Describe about A Fuzzy Multi-objective Model with MFCA Approach for Selecting Products Variety in a Textile Supply Chain?
The textile industry of United Kingdom focuses on the production of clothing and yarn and they distribute these products to the retailers of the industry. The raw materials that are used to manufacture these products are the synthetic and the natural products that are provided by the chemical industry. The United Kingdom has witnessed the technological advancement, which helped the textile industry to produce wools, cotton, silks and dyestuffs and it resulted in the export of the textile goods. As previously discussed in Assignment 1, the Lancashire Textile Limited is one of the significant textile companies in the United Kingdom (Amid, Zolfaghari and Siyahpoush 2015). The company is situated in Burnley. The company has adopted various corporate and business strategies that have helped the company to reach great heights and become one of the most important textile industries in the said country. Choosing a perfect corporate or a business strategy helps a company to achieve high returns on investment (Turker and Altuntas 2014).
This particular report aims to find out the corporate and the business strategies adopted by the said company that has helped the company to achieve great heights. The main objective of this report is to analyze the models and frameworks needed to support the textile industry as well as the firm to attain a good market position. The identification of possible strategies at the business as well as the corporate level will be evaluated in this report along with their suitable explanations. The scenario should be explained and the report should be critically analyzed in the end (Schäfer 2015).
Choice of Corporate Strategy
A strategy affects the overall direction of any organization and helps it to establish its working environment for the future. Corporate Strategy helps to define the businesses and the markets in which a firm chooses its operation. In other words, the overall direction and scope of a corporation and the way the businesses work together to achieve the desired goals is known as corporate strategy. Corporate strategy is based on knowing the current position of the organization and the methods that the organization adopts to reach a successful place in the potential market (Ballot et al. 2015).
A corporate strategy requires certain key concepts like values, vision, strategy, mission, tactics and policies, which further helps the organization to attain good market position. Corporate strategies enable the companies or the organizations to perform one or more value creation functions at significantly lower costs that help in supporting the differentiation advantage. The most important thing while the implementation of the corporate strategy is diversification. Diversification is used to reduce the volatile earnings of an organization. It minimizes risks and helps the organization to move into industries that are more attractive. It helps in improving the long-term performance of the firm and assures prolonged life of the organization. It helps in increasing the market share of the textile industry in the United Kingdom. The process helps the industry to introduce new products in the market and gain competitive advantage. It helps I increasing the geographic area of the firm thereby increasing production. Diversification can be of three types namely the vertical diversification, the horizontal diversification and the global diversification. The diversified firms help the organization to identify their current corporate strategy, i.e., the type and extent of diversification, new acquisitions, geographic scope, new entrants and current divestitures. While entering a new business, an organization should keep in mind the financial, strategic and cultural aspect of the business (Dangelico, Pontrandolfo and Pujari 2013). When a firm starts declining, it introduces new product into the market and this is a process of using the diversification strategy.
The advantages of diversification are:
Increase in market power
Scope of a better economy
Economies for internalizing the transactions
The study of the market system (internal)
Advantages of information (Bartram et al. 2015)
In the given case, the textile industry of the United Kingdom has received a good scope regarding its economy. The said company produces multiple products by reducing the cost of the products. This is a distinctive feature of the organization and it helps the company to attain high profit. The company has adopted the process of centralized strategic planning. This helps the organization to exert its policies to all its units in the given market. Due to the centralization of the financial and the accounting functions, the organization has gained high returns on investment in all its sectors. Due to the implication of this strategy, the managers or the leaders come to know about the characteristics and capabilities of the employees of the organization. They can find out the problems in the agency and the internal or the external factors affecting the organization. After finding out the problems, they can create disciplines of the capital market within the territory of the diversified corporation (Bryson and Ronayne 2014).
The given firm should choose the diversification strategy as this is the most effective strategy adopted by the organizations to achieve profits. The company should use a common channel for distribution and sales and it can help the organization to achieve scale economies, boost utilization efficiency and help move the firm rapidly across the Learning Curve. This would further help the organization to improve their marketing and management skills. Improved marketing skills can attract many potential customers to the firm and management strategies would help the organization to manage the internal and the external factors of the organization. Organizations are often affected by political instability within the organization that affects the overall production system of the organizations. Effective corporate strategies adopted by the organizations can help them to overcome the situational problems and proceed accordingly towards the path of success. The BCG Matrix Model can be of help to determine the current position of the business of the said firm (Dangelico, Pontrandolfo and Pujari 2013).
Choice of Business Strategy
A business strategy can be simply defined as a long-term process of business planning. Usually, a business strategy covers a period of three to five years or even longer according to the needs and demands of the business. A business strategy is designed to help the business achieve long-term benefits. A business strategy is usually concerned with the issues of the major resources such as increasing the finance to build a new plant or factory. Business strategies are concerned with the scope of the activities of the businesses. Business strategies can be categorized into two parts namely the general or generic strategies and the competitive strategies (Higgins, Toms and Filatotchev 2015). The fundamental generic strategies pursued by an organization are:
The growth of the organization- this suggests the expansion of the organization by purchasing new assets and developing new products.
Globalization- this involves moving or spreading the operations of the business in the global sector, i.e., to more countries.
Retrenchment- it includes cutting back to focus on the best lines of the organization.
