FINAL PROJECT

Training program:
MBA-MASTERS IN BUSINESS ADMISNISTRATION
Subject:
Final Project on Strategic Management
Send to: management@eneb.com

Last Name/Surname:
Name: ELENI
ID/Passport:
Address:
Region:
Country:
Telephone:
E-mail:
Date: 4/7/2021

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1. MISSION:
Bachi Barcelona sells modern, elegant female and male
handbags and accessories suited for your needs. Our purpose is to create
products of high quality and of unique design at reasonable prices. Our
commitment to support local businesses and adopt eco-friendly practices
demonstrates the urgency to preserve the environment, support local
economy while encouraging customers to make environmentally and socially
conscious purchases.
VISION:
Bachi Barcelona wishes to become a benchmark for the
designing, manufacturing and selling of unique, classy and ecological
handmade hand-bags and accessories. The company wishes to align its
goals with consumers’ needs and desires world-wide. In the long run, Bachi
would like to ensure its presence nationally and expansion to other countries
by gaining a share of the international market through exports and
participation in worlds most renowned exhibitions to increase the company’s
fame and Brand awareness.
VALUES:
 Innovation and talent: the founders of the company share
a passion for fashion, have good knowledge of current
trends and they use their talent to make unique designs.
 Commitment and respect to customers and local
community: the founders work closely with twenty
suppliers and have a 24–48-hour delivery, offering
several promotions with free deliveries.
 Ecological and quality products: the company takes into
consideration environmental issues, thus choosing eco-
friendly materials and suppliers who support this policy.
 Exclusiveness: all products have strikingly special
designs and are one of the kind standing out from the
rest.

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2. INTERNAL ANALYSIS
The company’s operations include primarily internal logistics
(photo and material selection and transport to manufacturers), external
logistics (storage of the surplus), sales marketing (trade fares and other
promotional events, outsourcing of photography, marketing and web
organization) and after sales service (national– international shipping, delivery
in 24-48 hours and free promotional content).
Meritzel and Nuria, collaborate with local hand-craftsmen, using
photos of nearby places as prints. The organization of the company is simple
and the two have* chosen to mainly use external consultants in all domains.
COMPETITIVE ADVANTAGES:
a) Economic advantage
Organizational structure: the company is known for its simple
structure since the owners have chosen to out-source manufacturing to keep
costs down.
The company holds no physical assets, such as stores, and
therefore has a less complicated structure. Additionally, no serious entry costs
are needed, as they don’t have rents, staff, salaries, etc.
No debts towards suppliers and/or banks
b) Differentiation advantage
Know how: passion for fashion and an in- depth knowledge of
the latest fashion trends and thorough apprehension of serious legal issues.
Aesthetics and high quality of design: the creation of distinctive
designs on hand crafted bags, making the products stand out.
c) Complementarity
Combining the company’s unique designs and close
collaboration with local suppliers and hand-craftsmen enables the company to
build up its brand reputation. As the main market of Bachi is the region of
Barcelona, the collaboration with small local suppliers and craftsmen shows
that they value their local economy and promote local quality standards.
d) Customer satisfaction

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 Motivation and desire to cover the customer’s needs and gain a
share of the market
DISADVANTAGES:
a) Low bargaining power for the price of the delivery
b) No bank financing and no sufficient working capital. The
company cannot expand easily and has low business growth
c) Having external consultants in marketing, web positioning,
accounting, photography increases costs.
d) Their product line is not merchandized and standardized
(they depend on craftsmen) so profitability is low since the
price of the product must be high.
e) Lack of digital maturity: limited presence on social media, not
many followers on Instagram, minimal to no networking
campaign policies, no relations with influencers and/ or
blogers, vlogers, celebrities.
f) Limited distribution networks and difficulty penetrating
international markets.
g) Little flexibility as far as orders is concerned, not working by
order.
h) New company with no clear strategy and no previous
knowledge of the barriers to entry.
i) Not a clear and specific policy on return products.
j) Lack of a designated department to address complaints.

