BBK-MOMN09H6_1516 Strategic

Management

[OLYMPIA SPORTS LTD BUSINESS REPORT]

Carmen Coberly (Chief Operations Officer)

Max Huelber Celante (Chief Executive Officer)
Naiara Fernandez (Chief Financial Officer)
Anthony Ezegou (Chief Marketing Officer)

Mission: Olympias Sports mission is to provide excellence that is needed in sports with high quality sports equipment.
We are committed to provide our customers with unmatched sports equipment nationally.
The passion for sports is at the core of our business and we encourage the participation of sports to all individuals.
Vision: The Olympia Sports vision is to be the leading Sports Company that inspires the world of sports.
Values: At Olympia Sports each member of our team is connected through our core values:
Committed We are committed in the relentless improvement of Sports Equipment.
Skilled We are focused and precise.

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Executive summary
Olympia Sports Ltd currently operates in Oxford Circus in the heart of London, UK. A study has
been carried out to investigate whether expanding as retail chain store in the main cities of UK, using
a differentiation strategy would be a viable option for the business. The study consists in analysis of
strategic decisions that was based on decisions from a variety of sources: market research, PEST,
SWOT, Porters Generic Strategies, and Ansoffs Matrix. Olympia Sports Ltd plan is to distribute
affordable cost products according to customers needs, and high quality to break the UK market.
Olympia Sports ltd has attained brand awareness through quality production, innovative products
and aggressive marketing which were made through yearly strategic decisions.
Significant importance has been placed on high growth products driven by current social trend such
as tennis rackets and helmets equipments. Olympia Sports Ltd competes in a highly fragmented and
competitive market. For this it has thoroughly planned a variety of promotional strategies using the
market analysis models in order to gain as much market share as possible.

The conclusion drawn from the analysis is that the present environment would benefit the company
by expanding as a retail chain store. A number of recommendations are made in order to establish
the new proposed operation including the need to focus on a competitive price, expansion on ecommerce, distribution channel, and high quality service and to target the younger generation as
the main customer base.

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Table of Contents

Executive Summary
1. Introduction
2. Findings
2. Week 2 S.W.O.T Analysis- Internal Environment,
2.1Decisions Period 3
2.2 Results
3. Week 3 S.W.O.T Analysis -External Environment, including PEST
3.1 Decisions Period 4
3.2 Results
4. Week 4 Porters Generic (Business Level) Strategies and Bowman Clock
4.1Decisions Period 5
4.2 Results
4.3 Reflections
Week 5 Corporate Level Growth Strategies Ansoff
5.1Decisions Period 6 & 7
5.2Results
Week 6 Conclusions and Recommendations
References
Appendix

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Introduction
Olympia Sports Mission: Olympias Sports mission is to provide excellence that is needed in sports
with high quality sports equipment. We are committed to provide our customers with unmatched
sports equipment nationally. The passion for sports is at the core of our business and we encourage
the participation of sports to all individuals.

Olympia Sports is a retail company that sells high quality sporting equipments that is stylish, in
demand and competitively priced. Olympia Sports Ltd is situated in London, UK currently operating
one shop which has been stablished since 2009.Its focus is the young generation aged between 1535 years old that is passionate about sports. Since its existence the company has been selling four
specific sports equipment products (Tennis Rackets, Helmets, Hockey Sticks, Football) with the idea
of exploring other range of sports products. Olympia Sports ltd purchases its inventory at regional
centre which is located in Kent making distribution costs affordable.
Our board of directors consists of three members: Naiara Fernandez (Spanish investor, Financial
PhD), Max Huelber Celante (an investor, Business PhD), and Carmen Coberly (an investor, Operation
Management PhD) Athony Ezegou (an investor, Marketing PhD) which have developed and
strategized plans over the weeks having a management background.

