FINAL PROJECT

Training program: Master in Management and Team

Management

Subject: Strategic Management

Send to: management@eneb.com

Last Name/Surname: Abanto

Name: Camille

ID/Passport: P4245999A

Address: Quezon City

Region: National Capital Region

Country: Philippines

Telephone: +639177044624

E-mail: camsabanto@yahoo.com

Date: 06/24/2021
Table of Contents
Strategic Management on BACHI Barcelona .............................................................. 4

Mission ........................................................................................................................ 4

Vision ........................................................................................................................... 4

Values.......................................................................................................................... 4

Internal analysis ........................................................................................................... 5

Competitive Advantages .......................................................................................... 5

Competitive Disadvantage ....................................................................................... 6

Tangible Resources ................................................................................................. 7

Intangible Resources ............................................................................................... 7

Capacities ................................................................................................................ 8

VRIO Analysis .......................................................................................................... 8

Strengths and Weaknesses ..................................................................................... 9

External Analysis ......................................................................................................... 9

PEST Analysis ......................................................................................................... 9

Five Porter Forces.................................................................................................. 12

Opportunities and Threats ...................................................................................... 13

Internal & External Analysis in Accordance to SWOT Analysis ................................. 13

Defensive strategy ................................................................................................. 13

Offensive strategy .................................................................................................. 13

Survival strategy..................................................................................................... 14
 Reorientation Strategy ........................................................................................... 14

Balanced Scorecard of BACHI Barcelona ................................................................. 15

Michael Porter’s Three Generic Strategies ................................................................ 16

Strategy in Cost Leadership. .................................................................................. 16

Differentiation Strategy........................................................................................... 16

Focus Strategy ....................................................................................................... 16

Bibliography .................................................................................................................. 18
Strategic Management on BACHI Barcelona
Mission

BACHI Barcelona is a company in the fashion industry specializing in handmade

handbags for men and women alike. The handbags by BACHI Barcelona were made to
be comfortable without overlooking innovation, quality and uniqueness in design. Our
main market are men and women who takes pride in comfortable fashion that are
unmistakably authentic.

Vision

BACHI Barcelona aims to be recognized as a differentiated product in the fashion

accessories industry. They would like to be known to produce high-quality and authentic
handbags that are 100% handmade with functionality and comfortability in design without
overlooking the details. The company aims to increase their visibility online satisfying
every customer with high quality designs matched with comfortability of the artisan
handbags they make.

Values

Passion
BACHI Barcelona is passionate in creating every handbag getting their inspiration with
experiences translating it to the designs of the handbags.

Authenticity

The company promises its consumers 100% authentic and unique designs that suits
every occasion and aesthetic.

Innovation in design

BACHI Barcelona created their handbag putting into mind the comfort of their consumers
without sacrificing design. Their designs are not only seen on the surface of the handbag

4
but in the inside as well so the consumer experience of each intricately handmade
handbag is different than the rest of the handbags in the market.

Commitment

The company knows the important of market and fashion trends and are keen to keep up
with market’s preferences implementing them in their handbag’s designs.

Quality

Every BACHI Barcelona handbag is 100% handmade following artisanal process with
each material they are made.

Internal analysis

Competitive Advantages
Equal gender market

BACHI Barcelona offers their products to both genders when their competitors offer a
feminine design to their products. Although all claimed to have authentic and unique
designs of their handbags, BACHI Barcelona handbags are 100% handmade and
ecofriendly.

More value for money

BACHI Barcelona has more value for money since they are more intricate with their
designs as the design is in the inside and outside of the handbag which makes it a
superior product between the three at a more affordable price range.

Eco-friendly

The company is eco-friendly in nature so they also touch on the more ecologically
concerned population of Spain and Europe.

5
A very good relationship with suppliers

The company is currently working with 20 local eco-friendly suppliers and since they
contribute and sustain local commerce in their area, this also translate to a better
relationship that they have with them.

Cost Leadership

BACHI on has only two employees who are the brains and the works of this company.
Both owners have a law degree so they are knowledgeable with legal matters and they
are also in charge with the design aspect of the product.

Market enthusiasm

Marketing strategy is to increase engagement online with their online website while
making use of the influencers to promote their product for them to more visible online.
They also participate in fairs so they are aware of the latest preferences of the market
and trends that can boost their marketing more.