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 The company’s main competitors and their respective
advantages include:
ZUBI  Specific department
 Have both an e-shop and accountable for the return of
physical shop products.
 Knowhow of the market and AFFORTUNADAS
marketing issues  Knowhow of the market and
 Well-known brand with economic issues
strong influence on social  Extensive variety of different
media products
 Have a wide variety of  Products with unique design
products including clothes, made from eco- friendly
bags materials
 Customization of products
offering the company
flexibility
 More competitive prices and
free shipping with higher
prices

TANGIBLE RESOURCES:
Material:
 All materials and different types of cloth, zippers and
photographs
 Stock of bags and accessories are available
Financial:
 Business expansion account for SME’s
 Clients and suppliers

INTANGIBLE RESOURCES:
Human:

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  In depth knowledge of fashion and legal issues
 Desire and motive for the improvement of the project
 Good collaboration with suppliers
Non- human:
 A fully organized web site containing a complete
catalogue for an easier purchase
 Blog “stories by Bachi” as a newsletter for updates on the
company.
 Brand’s vision, mission and values

V R I O
Available stock of bags for sale YES NO NO YES
Materials used for the elaboration of bags YES NO NO YES
Physical property for the elaboration of bags YES NO NO YES
Work with business expansion account to SMEs YES NO NO YES
with advantageous conditions in terms of bank
fees and expenses
Motivation and commitment to the creation and YES YES NO YES
running of the program
Clients and suppliers YES NO NO YES
Relationship with suppliers YES NO NO YES
knowledge of fashion trends and of legal issues YES YES NO YES
Consultants in the marketing area, social media NO NO NO YES
and creation
Blog stories "Bachi Barcelona" providing YES NO NO YES
information on the latest bags and accessories
and report news
The brand focuses on vision, mission, values and YES NO NO YES
client satisfaction
Access to pages on social media YES NO NO YES
Newsletter service: subscription with free gifts YES NO NO YES

STRENGTHS  Motivation to meet

 Collaboration with eco- customer needs
friendly suppliers boosts  Teamwork
local economy
 Knowhow of fashion and WEEKNESSES
legal issues  Low social media impact
 Limited distribution channels

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  Weak marketing position  Low marketability
 Restricted brand  No strategic plan
empowerment

3. PEST ANALYSIS
ECONOMIC STRUCTURE
1. Familiarity with the Purchasing Power Parity of the clients:
Until 2019 there was a steady growth in the GDP per capita
with an annual rate of 4%, implying a higher buying power of
people and an increase in quality of life. After the health crisis
of COVID-19, a 10% decrease in the GDP of Spain and
Catalonia has been observed (tradingeconomics.com,
statista.com), however, in 2021, the GDP per capita of Spain
seems to increase (wikepedia.com). Moreover, since the
outbreak of the pandemic, e-commerce has shown growth
and is forecasted steadily keep growing in coming years
(statista.com).
2. Stage of the business cycle:
There are signs of improvement since Spain’s prime lending
rate has bottomed out at 0%, but psychological metrics for
business and consumer confidence dropped year after year
(richestcoutryreports.com). On the other hand, retail sales
have better scores for the Spanish economy up to 2.72% at
November 2019 (1.87% higher from 0.85% according to The
Economist). After facing Euro debt crisis, employment crisis,
CoVid-19 crisis Spain is entering a period of Recovery, as
shown in the increase of GDP to $1.45 trillion in 2021 and
$1.94 trillion in PPP in 2021 (source Wikipedia “Economy of
Spain”).

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3. Public spending:
Public expenditure in Spain has increased significantly during
the last two decades between 2000-2020. In 2020 it was
€585.29 billion (statista.com). Government spending in Spain
reached €63.689 billion in the first quarter of 2021,
(tradingeconomics.com).
This shows that Spain is considered to witness economic
growth, therefore Bachi has every opportunity to produce
profits, increase workforce, productivity and material
consumption and assert a better negotiating position in its
market.
4. Policies on unemployment:
A radical labor reform-voting for a law that makes the labor
market more flexible facilitating layoff. From 2013 to 2020
unemployment rate fell.
Government furlough scheme known as ERTE-temporary
contracts after coronavirus crisis which delivered a serious
blow to the Spanish job market. 3.71 million people were
unemployed. The ERTE job retention schemes and aid for
self-employed cushioned the blow through an investment of
around € 35 billion in public funding. According to data
published by the National Statistics Institute, the
unemployment rate in Spain decreased to 15.98% in the first
quarter of 2021 from 16.2% in August 2020. The youth
unemployment rate dropped to 31.3%from 41.7%

TECHNOLOGICAL STRUCTURE
1. Reduced use and cost of energy since all products are
handcrafted.
2. Familiarity with the basic tools that will enhance online sales,
the in-depth understanding of the usefulness of social media
in advertising and selling the company’s products. Thus,
internet should be implemented in advertising and online
sales since its efficiency and speed will allow the company to

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 proceed in the future following the European e-trade increase
(15% according to statista.com) in recent years and
forecasted in years to come.

