lecture notes,
Whiteboard

Introduction to the module, mode of assessment,

awareness of the awarding body, assessment
criteria and the mode of assessment

Module handbook
Power point slides
Lecture notes

Planning systems: informal planning;

top-down planning; bottom-up planning;
behavioural approaches
Strategic planning issues: impact on
managers; targets; when to plan; who
should be involved; role of planning
Strategic planning techniques: BCG
growth-share matrix; directional policy
matrices; SPACE, PIMS
Assignment discussed and revised
Stakeholder analysis: stakeholder
significance grid; stakeholder mapping

Environment auditing: political,

economic, socio-cultural, technological,
legal and
environmental analysis (PESTLE);
Porters 5 force analysis; the threat of new
entrants; the
power of buyers; the power of suppliers;
the threat of substitutes; competitive
rivalry and
collaboration
Strategic positioning: the Ansoff matrix;
growth; stability; profitability; efficiency;
market

Explain the different planning systems

Review the strategic planning issues

Case study and

addressing the
learning outcome 1.2

Power point slides

Lecture notes,
Whiteboard

Explain different strategic planning techniques

Addressing the LO and case study

Case study and

addressing the
learning outcome 1.3

Identify different stakeholders

Examine the significance of different stakeholders
of an organisation using the stakeholder
significance grid and stakeholder mapping.
Analyse the changes in the external environment
affecting the business strategy using PESTEL.
Analyse changes taking place in the industry
using Porters Five forces

Case study and

addressing the
learning outcome 2.3

Power point slides

Lecture notes
Assignment case
study
Power point slides
Lecture notes,
Whiteboard

Case study and

addressing the
learning outcome 2.2

Module handbook
Power point slides
Lecture notes

Analyse the strategic positioning of an

organisation

Case study and

addressing the
strategic positioning

Power point slides,

Lecture notes,
Whiteboard

10

11

leadership; survival; mergers and

acquisitions; expansion into the global
marketplace
The organisational audit: benchmarking;
SWOT analysis; product positions; valuechain
analysis; demographic influences;
scenario planning; synergy culture and
values

Market entry strategies: organic growth;

growth by merger or acquisition; strategic
alliances; licensing; franchising
Substantive growth strategies: horizontal
and vertical integration; related and
unrelated
Diversification
Limited growth strategies: do nothing;
market penetration; market development;
product
development; innovation
Disinvestment strategies: retrenchment;
turnaround strategies; divestment;
liquidation
Strategy selection: considering the
alternatives; appropriateness; feasibility;

Carry out organisational audit for a given

business organisation using appropriate tools and
techniques.

Case study and

addressing the
learning outcome
2.1/2.4

Power point slides

Lecture notes,
Whiteboard

Examine possible alternative strategies relating to

substantive growth, limited growth or
retrenchment

Case study and

addressing the
learning outcome 3.1

Power point slides

Lecture notes,
Whiteboard

Evaluate alternative strategies for an organisation

using a suitable criteria in terms of

Case study and

addressing the

Power point slides

Lecture notes,

Present a new strategy for an organisation.

desirability

The realisation of strategic plans to

operational reality: communication
(selling the concepts);project teams;
identification of team and individual
roles, responsibilities and targets;
programme of activities; benchmark
targets at differing levels of the
organisation
Resource allocation: finance; human
resources; materials; time

appropriateness (suitability); feasibility

(viability); desirability (acceptability)
Select an appropriate future strategy for an
organisation
Explain how a new strategy can be
communicated to various stakeholders.
Identify project teams
Identify team and individual roles,
responsibilities and targets
Identify programme activities
Identify benchmark targets at differing levels of
the organisation
Evaluate resource requirements to implement a
new strategy for a given organisation

14

Review and evaluation: an evaluation of

the benchmarked outcomes in a given
time period in relation to corporate,
operational and individual targets

Carry out a review and evaluation of

benchmarked outcomes in a given time period in
relation to corporate, operational and individual
targets.

