Superdry Case Study

TMA 02 has four parts. You must answer each part. Before doing so, ensure that you have read the Guidance notes for that part.

It is important to note that all TMAs are applied on one case company which this year is ‘Superdry’. Your application should be based on the Materials provided at the end of each TMA.

Part 1

Read the documents provided in Part 1 of the ‘Materials’.

Considering your studies in Week 6, analyse the macro environment of an industry in which the company operates. 

Your answer to this part should be no more than 500 words. (20 marks)

Part 2

Read the documents provided in Part 2 of the ‘Materials’. 

Analyse one of the industries where the company operates, considering the structure of competition and the competitive forces within the industry. Based on that analysis, discuss the attractiveness of the industry. Refer to the theories and frameworks presented in Week 7 and 8 and apply them to the specific case.

Your answer to this part should be no more than 900 words. (25 marks)

Part 3

Read the documents provided in Part 3 of the ‘Materials’. 

Analyse the resources and capabilities of the company and how they might contribute to a position of sustainable competitive advantage. Refer to the theories and frameworks presented in Weeks 9, 10 and 11 and apply them to the company in the Materials.

Your answer to this part should be no more than 1400 words. (40 marks)

Part 4

Based on your study of Block 2 reflect on the skills you have developed and how the activities you carried out in Weeks 6 to 11 have enhanced those skills.

Your answer to this part should be no more than 200 words. (15 marks)

Guidance notes

In preparing your TMA, you should demonstrate your knowledge of the theory you have been studying by applying it to the case study outlined in the Materials section. 

Read the materials provided for each part. You can use them to prepare supporting evidence in your TMA. All the sources you use, including the materials provided in the TMA, should be correctly referenced.

The Materials section contains all the information about the case company required to prepare your assignment. The materials must be read critically: consider who is writing each document and if they have some particular interest. Do not copy and paste the materials in the TMA, but use them as a source of information for your discussion. 

You can also use materials from previous TMAs and external sources, provided that you reference them correctly, but the materials proposed here will enable you to write good answers.

Part 1

This question asks you to carry out an analysis of a macro environment. First, you should define the macro environment of interest: you will find it helpful to identify the industry on which you are focusing (see Week 7 Section 1.1). In this part, you need only to identify the industry; you will develop its definition in Part 2. It may be that the company is involved in more than one industry. If so, select one of the industries for your analysis of the macro environment.

For your analysis, choose one of the two frameworks for analysing the macro environment as introduced in Week 6 (see Sections 2 and3).

It is important to support your analysis with evidence from the Materials. Revisit Activities 6.4, 6.5, and 6.7 in Week 6 which demonstrate analyses of the macro environment. Build a narrative that discusses and evaluates the main forces of change in the macro environment.

Part 2

In this part you should carry out an industry analysis of the industry you chose in Part 1. Doing so is likely to include consideration of the topics you studied in Weeks 7 and 8. You should present your analysis as an assessment of the industry: a good answer will propose a detailed picture of the industry supported by data and reflections detailing the main outcomes of the analysis in a final paragraph and coming to a clear conclusion. You should include in your answer the following points:

1. The definition of the industry: if the case company operates in more than one industry, focus your analysis on one industry (see Week 7 Section 1.1).
2. The analysis of industry competition: you need to identify the type of industry and its features. You can use the Excel template in Week 7, Activity 7.7 and the data provided on the market shares in TMA 02 to calculate the concentration indexes, discuss their values (see Section 4) and the lifecycle phase of the industry (see Section 6).
3. The six forces analysis: a fundamental part of the answer is the analysis of the six forces which is the focus of Week 8. The guidance in Section 8 helps you structure your answer and the PowerPoint file provided in Activity 8.5 can be used to prepare a diagram of the six forces as a demonstration. You should discuss the contents of the diagram in the text, presenting the outcomes of the analysis. 

