FINAL PROJECT

Training program:
(MBA – Masters in Business Administration)
Subject:
(Strategic Management)
Send to: management@eneb.com

Last Name/Surname: Khawaja Muhammad Mudasar Lone

Name: Hamza Mudasar
ID/Passport: AA0418684
Address: Abu Dhabi
Region: Middle East
Country: UAE
Telephone: 00971504130323
E-mail: hamza_mudasar@yahoo.com
Date: 09/08/2022

ENEB Business School

Page 1
 Contents
1. Create the mission, vision and values of BACHII ............................................... 3

Mission, Vision, and Values ................................................................................... 4

2. Describe and explore the competitive advantages and disadvantages of BACHI

regarding its competitors. ....................................................................................... 4

Competitive Advantages......................................................................................... 4

Competitive Disadvantages .................................................................................... 5

Tangible Resources ................................................................................................ 6

Intangible resources ............................................................................................... 7

Capacities ................................................................................................................ 7

Prepares a VRIO analysis of the resources of BACHI Barcelona ........................ 8

Conclude the exercise with a small matrix that reflects the resulting Strengths
and Weaknesses. .................................................................................................... 9

3. Perform an external analysis (macroenvironment and microenvironment) of the

current situation. .................................................................................................. 10

PEST analysis. ....................................................................................................... 10

4 elements of the economic structure. ................................................................ 10

2 elements of the technological structure. .......................................................... 10

2 elements of the political structure. ................................................................... 11

Analysis of the 5 Porter Forces ............................................................................ 11

Bargaining power with suppliers. ........................................................................ 11

End the exercise with a small matrix that reflects the resulting ............................. 13

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

4. In accordance with the Weaknesses, Strengths (internal analysis), Opportunities

and Threats (external analysis), propose the following:........................................ 13

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

Offensive strategy. ................................................................................................ 14

Survival strategy. .................................................................................................. 14

Reorientation Strategy. ......................................................................................... 15

5. Develop a BSC in the form of a matrix. ............................................................ 15

Page 2
 6. Based on the contribution of Michael Porter, you must propose and justify the
following (one of each): ........................................................................................ 16

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

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

Focus Strategy. ..................................................................................................... 17

References ............................................................................................................. 17

RESOLVE

1. Create the mission, vision and values of BACHII

BACHI Barcelona is an online company which deals with sales of handbags

through the website. This article aims at delivering a full analysis of the
company's operations and future strategies in a strategic plan. This article will
identify the mission,vision, and values of the BACHI Barcelona organization. The
paper will also review the company's internal analysis, which includes the
competitive environment and its resources, both tangible and intangible
resources. The internal analysis will also look into the strengths and weaknesses
and report the company's VRIO analysis.

After the internal analysis, an external analysis will exclusively present the
PESTanalysis and Porter's five forces analysis. With the external analysis,
the paper will alsohighlight the threats and opportunities that the company
would possibly be facing in its operations. Having evaluated the company's
internal and external analysis, the paper will then analyze and propose the
different strategies that the company can utilize in thefuture to increase its
profitability and growth. The plans include defensive, survival, offensive, and
reorientation strategies. Lastly, with a BSC matrix, the report will propose
different cost leadership techniques, differentiation and focus.

Page 3
 Mission, Vision, and Values

With the several objectives that the company has, the mission statement
is, "To design and create high quality handbags for people of all genders and
ages. Our handbags are designed and handcrafted by our employees which
guarantees the customers unique items. We are also committed to making these
handbags available to consumers at very cheap and affordable price but still
maintaining a good level of profitability. The customers needs and views will
always be considered and catered for."(BACHI Barcelona).

The company's vision statement is "To be the leading handbag

manufacturer andsupplier in the country and the world at large. Through social
media use and social networking, the company aims to have a large market
share and many potential customers to deal with, thus conquering this industry
extensively.

Describe and explore the competitive advantages and disadvantages of

BACHI regarding its competitors.