15

Revision, and assignment guidance

addressing all learning outcomes
Assignment support
Assignment support
Assignment support
Assessment and feedback
Assessment and feedback

Revision and guidance addressing LO1-4

Module booklet

Assignment support and guidance

Assignment support and guidance
Assignment support and guidance
Feedback given to the learner
Feedback given to the learner

Module booklet
Module booklet
Module booklet

12

13

16
17
18
19
20

learning outcome 3.2

Whiteboard

Case study and

addressing the
learning outcome 4.1

Power point slides

Lecture notes,
Whiteboard

Case study and

addressing the
learning outcome 4.2
Case study and
addressing the
learning outcome 4.3

Power point slides

Lecture notes,
Whiteboard
Power point slides
Lecture notes,
Whiteboard
Module booklet

21

Assessment and feedback

Feedback given to the learner

2.1 Recommended text and links:

Recommended textbooks
Johnson G et al Exploring Corporate Strategy: Text and Cases, 8th edition (Financial Times/Prentice Hall, 2007) ISBN: 9781405887328
BPP Learning Media Business Essentials Unit 7 Business Strategy (BPPLearning Media, 2013) ISBN: 978-0751744798
Grant M R Contemporary Strategy Analysis (Wiley-Blackwell, 2007) ISBN: 9781405163095
Journals and newspapers
The Financial Times and other quality newspapers. Many business stories will appear in the news sections.
Harvard Business Review (Harvard Business Publishing)
The Economist (The Economist Newspaper Ltd)

Websites
www.bized.co.uk
www.bloomberg.com
www.businessballs.com
www.emerald-library.com

Bized provides a selection of teaching and learning resources

Bloomberg Business and Financial news
Business balls - a free ethical learning and development resource
Free materials, articles and ideas for team roles and leadership
Independent publisher of global research

www.fsb.org.uk
www.ft.com
www.hemscott.net

The Federation of Small Businesses

The Financial Times business sections
Share prices, stocks, investing and company information

Videos
Television news, current affairs and business programmes will also provide useful additional and up to date material on business and the
economy often with special features on particular business environment subjects. Many programmes are archived and can be viewed on
demand.
Wk Session Update
Date
Signature
1
2
3
4
5
6
7
8

9
10
11
12
13
14
15
Lecturer: Mr. K.A Mayah
Campus: Wentworth house
Contact details: kam_mka@yahoo.com
Assessment:
The module will be assessed meeting all the LO as specified by the awarding body, Ed Excel.
Please read the instructions carefully while addressing the tasks specified.
Contribution: 100% of the module
Outline Details: Individual report should be between approx 4000- 4500 words. Details enclosed in the assignment brief.

2.2 Teaching and Learning Activities

The module tutor(s) will aim to combine lectures with tutorial activities. This environment will provide opportunities for the student to
understand the course material through case study and text and to apply it in a practical way. The intent is to facilitate interactive class activities,
and discussion about the significant role of research in a global and local business environment.

2.3

Teaching Ethos

The colleges approach towards teaching and learning is simple and effective. The main aim of UKCBC is to assist learners in maximising their
potential by ensuring that they are taught clearly and effectively. This will enable students to engage in the learning environment and promote
success in both their academic studies and subsequent career.

2.3.1 Methods of Delivery:

LECTURES:
These will be developed around the key concepts as mentioned in the indicative course content and will use a range of live examples and cases
from business practice to demonstrate the application of theoretical concepts. This method is primarily used to identify and explain key aspects
of the subject so that learners can utilise their private study time more effectively.
SEMINARS:
These are in addition to the lectures. The seminars are designed to give learners the opportunity to test their understanding of the material
covered in the lectures and private study with the help of reference books. This methodology usually carries a set of questions identified in
advance. Seminars are interactive sessions led by the learners. This method of study gives the learner an excellent opportunity to clarify any
points of difficulty with the tutor and simultaneously develop their oral communication skills.
CASE STUDIES: An important learning methodology is the extensive use of case studies. They enable learners to apply the concepts that they
learn in their subjects. The learners have to study the case, analyse the facts presented and arrive at conclusions and recommendations. This
assists in the assessment of the learners ability to apply to the real world the tools and techniques of analysis which they have learnt. The case
study serves as a supplement to the theoretical knowledge imparted through the course work.
Plagiarism:
Any act of plagiarism will be seriously dealt with according to the colleges and awarding bodies regulations. In this context the definition and
scope of plagiarism are presented below:

Plagiarism is presenting someones work as your won. It includes copying information directly from the web or books without referencing the
material; submitting joint coursework as an individual effort; copying another students coursework; stealing coursework form another student
and submitting it as your own work. Suspected plagiarism will be investigated and if found to have occurred will be dealt with according to the
college procedure. (For further details please refer to the plagiarism policy and the student code of conduct.)

Assessment:
The module will be assessed meeting all the LO as specified by the awarding body, Ed Excel.
Please read the instructions carefully while addressing the tasks specified.
Contribution: 100% of the module
Outline Details: Individual report approx 4000-4500 words. Details enclosed in the assignment brief.

Unit Outcomes
Outcome

Evidence for the criteria to

pass.