Part 3

This question attracts most of the TMA marks as it spans three weeks of study (Weeks 9, 10 and 11), where you learnt about internal analysis. First, read the materials and take notes. Considering the company’s activity in the industry you identified in Part 2, and using the skills you developed in Week 9, trace the resources and capabilities profile of the company. You may demonstrate these by using a diagram similar to the one used in Activities 9.6 and 9.7. Discuss how resources underpin capabilities (relevant examples can be found in Section 5).

Once you have identified the relevant resources and capabilities, use one of the frameworks presented in Week 10 to appraise them (VRIO framework or value chain) and to discuss how resources and capabilities underpin competitive advantage of the case company (Refer to: (a) sections 4.1, 4.2, 6.1, 6.2 and 6.3 in developing your appraisal and (b) the discussion on the resources and capabilities appraisal during ‘TMA 02 preparation – Part B’ tutorial). To demonstrate the application of the framework of your choice, you may use relevant diagram(s) (offered in PowerPoint) from Sections 4.1 and 6.2.

Finally, develop your answer further by selecting one of the topics in Week 11 that is relevant to your argument. Choose the most relevant topic from: capabilities development (Section 1), dynamic capabilities (Section 2) or functional strategies that the company can adopt to enhance its competitive advantage (Section 3).

Part 4

During Weeks 6 to 11 (Block 2), you studied the strategic management theories and frameworks needed to carry out external and internal analyses. Look back at the summaries you prepared at the end of each week and think about the learning and skills you developed over the period. It may be that they have changed since you wrote the summaries. Use that reflection to identify one main skill you developed in studying Block 2. Discuss how you have developed this skill, explaining which activities in the block helped you to do so and why they were useful.

As with TMA 01, you need to take a step back from the content and think about what you have learnt. Your focus should be on how your study of Block 2 has helped you develop your skills and not on explaining the meaning of different frameworks and concepts. This part gives you the opportunity to show your ability to reflect: you should refer to the feedback received on Part 4 of TMA 01 in order to enhance your answer. 

A good answer to this part will provide clear examples of how you have enhanced your skills. For instance, you can reflect on how the application of a framework or a particular activity such as the analysis of market shares has enhanced your analytical skills. Your answer should conclude by showing how this learning has progressed your understanding of strategic management as a discipline.

References for Part 1

Amed, I., Balchandani, A., Berg, A., Hedrich, S., Jensen, J. E. and Rölkens, F. (2020) The state of fashion 2021: in search of promise in perilous times. Available at: https://www.mckinsey.com/ industries/ retail/ our-insights/ state-of-fashion (Accessed: 14 April 2021).

‘The global fashion agenda (2020)’, CEO Agenda. Available at: https://www.globalfashionagenda.com/ publications-and-policy/ ceo-agenda-covid-19-edition/(Accessed: 14 April 2021).

The Telegraph, (2018) ‘The future of retail’. Available at: https://www.telegraph.co.uk/business/ tips-for-the-future/ future-of-retail/ (Accessed: 14 April 2021).

2.1 Industry data

Part 2 encourages you to identify an industry relevant for the case company to conduct your analysis. The sources provided below offer one such option. You can use the data below, that is most appropriate for your analysis, or, if you chose a different industry, you can follow similar steps and research relevant information on Statista. The same guidance holds for section 2.2 below of Part 2.

Macrolevel data on retailing: global retailing of apparel. 

Statista (n.d.) Retail sales of the global apparel and footwear market 2017–2030. Available at: http://www.statista.com/ statistics/ 875708/ global-apparel-and-footwear-market-retail-sales-value/ (Accessed 17April 2021).

Long description of retail sales of the global apparel and footwear market 2017–2030 graph

GB data on retail sales in textile, clothing and footwear stores in Great Britain from 2005 to 2020, based on volume

Source: Statista (n.d.) Retail sales in textile, clothing and footwear stores in Great Britain from 2005 to 2020, based on volume. Available at: https://www-statista-com.libezproxy.open.ac.uk/ statistics/ 387807/ retail-sales-volume-for-clothing-footwear-textile-stores-great-britain-uk/ (Accessed: 21 April 2021).