GOALS
After carefully analysing the current market situation it was decided that Olympia Sports should
have a differentiation strategy. For this Olympia Sports needs to target a segment of the market to
deliver a message that the product is positively different from all other similar products available. A
product differentiation strategy provides a competitive advantage in market dominated by many
similar companies selling similar products.
Olympia Sports strives to provide the best quality service and equipment. The internal team is crucial
for the success for the company so future investments on training for further learning and growth
development will be carried out. The aim of this action is to have high skilled members with in depth
knowledge of our product that will help increase sales perspectives by 20 % over the next years.
One of the priorities is to increase sales by 20% through innovation, therefore investing in research
and development that provides high quality products. This will make provide Olympia Sports a
competitive advantage over the competitors. In addition increase customer loyalty by 35% by
creating loyalty cards with special offers.
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2. Week 2 S.W.O.T Analysis- Internal Environment (Strengths and Weakness), Strategic Capabilities
and Resource Based View
According Goodrich (2015) S.W.O.T model helps develop strategies and actions for capitalizing on
opportunities, create plans for addressing threats and weaknesses that could threaten the future of
the company.
Through the Key Performance Index (diagram 1.1) Olympia Sports has developed a SWOT analysis to
develop/differentiation strategy
Balance Scorecard-KPI 1.1

Edumundo Results (2015)

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SWOT DIAGRAM 1.1 Own Ilustrations

Main Strengths

Strong customer relationship

Customer trying centre

Effective marketing strategy/Good sponsorship

Weakness

Inventory and Stock

Human Resources

Financial resources

2.1DECISIONS PERIOD 3
Based on the outcomes of Olympia Sports SWOT internal analysis and significant business
development decisions were made:
Olympia Sports focus was to continue to improve the customer satisfaction. Investing in innovation
is vital to the success of Olympia sports as it wishes to differentiate the products as the competitors
are selling similar products. With the company expect to investment it hopes to continue to increase
customer satisfaction and customer retention, therefore resulting in a higher market share. Staff
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satisfaction and the productivity of the staff were low a relevant area that needs to be addressed.
Staff and high salaries were reduced to in order invest on the training and skills of the staff. The
distribution channel was to import directly from the factory as it was the most affordable option. At
the moment of acquisition the net profit was 35 369 at period 3. Profit and Profit growth are
standard on the KPIs, reflecting a good financial position for a company that is growing in the
industry. The concerns are the high administration costs and the high investments in research and
developments. At this level financial position was maintained not cutting the administration costs
and maintaining the investments costs in research and development.

2.2 Results: Olympia Sports maintained market share, marketing image and customer satisfaction
keeping in level with the other competitors. It will be hard for Olympia to decide where to position
itself in terms of market share due to a lack of market research, which makes it hard
to take decisions in terms of product pricing. The profit increased by 10 187, therefore
improving financial situation in period 3 and staying quite similar, as no additional expenses were
changed in the decision making from period 2 to 3. It is difficult to analyse the current market
situation with a lack of market research which makes it hard to make decisions in terms of
competitors price. It will be hard for Olympia Sports Ltd to decide where to position itself in terms
of market share and also the demand.

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3. Week 3 S.W.O.T Analysis -External Environment, including PEST

Further development of the SWOT analysis: opportunities and threats in the external environment.
Based on our SWOT the decisions were made on Opportunities and Threats:
Opportunities
Olympia Sports ltd is situated in one location, as part of the expansion; strategic location is the major
aim in order to attract our target customers. The company is aggressively focused in a marketing
campaign in order to expand nationally where it can be present in every city across the UK.
Furthermore with the advantage of warehouse in place and technology advancement an online
selling system would attract a wider range of consumers alongside with a strong marketing
campaign. A distribution centre would enable the company to have a more effective delivering
system in order to reach our customers efficiently.
Threats
It is not expected that the market will grow as mentioned in the communication for the next year as
a consequence need to consider the customer perception might change over time as well the
government regulations. This company is offering affordable high quality products but customers
may opt for less expensive goods over more distinctive ones. The company needs to be able to
adapt according to the external changes that may arise.
The PEST developed was incorporate in this period as seen in the diagram 1.2. According to (Makos,
Jim 2005) PEST is a strategic analytical tool that helps analyse the impact of the external issues
(Political, Economic, Socio Cultural and Technological).
There was a communication on the economy that affected the company:
In spite of the optimism of the government body for economic planning, the economic growth which was
predicted has not occurred. Edumundo communications

3.1 DECISIONS PERIOD 4

The impact of this economic news for Olympia Sports was to change the price and quality of the
products based on real market prices at current time with the aim to differentiate from the
competitors such as J.A.K Athletique. Due to lack of market research investment it was unable to see
the competitors prices or the market share it was at present. For this reason prices were lowered
for all the products. It was felt that as period 2 having a good economic growth the board of
directors maintained the inventory ordering high amount of products with aim to achieve high sales
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revenue. There has been a reduction of the sales team from 20 members to 7 members and
decreasing the salaries by 200 (2000-1800). Olympia sports aims to have further training and
developments for staff in order to have high skilled staff, for this the board of the company decided to
increase the training and working conditions from Average to Good in order to increase revenue. This will aim
to maintain the loyalty of the staff as training and development are seen as essential in the company.