Assessors
decision

Internal
verification
decision.
(agree,
disagree)

TASK 1:
You are required to carry out a research by using supportive materials like books,
annual reports, websites, etc., to explain strategic contexts and terminology, review
the issues involved in strategic planning, and explain different planning techniques
and give findings on P1.1, P1.2, and P1.3. You can draw examples from Mulberry or
any other organisation(s) of your choice. Answers without application to an
organisation(s) or appropriate examples will be deem as resubmission.
LO1Understand
P1.1 Asses how business
P1.1
P1.1
the organisational missions, visions, objectives,
(P,M,D)
(P,M,D)
purposes of
goals, core competencies
businesses
inform strategic planning
with reference to Mulberry or
any other organisation of
your choice.
P1.2 Analyse the factors that P1.2
P1.2
(P,M,D)
have to be considered when (P,M,D)
formulating strategic plans
with reference to Mulberry or
any other organisation of
your choice.
P1.3 - Evaluate the
P1.3
P1.3
(P,M,D)
(P,M,D)
effectiveness of techniques
used when developing
strategic business plans using
examples from Mulberry or
any other organisation(s) of
your choice.

15

Summarized
Feedback for Task
1(reflecting 1.1,
1.2, and 1.3, Pass,
Merit and
Distinction.)
IV comments
towards
Task 1
TASK 2
You are required to carry out a research by using supportive materials like books,
websites, etc., to produce an organisational audit, carry out an environmental audit,
and explain the significance of stakeholder analysis for Mulberry and give an
individual report of the findings on P2.1, P2.2, P2.3, and P2.4 Answers without
application to Mulberry or appropriate examples will be deem as resubmission.
LO2Understand
P2.1
P2.1
P2.1- Analyse the strategic
the nature of the
(P,M,D)
(P,M,D)
positioning of a given
national
organisation by carrying out
environment in
an organisational audit in
which businesses Mulberry
operate
P2.2
P2.2
P2.2- carry out an
(P,M,D)
(P,M,D)
environmental audit for a
given organisation Mulberry
P2.3
P2.3 Asses the significance of P2.3
(P,M,D)
stakeholder analysis when (P,M,D)
formulating new strategy
Mulberry
P2.4
P2.4
P.2.4- Present a new strategy
(P,M,D)
(P,M,D)
for a given organisation

Summarized
Feedback for Task
2(reflecting 2.1,
2.2, 2.3, Pass merit
and distinction.)
IV comments
towards
Task 2
16

TASK 3
You are required to carry out a research by using supportive materials like books,
websites, etc., to analyse possible alternative strategies relating to substantive growth,
limited growth or retrenchment and select an appropriate future strategy for
Mulberry and give an individual report of the findings on P3.1, and P3.2. Answers
without application to Mulberry or appropriate examples will be referred.
LO3Understand P3.1- Analyse the
P3.1
P3.1
the behaviour of appropriateness of alternative
(P,M,D)
(P,M,D)
organisations in strategies relating to market
their market
entry, substantive growth,
environment
limited growth or retrenchment
for a given organisation
Mulberry
P3.2
P3.2
P3.2- Justify the selection of a
(P,M,D)
(P,M,D)
strategy Mulberry

Summarized
Feedback for
Task 3(reflecting
3.1, 3.2, Pass
Merit and
Distinction.)
IV comments
towards
Task 3
TASK 4
You are required to carry out a research by using supportive materials like books,
websites, etc., to compare the roles and responsibilities for strategy implementation,
evaluate resource requirements to implement a new strategy for Mulberry and
discuss targets and timescales for achievement at Mulberry to monitor a given
strategy and give an individual report of the findings on P4.1, P4.2 and P4.3.
Answers without application to Mulberry or appropriate examples will be referred.
TASK 4
P4.1
P4.1
P4.1 Asses the roles and
LO4Understand responsibilities of personnel
(P,M,D)
(P,M,D)
how to
who are charged with strategy
implementation at Mulberry

17

implement a
chosen strategy.

P4.2 Analyse the estimated

resource requirements for
implementing a new strategy for
a given organisation for
Mulberry
P4.3 Evaluate the contribution
of SMART targets to the
achievement of strategy
implementation in a given
organisation Mulberry

P4.2
(P,M,D)

P4.2
(P,M,D)

P4.3
(P,M,D)

P4.3
(P,M,D)

Summarized
Feedback for
Task 4(reflecting
4.1, 4.2, 4.3, Pass
merit and
distinction.)
IV comments
towards
Task 4
Merit grades
M
awarded
1
Distinction
D1
grades awarded
Any other comments

M2
D2

Grade given by the Assessor:

Pass
Merit
Assessors Signature:
IV Grading Check:
Agree
Disagree
IV signature:
Date:
Students feedback:

M3

P1
D3

P2

P3

P4

Resubmit :

Distinction
Date:
Comments if any:
Modify grade to

18

Student Signature:
Date:
Plagiarism:
Any act of plagiarism will be seriously dealt with according to the colleges and
awarding bodies regulations. In this context the definition and scope of plagiarism
are presented below:
Plagiarism is presenting someones work as your won. It includes copying
information directly from the web or books without referencing the material;
submitting joint coursework as an individual effort; copying another students
coursework; stealing coursework form another student and submitting it as your own
work. Suspected plagiarism will be investigated and if found to have occurred will be
dealt with according to the college procedure. (For further details please refer to the
plagiarism policy and the student code of conduct.)

ASSIGNMENT
TASK 1 to TASK 4: You are required to follow the instructions as specified
towards each task and support with a research by using supportive materials like
books, websites, etc., and give a feedback on the findings.
TASK 1:
You are required to carry out research by using supportive materials like books,
annual reports, websites, etc., to asses strategic contexts and terminology, review
19

the issues involved in strategic planning, and evaluate different planning

techniques and give findings on P1.1, P1.2, and P1.3. You can draw examples
from Mulberry or any other organisation(s) of your choice. Answers without
application to an organisation(s) or appropriate examples will be deem as
resubmission.
LO1 Understand the process of strategic planning
1.1 Asses how business missions, visions, objectives, goals, core competencies
inform strategic planning with reference to Mulberry or any other organisation of
your choice..
1.2 Analyse the factors that have to be considered when formulating strategic
plans with reference to Mulberry or any other organisation of your choice..
1.3. Evaluate the effectiveness of techniques used when developing strategic
business plans using examples from Mulberry or any other organisation(s) of
your choice.

Case study for task 2, task 3 and task 4: Individual report

Mulberry Group PLC the English luxury brand
is a United Kingdom-based holding company
incorporated in 1974 and is listed on the
Alternative Investment market (AIM). The group
currently employs approximately 943 employees.
The Company is engaged in the design and manufacture or sourcing of luxury
accessories, clothing and footwear and their subsequent sale through wholesale
channels or its own stores and concessions in home and export markets. It
operates in two segments: the Retail business and Design business.
20

The Retail segment is engaged in the sale of Mulberry branded fashion

accessories, clothing and footwear through a number of shops and department
store concessions.
The design segment includes brand management, marketing, product design,
manufacture, sourcing and wholesale distribution for the Mulberry brand. It
invests in design and development in order to develop and market accessory,
clothing and footwear collections for Spring/Summer and Autumn/Winter each
year.
The Company's wholly owned subsidiaries include Mulberry Company (Design)
Limited, Mulberry Company (France) SARL and Mulberry Company (Europe)
Limited.

MULBERRY GROUP PLC ("Mulberry" or the "Group")

PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MARCH 2013
FINANCIAL HIGHLIGHTSFOR THE YEAR ENDED 31 MARCH 2013
Total revenue of 165.1 million (2012: 168.5 million)
Retail revenue up 8% to 107.2 million, up 6% like-for-like
Wholesale revenue down 16% to 57.9 million, reflecting European account
rationalisation and destocking by Asian partners
Profit before tax of 26.0 million (2012: 36.0 million), reflecting an
investment in directly operated international stores and a contraction in
gross margin
Basic earnings per share of 32.2p (2012: 43.9p)
Proposed dividend of 5.0p per share (2012: 5.0p per share)
OPERATING HIGHLIGHTS FOR THE YEAR ENDED 31 MARCH 2013

Opened17 new international stores,

Construction of second UK factory completed on 3 June 2013
Enhanced product range including bags, small leather goods and men's
accessories
Established regional structure and invested in talent across the business

CURRENT TRADING AND OUTLOOK

Retail revenue up 9% for the 10 weeks to 8 June 2013, like-for-like sales up 6%
Modest growth in wholesale sales expected for 2013/14
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Three new stores (Berlin, Vienna and Palma de Mallorca)opened since 31

March 2013; targeting 15 to 20 new stores during 2013/14

BRUNO GUILLON, CHIEF EXECUTIVE, COMMENTED:

After three years of rapid growth, we have had a year of consolidation during
which we have laid the foundations for the transition of Mulberry from a UK
success story into a global luxury brand. In particular we are increasing UK
production and enhancing both our retail experience and product range.
Mulberry has a well-established business in the UK and a growing presence in
Europe. With over 80% of ITS sales derived from these markets where the
economic climate remains difficult, Mulberry's challenge for the future is to
accelerate our brand awareness in the USA and Asia. Greater visibility in Asia
will allow us to benefit from tourist traffic in Europe and the USA at the same
time as growing our business locally."
MULBERRY GROUP PLC STRATEGY
Mulberry's four long term strategic themes and progress made by management
over the last 12 months:
1. Reinforce luxury positioning:

Made in England: second factory in Somerset, UK, was completed during

June 2013, and it will double our UK production capacity; and
Distribution: opened retail stores in prime locations with an updated store
concept and rationalised the wholesale distribution network in Europe.

