Activity 1 Strategic Management and Business Policy

Scenario: E&E Clothing Corporation is a leading clothing retailer that has been in
business for over a decade. The company's sales have been declining due to increased
competition from online retailers. The top management team recognizes the need to
take strategic decisions to increase sales and stay competitive in the market.
STRATEGIC DECISION PROCESS

I. Current Situation
A. Current Performance
E&E Clothing Corporation has been performing well in terms of profitability
and market share. Its ROI has been consistent at 15% for the past five years. In
terms of market share, the company currently holds 30% of the total market
share in the clothing retail industry.
B. Strategic Posture
Mission: To supply high-quality clothing and exceptional customer service that

exceeds customer expectations.
Vision: To become the leading clothing retailer in the industry by expanding

our product line and market reach, while maintaining our commitment to qual-
ity and customer satisfaction.
Objectives:
1. Increase sales revenue by 10% within the next fiscal year.
2. Expand our product line to include accessories and shoes.
3. Open five new stores in major cities within the next two years.
4. Improve employee satisfaction and retention by 15% within the next
year.
Strategies:
1. Increase marketing efforts through targeted campaigns and social me-
dia promotions.
2. Expand the product line through partnerships with designers and man-
ufacturers.
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3. Open new stores in high-traffic areas.
4. Improve employee satisfaction through better training and benefits.
Policies:
1. Strict quality control policies to ensure high-quality products.
2. Customer-first policy to ensure exceptional customer service.
3. Fair labor practices and employee benefits policies.
The management team of E&E Clothing Corporation finds the problem of
declining sales and gathers data about the current market trends, customer
preferences, and the performance of their competitors.
II. Corporate Governance
A. Board of Directors
 Luxumus Haukerman (Chairman – Internal)
 Taniel Kurokuchi (Vice-Chairman – Internal)
 Roro Kim (Internal)
 Darlene Alderson (External)
 Elliot Alderson (External)
 Tyrel Wellick (External)
The board of directors of E&E Clothing Corporation consists of six
members. Three of these members are external, while the other three are
internal. The external members are industry experts and bring a wealth of
knowledge and experience to the board. They contribute by providing
strategic direction and oversight to the corporation. The internal members are
the company’s senior executives who also serve on the board.
B. Top Management
 CEO: Luxumus Haukerman
 COO: Taniel Kurokuchi
 CFO: Roro Kim
 CMO: Darlene Alderson
 HR Director: Elliot Alderson
The top management of E&E Clothing Corporation consists of the
CEO, CFO, COO, and CMO. The CEO is responsible for the overall direction
and strategy of the company, while the CFO oversees the company's financial
operations. The COO is responsible for the company’s day-to-day operations,
and the CMO oversees the company's marketing efforts. The top
management interacts well with the lower-level managers and with the board
of directors. There is good communication and collaboration between the top
management and the lower levels of the organization.
After analyzing the data, the management team identifies options such as
launching an e-commerce platform, improving the quality of their products, and offering
more personalized customer experiences.
III. External Environment: Opportunities and Threats (SWOT)

Opportunities:
 Expansion into new markets
 Collaboration with designers and manufacturers to expand the product
line.
 Growing demand for sustainable and eco-friendly products
 Increasing trend of online shopping
Threats:
 Intense competition from other clothing retailers
 Economic downturns and market instability
 Changes in consumer preferences and buying habits.
 Supply chain disruptions and logistic issues
IV. Internal Environment: Strengths and Weaknesses (SWOT)

