Just Toyz is an online wholesaler in Thai, which supplies toys in the United Kingdom and Japan. This report aims to develop to strategic plan for the organization. It provides a brief SWOT analysis of the company in which strengths, weaknesses, opportunities, and threats are discussed that can affect the growth of the company. This report discusses about school strategy and one school strategy has also been selected for the company to improve its growth. External and internal changes along with competitive advantage strategies are also discussed so that the company can strengthen the market share in the international market. However, the company is financially strong and has the potential to earn profit in the international market.
Just Toyz is an online wholesaler in Thai, whose CEO is Ted Willard. It supplies toys in the United Kingdom and Japan. The company was an internet startup that became a multimillion company in just 36 months. The report will discuss different strategy schools and will choose one from it which will be best support for the growth of Just Toyz. In addition, this report will provide strategies for Just Toyz to take advantage of the competitive market so that their market share can be strengthened. Moreover, a recommendation will be provided on the short-term and long-term goals of Just Toyz. The mission and vision statement of the company will be discussed along with the SWOT analysis and goals of the company. The report aims to develop a strategic plan for Just Toyz to help the company for its continuous growth.
The mission statement of the company is to develop and supply high-quality toys at an affordable price for children that are enjoyable and educational for them.
The vision statement of the company is to enhance and improve our leadership in the wholesale and retail market within as well as outside the boundaries (Ansoff, Kipley, Lewis, Helm-Stevens & Ansoff, 2018).
It can be established from this vision and mission statement that Just Toyz aspires to win over every child and parent in its operating markets. Just Toyz set its standards high by setting standards to satisfy every single customer in the market place.
As the company deals with the supply of toys in The United Kingdom and Japan through its website, the goals and objectives of the company are as follows:
To develop innovative, affordable and educational toys for the children
To create a profitable company by supplying a huge number of toys
Improve the learning skills of children through interactive toys
Expand the business to other countries (Ansoff, Kipley, Lewis, Helm-Stevens & Ansoff, 2018).
Henry Mintzberg has provided ten strategies of schools which include perspective school, design school, environmental school, cognitive school, cultural school power school, configuration school, planning school, positioning school, an entrepreneurial school. The different strategies of schools are discussed below.
Prescriptive school is a school of thought. These schools suggest the formulation of strategies. In order to devise a strategy, this school of thought discusses the business method to be used (Rothaermel, 2016).
The design school is a type of concept in which the formulation of strategy is accomplished by using techniques and tools such as the Ashridge Mission model and SWOT analysis. The company that follows this concept should analyze its internal environment and external environment using SWOT analysis. SWOT analysis is used to discover the company's strengths, weaknesses, opportunities, and threats. According to the analysis made in SWOT analysis, the strategy is formulated for the company. The concept of design school is very useful but it has some drawbacks too. It is very important for a business to track its external changes as they are not constant, but the concept ignores the external change which is a disadvantage of using this strategy school. Moreover, in this competitive world innovative strategy is very important but this concept doesn't provide room for innovation, which restricts the business for further improvement (Lasserre, 2017).
The planning school concept focuses on the implementation of strategies along with the analysis of current situations of the business. The organization following this concept is suggested to first analyze the business current situation, which includes contemporary issues of the company, position of the business and external factors. After then, the organization is recommended to craft the strategy for the organization, while focusing on its implementation. The philosophy of this concept is the same as that of five tasks of the strategic management process. Therefore, for the contemporary business environment, it is one of the most useful concepts. The concept provides room for innovation and is influenced by urban planning (Mccarthy, 2016). The planning school concept is better than that of design school as it focuses on the innovation and external environment of the business. Besides this, it also has some drawbacks like other concepts. The manager is responsible for carrying out this process along with monitoring each and every action. As a result, it can create a conflict between managers of the company during the process of implementation and group thinking.
The positioning school concept focuses on the positioning of the company. It first analyzes the current position of the company in the market or industry after that the process of strategy development starts in order to change the position of the business in the industry. The main focus of this concept is to enhance the position of the business in the minds of the customers through developing related strategies. It is different from the above strategies as discuss as it is influenced by the military strategy. The concept to have drawback which is that this strategy can only be used by the large firm as they are financially strong and are capable of investing large money to enhance their position in the market (Mccarthy, 2016). This concept cannot be used by a small firm as they lack financially. Therefore, the concept is not accepted universally for the process of strategy formulation. Moreover, the concept concentrates on profits avoiding external factors like political, legal, social, environmental and technological factors.