POLITICAL STRUCTURE
1. Organization and attitude of the administration:
1. At a national level: The kingdom of Spain is a
parliamentary monarchy, structured on 1978
constitution which established it as a social and
democratic state subject to the rule of law. The
Spanish authorities’ decisions are driven by the
values of freedom, equality, solidarity and respect
for fundamental human and legal rights. It is within
this structure that the Spanish governments have
strongly protected intellectual property, customers’
personal data and secured trade, e-commerce and
businesses in physical and electronic form.
2. At a regional level: Catalonia, where the company
operates, has an autonomous system of
government and is an economically robust region
(GTP in 2020 reached 20% of the national
according to statista.com). This system enables
the presence of small, medium sized and multi-
national companies, while in many aspects sharing
jurisdiction with the national government. In 2017
there was friction between central and regional
government as the later claimed independence.
This turbulence had a serious effect on regional
economy but since the situation has regulated,
stability has started to return.
3. At a European level: Being a member of EU and
Eurozone, Spain has to abide to the laws that bind
the commerce and e-commerce, helping European
businesses to overcome obstacles in trade,

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 imposed by other countries and enforce European
exports as well as strengthen businesses’
presence both within and outside the EU.
Bachi must focus on ameliorating e-commerce
quality policies, while also considering all of the
above political levels and laws and the emerging
complications.
2. Regulations and environmental protection :
1. In Spain: The Spanish environmental legal
framework comprises of laws regulating particular
industries and activities and laws protecting the
environment and controlling certain contaminating
agents. Most Spanish environmental laws derive
from the transposition of EU legislation. Non-
compliance with environmental laws results in
either administrative or criminal sanctions.
2. In Catalonia; Tax credits on environmental
investments allow companies to improve their
environmental impact and at the same time
represents a major economic incentive consisting
of reduction in their corporate income tax. More
specifically, they consist of 8% tax relief on the
amount invested in certain assets.
3. Bachi Barcelona, who’s processes are eco-friendly
and operates in Catalonia offers a grate economic
and financial opportunity for profit making -due to
the tax relief- and for financing investments. The
company takes responsibility for their
environmental protection and complies with the
most demanding policies for social corporate
responsibility.
3. Social structure:
1. Fashion has always been a domain of interest for
all people and especially for women, who after

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 their emancipation have chosen not only to be
buyers but sellers, designers and manufacturers,
directing fashion to simple, luxury yet affordable
fashion items, dictating the current trends. This
dynamic domain, encompasses a set of activities
like the transformation of natural and artificial
materials and productive activities like
manufacturing clothes, shoes, accessories, etc.
offering in 2021 21556 million USD only for bags
and accessories, according to statista.com. In
2022 a prediction states 23191 million USD will be
spent in bags and accessories and that will rise in
2023 to 24519.4 million USD.
Therefore, Bachi should be oriented in the analysis
of social behavior, giving priority to fashion trends
and sustainability.
2. Distribution of income: In January 2021 the actual
disposable personal income was 240872 million
Euros according the National Statistics’ Institute.
An amount higher than that of the fourth quarter of
2020 which was 204323 million Euros. Salaries
range from 830.00€ lowest average to 11400.00€
highest average, allowing people to do more
purchases. According to salaryexplorer.com
employs witness an 8% salary increase every 17
months on average. Thus, Bachi Barcelona should
take advantage of the economic status and
address its products to a larger audience,
expecting an increase in sales especially since the
CoVid-19 health crisis is likely coming to an end.

PORTER FORCES
Market with a great ability to compete
3. Bargaining power of suppliers:

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  Suppliers switching costs alone
 There is a large number of suppliers relative to the
buyers
 Buyer relies on suppliers
4. Consumer bargaining power is high because:
 Switching costs are low
 Several substitutes on the market
 Buyer is able to get similar products from other
suppliers
 GDP per capita and PPP have increased in 2021
5. Threat of entry of substitute is high because:
 There is a great variety of bags
 Switching costs are low
 There is greater substitute availability by
competitors
6. Threat of entries from new competitor is high because:
 Low initial capital investment is required
 Access to suppliers and distribution channels is
easily obtained
 Weak government regulations and no limits to
enter in this market
7. Rivalry between competitors is high because:
 There are other competitors
 Competitors have attained brand loyalty
 Many followers on social media

