MBA600 Capstone Strategy Report 2 Sample
Assignment Brief
Using the same organisation from the first assessment, individually, you are required to write a 2000- word business report in which you must apply learnings from the
Capstone topics to the organisation by undertaking additional research.
Your Task
The purpose of this assessment is to foster a student's ability to evaluate an organisation’s performance and develop recommendations to promote future performance improvements.
Instructions
Again, assuming the role of an organisational consultant, you are to write a report that clearly articulates the organisation’s strategy and business model and outlines a detailed approach to Competition Strategy (Week 3), how the chosen organisation’s performance is/can be measured against their strategies (Week 4). You will also be required to prepare a Balanced Scorecard for the chosen organisation (Week 7). Attention should be paid to the use of secondary research and insights (Week 8).
Areas covered should include:
• An Executive Summary.
• An Introduction that summarises the purpose of the report.
• A summary of the organisation’s strategy.
• A specific outline of the organisation’s approach to competition strategy, performance measurement and the Balanced Scorecard.
• A summary of recommendations that identify areas of focus and opportunities to enhance the organisation’s performance in the future.
• A conclusion.
• Reference list.
You are encouraged to use a wide variety of information sources that include, where possible, primary research, such as interviews with staff or executive members within their chosen organisation as well as the use of an appropriate mix of strategic and business analysis tools and references. These references should be presented as in-text citations and a reference list at the end of your business report.
Solution
Introduction
Super retail brand is a retail group of Australians that manages four major retail brands across Australia and New Zealand in the auto and sports apparel sector. Under the governance framework, this organisation has focused on the people and planet aspect to ensure its commitment to sustainability and this organisation has retained sales of $3.8 billion (Super Retail group, 2023). This report has included a detailed interpretation of the organisation's financial results and a summary of organisational details.
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Figure 1: Group sales by year
(Source: Super retail group, 2023)
Summary of Organisation
Major brands operating under Super Retail Group include Supercheap Auto, Rebel, BCF, and Macpac. In the year 2023, each of these groups contributed to total sales of the company for example Supercheap Auto contributed 8%, Rebel contributed 8% and BCF contributed 1% and Macpac contributed 22% (Super retail group, 2023). This group is a proud owner of these high-performing auto brands that have a significant impact on lifestyle categories including auto, sports, and outdoor leisure. This organisation maintains both click-and-collect and home delivery for its products and there are a total of 736 stores with 15,599 numbers of employees (Super retail group, 2023). The vision statement of this brand is to inspire people to live as per their passion and the mission of this brand is to inspire more than 10 million customers to live their passion by 2025. The major values of this organisation include ensuring better every day and being stronger together by prioritising stakeholder views (Super retail group, 2023). In the year 2023, this group achieved sales growth of 7% and a 22% increase in online sales. Customer loyalty increased up to 10.3 million in 2023 and there are 88% in-store sales and the rest is through click and collection as well as home delivery. The major strategic drivers that contributed to sales of the company include the growth of four core brands, leveraging customers’ needs and omnichannel marketing practices as well as simplifying business and excelling in omnichannel retailing. Along with retaining economic output this organisation has focused on sustainability and interest in using recycling parts for auto manufacturing and used 81,643 recycled auto parts for Macpac’s in-store collection (Super retail group, 2023). This report includes a detailed interpretation of competition, performance measurement strategy, and balanced scorecard considered by the brand for university assignment help.
Organisations Approach Competition, Performance Measurement, and Balanced Scorecard
Approach to competition
This organisation has considered successfully addressing competition and new entrants by maintaining a large-scale shift in the competitive landscape. There has been a significant increase in the movement towards direct-to-consumer sales channels to trade partners which have significantly altered the competitive advantages and there is a high possibility of loss of group sales (Super retail group, 2023). The risk management strategies for this organisation have considered improving brand awareness, optimising the in-store network, and regularly monitoring the computer market share. This organisation has also focused on investing in active loyalty membership for personalised services and working closely with trade partners to maximise opportunities along with growing the four core brands through both offline and online sales. Internal resources play a significant role in retaining sustained competitiveness in this context based on VRIO analysis efficiency of the current sources and competitive opportunities can be determined.