This strategy suggests that the organization following this concept should have a visionary leader. The visionary leader is responsible for the strategy formulation for the organization and it is required that the organization must follow this strategy throughout its existence while making changes in it according to the change in the contemporary environment. The formulation of strategy is centralized therefore very much important. Hence, the visionary leaders is completely responsible for the development of the strategy. The concept also has some drawbacks as the employees are not involved in the formulation of the strategy, therefore they may not respond to the strategy efficiently and effectively. As a result, it may restrict the proper implementation of the strategy (David & David, 2016).
The concept first analyses the physiological needs of the customers after that the formulation of strategy is implemented. Therefore, an organization using this strategy school must focus on the wants and needs of the customer by analyzing the response and behavior of the customer in certain situations. Afterward, the organization formulates its strategy by considering these factors and caring out deep research on this factor. The cognitive school strategy is influenced by phycology but it is used for the contemporary business environment. It is so because it is very expensive for the organization to research customer phycology. Moreover, caring out the research is very time-consuming. In addition, the concept formulates the strategy according to the phycology of strategy maker which is based on the assumption and chances of strategy fail are more (Lasserre, 2017).
The organization using this concept should formulate its strategies by considering the mistakes they have made in the past and what they have learned from it. The process of formulation of strategy is slow. It is slow because the manager first learns from its mistakes and afterward they formulate the strategy. The process of strategy formulation is the same as that of cognitive school. This concept is proven to be useful as it is influenced by education. The concept has the same problem as that of cognitive school which is as follows. First, it is very time consuming and expensive. Second, it may also happen that the organization ends up with no strategy (David & David, 2016).
Based on the power, the strategy is formulated which results in the competitive advantage of the market for the organization. The power of the brand image, huge capital, and high revenue can be used for strategy formulation. It is influenced by political science as the strategy exerts power on the customers. The concept is similar to entrepreneurial school and these strategies are used by an organization that is operating in monopoly. It has two drawbacks.The first drawback is that it is very expensive as a heavy investment is required to make a statement. Second, an organization in powerful conditions may lead to wrong strategy formulation (Mccarthy, 2016).
The concept uses the culture of corporate in order to formulate the strategy by encouraging the employees for their involvement and cooperation. This concept also resembles with the entrepreneurial school. The cultural school strategy is influenced by anthropology which helps the organization by guiding it in order to pact with mergers and acquisitions. The concept has some drawbacks which are as follows. First, it avoids external factors. Second, the conflict between the organization employees may occur (Opata, Sarbah, Nusenu & Tetteh, 2017).
The organization following this concept is recommended to analyze the external environment factors of the organization for crafting of formulating the strategies. The concept analyses political, economic, social, legal and technological factors to develop strategies for the organization in order to tackle the problem faced by them due to these factors. This concept is similar to that of design school and is very useful. However, it avoids the analysis of the internal environment of the organization which results in difficulties in strategy implementation. The organization must focus on both internal and external factors to formulate a compound strategy. Doing this helps in creating space for innovation which may result in a competitive advantage in the market (Lasserre, 2017).
The organization using this concept is found to always change their decision-making process, due to which it is one of the innovative strategy school. However, implementation of this strategy school is difficult as the formulation of strategy requires a high flexibility of employees to adjust the rapid changes along with fixable organization structure (Rothaermel, 2016).
The strategy chosen for the growth of Just Toyz is environmental school as the company operates in the United Kingdom and Japan through its website. The strategy school will help in analyzing the environment of the United Kingdom and Japan for the formulation of strategy.
The section will discuss the strength and weaknesses of the company along with the opportunities and threats that may influence the growth of Just Toyz.
First, the company has a great return on its capital expenditure as the company is very successful in executing a new project. An example of this is that the company has become a multimillion Baht company in just 36 months of its starting.
The company has a strong portfolio in the US and Japan. Third, the company uses high technology as it works through its website.
The company has performed extremely tremendous in new markets of the US and Japan (Delery & Roumpi, 2017).
The company provides high quality of toys at affordable prices.
The company has a strong community of dealers that supply the toys in foreign markets.
The company has strong financial capability.
The company can expand its reach to a new market especially in Asian countries like India where the population of young children is more.
Innovative promotional strategies to increase the supply of toys (Rothaermel, 2016).