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OPPORTUNITIES THREATS
 Possibility to expand  Entry of new competitors in
manufacturing to a variety of the same market
new products  High competition from Zubi
 Possibility of positioning in and Affortunadas
social networks  High cost with suppliers
 Possibility to participate in  Competitive pricing
commercial events  Covid health crisis has
 Motivation to meet the caused an economic
needs of clients downturn on a regional,
 High integrity and national and international
commitment to this level
entrepreneurial project  Shift in the size and
demographic composition of
the market area due to the
deaths by CoVid-19

4. DEFENSIVE STRATEGY
The company must focus on maintaining quality products at
competitive prices. Set a marketing strategy around the quality
advantages of various parts of the company’s products, in both
Spanish and English. Providing a warranty for their products
and/ or parts, should also increase the loyal customer base.
Properly marketing for superior quality and working with
influential figures as spokespeople would increase both the
customer base and loyalty. A worthwhile endeavor would be
enticing the suppliers to negotiate for exclusivity, better terms
and prices.
OFFENSIVE STRATEGY
A new marketing strategy needs to be formed, centered around
the company’s top or newest products, while providing the

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customers with possible loyalty rewards. A sort of point system
with inclining thresholds can be incorporated through the social
media networks that will accommodate this model. To maximize
the potential, the company should redesign their webpage to
include English, while at the same time moving to proper
collaborations with influencers and fashion bloggers. Taking
advantage of the continuous incline of e-commerce and making
the loyal customers part of the final stages of product designing,
Bachi should also market this concept through more channels,
possibly even non online channels. This strategy should be
followed locally, nationally and internationally as well, making
use of foreign sites and platforms to promote their products.
Thus, they create and take advantage of new niches and cause
serious cracks to appear in the current market leaders’ follower
base.
SURVIVAL STRATEGY
The company has outsourced almost all operations, including
marketing. Bachi should collect the data from all marketing
strategies used so far and analyze them to determine the most
effective for them. They should also collect and analyze all data
on their sales to find customers’ favorites and reduce the active
line of products to focus on them. These analyses ought to help
them reduce costs and increase efficiency. They should also
rethink the on request and on demand strategy to accommodate
for the higher financial class customers.

REORIENTATION STRATEGY
Bachi Barcelona can create a new publicly traded company
“Bachi Barcelona” with fully or partial autonomy from the parent
company in an effort to penetrate European and international
markets. Bachi International will be a spin off company, which
will give complete tax benefit to Bachi International and will not
burden the parent company with any potential losses. This newly
found company can add in its portfolio a new line of products

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 such as scarfs, stoles, wraps with the prospect of creating
bedding, blankets and clothing in general in the future.
Moreover, this new company can take advantage of all efforts
made by EU policy makers with the aim of fostering SME access
to finance and enable them to fully reap the benefits of a more
diversified financial landscape. For example the SBA “Small
Business Plan” voted in June 2008 (COM(2008)0934) limiting
bureaucratic procedures and the general support services like
Enterprise Europe Network, International Troubleshooting
Network(Solvit).Last but not least we should mention that after
the Covid Crisis the situation has aggravated for the SME
therefore Spain has notified to the Commission under the
Temporary Framework two guarantee schemes on new loans
and refinancing operations for SME.Taking all the
aforementioned into consideration it is with little doubt that Bachi
International can find the necessary funding and channels to
penetrate European and International Markets making its brand
known.

OBJECTIVE GOALS INDICATORS INITIATIVES

S
FINANCIAL Increase Increase sales Financial Negotiate with suppliers,
PERSPECTIV sales and by 10% statements craftsmen and outsource
E lower costs companies
decrease costs Form collaborative
by 5% contracts with courier
companies
International Increase Clicks and/or Translate the website
Sales international likes from and Social Media pages
sales by 10% abroad to English
International Create banners in
shippings English and Spanish
Negotiate with blogers,
vlogers, influencers, etc
CUSTOMER Become a Increase Returning Acquire a Quality
PERSPECTIV benchmark customer loyalty customers Control Manager
E company Increase new Number of Perform monthly
products' product collective meetings with
releases releaces standard representatives
from all outsource

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 companies
INTERNAL Standardize Standard Number of Acquire a Quality
PERSPECTIV quality product quality quality Control Manager
E complaints
Shipping time Delivery times Form collaborative
and quality contracts with courier
companies
GROWTH Competitive Define a clear Number of Establish a clear return
PERSPECTIV advance company unhandled policy
E strategy complaints Acquire a Quality
and returned Control Manager
products Move marketing strategy
away from fairs and onto
on-line promotions
5. BSC

Following the above strategic map, the Balance Score Card for
Bachi focuses on what that the creators and owners want for the
future of the company and the points that will lead to that result.