Strengths:
 High-quality products
 Exceptional customer service
 Established brand reputation.
 Strong financial position
 The experienced and resolute management team
Weaknesses:
 Limited product line
 Limited market reach
 Dependence on a single supplier
 High employee turnover
Budgeting
Expenses:
Salaries and benefits for 50 employees: ₱500,000
Rent for office space: ₱50,000.
Utilities, including internet and phone: ₱5,000.
Software development tools and equipment: ₱20,000
Marketing and advertising expenses: ₱10,000
Professional services, such as legal and accounting fees: ₱15,000
Miscellaneous expenses: ₱5,000
Total expenses: ₱605,000
Revenues:
Contract work for clients: ₱750,000.
Net income:
Revenues ($750,000) - Expenses ($605,000) = ₱145,000
.
V. Analysis of Strategic Factors
Sustainability issues have become increasingly important in the clothing
retail industry, and customers are becoming more conscious of the environmental
impact of their purchases. The societal environment is also changing rapidly, with
new social norms and cultural practices emerging. The task environment is highly
competitive, with new entrants and established players vying for market share.
The External Factor Analysis Summary (EFAS) shows that the most significant
external opportunities and threats facing E&E Clothing Corporation are changes
in consumer behavior, increased competition, and evolving regulations.
Based on the situational analysis and a review of the company’s mission
and objectives, the most critical strategic factors facing E&E Clothing Corporation
are maintaining its market share, developing new sustainable products, and
improving HRM and IT operations. The SWOT analysis highlights the company's
strong brand and corporate culture as key strengths but also identify the
competition and changing consumer behavior as significant threats.
The management team evaluates each option and decides to launch an e-
commerce platform to increase sales and reach a wider audience. They partner
with a leading technology provider to build a user-friendly website that allows
customers to browse and purchase products online.
VI. Strategic Alternatives and Recommended Strategy

Alternative Strategies:
1. Focus on sustainability and eco-friendliness to cater to the growing de-
mand for environmentally conscious products.
2. Invest in e-commerce and online marketing to expand market reach.
3. Diversify the supply chain and partner with multiple suppliers to mitigate
risks.
Recommended Strategies:
1. Expand the product line through partnerships with designers and manu-
facturers to meet the growing demand for sustainable and eco-friendly
products.
2. Open new stores in high-traffic areas to expand market reach and in-
crease sales revenue.
3. Improve employee satisfaction and retention through better training and
benefits to reduce turnover and keep high-quality customer service.
The alternative strategies for E&E Clothing Corporation include expanding
into new markets, diversifying the product line to include sustainable products,
and improving HRM and IT operations. The recommended strategies are to
develop new sustainable products, invest in HRM and IT infrastructure, and
partner with other companies to develop new markets.
VII. Implementation
Implementing the Strategies:
1. Establish partnerships with sustainable and eco-friendly designers and
manufacturers.
2. Identify and secure high-traffic locations for new stores.
3. Implement employee training and benefits programs to improve satisfac-
tion and retention.
4. Build the e-commerce platform: Partner with a leading technology provider
to build a user-friendly website that allows customers to browse and pur-
chase products online.
5. Establish an efficient supply chain: Develop a supply chain strategy to en-
sure the timely delivery of products to customers.
6. Train staff: Train staff to manage the new platform and provide quality cus-
tomer service.
To implement the recommended strategies, E&E Clothing Corporation will
need to develop new sustainable products and launch marketing campaigns to
promote them. The company will also need to invest in its HRM and IT
infrastructure, developing new standard operating procedures and training
programs for employees. The programs are financially feasible but will require
significant investment from the company.
VIII. Evaluation and Control

Evaluating and Control:
1. Monitor sales revenue and customer feedback to evaluate the effective-
ness of the new product line and store locations.
2. Conduct employee satisfaction surveys to evaluate the effectiveness of
the new training and benefits programs.
Continuously review and adjust strategies based on feedback and market trends.
The management team monitors the effectiveness of the e-commerce
platform by tracking website traffic, online sales, and customer feedback. They
continuously improve the platform to provide better user experiences and ensure
its success.
To evaluate the success of the recommended strategies, E&E Clothing
Corporation will need to track its ROI, market share, and profitability. The
company will also need to monitor customer satisfaction and track its progress in
developing sustainable products. Regular meetings with the board of directors
and top management will ensure that the company stays on track and adjusts its
strategies as necessary.
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Activity 1 Strategic Management and Business Policy

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Scenario: E&E Clothing Corporation is a leading clothing retailer that has been in

STRATEGIC DECISION PROCESS

Mission: To supply high-quality clothing and exceptional customer service that

Vision: To become the leading clothing retailer in the industry by expanding

II. Corporate Governance

III. External Environment: Opportunities and Threats (SWOT)

IV. Internal Environment: Strengths and Weaknesses (SWOT)

VI. Strategic Alternatives and Recommended Strategy

VIII. Evaluation and Control

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