Competitive Disadvantage
Product Variety

The two competitors of the brand have a wider variety of product offering to the market
which includes other accessories other than handbags.

Geographical Reach

BACHI only ships in Barcelona and some of the cities near it whereas the competitors are
able to cater people all around the world as they ship their product worldwide.

Common Aesthetic: BACHI’s handbags have a similar aesthetic with its competitors.

Limited channel for sales

BACHI only sells online and does not have a physical store whereas their competitors
have this channel for sales.

6
Low bargaining power

BACHI’s sales is not yet at the level wherein they can impose bargaining power with
suppliers and shipping services.

Tangible Resources
Material

i. Raw materials for manufacturing such as cloth, leather, dyeing materials, zippers,
packaging and other materials used to produce the handbag itself.

ii. Handbags are produced in bulk for easy sales and faster shipping

iii. Spaces, factories and warehouse to visualize, make and store the handbags for
production.

Financial

i. Capital is from the combined money of the two owners of the company

ii. They work with a Business Expansion Account for SMEs with advantageous
conditions in terms of fees and bank charges, but they do not have financing.

Intangible Resources
Non-human

i. Their online website is their main and only channel for sales.

ii. Branding of BACHI is very true to its nature as they stick to making authentic and
100% handmade designs.

Human

i. Both owners built the brand with their own enthusiasm in fashion accessories and
are very well customed to the trends and preferences of the current market.

ii. Both owners also have a law degree and these helps to lessen costs in hiring their
legal consultant for the business.

iii. BACHI Barcelona is a registered business in Barcelona and with copyright.

7
Capacities

The owners of BACHI Barcelona built their business with their own knowledge in
design. They designed their handbags so they can attest to their promise of
authenticity without sacrificing comfort and trendiness of the product for the
market. They are currently working with 20 suppliers for the process of making
their handbags making sure that it will be off quality and up to standards of their
vision for their company.

VRIO Analysis

Value Rarity Inimitability Organization

Financia Resources
Initial capital YES NO NO YES
Bank financing NO NO NO NO
Pricing YES NO NO YES
Cost of production YES NO NO YES
Physical Resources
Customers YES NO NO YES
Skilled staff YES YES YES YES
Suppliers YES NO NO YES
Individual resources
Factories YES NO NO YES
Warehouse YES NO NO YES
Ready product stocks YES NO NO YES
Physical store YES NO NO YES
Machinery and equipment YES NO NO YES
Organization's Resources
Online store YES NO NO YES
Authenticity of product YES YES YES YES
Social media engagement YES NO NO YES
Relationship with suppliers YES YES YES YES
Product variety YES NO NO YES
Eco-friendly YES YES YES YES

8
 Strengths and Weaknesses

Strengths Weaknesses
Products are true to their branding Online website as the only option
Passion and enthusiasm of the owners for sales
for design and trends Brand is new to the market
Authentic and innovative designs Marketing strategy is geared towards
Knowledge on legalities of the business women
Good relationship with local commerce Sales and shipping are not available
Eco-friendly worldwide
Products are for all genders

External Analysis

PEST Analysis
Political structure

• Regulations and environmental protection

There are a couple of legislations in Spain that aims to protect their air, water, legislation
on chemicals, solid and hazardous waste, and contaminated land. But since BACHI
Barcelona are sourcing their products from locally and eco-friendly suppliers, they attest
to their promise to offer eco-friendly handbags to their customers.

• Fiscal policies

This fiscal policy in Spain aimed to end the prolonged recession in Spain. It has to goals;
fiscal consolidation and structural reforms. It’s general aim to bring back the public
finances back on path to fiscal and financial stability. It has been geared favorably towards
business as they bring more employment to the country and economic growth. With these
government policies, BACHI and other businesses alike will be greatly supported by the
government as long as they bring about jobs and good circulation of money in the country.

9
Economic structure

• Stage of the business cycle

BACHI is relatively new in the business but not the only business offering the same
concept in the market. With this, they have to think about innovative ways to make
their products unique and authentic. BACHI is keen on marketing this concept,
having authentic designs of their handbags and their design is intricately done
since it is on the inside and the outside surface of the bag which makes it very
differentiated in the market.