Competitive Advantages

BACHI Barcelona has the advantage of having cost leadership. Among its many
competitors, including Zubi and Afortunadas, the company sells the handbags at
a low cost. The costs mainly revolve around the production and delivery, which
sometimes are accounted for by the customers. Also, having two owners and a
few employees, the cost of human capital is significantly minimized. Having the
cost leadership enables the company to sell the handbags at meager prices to
its customers (David, 2016). If compared to the competitors like Zubi, BACHI has
very low-priced goods. Sometimes, it offers temporary discounts and after sales
services, including the delivery of the items. With the low prices for the
commodities, the company can be sure to have a highly competitive rate.

Page 4
The company also attains a competitive advantage through its sales promotions.
To attract more potential customers, BACHI often provides several sale
promotions. By capturing the attention of the consumers, the compared is now
assured of gaining high competitiveness. BACHI Barcelona also has an
increased differentiation of its commodities. The quality and designs of the
handbags are significantly different from those of its competitors. Being
handcrafted, one can always come across a different and unique design that is
certainly similar to that of the competitors (Rosenberg, 2020). Additionally, the
bags are entirely original as the patterns are printed on both the inside and
outside parts.

Besides, the close relationship goes more profound to the company's suppliers
and providers, who are exceptionally eco-friendly. With these suppliers, it is
evident that the company exclusively uses eco-friendly materials to create the
handbags. This reveals that BACHI Barcelona is one of the companies in the
front line that conserves the environment. This feature is a great source of
competition, which would even be supported by high authorities.

Competitive Disadvantages

Even with the many competitive advantages that BACHI has, several
disadvantages make its competitors outshine. Competitive disadvantages are
conditions in which a business' competitors have but lack in the particular
business resulting in underperformance. Even as BACHI has sufficiently
developed in some areas, there are others that make it lag.

For instance, the company has an entirely poor advertisement and marketing
strategy. Marketing is one of the essential features of a profitable business.
Marketing gives a business great exposure to the environment. In the case of
BACHI Barcelona, sales promotions and social networking are the most common
ways of marketing for the products. The company simply focuses on acquiring

Page 5
more subscribers and followers who sometimes don't even purchase the
products. With the need to be known across many regions in the country and
globally, there is a need to better the marketing strategies. The more one
advertises for their products, the more it gets known in the market, thus
increasing potential customers.

Additionally, the organization operates entirely through the website and social
media. Unlike many other competitors like Zubi, BACHI does not have a physical
store. Not all customers are usually confident with purchasing goods online.
Many people often want to feel or try on the commodities, for example, clothing;
thus, many people may hesitate to buy the items online. Therefore, the
competitors, in this case, have an added advantage.

With the poor marketing strategies, the company consequently has lesser
recognition in the national market. Unlike Zubi, which is extensively identified in
Barcelona, BACHI Barcelona is still struggling to gain a large market. Therefore,
the business has a disadvantage when dealing with competitors who are broadly
known.

Identify the tangible resources (physical and financial), the intangible

resources and the capacities that we have.

Tangible Resources

A company often uses resources to increase profitability and gain profit. These
are either physical or financial resources that a company possesses. These
items have a set monetary value and can be easily be turned into liquid
resources. Tangible resources can either be physical, financial, technological,
and organizational. These categories will therefore help in the identification of
the resources that BACHI Barcelona has.

BACHI has tangible physical resources which include, raw materials for making
the bags, the stock, which is exclusively composed of the bags that have already
been made. Also, the company has equipment which are used in making the

Page 6
bags. In addition, the company has financial resources, which include the initial
capital, which was contributed by Meritxell and Nuria. Since the company does
not have any financing sources, the primary source of money is the owners'
contributions.

Intangible resources

On the other hand, intangible resources are not physical in nature and cannot be
touched. These resources are often quite challenging to evaluate and turn into
liquid assets (Verma, 2016). This group consists of items like human resources,
which include the owners of the company. The owners also contribute their
extensive knowledge and great motivation to the business, which is also a
resource. Also, the owners have high enthusiasm and commitment are also
resources. The company's website is also a vital resource.