The company is an internet startup and most of the business operation depends on the foreign market (The US and Japan), the company possesses the following weaknesses. The first weakness is that the company has less knowledge of foreign market trends and the economy. It also has inefficient and improper financial planning. Third, despite large supply, the uniqueness and positioning of the brand are not yet clear. Fourth, company structure limits the expansion of adjacent product segments (Johnson, 2016).
The company has the following opportunities.
The company can expand its reach to new markets as it is financially strong.
Educational toys increase the rate of sales as children are highly attracted to them.
As a result of high investment in an online platform, the company has chances to gain new customers.
A new trend in consumer behavior can increase the chance of Just Toyz to enter a new market.
New environmental policies will create new opportunities in the industry.
The increase in online shopping and treading provides an opportunity for growth (Delery & Roumpi, 2017).
The threats for Just Toyz are as follows.
Change in the political and economic environment of Japan and the US may result in the degradation of profit.
As per the scenario, children are more attracted to mobile phones; a decrease in the sale of toys will directly affect the revenue of the company Just Toyz.
A high degree of competition as a large number of websites and online platforms is there who deals in the industry.
The growing strength of local distributors and suppliers can affect the company’s growth (Johnson, 2016).
To take advantage of a competitive market and strengthen the market share in the international market, Just Toyz can implement competitive marketing strategies that include cost leadership, differentiation, and focus. The competitive advantage strategies are discussed below.
The objective of the company under the cost leadership strategy is to become the lowest-cost producer. This can only be achieved by the company when it can exploit the economies of scale through large-scale production. If the company is capable of producing products at a lower cost as compared to the competitors then the company becomes able to establish a selling price of products that cannot be replaced by competitors. Therefore, if Just Toyz adopts this cost leadership strategy, then it will be able to gain profit over its competitors due to significant cost advantage (Jannesson, Nilsson & Rapp, 2016). Through this pricing strategy Just Toyz will be able to compete with low priced toys at dollar stores because the customers had switched to lower priced outlets. Moreover, it will help Just Toyz to gain the loyalty of kids that are the true segment they want to attract and retain. Furthermore Just Toys is going to keep changing its merchandize offering at its stores with a set of hundred items made available at one time. Therefore, keeping the excitement factor for kids and making encouraging collectibles through this offering the company can earn more profit. (Jannesson, Nilsson & Rapp, 2016).
Due to the changing market environment Just Toyz needs to update its core competencies it was previously focusing on marketing a shopping experience to its young customers and their parents alike. However, now it needs to tap into the price conscious attitude of the customers and provide value for their money. It should develop a core competency offering a good product assortment, quality of service and that too at a highly competitive lower price. It should develop alliances or partnerships with its suppliers to accomplish these objectives and carving this core competency that can ensure its survival in the market (Lloret, 2016). Furthermore, it should eye the emerging international growth markets particularly in Asia with high disposable income and a greater population segment of children.
Implementation of differentiation strategy results in differentiating the company’s products or services from that of its competitors. Just Toyz can achieve it by delivering innovative products or services, or high-quality products or services to customers. Moreover, if the company becomes successful in differentiating than the company becomes able to set a premium price on its products and services (Anwar, Khan & Khan, 2018).
The company should focus towards differentiating itself from the other discount retailers by communicating additional benefits with no extra costs or some edge that the discount retailers cannot compete with. For instance, exclusive product line is available at Just Toys online stores only and offering more selective toys that are in agreement with contemporary children wants. Its marketing strategy should help strengthen its brands equity and communicate good quality (Anwar, Khan & Khan, 2018). An isolated approach to marketing strategy formulation will not help. Just Toys will have to come up with an impressive integrated marketing communications mix that is based on the holistic marketing concept.
The focus strategy deals with focusing on a narrow-target market segment for the company's product and services. The rate of success depends on the customer, as the implementation of this strategy is only successful when the customers have different needs and want. Moreover, it also depends on how accurately the company's product and services are meeting the needs and wants of the customer. There are two variants of focus strategies which are as follows.
Differentiation focus: Company having differentiated products and services in a narrow market segment.
Cost focus: Lowest-cost producer in a narrow market segment (Jannesson, Nilsson & Rapp, 2016)
The company can achieve a competitive advantage in two ways, through external change. It is observed that when PEST factors change in countries, various opportunities appear. Secondly, developing cost leadership and differentiation strategy within the company. These two ways are discussed below.