2. International expansion:
Mulberry management continues to focus on prime retail locations
complemented by high quality wholesale accounts. During the year Mulberry:
Improved Mulberry retail and franchise store network:
Opened seven directly operated stores and ten partner stores in prime retail
locations, in line with our target of 15-20 stores per annum. This brings our
global store footprint to 115 stores, including directly operated and partner
stores;

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Consolidated Mulberry Middle East franchise operations, appointing

Chalhoub Group to operate business in the region (excluding Qatar) and
accelerating the store opening plans over the next two to three years; and
Increased the quality of multi-brand distribution network through a
European account rationalisation, continuing to build and maintain strategic
partnerships with key department store accounts.

3. Product development
A number of product development initiatives have been completed by Mulberry
during the year which includes the launch with the AW13 collection in stores
from June to September 2013. For example:
In the women's bags category Mulberry have reinforced their core and entry
level offerings under 1,000 with additional leather, colour and component
offerings and the continued introduction of new styles. The price architecture
of the offering has also been extended at the higher end of the Mulberry
range, with the introduction of handbags priced between 1,000 and 1,700;
Increased the colour and style options for small leather goods, belts and
fashion accessories; and
The men's accessories category has been significantly reinforced, with a 50%
increase in product lines for AW13 compared to AW12. Growth of this
category is an area of opportunity for the brand, particularly in Asian
markets.
4. Leverage operations to support growth
One of Mulberry key strategies is to maintain a balanced investment programme
including new stores, factory facilities and IT systems. During the year to 31
March 2013 Mulberry invested in all three areas with 8.8 million in capital
expenditure spent on stores, 4.4 million on Mulberry UK factories and 2.9
million on IT systems.
Mulberry management has also enhanced the organisation structure with an
investment in talent throughout the organisation and a move to regional
reporting lines from 1 April 2013. Regional heads have been appointed for
Europe and North America and the new structure is designed to bring
consistency and co-ordination between the retail and wholesale channels and
drive international growth through regional focus and accountability.

23

During the year Mulberry management completed a review of Mulberry supply

chain. The management have implemented an improved wholesale ordering
timetable and commencing a project for the implementation of a new integrated
supply chain system which is expected to be completed during the financial year
ending 31 March 2015.
While investing for future growth, Mulberry management continue to carefully
manage investments and costs throughout the business.
Business review
Total revenue for the year to 31 March 2013 was 165.1 million, down 2% from
168.5 million in 2012, reflecting growth in retail sales offset by a decline in
wholesale sales.
RETAIL
Mulberry own stores and concessions saw continued growth with revenues up
8% to 107.2 million (2012: 99.7 million) and up 6% like-for-like. This was
achieved against a backdrop of very strong growth last year of 36% and a
challenging economic climate in the UK and Europe as well as a reduction in
tourist spending in the London stores.
UK retail sales were up 6% to 91.8 million (2012: 86.9 million);
International retail sales were up 20% to 15.4 million (2012: 12.8
million).
During the period Mulberry opened seven new directly operated stores
in the USA, Germany and Switzerland;
Online sales, which are included in the segments above, were up 21% to
17.6 million, accounting for 11% of Group sales (2012: 9%).

WHOLESALE
Wholesale revenue was down 16% to 57.9 million (2012: 68.8
million), reflecting two key factors:
The quality of the European wholesale channel was improved through
rationalisation of accounts; and
24

A slowdown of demand in Asia following very strong sales over the last
two years driven by certain key products. This resulted in a period of
destocking and cautious re-ordering by our Asian franchise partners
during the year to 31 March 2013.
Although these factors have resulted in lower wholesale sales this year, the steps
that we are taking to improve the quality of the wholesale distribution network
are expected to have a positive impact on both the retail and wholesale
businesses in the future.