To provide high quality products the board of directors changed the suppliers of the two products
football and drivers helmet as they had a high market share, suppliers were changed high quality
providers Henderson and Schneiders GmbH. The products Tennis racket and Ice Hockey sticks
remained with the same suppliers Kansas Inc. as the market share and sales were low.
In terms of financial decisions Olympia Sports had high marketing costs and research development
costs. Marketing costs were cut by 4000, research development costs were cut by 7550 as it was
felt that marketing strategy was doing well and money could be invested in other areas such as staff
development.
3.2Results
Products were sold but because the prices were so low that Olympia Sports could not compete in
the market with the other competitors prices. It led to a large loss of the market share and for the
company go down in the stock exchange by 12%. The impacts of the PESTEL: Technology is
responsible for revenue growth. Neglecting the use of this feature would result in disadvantage for
the company. Lack of health and safety at the workplace may contribute to ecological
impact. The PESTEL in the proves that Olympia Sports can have a quite stable external environment. The
key reason behind this might be because it operates in the retail industry. This means consumers
might reduce consumption partially but will not stop buying completely.

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DIAGRAM 1.2 (Own illustration)

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4. Week 4 Porters Generic (Business Level) Strategies period 4

According to Scholes in (2014) Porters Generic model evaluates how Olympia Sports ltd pursues a
competitive advantage across its market scope. Four distinct business strategies can be determined:
Overall cost leadership, differentiation, cost focus and differentiation focus.
Olympia Sports ltd strategic stance is to be a differentiation strategy (see diagram 1.3) which
according Porter in MindTools (2015) are companies that pursue a differentiation strategy win
market share by offering unique features that are valued by their customers.

Diagram 1.3 Own illustration

4.1 Decisions Period 5:
In period 3 an investment of 3800 was placed in research and development spread between all
products. This was to improve the quality and innovation of our products in order to differentiate
ourselves from the market. According to Olympia Sports Ltd Porter Generic Strategy the elements of
differentiation strategy is the intellectual property-skilled staff with in depth knowledge of the
products. The product that differentiate is from the competitors is high technology tennis racquets.
Having invested in period 4 for the market analysis competitors price it was noted that the prices
were not analysed properly and below the market. Prices of all products were increase to the
original prices from period 2, to compete with the competitors. Price of the tennis racquets were
priced higher as it was below the average price. The market demand was analysed for the products
in order to have the correct amount of inventory to meet the customer demand, a lot of inventory
was unsold from some of the products (drivers helmets and ice hockey stick) from period 4 except
for the tennis racquet. Demand has gone up by 100 units since period 4 and by this analysis orders
for Football were 100 units and for Tennis Racquets 200 units. To improve staff product and staff
satisfaction Olympia Sports ltd recruited a manager who could improve this Julia Wagner. Based on
the managerial criteria in approaching people in a positive manner and although a higher
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remuneration of 2600 it was felt that that in order for the success of the company and direction it
was the best decision.
4.2 Results
Key to improving our market share was to invest in the following market research competitor prices,
market analysis and staff satisfaction. This will give in insight of the pricing of the products, what is
the market share and in which product to invest more in.