Capacities

BACHI Barcelona is a company that was initiated by two women with tremendous
knowledge of the fashion industry and in legal matters. The two ladies have great
enthusiasm and high involvement in their business. Therefore, this gives the
company a generous capacity of operation. With the excellent knowledge they
have, they can amicably utilize it to bring forth great results. The two women have
a clear stock policy that helps them, and they never sacrifice their innovative
designs. Working with 20 suppliers, the company has a considerable possibility
and capacity of growing broadly and extensively.

Page 7
 Prepares a VRIO analysis of the resources of BACHI Barcelona

Resource or Capability Is it Is it rare? Is it Is it

valuable? inimitable? organized to
exploit?
Capital contributed by owners yes no No yes

Stock (bags) Yes no No yes

Raw materials for making the yes no No yes

Bags
Equipment for making bags yes no No yes

Company owners yes no no yes

Knowledge and motivation yes yes no yes

provided by the owners
Enthusiasm and commitment yes yes no Yes

Company’s website yes no No Yes

A VRIO analysis is a framework that helps a business analyst evaluate the value,
rarity, imitability, and organization of a business. With the particular order given,
one factor acts as a step ahead to the next element. The table below reveals a
VRIO analysis of BACHI Barcelona company

Page 8
Conclude the exercise with a small matrix that reflects the resulting
Strengths and Weaknesses.

Strengths

1. Great knowledge in law and legal formalities.

2. Handbags designs are unique and handcrafted.
3. Stock has great differentiation with originality.
4. Enthusiasm and desire to grow.
5. Low bargaining power.
6. Clear stock policy.
7. Eco-friendly suppliers and raw materials.
8. Good relationships with suppliers and providers.
9. Close relations with the public.
10. High quality customer services, satisfying customer needs.

Weakness

11. Has no physical store.

12. Poor advertisement and marketing strategies.
13. Less recognition in the national market.
14. Challenges to penetrate international market.
15. Has no financing sources.
16. Low charges on transport.
17. Has no strategic plan for the business.
18. Narrow range of the variety of products provided to customers.
19. Has few suppliers

Page 9
3. Perform an external analysis (macroenvironment and microenvironment)
of the current situation.

PEST analysis.

Pest analysis is an analysis of the macroenvironmental factors that influence

business operations. There are various types of macroenvironmental factors,
including economic, political, social, and technological factors. Hence, there is a
need to evaluate every structure of the macroenvironmental factors to determine
how they have influenced the operations of BACHI Barcelona Company.

4 elements of the economic structure.

Even though it is a young company, it has greatly supported great numbers of

individuals who work with them in their operations. By offering the job
opportunities, the employees have a guarantee of having high living standard
rates. With the high standards, there is consequently high productivity in the
region and Barcelona at large.

2 elements of the technological structure.

The business has a tremendous technological structure, which has greatly

facilitated the operations of the business. The technological structure is
composed more of social media exposure and usage. Evidently, the company
has majorly concentrated on acquiring followers and subscribers through social
media. All the business transactions and operations are carried on online
platforms, including Facebook, Twitter, Pinterest, and Instagram, among others.
The company can also post its pictures and posts on these platforms to
communicate with customers and potential individuals.

Page 10
2 elements of the political structure.

The two business owners hold degrees in law, which gives them extensive
knowledge about the political world. Therefore, with this knowledge, the business
is directly connected to the political environment. With the help of the owners,
the business can excellently run according to the political laws and governance,
from the knowledge acquired by the professional law persons.

Analysis of the 5 Porter Forces

Bargaining power with suppliers.

BACHI Barcelona has been in operation for one year and so far, has 20 suppliers.
In most instances, suppliers often pressurize the buyers with high prices for their
products. This is the bargaining power of the suppliers. Having a wide range of
suppliers is quite beneficial as one is able to deal with those who have products
at favorable prices.

Power of negotiation of the consumers.

