ASOS Plc: Online Fashion And Beauty In The UK.

Mission and Vision of ASOS

Question:

Discuss about the Strategic Management Analysis for ASOS Plc.

ASOS Plc is an online beauty and fashion store in United Kingdom and offers menswear, women wear, accessories, and footwear, jewelry and beauty products. Founded in 2000, ASOS is headquartered in Camden Town at Greater London House (Marques, 2015). The company sells more than 80000 own-brand products online and via mobile experiences. It aims at young adults and sells more than 850 brands and its own range of accessories and clothes. For the financial year 2015, the revenue of ASOS was £1,119.9 million and net assets of £237.3 million. The websites of ASOS is targeting different countries, like; USA, Australia, UK, Spain, Russia, Germany, Italy, Franca and China. In addition to this, the company delivers its products to more than 140 nations from distribution centers in the Europe, United States, China and United Kingdom (Jon, 2017).

The mission statement of ASOS is to become the number one e-commerce shopping destination in the world for the people, who love and passionate about the fashion. To attain this, the company is a multi-platform and unique, which truly booms with the customers, who use the products, because it is created by them (Bhardwaj, and Fairhurst, 2010). The company is working to attain this mission by implementing effective marketing strategies.

Under its vision statement, ASOS aims to become synonymous to the fashion for the people between the age group of 16 and 25 like; Facebook is for social media networking and Google is for making search. Moreover, its targets to provide best shopping experience to its potential customers in the expectations that they will get return each and every day (Cole, 2013).

The above-stated statements will definitely assist the organization in attaining sustainable competitive advantage against it competitors. Under these statements, ASOS is aiming on providing most engaging shopping experience and expanding its business globally. The organization is available for twenty-something’s, wherever they are across the globe. In addition to this, this entity is providing highly effective and efficient retailing. For this, it is executing a faster supply chain for delivering the desired fashion at appropriate prices and on appropriate time. By doing this, it is attracting a maximum customer base inside and outside its home country. The customers will be satisfied with its great services, as they are getting their desired fashion products at their home. Thus, incorporation of these factors in mission and vision will assist ASOS in gaining sustainable competitive advantage (DesJardins, and McCall, 2014).

Porter's Five Forces Analysis for ASOS

Porter’s five forces analysis is a tool of marketing that is conducted to analyze the trends and competition in the prospective industry. It includes five forces, which may impact the growth of company in that particular market. Porter’s five forces analysis for ASOS is stated below;

In the fashion industry, there are so many competitors, which are posing intense competition on ASOS Plc. From these competitors, Amazon.com is the most popular online retail for fashion and apparel and Marks & Spencer is on the top rank among multi-channel retailers in the world. It indicates that ASOS is operating its business in very competitive fashion industry (Eden, & Ackermann, 2013). This competition takes the toll on long term productivity of this company. Apart from these above stated competitors, there are some other British fashion retailers, who offered cloths online, such as; Boohoo, Next, Net-a-Porter, Missguided, Topshop and My-wardrobe. These organizations are generation significant revenues and profits against ASOS Plc.

In the fashion and clothing industry, the customers have increased demands. They generally prefer to purchase best products by paying minimum prices. This fact is putting pressure on the profitability of the players in the industry (Gordon, 2012). If the customer base of ASOS will be smaller and stronger, there will be higher bargaining power of buyers and their ability for seeking the offers and discounts will be comparatively higher.

All the firms in fashion industry can purchase there raw material from several suppliers. The leading suppliers can decrease the margins of ASOS that it can generate in the retail market. In the customer’s service sector, strong suppliers utilize their selling power to excerpt higher prices from the companies in fashion and retail industry. In the fashion industry, the bargaining power of suppliers is very high, thus it decreases the profitability of retail and clothing companies (Hill, Jones and Schilling, 2014).

Threat of new entrants in fashion industry is also high as the new entrants bring some new and innovative things, which put pressure on the existing companies including ASOS Plc. new companies are engaged in implementing cost effective strategy, reducing costs and offering innovative value proposition to people (Hollensen, 2015).

Clothing is one of the basic requirements of human life. It is the necessity, for which it is very hard to get any substitute to replace this. So, the threat of substitute in the industry is comparatively low. Substitution in the fashion and apparel industry is just competition.

Online Retailing Services

From the above industry analysis, it can be concluded that attractiveness of this industry is moderate. It can be seen that the company has some threats and some advantages as there is no substitute to the fashion and clothing. It is not much attractive as the buyers have higher indirect bargaining power with lots of leading competitors that make it hard to make a place in the fashion industry (Kunz, Karpova, & Garner, 2016).

These are the activities, which are related to storing and distributing the raw materials that go under the process of manufacturing. ASOS has an effective supply chain process and established fulfillment and distribution center in different countries. Generally, it fulfills the orders from its automated picking warehouse. Now, it is planning to expand its warehousing operations.