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Table 1: VRIO analysis for the current competitive strategy of Super Retail Group
(Source: Super retail group, 2023)
Super Retail Group has expanded its business mainly in auto parts retailing and automobile sales. The major competitors in the automobile sector include Advanced Auto Parts INC, paperboys as well as other international competitors. In this context based on the demand for auto part recycling and retailing in Australia, the current competition associated with the brand can be evaluated. The total revenue of motor vehicle parts retailing in Australia is $6.7 billion and an average of 22,881 employees work in the sector (IBISWorld, 2023). Currently, 2737 businesses operate in the sector and the current wage of the workforce is $1.2 billion (IBISWorld, 2023). The sector has been significantly impacted by the COVID-19 pandemic as consumer confidence significantly failed due to job and revenue losses. However, after the pandemic is over, there has been a significant increase in the tendency of consumers to repair and maintain their vehicles rather than replacing those (Beck & Hensher, 2020). As a result, there has been significant growth in this industry. Overall for Super Retailing Group operating in the auto parts retailing sector, it has significant scope to retain competitiveness however the total number of organisations in this sector highlights the presence of tough competition. Based on the price analysis, the major internal factors that result in competitiveness for the brand include brand portfolio, employing engagement, brand reputation, and the focus on innovation as well as focus on electric vehicles and manufacturing. Super retail group has been accused of underpaying employees in 2017 and 2018 and the back pay was approximately $1.14 million (LaFrenz & Marin-Guzman, 2023). Such incidents impair competitiveness in terms of employee retention and brand image.
Approach to Performance Measurement
Along with financial outcomes, this organisation has focused on retaining sustainability practices. Thus the metrics and targets towards both financial and sustainability framework for this company include reducing emissions and reaching a target of zero, remission in terms of both scope one and scope to emissions by 2030. By 2020 this organisation has created new targets of packaging, waste, and emissions to be completed by 2023 and this organisation has always started to implement the targets and already reduced 26.3% greenhouse gas emissions including both scope one and scope two (Super retail group, 2023). There has been a 2.9% reduction in total electricity use and other climate goals have also started to progress in 2023 (Super Retail Group, 2023). This organisation has considered adhering to the Natural Greenhouse and Energy Reporting Act 2007 for managing the metrics including both financial and sustainability performance. Based on Porter's five forces framework the current performance measurement and performance scope for super retail group Australia can be easily evaluated. As per Porter's five forces, the performance metrics and requirements are mentioned below.
Competitiveness (high)
Super Retailing Group offers diversified ranges of auto apparel to consumers through its four major brands. Supercheap Auto offers automotive parts distribution BCF offers boating and campaign equipment, Rebel Sports offers brand sporting goods, and Macpac offers apparel for mounting and adventure sports (IBISWorld, 2023). Overall it operates in a broad sector thus for each of the four brands there are competitors in this sector. The major competitor of this brand is Wesfarmers. However, for the competitive landscape, this brand has focused on retaining competitiveness by presence in both online and offline platforms and cash cash-generative business model (Super Retail Group, 2023). However, there is still a high threat of competition.
Bargaining power of consumers (high)
The bargaining power of the consumer is high for super retail stores as in post-pandemic situations there have been challenges of disposable income and inflation as a result consumers are preferring brands as per their financial conditions. There has been an increasing trend of e-commerce transactions and dependence on local service providers (Biskri, 2021). In this digital-first environment, direct customer purchase has significantly improved in Australia. Currently, super retailing groups offer omnichannel platform consumers as a result of a scope of addressing this e-commerce trend of consumers.
Bargaining power of suppliers (high)
The presence of high competition in the auto retail sector of Australia has resulted in significant bargaining power for suppliers. In the year 2023 the super retail group has battled with inflationary pressure of wages, rent, and energy expenses as a result there is a significantly high cost of business and the overall bargaining power of suppliers thus increasing (LaFrenz, 2023). Super Retail Group has focused on recycling and reducing energy expenses however there is still scope for improvement.
The threat of substitute (low)
Due to fast changes in consumer trends and inflation after the pandemic, there is less threat of substitution as customers have focused on retaining existing vehicles rather than investing in new ones (IBISWorld, 2023).
Threat of new entrance (low)
The threat of new entrants is also low for Super Retail due to its expanded brand portfolio and the rising cost of operations in the sector.
Balanced Scorecard
When analysing the strategic position of a super retail group based on the balanced scorecard it can be identified that financial perspectives are managed through engagement with stakeholders and in the case of brand portfolio and implies there has been significant growth in sales and maintenance of inclusive and diversified workforce has resulted in high employee satisfaction. In the case of the government there has been government funding support as well as responsible sourcing is prioritised (Super Retail Group, 2023). However, this brand is currently dealing with excessive cost of operation in terms of consumer spending and managing wages of employees which has created a significant challenge for retaining its brand image (LaFrenz, 2023). In the case of customer perspective there has been an increase in the number of active club members which signifies the presence of customer engagement and in the case of internal processes it has majorly focused on sustainability and recycling along with training operations for fostering employee engagement (Super retail group, 2023). (Refer to appendix)
Summary of Recommendation
Employee Satisfaction Through Training and Transparency
Super Retail Store has faced controversy for its wage issues in the past however it has retained employee engagement through training and development (LaFrenz & Marin-Guzman, 2023). Thus the major recommendation to retain competitiveness is to focus on a skilled workforce for four of the brands. Assessing employee satisfaction through internal surveys and focusing on employee-centric training will be beneficial. Maintaining employee-centric training activities fosters a sense of employee commitment and it will lead to high employee retention and a positive brand image (Dachner et al., 2021)
In-house Production of Auto Parts and Recycling to Limit Cost
Supplier bargaining power is high Super Retail Group similar to customer bargaining power and currently the brand is dealing with excessive cost of operation. Thus engaging with in-house production activities will help to manage the cost of operations and limit the costs of managing the supply chain. The pandemic has distributed the supply and distribution of auto parts worldwide in this context engaging with in-house manufacturing of auto parts will help to limit supplier-related uncertainty in operations (Ishida, 2020).