During the year Mulberry opened ten partner stores: a flagship store in
Singapore, five stores in Korea, and one store in each of Shanghai, Beijing,
Nagoya and Bahrain.
FINANCIAL
Gross margin was 63.3% for the year to 31 March 2013 (2012: 66.2%) due largely
to a catch-up in product related overheads relative to sales which have
normalised this year after rapid sales growth in the previous two years. In
addition, gross margin was affected by higher raw materials costs which were not
reflected in prices until November 2012.
Net operating expenses for the period increased by 2.9 million to 79.0 million
(2012: 76.1 million). This includes 6.3 million additional costs related to new
directly operated international stores offset by cost savings in other areas.
Profit before tax fell 28% to 26.0 million (2012: 36.0 million) this was due to the
reduction in gross margin and the investment in directly operated international
stores.
Capital expenditure for the period was 16.9 million, of which 8.8 million
related to new stores, 4.4 million to factories and 2.9 million to investment in IT
systems.
Inventories have increased to 35.7 million from 32.5 million at the start of the
period partly reflecting new store openings but also lower sales than originally
anticipated. Overall, the Group balance sheet remains strong with cash of 21.9
million at 31 March 2013 (2012: 27.3 million) and no debt.
The cash generated from operations for the year amounted to an inflow of
24.2 million (2012: inflow of 30.1 million).
25

Basic earnings per share for the year decreased by 27% to 32.2p (2012: 43.9p).
The Mulberry Board is recommending the payment of a dividend on the
ordinary shares of 5.0p per ordinary share (2012: 5.0p) which will be paid on 9
September 2013 to shareholders on the register on 16 August 2013.

CURRENT TRADING AND OUTLOOK

The outlook for both the retail and wholesale businesses for the year to 31 March
2014 remains challenging given Mulberry's heavy reliance upon the UK and
European markets where the economic climate continues to be difficult.

The trading conditions in Mulberry's more developed domestic market highlight

the importance of our international growth strategy. Mulberry management
continue to take the necessary steps to build Mulberry businesses in the USA and
Asia, opening stores in prime retail locations and investing in marketing
initiatives that highlight the brand's heritage and craftsmanship. The Asian
customer is important globally as tourism continues to be a critical component of
luxury sales, and we are particularly focused on raising our brand awareness in
this market.

During the 10 weeks to 8 June 2013, total Retail sales were 9% above the same
period last year (like-for-like sales up 6%).

The wholesale order book for SS14 is building satisfactorily and Mulberry
management expect modest growth in wholesale sales for the year to 31 March
2014.
26

Since 31 March 2013 Mulberry management have opened directly operated stores
in Berlin and Vienna and a partner store in Palma de Mallorca. Mulberry
management target is to open 15 to 20 new international stores per annum, being
a combination of both directly operated and partner stores.

Capital expenditure for the year to 31 March 2014 is expected to be in the order of
20.0 million, subject to the timing of new store openings and other investments.
This continues to be funded from internally generated cash flow.

During the year to 31 March 2014 the management will continue with Mulberry
global expansion strategy, focusing on the transition of Mulberry from a UK
success story into a global luxury brand.

Available from http://www.mulberry.com

The following articles below shows how the British press have reported on
Mulberrys recent performance for the year ending 31/03/2013:

QUESTOR SHARE TIP: AVOID MULBERRY AS IT STILL HAS MUCH TO

PROVE
Garry White, The Telegraph 16 June 2013,
Available fromhttp://www.telegraph.co.uk
If Mulberry pulls off its plans the shares are undervalued, but it still has much to
prove. Questor says avoid.
Shareholders in Mulberry get a 20pc discount on its handbags. If you are paying
1,000 plus for the latest must-have accessory, this is something well worth
having.
27

However, shares should not be bought for perks alone and, with the shock
departure of its creative director Emma Hill last week, what now for the British
upstart luxury goods retailer?
Bruno Guillon, who has been chief executive for just over a year, thinks profits
can rebound in 2013, after they slumped 28pc last year. This followed destocking
of its Alexa line in Asia, where the bag is more famous than the Mulberry
brand itself. It also reflects the fact that 80pc of sales are in Europe.
The long-term plan is to turn Mulberry from an essentially domestic brand into a
global brand. This will take a lot of investment in brand awareness in Asia and
the US. The luxury goods consumer has not escaped the downturn, with
disappointing results this year from French giants LVMH and PPR underscoring
issues in the sector.
Some investors had been concerned that the brand may be about to move too
upmarket. However, 60pc of its products are still below 1,000, which is regarded
as entry level. Ms Hills departure is also a concern, but a brand and a
company are never one person alone and she has built up a well-regarded design
team during her tenure.
Burberry sells a plethora of items, Mulberrys product range is much more
limited. This means that if its designers fail to hit or lead a fashion trend, there
could be big trouble. Burberry has a wide products range that does not depend
on one categorys success. But its brand is supported in its home market by the
fact that it makes 25pc of its products in England, a number that is set to increase
substantially when it opens its second factory.
However, it is the international market that is key to its future share price
performance and that will take a substantial amount of investment. Last year, the
group opened 17 new international stores and retail sales at the unit rose 20pc to
15.4m.
The truth is that the jury is still out on whether Mulberry can meet its strategic
ambitions and repeat its UK success elsewhere. We are now entering a period of
investment for the group and also one of design uncertainty against a subdued
European market backdrop.
This would represent a share price challenge for any company, but it is especially
relevant for luxury goods groups such as Mulberry. Even after two profit
warnings and the fact that the shares are more than 60pc below their peak, the
current-year earnings multiple is 24.4. This is pricing in a lot of growth.
So, Questor feels more evidence of delivery is needed before a buy rating is
appropriate, so avoid for now.
28