ASOS is working for enhancing its operations and customer experience. It is planning to expand its warehouse operations in United States. The customers are able to opt for the home delivery or utilize the Pick-Up-Drop-Off network of its various store locations for collection of products. In addition, it is making huge investment in customer service. The delivery services of the company are very effective (Neville, 2013).

ASOS offers a great shopping experience through online media. The company is continuously inventing in warehousing and distribution centers. The delivery system is different in different countries, like; the company offer next day delivery at a premium in France, Germany, Italy, Spain and Belgium. It is offering the return facility, if the customers are not satisfied with the products. ASOS is emphasizing on merging the warehouse to create distribution and supply chain more effective and efficient.

Marketing and sales assist in creating customer awareness and satisfying the customers for buying the products and services (Su, & Tong, 2015). The company is interacting with the customers via social media, e-mail, Facebook, Twitter, ASOS website, Instagram, Youtube and Fashion Up mobile app. This online experience has enhanced the customer engagement and increased its customer base.

Services are the major activities, which are offered by the company and enhanced value of products and services. The company understood that it is very important to maintain the loyalty among customers. For this, it is important to provide quality services to customers, so company is enhancing its online retailing services.

Human resource management at organization is very effective at ASOS. All the related departments are managed by allocating separate roles and responsibilities. It provides training to the people, who manage the apps and website and the people, who deliver the products to final customer.

Infrastructure Development

In addition, the company is making focus on expanding the infrastructure to support its profits and revenues. At the center of infrastructure is the Information Technology. Under infrastructure development, it focuses on HR, transportation, supply chain and some other divisions (Turker, and Altuntas, 2014).

ASOS emphasizes on the development of information technology. The company is using advanced technology for delivering the products to customers. The supply chain of the company is linked through information flow. It has developed digital presence all over the world. These activities are creating value to the customers.

The company is creating the value by implementing these resources and capabilities effectively. Primarily, it is focusing on developing and upgrading the technology for providing great customer experience (Su, & Tong, 2015). In the future, the company can implement some effective strategies for improving them. It should enhance its operation plan and execute marketing strategies.

In the global competitive environment, ASOS Plc. should implement some specific strategies to attain sustainable competitive advantage. The senior management in the organization should implement effective IT strategy, which will enable them in managing the information systems in a better way. It will reduce the costs and enhance the effectiveness and efficiency of the business operations (Zott, Amit and Massa, 2011). It will aid the back office operations, like; purchasing, placing an order, merchandizing and execution of the processes. In addition, the company should use low cost model for entering to the global market. For gaining sustainable competitive advantage, ASOS should understand the needs and preferences of the customers.

They should understand the current trends in the market and updated fashion trends. Moreover, it should emphasize on the Customer Relationship Management via social networking sites, like; Facebook, Twitter etc. It will make the organization able in getting customer feedback about their products and services (Kotlar, & Armstrong, 2012). Although, the company has 24 hours customer support that will offer ASOS the increased competitive advantage. In the global competitive market, ASOS should use effective market entry strategies, which will assist it in establishing its business operations in the new market. These strategies will help ASOS Plc. in getting over the global economic crisis and enhance its operations in other countries.

References

Bhardwaj, V. and Fairhurst, A., 2010. Fast fashion: response to changes in the fashion industry. The International Review of Retail, Distribution and Consumer Research, 20(1), pp.165-173.

Cole, G.A., 2013, Strategic Management, Cengage Learning.

DesJardins, J.R. and McCall, J.J., 2014. Contemporary issues in business ethics. Cengage Learning.

Eden, C., & Ackermann, F., 2013, Making strategy: The journey of strategic management. Sage.

Gordon, R., 2012, Re-thinking and re-tooling the social marketing mix. Australasian Marketing Journal (AMJ), 20(2), 122-126. 

Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated approach. Cengage Learning.

Hollensen, S., 2015, Marketing management: A relationship approach. Pearson Education.

Jon, C., 2017, "Growing Business Success Stories – ASOS". Retrieved from Growingbusiness.co.uk. 

Kotlar, P. & Armstrong, G., 2012, Principles of Marketing (14 edition). Pearson Education, Inc.

Kunz, G. I., Karpova, E., & Garner, M. B., 2016, Going global: The textile and apparel industry. Fairchild Books.

Marques, M.B., 2015. Equity valuation Asos PLC (Doctoral dissertation).

Neville, S., 2013,. Asos pulls belts in radioactive scare". The Guardian. 

Su, J., & Tong, X., 2015, Brand personality and brand equity: evidence from the sportswear industry. Journal of Product & Brand Management, 24(2), 124-133.

Turker, D. and Altuntas, C., 2014. Sustainable supply chain management in the fast fashion industry: An analysis of corporate reports. European Management Journal, 32(5), pp.837-849.

Zott, C., Amit, R. and Massa, L., 2011. The business model: recent developments and future research. Journal of management, 37(4), pp.1019-1042.