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5. W.5 Corporate Level Growth Strategies Ansoff

Ansoffs matrix according to (, 2015) suggests four alternative marketing strategies which hinge on
whether products are new or existing. The four strategies according to Ansoff (Business case studies,
2015) are: market penetration, product development, market development and diversification.
Olympia Sports ltd chooses to adopt market development This strategy entails finding new
markets for existing products. Market research and further segmentation of markets helps to
identify new groups of customers. Olympia Sports Ltd can adapt a market development strategy by
looking into a new distribution channel such as being on-line retailers. For this purpose training of
employees, understanding of centralised warehouse rather than local depots has to be introduced
into the company.
Diagram 1.3

Ansoff Growth Matrix Own illustration

5.1 Decisions Period 6 & 7

According to the BCG matrix (diagram 1.3) Olympia Sports looked at the market share growth and
demand of the products in order to differentiate from the competitors. This showed that market
demand has been increasing since the last period, therefore Olympia Sports increased stock to meet
the customer demands that is expected with this decision which profit and business capital will
increase. Turnover sales revenue reveals the income generated from sales is below the minimum
(306.677) the Minimum being 350 000. It is expected that maintaining the product prices and
ordering the adequate level of stock this will cause the company profitability and gains to increase in
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the market share. The BCG Matrix (Edumundo) market research showed that three of the products:
Tennis Rackets, Ice Hockey Stick, and Drivers helmets carry a great the potential of gain in the
market. These products are question market products meaning that they have a high market
growth but have a low market share. Investment in these products will be done to grow market
share and to become star (Market Leaders). The 4th product is football, this is in dogs position in
the BCG matrix, meaning that there is low growth and low market shares therefore no investment or
stock was ordered. Olympia Sports Ltd. needs to invest less in this product as the market share and
growth is low. With this decision in place this product should generate relatively low cash and
hopefully be liquidated. The key decision in period 6 was the loan, as there was no cash flow
generated over the last period, to cover the expenses of the company.
Diagram 1.3

Results Edumundo 2015

Results: Gain in the competitive market, staff satisfaction was team leader. The overall impact that prospects
for the company seemed to be positive if they follow the strategy.

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Week 6.Conclusion and Recommendations

The main question considered in this report is by using a differentiation strategy if Olympia Ltd could
convert into a retail chain support by implementing the theoretical frameworks. Based on the
preceding analysis the conclusion drawn is that due to the low market share value and financial
situation this expansion was not possible. Through the generic strategies applied Olympia Sports ltd
tried to create a competitive advantage however the result does not reflect this due indecisive
decisions. Olympia Sports Ltd has learnt in the last periods not to react aggressively to the Key
Performance Indicators, too many changes occurred financially and internally which can create a
misconception of what the company represents.
To ensure that market growth for Olympia Sports ltd continues the following recommendations
were made:

Investment in technology should be made primarily focused on the products and services

Distribution processes-Invest in the own storehouse in the long term as transport costs are
relatively low, but it requires a large initial investment so this is a long term decision.

The target customer base should continue to be the younger generation with emphasis on
products for young women.

To ensure the loyalty and retention of staff the company should continue to develop the
skills of staff and provide the clear career pathway.

To enhance the online business of the company to increase company image and to reach
customers faster.

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Referencing
Chapman, A. (2015). Swot Analyis. Available:
http://www.businessballs.com/swotanalysisfreetemplate.htm#standard-copyright.
[Accessed 17 October 2015].
Edumundo: Sign up Businessgame . 2015. Edumundo: Sign up Businessgame . [ONLINE] Available at:
http://game.edumundo.co.uk/default.aspx?id=1.
[Accessed 12 November 2015]
Gerry Johnson, 2008. Exploring Corporate Strategy: Text &Cases with Companion Website Student
Access Card (8th Edition). 8 Edition. Prentice Hall.
Goodrich, R. (2015). SWOT Analysis: Examples, Templates & Definition. Available:
http://www.businessnewsdaily.com/4245-swot-analysis.html.
[Accessed 26th October 2015].
Makos, J. (2015). Difference between SWOT, PEST, STEEP and STEEPLE Analysis. Available:
http://pestleanalysis.com/difference-swot-pest-steep-steeple-analysis/.
[accessed 20 October 2015].
Mindtools Editiorial Team. (2015). Porter's Generic Strategies Choosing Your Route to
Success. Available: https://www.mindtools.com/pages/article/newSTR_82.htm.
[Accessed 21 October 2015].
N/A. (2010). Achieving growth through product development. Available:
http://businesscasestudies.co.uk/portakabin/achieving-growth-through-productdevelopment/ansoffs-matrix.html#axzz3rBkofetM.
[Accessed 26th October 2015].

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Appendix

Own illustration

Own illustration
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