• Economic growth

The Spanish economy faced a great and long recession from the year 2008–2016.
And since then, they have developed a fiscal policy geared to end the recession.
With this, the economical state of Spain has changed has been on an accelerating
pace. The new policies have been focused on capitalization of the private sectors
and lessening the tax burden on the working population of the body. These have
all been good to the economic state of the country not until the pandemic hit the
country and the whole world. These policies will not matter if the economy has
been on a standstill last 2020, however, with the aggressive vaccination drives all
over the European Union, the economy of Spain and Europe has been steadily
undergoing correction.

• Interest rates and monetary policy

Because of Covid-19, the Spanish authorities have swiftly responded by

formulating an economic support aimed to help small business with agile and
flexible loans to keep their business afloat.

• Taxation

Taxation on SMEs has been linear throughout the years but because of Covid-19
causing halt in businesses, the government responded by Royal Decree Law.
10
 Small to mid-range business with a trading volume of €6 million or less may defer
the payment of tax amounts due not exceeding €30,000 for up to six months, with
no interest penalties to be applied during the first three months.

Social Structure

• Changes in lifestyle

BACHI’s only source of sales is the e-commerce platform. Spain e-commerce

platform is booming at an accelerating pace since Spain is the most penetrated by
smartphones amongst the European countries fueling e-commerce growth in the
country. BACHI has a great advantage on this since this is where they generate
sales and engagement with their customers.

• Demographics

BACHI Barcelona has products for men and women unlike the other competitors
which are solely focused on women’s fashion.

Technological Structure

• The rate of transfer of technology

The rate of transfer of technology is fast paced in Spain. Since most of the
population is using the internet with their leisure and business so with the
expansion of the market, they should consider technological advances to their e-
commerce website such as the need to integrate with their data in numbers to their
advantage and relevant to their goal to increase in sales.

• New inventions and development

With the data that the businesses get throughout their years of operation, they are
now able to know that kind of development they need to do or reassess in their
business structure. BACHI’s channel of sale has been their online website and as
a development to their marketing, they are now scaling enthusiastically to various
social media platforms trying to increase engagement and visibility with their
consumers.

11
 Five Porter Forces
Bargaining power with suppliers.

Since BACHI is working with 20 different suppliers, it is said that in this concept, the more
suppliers you have, the less bargaining power of the suppliers. There are many suppliers
that the company can work on but they are working locally to promote and help local
commerce.

Power of negotiation of the consumers.

Handbags can be bought anywhere; it may be in a physical store and online. The power
on consumer is great on this aspect since a handbag is not a high-demand product so
the target market which maybe few, can demand lower prices of the product. BACHI
Barcelona, staying true to its brand of authenticity is at the same price range with some if
its competitors but giving more value for money since it offers comfort, innovative designs
that are authentic.

Threat on income of substitute products.

Substitute products that are common with the use of BACHI’s handbags are everywhere.
Yes, it is a unique product but not hard to imitate. When imitation happens, the
differentiation of the product will most likely lower down and since BACHI is not a go-to
brand at the moment, the buyers can opt to buy the substitute.

Threat of new competitors.

The threat of new competitors is highly likely. They already have 2 string competitors and
because of the growth of e-commerce all around the world, there maybe new competitors
that can enter like Amazon or other e-commerce-based business that ships around the
world and with low prices. However, since BACHI is on brand and is unique to the market,
it will be hard to have this concept present in the other platforms

12
Rivalry among competitors

BACHI Barcelona’s main claim is that they produce 100% handmade, authentic handbag
which their competitors do not claim. The suppliers working with the company are all local
suppliers with which they have a good relationship with, however, this may translate into
less competitive prices than if they worked with suppliers from countries with different
labor rights cultures.

Opportunities and Threats

Opportunities
Possibility to expand to a wider
market
To increase social media visibility
Creation of wider of variety of
products
Particiation in more public events
Possible collaboration with more
influencers
Threats
Entry of same competitors with
similar concept
Entry of similar products at a lower price
Pandemic market response
Competitors having a greater
visibility in social media

Internal & External Analysis in Accordance to SWOT Analysis

Defensive strategy

The defensive strategy should be to maintain its branding towards their growth. In
combination of their strengths and threats, their unique design can greatly
outweigh its competitors offering similar concept products to the market. They
should be able to stay true to their branding since this is what sets them apart from
the competitors in this industry and while doing this, improve their customer
satisfaction by maintaining or increasing quality standards for their products.