Figure 1: Porter’s Generic Strategies
(Source: Higgins, Toms and Filatotchev 2015)
On the other hand, the competitive strategies are more concerned with performing things in a better way than the prospective competitors in the potential market perform. This particular strategy involves two fundamental ways of being competitive (Bryson and Ronayne 2014). They are:
To sell the products or services of the organization at a lower price than the competitors
To differentiate the products or services from those of the competitors
This helps the organizations to improve their scale economies and differentiate their services or products from their competitors to expect high returns on investment. In this report, the industry deals with export and import of textile. The textile industry of the United Kingdom is very popular, as it has attained great heights from the perspective of the business. The organization has adopted the generic strategies to increase the productivity of the firm (Schäfer 2015).
Growth- the Company has expanded its chain of supply of the products because of the high demands of the customers. It is a key driver to the organization as it focuses on the rapid changing environment of the organization and supplying services or the products to its potential customers. The growth of the company has provided the people of the United Kingdom with more employment opportunities. More units of the business have grown and they have provided many people with employment opportunities (Higgins, Toms and Filatotchev 2015).
Globalization- the global scenario of the textile industry of United Kingdom proves that the industry has the potential to create innovative products and earn high profits. The working condition of the people has improved under immense international pressure because of the globalization process. Globalization is the key driver of the economic growth of the textile industry in the United Kingdom. The industry has seen a substantial growth in the past few years and it as added to the profit factor of the industry. The said firm has their manufacturing business units in China and India where they produce products and services at low rates. It has a two-way benefit. Firstly, it benefits the people of China and India. These countries have seen a substantial growth in export business of textile industry. The working conditions of these countries have improved. Secondly, the textile industry of United Kingdom has gained monetary benefits from outsourcing the products or services. They have been gaining high returns on investment by importing the goods from India and China. Therefore, choosing the general or generic strategies has helped the said organization to increase its productivity in both the domestic sector and the international sector. It has also increased the opportunity for employment in all the three countries (Jia et al. 2015).
Evaluation of the adopted strategies
As previously discussed, the said firm has adopted various strategies to increase its productivity and earn high returns on investment. The adoption includes the strategies at the corporate level as well as at the business level. Both the corporate and the business strategies help an organization to reach great heights in the potential market. Firstly, talking about the corporate strategies, the company has chosen the process of diversification. Diversification has many benefits as it helps an organization to grow and expand. It increases the market power. The organizations can gain power in the potential market if they follow the diversification strategy. They get the opportunity to deal with diversified products in the prospective market and this helps them to identify their strengths and weaknesses while dealing with the customers. It motivates the business to enter into a new market and create a new and unique product for the market. This strategy requires the organizations to acquire new techniques, new facilities and new skills. The process involves adding new products to the existing products. The process of diversification includes three categories: horizontal, concentric and conglomerate diversification (Malerba et al. 2015).
Horizontal- this type of diversification refers to adding of new services or products that are usually commercially or technologically unrelated to the current products but have the opportunity to appeal to the present customers. This strategy enhances the dependency of the firm on particular market segments. This strategy is adopted only when the current customers show their loyalty towards the presently available products and if the new products have good quality and is marketed well. In this case, the said firm has switched to production of many different products and it has helped the organization to earn a huge profit (Macchion et al. 2015).
Concentric- it suggests that there is a similarity of technologies among various industries. It means that the organization is capable of influence its technical aspects to gain an advantage. This helps in increasing the market share of the products. In this case, the said company has expanded its business in India and China and it has increased the technical aspects of the organization (Jia et al. 2015).
Conglomerate- it suggests that diversification may have a defensive or offensive approach. The offensive aspects can increase the position of the organization in the market whereas the defensive aspects can spread the risk of market concentration (Macchion et al. 2015).
This report has also suggested the business strategies adopted by the business. The generic or general strategies have helped the organization to increase its productivity in both the domestic and the international sectors. This proved quite beneficial for the organization. Michael Porter introduced generic strategies and they include lower cost, differentiation and focus. The strategies help in detailing the interaction between product differentiation, marketing focus and cost minimization. These strategies suggest that an industry can have multiple market segments and these segments can be targeted by the industry. The main analysis of generic strategy is that the organizations have the capability to achieve advantages in the competitive sector by differentiating or categorize the products or the services from those of the prospective competitors (Malerba et al. 2015).
In this particular case, the said company has adopted the generic strategies of differentiating its products and lowering them in other markets to achieve profit in the main market. This helped the company to expand its business and gain high profits. The company has also focused on the market where it enjoys the least competition. This identification has helped the company to plan long-term strategies (Robins 2015).
Conclusion and Recommendation
After analyzing the selected industry of the United Kingdom, it is portrayed that, the textile industry has been achieving huge profit and success from the past few years. It is one of the most important industries of the United Kingdom and the Lancashire Textile Ltd. is one of the most important textile companies of the said country. The company has acquired more than hundred years of experience in the textile industry and the analysis proves that the company delivers quality goods and services to its customers by adopting various corporate and business strategies. The report has also analyzed the prospective market for the industry in both the domestic and the international sectors. The strategies adopted by the company have proved beneficial to the company to increase its productivity and sales in the potential market. The preferences of the customers and the advancements in technologies have helped the organization as well as the textile industry to gain popularity and reputation in the territory of United Kingdom. The demands of the customers have been increasing and the industry has taken possible steps to meet the needs of its potential customers and this has helped the company to make more profit (Robins 2015).
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