http://www.telegraph.co.uk/finance/markets/questor/10121246/Questorshare-tip-Avoid-Mulberry-as-it-still-has-much-to-prove.html

Emma Hill: Designer who made Mulberry a global player packs her bags for
good
Laura Chesters, Theindependent, Monday 10/06/2013
Available fromhttp://www.independent.co.uk
Emma Hill theCreative director credited with turning the Somerset-based firm
into an international fashion powerhouse loved by celebrities has quit in a
management disagreement.
Mr Guillon has been trying to expand the awareness of the brand overseas but
critics have said his desire to make the brand even more expensive will alienate
its loyal following.
In its heyday of 2010/2011, a Mulberry handbag sold for around 600 but now its
latest design the Willow sells for between 1,250 and 1,500. The Londonbased brand has issued three profit warnings in the past year and results on
Thursday are forecast to see a 28 per cent drop in profits.
Mr Guillon is hopeful of a turnaround, with the expansion of new product
categories including clothes and shoes and its new Willow handbag, created by
Ms Hill.
Earlier this year Mr Guillon told The Independent that he wanted to catch the
new luxury customers and shoppers in Asia, including Singapore and China,
were top of his list to attract to the brand.
Luca Solca, managing director of luxury at Exane BNP Paribas, said: Mulberry is
trying to reposition itself to the high-end and emulate recent successes of
brands like BottegaVeneta and Celine. I think this is not obvious for a brand like
Mulberry.Mulberry in my view should be cheaper than Burberry and Gucci.
There is now little choice for handbags priced between 250 and 600 with only a
handful of players such as Longchamp and Coach and market results indicate
that Mulberrys upmarket ambitions are facing hurdles.

29

http://www.independent.co.uk/life-style/fashion/news/emma-hill-designerwho-made-mulberry-a-global-player-packs-her-bags-for-good-8652419.html?
origin=internalSearch

TASK 2: Be able to formulate a new strategy

You are required to carry out a research by using supportive materials like books,
websites, etc., to produce an organisational audit for Mulberry, carry out an
environmental audit for Mulberry, and asses the significance of stakeholder
analysis to Mulberry and give an individual report of the findings on P2.1, P2.2,
and P2.3 and 2.4. Answers without application to Mulberry or appropriate
examples will be deem as resubmission.

LO2 Be able to formulate a new strategy

2.1 Analyse the strategic positioning of a given organisation by carrying out an
organisational audit in Mulberry.
2.2. Carry out an environmental audit for a given organisation Mulberry
2.3. Asses the significance of stakeholder analysis when formulating new strategy
Mulberry
2.4 Present a new strategy for a given organisation
TASK 3
You are required to carry out a research by using supportive materials like books,
websites, etc., to analyse possible alternative strategies relating to substantive
growth, limited growth or retrenchment and select an appropriate future strategy
for Mulberry and give an individual report of the findings on P3.1, andP3.2.
Answers without application to Mulberry or appropriate examples will be
referred.

LO3 Understand approaches to strategy evaluation and selection

3.1 Analyse the appropriateness of alternative strategies relating to market entry,
substantive growth, limited growth or retrenchment for a given organisation
Mulberry
3.2. Justify the selection of a strategy Mulberry
30

Task 4
LO4 Understand how to implement a chosen strategy
You are required to carry out a research by using supportive materials like books,
websites, etc., to compare the roles and responsibilities for strategy
implementation, evaluate resource requirements to implement a new strategy for
Mulberry and discuss targets and timescales for achievement at Mulberry to
monitor a given strategy and give an individual report of the findings on P4.1,
P4.2 and P4.3. Answers without application to Mulberry or appropriate
examples will be referred.
4.1 Asses the roles and responsibilities of personnel who are charged with
strategy implementation at Mulberry
4.2 Analyse the estimated resource requirements for implementing a new
strategy for a given organisation for Mulberry
4.3 Evaluate the contribution of SMART targets to the achievement of strategy
implementation in a given organisation Mulberry

