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This report has examined both Billabong and the competitive environment in which it operates in order to formulate strategic recommendations.

Extracts from this document...

Introduction

EXECUTIVE SUMMARY 3 INTRODUCTION 4 COMPANY OVERVIEW 4 OPERATIONS 4 FINANCIAL 4 HUMAN RESOURCES 5 CORPORATE GOVERNANCE AND LEADERSHIP 5 MARKETING STRATEGY/POSITION 5 SITUATIONAL ANALYSIS 6 COMPETITIVE ENVIRONMENT 6 SIZE AND GROWTH 6 COMPETITOR REVENUE 7 COMPETITIVE MARKETING STRATEGIES 7 SWOT 7 PESTEL 7 POLITICAL/LEGAL TRENDS 8 ECONOMIC TRENDS 8 SOCIAL/ENVIRONMENTAL TRENDS 8 TECHNOLOGICAL TRENDS 8 STRATEGY ANALYSIS 9 CORE COMPETENCES 9 IDENTIFYING COMPETITIVE ADVANTAGE 10 PROCESSES OF DEVELOPMENT 10 STRATEGIC OPTIONS 11 IDENTIFICATION 11 Strategic Options Ranking 11 STRATEGY SELECTION 12 STAKEHOLDER ANALYSIS 12 RECOMMENDATIONS 14 SHORT TERM STRATEGY 14 LONG TERM STRATEGY 14 CONCLUSIONS 16 APPENDIX 1: OPERATIONS 17 APPENDIX 2: FINANCIAL ANALYSIS 18 APPENDIX 3: BILLABONG INTERNATIONAL HUMAN RESOURCE INITIATIVES 19 APPENDIX 4: MARKET SEGMENTATION AND COMPETITOR ANALYSIS 20 APPENDIX 5: BILLAGONG SWOT ANALYSIS 21 APPENDIX 6: PESTEL 22 APPENDIX 7: COMPETITOR ANALYSIS 23 APPENDIX 8: BILLABONG - STRATEGY DEVELOPMENT DIRECTIONS 24 APPENDIX 9: STRATEGIC OPTIONS RANKING MATRIX 25 APPENDIX 10: BILLABONG (MCKINSEY) GROWTH PYRAMID 26 APPENDIX 11: STAKEHOLDER INTEREST VS POWER MATRIX 27 APPENDIX 12: LEADERSHIP ANALYSIS - BILLABONG'S HISTORICAL PERSPECTIVE 28 APPENDIX 13: REFERENCES USED 30 APPENDIX 14: ENDNOTES 32 EXECUTIVE SUMMARY Billabong International is a major competitor in the niche, highly competitive market of surfwear, worth $4.5billion and growing 10-12% annually. With Billabong seeking to achieve annual revenue growth of 20-25%, the organisation is challenged to find ways to meet these revenue targets within the current confines of its competitive environment. To enable the organisation to achieve its growth goals, new strategies must be identified and implemented. This report has examined both Billabong and the competitive environment in which it operates in order to formulate strategic recommendations. An internal analysis covering the company's operations, finances, human resources, corporate governance and marketing strategy provides the framework to identify the core competences and areas of competitive advantage for Billabong. An external analysis of the competitive environment sets the framework for identifying strategic opportunities for Billabong in the market place. ...read more.

Middle

Enterprise-Wide Customer Focus Billabong must revise its business strategy to reflect an enterprise-wide customer-centric focus. In many ways the organisation has developed core components necessary to create synergies between its brand and its customers. However, a customer-focused organisation requires top-down, bottom-up commitment to make the customer central to all business decisions. The end goal being a holistic approach to knowing, understanding and defining customers' wants in shaping deliverables. This is supported through continued investments in marketing solutions such as customer relationship management. As Billabong expands into new territories and develops new products in new markets it will need a much more disciplined approach in order to enhance its customer focus. A customer-centric focus will allow Billabong to tap into short term fads and shifts in market trends. Leadership Leadership sets the agenda for an organisation. Future growth strategies will be defined through acceptance by senior management across the organisation. The importance of a knowledge-sharing environment is supported by ongoing training and development programs which stretch across the organisation, help to remove divisional silos, increases employee skill set to improve promotion from within and promote the cultural imperative of the company. Future leadership should continue to maintain its original vision and values of promoting healthy outdoor lifestyle. 4.4 STRATEGIC OPTIONS 4.4.1 IDENTIFICATION Having identified the processes of development and what is required, there are a number of strategic options available to the organisation: * Increase market share * Maintain market share * Product/market diversification * Acquisition: complimentary brand/competitor * Backward integration: manufacture products, acquire more of the supply chain * Strategic Alliance * Forward Integration: acquire/open new stores, expand SBU and subsidiaries portfolio * Overseas market expansion * Do nothing 4.4.2 STRATEGIC OPTIONS RANKING Ranking the identified strategic options against key strategic factors derived from the SWOT analysis suggests that increasing market share and product/market diversification strategies would be most suitable as a short term strategy (Appendix 9). ...read more.

Conclusion

Transactional leadership at Billabong was characterised by leadership power through position, ability to reward/coerce, interpersonal skills and negotiated agreements. It was a pure Newtonian philosophy of management, high on Hofstede's power distance inequality, high on uncertainty avoidance and masculine47. The benefits to Billabong from such a leadership style included the ability to expand significantly across the globe, harness diverse talents from a large number of people through negotiation of transactions for reward as opposed to pure commitment to a single ideological vision and ultimately to list the organisation as a public company and to grow from the resources of such listing. Kuhnert identified two types of transactional leaders, those who are concerned with achieving their own personal needs and others who are "team players" concerned with follower welfare and interpersonal relationships48. Matthew Perrin's case at Billabong was a classic illustration of the first form of transactional leadership. He brought his skills as a lawyer and corporate executive to the table to enable the company to achieve the public listing, in return for significant share options as reward. He later cashed in his options and moved on with no real concern for the organisation's strategic future. Finally, a question arises as to whether organic leadership49, an approach where leadership is shared by highly skilled practitioners in a team environment, working in networks, has any merit for Billabong. While it is unlikely that overall strategic leadership at an organisation-wide level will ever become truly organic at Billabong, aspects of this New Science leadership philosophy are well suited to some of its divisional activities, such as the Global Design Team. Organic networks at the Design Team level at Billabong provide the ability to innovate outcomes rapidly to suit a complex and ever changing youth fashion market. APPENDIX 13: REFERENCES USED Journals Barnett, B., 2004. 'You're only as young as you play', Pique Newsmagazine, 15 April Deans, G.K. and Kroeger, F., (2004). 'Growing to New Heights', Executive Agenda, A.T. Kearney, Vol 7 No 1 Matthew Perrin interview, in: 'Rocky times in the surf', Canberra Times, 9 November 2002 McCullough, J., 2000. `Mr. ...read more.

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