While considering that BACHI Barcelona exclusively operates through online

platforms, they are able to reach out to many customers. Their expounded social
networking techniques have greatly helped the company to have many
customers and be known to the public. However, the customers may have a lot
of power of negotiation for the products. This is made possible by several factors
surrounding the company (Tuten, 2017).

Threat on income of substitute products.

The pressure of the income of new substitute goods may not be a great threat to
the company. This is because BACHI Barcelona produces goods of high
differentiation and great originality compared to the other companies. With their

Page 11
designs imprinted on both the inside and outside parts, the company needs not
worry about any substitutes. In addition, the two owners have a vast knowledge
of the fashion industry and legal matters, which makes them knowledgeable
about matters concerning originality and threats (Miro, 2016). Even with the
increased competition in the industry, BACHI Barcelona outshines them all to
differentiate its products' quality.

Threat of new competitors.

Even with new competitors coming into the industry, BACHI Barcelona may not
face great threats from these competitors. This is significantly contributed by the
originality and exceptional differentiation of its products. The bags and
accessories that the company creates are quite hard to imitate and copy (Flavius,
2016). In addition, there is already high competition in the environment. Thus,
the entry of more competitors in the industry may not be quite a threat to BACHI.

Rivalry among competitors.

Evidently, there is a lot of rivalry in the industry among the competitors due to the
stiff competition being experienced. Considering that the products being
manufactured are typically the same, the competing companies will tend to make
changes and advancements on their products to make them more unique and
appealing to the consumers. This is one of the most common ways of attracting
consumers (Axa Health Keeper, 2018).

Page 12
End the exercise with a small matrix that reflects the resulting

Opportunities and Threats.

Opportunities Threats
1. Possibility of expanding their business. 1. High bargaining power of the suppliers.
2. Using advanced technology for 2. Entry of new competitors into the
industry.
thebusiness operations.
3. Increased rivalry among the competitors
3. Elevated economic standards in the
4. elevated product competition among
country increasing the profitability of
thecompanies.
thebusiness.
4. Increased motivation, enthusiasm
andcommitment in the business.
5. Increased teamwork among
theemployees.

4. In accordance with the Weaknesses, Strengths (internal analysis),

Opportunities and Threats (external analysis), propose the following:

Defensive strategy.

Companies often use this strategy to defend themselves from the attacks of the
competitors. The attacks may include advanced quality of the goods, increased
advertisement, and marketing or even rebranding, among many others (Felix,
2017). To sustain these attacks, BACHI Barcelona needs to come up with ideas
and new strategies. These strategies would primarily help them in maintaining
their customers and minimizing the threats in the industry. One of the most
successful strategies the business should take in is Increasing the range of the
varieties of products the company provides. Notably, the competitors have
Page 13
included other items like clothing and masks among the products they sell, which
increases their competitive advantage. Therefore, BACHI can opt to sell more
variety of bags, including bag packs and suitcases in their stock. They may also
consider adding accessories that the designers, who are the owners, have
originally designed to match the handbags.

Offensive strategy.

This is a strategy that a business uses as a way of attacking its competitors. This
strategy often helps the business increase its customers. By using this strategy,
the business uses its strengths and opportunities to get closer to more potential
customers. One of the best moves BACHI Barcelona can make is expanding its
territories to the international boundaries. Even though the business has few
connections to the international level, the owners not to have much knowledge
to enable them to penetrate the market (Godey, 2016). Once they make it
through, the company will gain additional international clients who would wish to
purchase the products. This would make them more competitive and gain more
profits. The business may also opt to enter into alliances with influencers and
distributors to help in marketing and distributing the products successfully (Sajid,
2016). With more influencers, for example, those who operate on YouTube, the
business can be certain about attracting more customers. On the other hand,
distributors would help the organization deliver the commodities to the buyers in
good time and shape.

Survival strategy.

