Mango, Popularizing Fashion, Case Study Example

Introduction

Strategic management is a practice, which every business emphasizes on for competitiveness in the market. Business managers have developed strategies for their businesses to enter into existing and new markets with success. Managers and executives arrange and develop business plans on how they can best enter into the market and are able to meet the customer needs or achieve the business goals. One of the tools, which is indispensable for every business entity is a business model (Dye, 2004). A business model analyses the business strategically and provide guidelines on how the business can be conducted with minimal expenses but maximum profits while addressing all the customer needs. It is a must have tool for every business organization if it must remain in the business or be competitive especially in a competitive market (Anderson, Fornell & Lehmann, 1994).

This paper provides an outline on how below questions about Mango business model case study can best be tackled. It will further provide an outline on which strategy mango should follow to enter new fashion sector with success. The answers will be based on theoretical reasoning and full strategic analysis business management concepts (Amit & Zott, 2001).

Q1. What are the main advantages of Mango’s business model? Can it be easily copied? Base your answer on a full strategic analysis.

To best answer this question, we shall first discuss what a business model is and what position it holds in a business entity. We shall also discuss how the model is developed, who develops it, what it must include and when it is needed. After learning what the business model is, we shall develop a strategy to assess the business model of mango business. We shall asses the reality of the model, the importance of the model and potential of the model to help the organization gain competitive advantage in the market (Drucker, 2007). During assessment, we shall use full strategic analysis technique to identify if the model contains the following nine general building blocks of a business model.

1. Customer segments: this will focus on the groups of mango customers with unique/ distinct characters.
2. Value propositions: here we shall focus on the bundles of the products and services mango presents into the market that satisfy its customer segment’s needs.
3. Distribution channels: this will analyze the communication channels that Mango Company is using to communicate with its customers. Furthermore, which communication channel they use to offer value propositions.
4. Customer relationships: we shall analyze the types of relationships mango has with each of its customer segment.
5. Revenue streams: we shall analyze the streams through which mango earns it revenues from its customers. In addition, how mango uses the revenue to create value and customer facing activities.
6. Key resources: this section we shall analyze major resources on which the business model is built.
7. Key activities: this section will analyze significant activities that mango is performing or performed to implement its business model.
8. Partner work: we shall analyze the partners and suppliers that mango work with in enhancing its business operation.
9. Cost structure: we shall analyze the costs mango is incurring in running its business model (Porter, 1996).

We shall discuss the above business model building blocks and develop a link between them to be able to draw their advantages in relationship to Mango business cases study. The above technique is a clear representation of full strategic analysis of the business entity (Shafer, Scott Jeff & Jane, 2005). By going through each building block of business model we shall be able to assess the model by asking key questions that crystallize the Mango business models strengths, weaknesses, and highlights of opportunities and treats. This analysis will help us to identify the advantages of Mango business model and determine if it can be copied.

Q2. What strategy should Mango follow in the future in order to enter new fashion sectors? Incorporate theoretical reasoning in developing your answer

To answer this question requires mastery of the current status on mango business model so that to determine if it has flaws which require improvements. Analysis and assessment of the current business model of Mango Company will provide knowledge on what the company should do in future to enter new fashion sector (Magretta, 2002). Designing for future entrance is not an easy task, mangers must use many strategies to be able to draw clear picture of the existing market and then decide what strategy they will use to enter the market and conger it. One of the strategies is improving the existing business model. They may decide to begin by describing the existing business model, assess/ analyze the existing business model to identify its strengths, weaknesses, opportunities and treats and then finally act accordingly by designing an improved business model with major innovations (Porter, 1985).

Further, Mango may use the following strategies to enter the new market

• Alignment to goal: this ensures that the business model is aligned to the goals of the business.
• Reinforcement: this will help Mango to apply several strategies which complement one another in entry. If one strategy fails, another will take over.
• Virtuousness: refers to the presence of virtuous cycles (positive feedback loops) that help the business model gain strength over time. Those cycles will boost entry.
• Measuring robustness: this will help the business to determine its ability to sustain its effectiveness in the market. Robustness will help Mango to determine its strength of entry and lay possible plans for success (London & Hart, 2003).

Advice on how to assess a business model of the company

In order to be able to assess the business model of an organization, you must first describe the current business model using nine building blocks of business model highlighted above (Amir & Lev, 1996). After description of each building block, ask yourself several questions based on each block. For instance for customer segments ask;

1. Do we know our customers and their needs sufficiently?
2. Are some customer groups likely to shift soon?

3. Do we regroup different customers sufficiently?

Do the same critical analysis for each building block to be able to determine the worthiness of the business model.

References

Amir, E., & Lev, B., (1996). Value-relevance of nonfinancial information: The wireless communications industry. Journal of Accounting and Economics 22 (1-3): 3-30.

Amit, R & Zott, C. (2001). “Value Creation in e-business,” Strategic Management Journal, 22, pp. 493-520.

Anderson, E. W., Fornell, C. & Lehmann, D. R. (1994). Customer satisfaction, market share, and profitability: Findings from Sweden. Journal of Marketing 58 (3): 53-66.

Drucker, P., (2007). “The practice of Management,” Harper and Row publishers

Dye, R. (2004). Strategy Selection and Performance Measurement Choice When Profits Drivers Are Uncertain, Management Science 50 (12): 1642-1637

London, T. & Hart, S. (2003). “Reinventing Strategies for Emerging Markets: Beyond The Transnational Model.” journal of international business studies, sep. 2004.

Magretta, J. (2002). “Why Business Models Matter,” Harvard Business Review, May.

Porter, M., (1985). “Competitive Advantage,” The free Press, Nueva York.

Porter, M., (1996). “What Is Strategy?” Harvard business review.

Shafer, Scott M., H. Jeff, S., & Jane C. L., (2005). “The power of Business Models,” Business Horizons, 48, pp.199-2007.