Assignment Guidelines:
Use a standard report structure, Word-process the report and use Normal
script of a proper font size 12.
Produce an academic report, detailing the above issues with an approx
word limit of 4000 to 4500 words.
Complete the title page and sign the statement of authenticity.
The Assignment sheet should be attached in the front.
Submit the document in a folder in the form of a file as well as a soft copy
on the submission date.
It should be uploaded on E-Learning platform before the deadline and
submitted to -------- and sign the submission form of the college.
Assignments submitted after the deadline will not be accepted unless
mitigating and may be entitled for a late fee.
Collusion and Plagiarism must be avoided.
Start each answer on a new page and pages should be numbered.
Highlight each question clearly.
Include a Bibliography at the end of the assignment and use the Harvard
referencing system.
31

 All work should be comprehensively referenced and all sources must be

fully acknowledged, such as books and journals, websites (include the
date of visit), etc.
Try to give the page numbers, publishers' details and the year of
publication
In order to pass you need to address all the LO
In order to get a merit you need to address the characteristics of a pass and
then M1, M2,M3
In order to get a Distinction you need to address the characteristics of pass,
merit and then D1, D2 and D3.Use a common format for the questions, for
example:
Introduction (analyze the question.)
Underpinning Knowledge (write about the relevant theory/points)
Applied knowledge(Data Analysis)
Conclusions and Recommendations (summarizing the whole scenario
keeping in view pass, merit, distinction criteria.)

Student feedback form with the Assessment Grid indicating pass, merit and
distinction:
Name:
Number:
Unit 7: Business Strategy
Outcomes/criteria:

LO1 Understand the

process of strategic
planning

Registration

Indicative characteristics

As per the assessment

criteria specified for pass

Contextualisation
Learner should present
evidence that shows they are
able to
Addressing 1.1, 1.2 and 1.3 as
instructed and exhibit an
understanding of the process
of strategic planning.

LO2 Be able to formulate

Do

Addressing 2.1, 2.2 2.3 and 2.4

32

a new strategy

as instructed with evidence

towards Understanding the
internal and external analysis
of Mulberry. Significance of
stakeholder analysis.

Addressing 3.1 and 3.2 as

LO3 Understand
approaches to strategy
evaluation and selection

LO4 Understand how to

implement a chosen
strategy.

Do

instructed with evidence

towards Understanding
Evaluation of Mulberrys
strategy and selection.

Do

Addressing 4.1, 4.2 and 4.3 as

instructed with evidence
towards Understanding,
comparing roles and
responsibilities, resource
allocation, target, time scale of
Mulberry and Implementation.

33

Merit Description:
M. Identify and apply
strategies to find
appropriate solutions.

. Effective judgments have

been made.

. An effective approach to
study and research has
been used.
M2. Select/ design and
apply appropriate
methods/ techniques.

M3. Present and

communicate appropriate
findings.

. A range of sources of
information used.
. The selection of methods
and techniques applied.

. Logical and coherent

arguments have been
presented
. Technical language
accurately used.

To achieve M1, leaner would

have to apply an effective
approach to study, research to
make judgement with regards
to chosen
Organisation/Mulberry.
(1.3, 2.3)
To achieve M2, learner would
have to use or used appropriate
source of information and
suitable techniques to explore
and evaluate the internal and
external environment of
Mulberry. For instance, using,
SWOT, PESTEL, Porters 5
forces, Stake holder, Ansoff Mix,
etc (2.1,2.2, 2.3 and 2.4)

To achieve M3, the structuring

and presentation of
report/work is appropriate.
Relevant terminology and
concepts have been used
accurately.

34

Distinction Description:
D1. Use critical reflection
to evaluate own work and
justify valid conclusion.

D2. Take responsibility for

managing and organizing
activities.

D3. Demonstrate
convergent, lateral and
creative thinking

. Self-criticism of approach
has taken place.
. Evaluation has taken place
using defined criteria
Autonomy/independence
demonstrated

To achieve D1, conclusions are

made in a logical and consistent
with the flow of arguments
within the work.

The importance of
interdependence has been
recognized.

Autonomy and independence of

approach and critical thinking
has been demonstrated in
evaluating Mulberrys
strategies. Conducting analysis
is very important in this
regards. (3.1 and 3.2)

Capacity for logical and

coherent thought has been
applied.
Receptiveness to new ideas
has demonstrated.

To achieve D3, Convergent,

logical and coherent thought
have been applied and new
ideas evident. For instance,
response to competitors
strategies and recommendation
for Mulberry.

35