Perspectiv Goal Indicator Unit of Target Measuremen Result Responcible

e measure t frequency Party
Financial Increase Financial Percentage 10% Annual Financial
Total Sales Statements manager,
Marketing
manager
Financial Increase International Percentage 10% Annual Financial
International shippings manager,
Sales and clicks Marketing
manager,
Website and
Social Media
manager
Financial Decrease Financial Percentage 5% Annual Meritxell and
costs Statements Nuria
Customer Increase Returning Percentage 10% Monthly Quality
loyalty customers Control
manager
Customer Increase Number of Numerical 3 Quarterly Research
new products' and
products' releases Development
releases team

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Internal Standard Number of Numerical 5 Annual Quality
product quality Control
quality based manager
complaints
Internal Standard Delivery Percentage -10% Annual Meritxell and
delivery times Nuria
quality
Growth Define a Number of Numerical 0 Monthly Meritxell and
clear unhandled Nuria, Quality
strategy complaints Control
and manager,
returned Marketing
products manager
6. STRATEGY IN COST LEADERSHIP
This type of strategy consists in selling products at the lowest
price compared to the competition but without lessening the
quality of the product. That is why it would be wise to introduce
an economic line of bags and an expensive line of bags which
will address to two different types of customers. As for the
economic bags BACHI Barcelona should first try to reduce the
unit costs. For this to be achieved the company ought to search
for new suppliers with low bargaining power from whom they will
be able to buy raw materials at a lower price reducing the
production costs. Moreover, the company should evaluate the
production processes, in this case the performance of the
craftsmen. The owners ought to keep detailed and accurate
records of the craftsmen performance and carefully select the
ones who have the optimum performance, the necessary
equipment, to produce larger volumes of products in shorter
periods of time and the required premises to carefully store
them. This will enable them to have the needed surplus to cover
customer’s demands and increase sales. Then BACHI can
negotiate the payment of the craftsmen reaching the best price
for the company which will lead to the company attaining
economies of scale. For further minimization of the operational
costs the company should work closely with a computer
specialist who will use advance computing and networking

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technologies for maximum operational efficiency which will lead
to minimum costs. The IT specialist will help the company
benefit from processes automation, which is generally used in
purchase processing, scheduling and other operational
processes, minimizing the costs of its online retail. So with
efficient use of raw materials, which will be purchased at a low
price, and increased productivity the final step for Bachi is to
proceed in minimizing the price of the products, attracting new
customers.
DIFFERENTIATION STRATEGY
This type of strategy is inextricably related to the creation of
unique and distinct products. BACHI has implemented this
strategy from the first day of its foundation since the handbags
bear unique designs, photos of places taken by professional
photographers, are of high quality and hand crafted. Based on
these attributes the company must focus on one important
aspect of differentiation strategy: exclusivity. Contrary to the
economic line of bags, which was proposed in cost leadership
strategy, here emphasis should be given in the unique selling
proposition. More specifically since the bags are of high quality
and hand crafted, it means they are scarce, there are no
substitutes available, so the customers will have the pleasure to
have a unique and exclusive bag only for themselves, increasing
brand loyalty and profit margins. Following the example of
Hermes bags Bachi can do the following: 1.The customers who
are frequent buyers can be given the opportunity to be among
the few who will be invited to get an expensive bag.
2.Eventhough the bags are easily purchased through the
website the owners can create a waiting list in which the
customers can wait for an invitation to purchase the most
expensive bag and wait for it to arrive after weeks. 3.Customers
will be given one specific model at a specific color and size and
they can choose to buy it or leave it, knowing there will be only
few who will have it.

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FOCUS STRATEGY
This type of strategy has as a goal to create, market and sell a
unique product to address the needs of a specific group of
customers. In this case Bachi by following the differentiation
strategy can create a luxury line of high-quality products, which
will address to affluent customers only. Once the customers see
that the purchased items are one of a kind and not part of mass
production they will be attracted more easily and Bachi will
increase brand royalty, which will result in an increase in sales,
offering the company higher profit margins. One other option is
to have direct communication with rich clients and/or well-known
public figures through online video-calls or e-mails so that the
owners will know exactly what their customers want and need
fostering brand engagement. Thus, the company will ensure it
has attained a niche of the market composed of wealthy and
influential people.

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