Conducting Regular Customer Surveys and Attractive Offers for Customer Retention
In post-pandemic situations, customer purchase intentions for the auto sector have changed in Australia in terms of dependence on the local situation and major focus on car repair. Thus maintaining customer need assessment and retaining customer benefits will foster profitability (Delic Eyers, 2020). In the situation of rapid changes in customer demand, it is clear that customer assessment through surveys will help to monitor market conditions appropriately.
Conclusion
Based on the overall analysis it is clear that currently, Super Retail Group has retained a positive outcome however rapid competition and brand image regarding wage issues towards employees are areas of concern. The balanced scorecard also highlights the scope for improvement. Here the recommendation for the company is to engage with employees’ appraisal and transparency. There is also scope to retain competitiveness by maintaining supplier code of contract and regular customer surveys as in post-pandemic environments customer preferences rapidly change based on household disposable income and inflation.
References
Beck, M,J, and Hensher, D,A, 2020, ‘Insights into the impact of COVID-19 on household travel and activities in Australia–The early days of easing restrictions’, Transport policy, Vol.99, pp.95-119.
Biskri, S, 2021, ‘Rethinking Retail: consumer trends and outlook’, BDO Australia, Viewed 28 December 2023, <https://www.bdo.com.au/en-au/insights/retail/rethinking-retail-consumer-trends-and-outlook>
Dachner, A,M, Ellingson, J,E, Noe, R,A, and Saxton, B,M, 2021, ‘The future of employee development’, Human Resource Management Review, Vol, 31, No, 2, p.100732.
Delic, M, and Eyers, D,R, 2020, ‘The effect of additive manufacturing adoption on supply chain flexibility and performance: An empirical analysis from the automotive industry’, International Journal of Production Economics, Vol,228, p.107689.
IBISWorld, 2023, Motor Vehicle Parts Retailing in Australia - Market Size, Industry Analysis, Trends and Forecasts (2024-2029), Viewed 28 December 2023, <https://www.ibisworld.com/au/industry/motor-vehicle-parts-retailing/2184/>
IBISWorld, 2023, Super Retail Group Limited - Australian Company Profile, Viewed 28 December 2023, <https://www.ibisworld.com/au/company/super-retail-group-limited/10574/>
Ishida, S, 2020, ‘Perspectives on supply chain management in a pandemic and the post-COVID-19 era’, IEEE Engineering Management Review, Vol,48, no, 3, pp.146-152.
LaFrenz, C and Marin-Guzman, D, 2023, ‘Super Retail taken to court over ‘flawed’ $52m backpay review’, Financial Review, Viewed 28 December 2023, < https://www.afr.com/companies/retail/fair-work-takes-super-retail-to-court-over-1m-backpay-20230120-p5ce5g>
LaFrenz, C, 2023, ‘Supercheap owner battles higher wages and costs’, Financial Review, Viewed 28 December 2023, <https://www.afr.com/companies/retail/supercheap-owner-battles-higher-wages-and-costs-20230503-p5d5ef>
LaFrenz, C, 2023, ‘Supercheap tumbles on costs confession’, Financial Review, 28 December 2023,< https://www.afr.com/companies/retail/supercheap-tumbles-on-costs-confession-20230504-p5d5lp>
Super retail group, 2023, Annual Report, Viewed 28 December 2023, <https://media.supercheapauto.com.au/corp/files/documents/2023%20SUL%20A58c0a685.pdf>
Super retail group, 2023, Super Retail Group Full Year Results, Viewed 28 December 2023, <https://media.supercheapauto.com.au/corp/files/documents/2023%20Full%20170f06fc.pdf>
Super retail group, 2023, Super Retail Group Investor Strategy Day, Viewed 28 December 2023,<https://media.supercheapauto.com.au/corp/files/documents/ASX%20Announe092c7e2.pdf>
Super retail group, 2023, Sustainability Report, Viewed 28 December 2023, <https://media.supercheapauto.com.au/corp/files/documents/FY23%20Sustainabilit.pdf>
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