Offensive strategy

The offensive strategy of the company should be the combination of strengths and
opportunities. The strength of this business is the owner’s capabilities and attitudes
towards the business. Both owners are enthusiastic in creating new designs for

13
their brand and at the same time, exploring new trends. Their opportunities are the
developing relationship with fashion brands. With this, they can collaborate their
concept to create new variety in their products and with these well-known brands
helping them with the visibility in the fashion industry and in turn, increase following
and engagement in the online platforms.

Survival strategy

For the survival of the business, they should take note of their weaknesses and
threats. For BACHI Barcelona to survive the market, they should be well aware of
their weaknesses and one of them is that their marketing is geared towards women
when they have lines for the male gender. They also only have the online store as
their point in sales while their competitors have physical stores to sell their
products. In knowing these things, they should dedicate time and effort in
searching for resources that can help them level the playing field.

Reorientation Strategy

Reorientation strategy or refocusing are combinations of the weaknesses and

opportunities of the business. Since they are relatively new to the business, their
weaknesses are not something that can solve now so they refocus their energy
with things that they can do something about. Since they are not able to have a
physical store now, because of the pandemic, they should be focusing on
increasing their visibility online. They should allocate their resources on how they
can improve their marketing strategy in e-commerce to increase engagement with
their potential customers so they can increase visibility in the e-commerce world.

14
Balanced Scorecard of BACHI Barcelona

Perspective Goal Indicator Target Frequency of Responsible

% Measurement

Financial To guarantee the Increase funding and 20% Annual Financial

business’ capital manager
sustainability

Financial Increase business Increase sales 20% Annual Financial

revenue manager

Financial To decrease cost of Relationship with 5% Annual Procurement

materials supplier

Customer To increase Customer 75% Per sale Marketing

customer satisfaction manager
satisfaction

Processes To visibility online Higher engagement 50% Quarterly Marketing

rates manager

Processes To increase quality Justified complaints 5% Quarterly Marketing

of products Manager

Learning To facilitate labor Training 30 Annual Human

capability force management hours resources
Manager

15
Michael Porter’s Three Generic Strategies

Strategy in Cost Leadership.

Proposal: BACHI Barcelona should offer their products with promos and discounts
in shipping like the rest of their competition. In turn, they can lower the cost of
production by simplifying designs to lessen use of the raw materials.

Justification: Since BACHI Barcelona’s products are offered at the same price
with its competitors, however, the cost in shipping might tip the scale in favor of
their competitors. Since BACHI is already in brand with being authentic and unique
with their designs, offering their products with the similar price and discounts or
promos on shipping might be able to help them generate more sales and to do
this, they must decrease cost in other areas like production costs.

Differentiation Strategy

Proposal: The differentiation strategy for BACHI isn’t new since their products are
consistent with their branding; authentic and unique designs. With this, I’d like to
propose an additional option for shipping such a “Next day delivery” with an
additional cost. This is something that up to this date, none of the competitors are
offering.

Justification: Since the differentiation of the product is already attained, they

should be able to offer services of convenience with their customers as a plus
factor to their marketing strategy. This will make them far more unique than their
competition and an additional strategy to generate sales out of convenience.

Focus Strategy

Proposal: The proposal for the focus strategy is to focus their efforts on marketing
with the “fashionable working class”. Their designs are designed to be fashionably
unique and comfortable and this what the working class needs. They should focus
more on the working women of the population. The aim is to be the go-to brand
and the handbag of choice for the female working class.

16
Justification: Feminism and gender equality in the workforce is a trend nowadays
and they should use this to their advantage since they are a brand catering mostly
to women. They should use feminism concepts for their branding and marketing to
attract this specific group in the market and in turn, generating more engagement
in their online platforms and in return, attracting more sales.

17
Bibliography
https://www.bachibarcelona.com/

https://www.lamoncloa.gob.es/lang/en/espana/stpv/spaintoday2015/fiscalpolicy/Paginas
/index.aspx

https://www.trade.gov/knowledge-product/spain-ecommerce

https://www.imf.org/en/News/Articles/2020/11/12/na111320-five-charts-on-spains-
economy-and-response-to-covid-19

18