While choosing this strategy, the business aims to push through its operations to
make as many sales as possible. In order to survive, the business must come up
with several tactical moves that will help it push through amid intense
competition. In most instances, managers often advise businesses to use
survival strategies in their operations (Kumar, 2016). These strategies help the

Page 14
business maintain its profitability and growth, which are vital for every business.
BACHI Barcelona may opt to identify the products with the highest profitability
rates and invest more in them. This would ensure that it captures as much profit
as it can from these businesses. The business may also consider negotiating
with its 20 suppliers to reduce the prices of their supplies. These negotiations
would help BACHI acquire the raw materials at relatively low costs, thus
increasing the profits.

Reorientation Strategy.

In this case, the business strives to offer improvements on the products they offer
to the consumers. Here, a business takes advantage of its opportunities to
handle the weaknesses. The business attempts to offer a complete turn-around
of the products it provides (Rothaermel, 2016).

5. Develop a BSC in the form of a matrix.

Page 15
6. Based on the contribution of Michael Porter, you must propose and
justify the following (one of each):

Strategy in Cost Leadership.

A strategy in cost leadership would help a company reduce its costs of operations
to maximize its profits. Therefore, BACHI Barcelona needs to develop strategies
that will lower its production costs, which would eventually help lower the cost of
the final products. To achieve this plan, the business should first renegotiate with
its suppliers to lower their prices for the raw materials (CEPYMEnews, 2019).

In addition, the company should evaluate its experience curve of the products it
has been selling. This evaluation would help the business recognize the most
profitable product (Espinosa, 2017). With this information, the business would
concentrate on producing this good in large quantities to increase sales. Hence,
it would eventually attain the goal of making many sales with fewer production
costs.

Differentiation Strategy.

This strategy primarily focuses on the uniqueness and originality of the product.
The quality of the products should be exceptionally different from that of the
competitors. However, the company should be keen to main good quality of the
original products, that would be quite challenging to copy or imitate. Besides,
even with the uniqueness, the business should also prioritize the advertisement
of the products (CEPYMEnews, 2019). To be known well in Barcelona and
globally, BACHI should invest more in marketing the commodity.

Page 16
Focus Strategy.

While dealing with strategy, the business aims at maintaining concentration and
consistency of the operation. This ranges from the product's quality, the designs,
the location of operation, and the target market. Therefore, first, the company
needs to concentrate on its target market. Since it has decided to change its line
of operation to provide summer clothes for men, women, and children, it should
be keen to produce and supply these commodities specifically. Therefore, as
they advertise and market these products, the company should concentrate
mainly on communicating with these individuals (CEPYMEnews, 2019).

References

ABC Entrepreneur. (2017). Internal Analysis of the Company. Retrieved from

http://abcdelemprendedor.blogspot.com/2017/04/analisis-interno-de-la-
empresa.html

Alalwan, A. A., Rana, N. P., Dwivedi, Y. K. &Algharabat, R. (2017). Social media

in marketing: A review and analysis of the existing literature. Telematics and
Informatics, 34(7), 1177-1190.

Amarakoon, U., Weerawardena, J.& Verreynne, M. L. (2018). Learning

capabilities, human resource management innovation and competitive
advantage. The International Journal of Human Resource Management, 29(10),
1736-1766.

Axa Health Keeper (2018). Eco-friendly products. What are they? Retrieved from
https://www.axahealthkeeper.com/blog/productos-eco-friendly-que- son/

BACHI Barcelona. BACHI World: Get to know us. Barcelona, Spain. Retrieved
from https://www.bachibarcelona.com/conocenos/

Page 17
CEPYMEnews (2019). Michael Porter's 3 generic competitive. Retrieved from
https://cepymenews.es/las-3-estrategias-competitivas-genericas-de- michael-
porter

David, F.& David, F. R. (2016). Strategic management: A competitive advantage

approach, concepts and cases. Pearson–Prentice Hall.

Espinosa, R. (2017). Competitive Advantage: what is it, keys, types and

examples. Retrieved from https://robertoespinosa.es/2017/10/22/ventaja-
competitiva-que-es-tipos-ejemplos

Page 18