Changes in political, economic, social, legal; and environmental factors affect the company's external environment. Just Toyz can take advantage of these by analyzing the external factors in Japan and the United Kingdom. This will help Just Toyz to become superior over its competitors. Moreover, if Just Toyz generates the capability of responding fast to changes than it will be a great advantage for them. However, if the company is unable to respond then it may never be benefited from the opportunities that have been raised by changes in external factors (Anwar, Khan & Khan, 2018).
VRIO Resources: VRIO resources include valuable, rare, hard to imitate and organized. The company having VRIO resources has the advantage of being over to its competitors as no one can acquire its position. The attributes of VRIO resources are reputation, culture, brand equity and intellectual property (Lloret, 2016).
Unique competences: It is the ability of the company to perform its task successfully. Competence is a collection of processes, capabilities, knowledge, and skills. It the company generates this capability then the company has a competitive advantage over its rivals as it is very hard to copy such capabilities.
Innovative capabilities: it has observed that a company only gains superiority when it became able to innovate things. Innovation can be done in various things such as in products and services, business models, or business processes. This capability provides the company with a strong competitive edge (Gross, Javalgi & Mathew, 2017).
It is important to use competitive advantage strategies for an organization as it distinguishes the company from its competitors. Moreover, it helps the company to strengthen the share prices of the company in the international market. It helps in gaining more customers along with the improvement in brand loyalty. It also contributes to higher prices for the company's products and services. The company working in the international market should priorities the goal of establishing such a competitive advantage. As per the current scenario, a business needs to achieve a competitive advantage as if we observe the market; there is a huge competition where an enormous amount of alternative is present to replace the business (Rugman& Verbeke, 2017).
The company short term goals are to make customers familiar with the toys in a short period. The company first needs to create a base of customer or retailer who wants their toys. For this, the company needs to focus on aggressive strategies that can help it to achieve a loyal customer. The company can use various strategies such as the blue ocean strategy. According to this strategy, the company can first supply its product at a low price to attract a large number of customers and other shops (Batzer, 2019). This will help the company to create a base of loyal customer which will only prefer the toys of Just Toyz as the company will provide innovative and high-quality toys at affordable prices. After some time, when the company has achieved the targeted customers or dealers, and when they become dependent on Just Toyz toys, the company should increase the price of toys. This strategy will help the company to achieve its short term goal in a short period. Moreover, as a result, the company will gain the base of customers it requires along with improvement in the profit, particularly in the international market. In addition, for accomplishing the short term goal, the company should use innovative business models and innovative theories so that, it can create an image of its brand in the minds of the customer. It will help in increasing the reputation of the brand as well as will result in better growth in the international market (Rugman& Verbeke, 2017).
The company’s long term goal is to become a global business icon and enhance the goodwill of the company's product and service internationally. The company can achieve its long term goal through doing various activities which include the following things. Firstly, the company needs to set a website traffic goal. This long term goal is to increase the traffic up to 50 per cent on the company website (Batzer, 2019). This will help the company to create a brand image in the minds of customers and dealers. Secondly, the company needs to set long term revenue goals. This goal will help the company to achieve the targeted goal in the predicted period of time. It will keep the employees of the company focused on a single attribute. To achieve this, the company has to expand its business in a new market in order to gain new customers and distributors (Kono, 2016). It will require innovative promotional strategies to aware people of the products of the company as well as their benefits. Moreover, offering benefits to customers on the purchase will help the company to attract more customers towards it in no time. Moreover, as the company works from its website, the company should use innovative promotional strategies so that the customer becomes aware of the brand products. The company can use various strategies for promotion such as, through conferences, social media platform and many more. It is one of the best ideas to accomplish the long term goals as most of the company working from their website uses this strategy for making more profit.
It can be concluded the report has discussed different strategy schools which include perspective school, design school, environmental school, cognitive school, cultural school power school, configuration school, planning school, positioning school, an entrepreneurial school. An environmental school strategy was selected for the company as it will help in analyzing the environment of the United Kingdom and Japan for the formulation of strategy. Moreover, the report has provided a brief SWOT analysis in which it was found that the company has the potential to expand its market in international business. However, competitive strategies can help the company to grow in the foreign market have also been discussed along with the external and internal changes. Further, recommendations on short term and long term goals are also provided. The company is financially strong and possesses high knowledge of the market which will help it to earn revenue in the foreign market.
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