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Corporate Strategy

Corporate Strategy

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Published by tahirmassud
assignment corporate strategy
assignment corporate strategy

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Published by: tahirmassud on Apr 14, 2011
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02/08/2014

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1
Introduction
Macpac is an entrepreneurial start-up company which deals with the outdoor and adventureequipment industry based in New Zealand. The company was started by Bruce McIntyre in 1973 byacquiring Christchurch-based bag manufacturing and repair business, when he was 19 years of age,by the year 2006 the company became an iconic brand in the New Zealand and had survived duringit bad times in late 1990 and early 2000¶s. Macpac started at home and in 2006 it was working as aglobal industry having its markets in Europe, America, Asia, Vietnams etc as well. In thisassignment, I will be discussing the factors that lead Macpac to achieve success in internationalmarket till from 1973-2006. The below are the factors which lead to achieve for the success of Macpac internationally from 1973-2006.
Growth and development of Macpac.
Internal growth:
A business can achieve the market development, and can initiate the penetration by utilisingdifferent resources like people, money and time internally. To increase the overall sales of productssold is the purpose of market penetration strategy. Thus growing revenue and widening the marketshare. The other internal growth strategy is the market development that engages new potentialcustomers and untouched segments of the market.Looking at the case of Macpac, it is quite clear that the focus of their focus has been on the qualityof the products right from the beginning from the stage of manufacturing and thus creating a brandimage in the minds of the customers. Alongside their focus was on culture and structures within theorganisation which made the internationally successful. Due to their new penetration strategies theywere able to widen their trade in the European countries. After observing the continues decrease intheir hardcore products, company adapted the new strategy and now focused more on design andfashion. For this new change they also appointed specialised persons for fashion pilot project whichwas started in New Zealand. They concentrated on both the domestic and international market togroom their business.
(Harrison, 2008)
 
 
2
Ex
ternal growth strategies:
These types
 
of 
 
strategies are adapted to increase the growth rates of anorganisation by simply investing their resources in another firm. It is a horizontal type of integrationwhere in a business enters into Memorandum of association (MOU) with the other same linebusiness organisation or firm in other words merging with the other organisation. This merger isoften with in the same line, same sized organisations. Merging is mutually desired and is results information of essential strategy options which sometimes turns into extraordinary changes in theoverall performance of the company. To penetrate into the new market merger strategy is followedby the company. Now in case of Macpac, it is clear that when the company has emerged in 1980¶sand increased its staff by 20 and sales of NZ $300000, at that time the owner of the company(Macpac) Bruce Mclntyre decided merger with a retailer Geoff Gabites. The retailer company of Gabites and his wife shally were dealing with the business of producing cloths, sleeping bags andtents with a limited no. of sales and few profits. The strategy adapted by the Macpac proved to beresult oriented for both the companies as both of them formed a marketing association andpartnership and work under the same banner Macpac, thus a strong brand was on the launch pad.This brand was the first of its kind in the country producing a variety of products. Hence businessexperience of both the entrepreneurs helped Macpac to enter in both domestic and internationalmarket.
(Johnson and Scholes, 2000)
 
(www.apeccp.org)
 
During the year 1990 Macpac started to capture the international business and at the same time saleshad jumped to NZ$8 million which is 35% overseas sales. The company started direct business withthe Australian retailers by selling them the products. This was achieved because of the work cultureand team work. Macpac was considered to be the one of the iconic brands in Newzeland. Thedirector of the company Macpac believed in de-centralisation of powers and was always againsthierarchical management style in the organisation. The secret of success for Macpac is behind theteam work culture and the production of the quality product. This leads to the lot collaboration inthe company. The change in strategy by Macpac in 1996 proved to be successful, wherein theydecided to sell their products directly to the overseas retailers, hence resulting in elimination of middle agents from the sales. Till twentieth century this strategy turned to be successful and wasrunning smoothly, but profits of Macpac started to dip down with the start of 21
st
century, itincurred losses in three years 2001-2005 and there were lots of reasons for that and they will bediscussed below.
 
3
Reasons for the loses that Macpac incurred during 3 years
At the beginning of 21
st
century, Macpac incurred losses, it had many factors mainly theexternal and they were political, economical, social/legal, technological collectively which is knownas PEST.
Political:
the
 
incident of September 11 (9/11) on the famous twin towers (world tradecentre) of America changed the world scenario and has affected the whole world. It was disaster for the world economy as USA is the hub of the world economy. Macpac was hit by this disaster aswell, the sales were dropped drastically by 30% and in the next year by 10 % more. After this attack on American investors from all over the world hesitated to invest due to increasing insecurity andinstability in the political environment and the world scenario. Sometimes it was due to highsecurity issues adapted by various countries of the world including US and UK.
E
conomical:
this factor has surely
 
affected the
 
sales and caused losses to the company. AsMacpac was focussing on maintaining good quality, so to maintain quality they used highly andadvanced technologies and material to satisfy the customers.Due to decrease in fame
 
and trend for adventure sports and outdoor people started aimingand preferred to buy at low price goods instead of good quality and expensive which directlyaffected the sales of the company Macpac. The downfall of sales was due to this.
 
REASONS FOR THELOSSES INCURREDBY MACPACECONOMICRECESSIONWAS CAUSEDDUE TO THEPOLITICALTHE 9/11ATTACK CREATEDTECHNOLOGICAL
y
 
HIGH TECHNOLGYMEANT HIGHPRICE OF
SOCIO/CULTURAL
y
 
CHANGE INLIFESTYLE

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