Long description of retail sales in textile, clothing and footwear stores in Great Britain from 2005-2020, based on volume graph.

2.2 Market shares

In this Excel file  you will find different datasets: select the one that best fit with your selected industry (you can move from one dataset to another from the bottom left of the Excel file). Note the instructions for section 2.1 above also apply here.

Sheet 1: Global market shares of the leading apparel brands in 2017

Statista (n.d.) Market share clothing worldwide. Available at: http://www.statista.com/statistics/ 856454/ market-share-of-the-leading-clothing-and-apparel-brands-worldwide/(Accessed: 17 April 2021).

Long description of global market shares of the leading apparel brands in 2017 graph.

Sheet 2: Sales of the leading apparel/footwear retailing companies worldwide 2018

Statista (n.d.) Sales of the leading apparel/footwear retailing companies worldwide 2018. Available at: http://www.statista.com/ statistics/ 257979/ sales-of-the-leading-apparel-footwear-retailing-companies-worldwide/ (Accessed: 21 April 2021).

Long description of sales of the leading apparel/footwear retailing companies worldwide 2018 graph

Sheet 3: Leading 10 retailers’ share of the apparel market in the United Kingdom (UK) in 2008 and 2018

Statista (n.d.) Leading retailers’ share of the apparel market in the United Kingdom (UK) in 2008 and 2018. Available at:: https://www-statista-com.libezproxy.open.ac.uk/statistics/ 673906/ leading-retailer-share-of-apparel-market-united-kingdom-uk/(Accessed: 21 April 2021).

Long description of leading 10 retailers’ share of the apparel market in the UK in 2008 and 2018 graph

2.3 COVID-19

Read Beard (2020) and Warden (2020) for a discussion on the impact of the pandemic on British textiles and fashion industries respectively.

2.4 Customer shifts

Relevant extracts from The Business of Fashion and McKinsey & Co (2020) report are: 

• Page 18: from ‘Even after the dust settles…’ to ‘… Construed as tone death’.
• Page 29: from ‘Before Covid 19, fashion…’ to page 30 ‘…US fashion companies declaring bankruptcy’.

2.5 Can fast fashion’s $2.5tn supply chain be stitched back together?

Read the work of Nilsson and Terazono (2020) for the impact of the pandemic on the fashion industry with a specific focus on global value chains.

References for Part 2

Beard, S. (2020) ‘British textiles get an unexpected boost from COVID-19’, Marketplace, 13 April. Available at: https://www.marketplace.org/ 2020/ 04/ 13/ covid-19-britain-textile-industry/(Accessed: 17 April 2021). 

Nilsson, P. and Terazono, E. (2020) ‘Can fast fashion’s $2.5tn supply chain be stitched back together?’, Financial Times, 17 May. Available at: https://www.open.ac.uk/ libraryservices/resource/ article:128070&f=31051&f=31051(Accessed: 21 April 2021). 

The Business of Fashion and McKinsey & Co (2020) The State of Fashion 2020: Coronavirus Update. Available at: https://www.mckinsey.com/ ~/ media/ McKinsey/ Industries/ Retail/Our%20Insights/Its%20time%20to%20rewire%20the%20fashion%20system%20State%20of%20Fashion%20coronavirus%20update/ The-State-of-Fashion-2020-Coronavirus-Update-final.ashx. (Accessed: 17 April 2021).

Warden, J. (2020) ‘4 ways Covid-19 will change the fashion industry’, The Royal Society for Arts, 28 May. Available at: https://www.thersa.org/ blog/ 2020/ 05/ fashion-change-covid(Accessed: 22 April 2021).

Part 3

Relevant material to answer Part 3 of this TMA can be found in the f

3.1 Overview of financial performance, long-term strategic plans and recent developments

Look at Superdry (2021f) for a summary of financial performance from 2016-2020. For an overview of Superdry’s long-term strategic plans read Superdry (2019) Financial results & Strategy (below). Revisit Superdry (2021d) page 4, section titled: ‘Difficult decisions, strategic changes and a disappointing performance’, the third paragraph presents the Chairman’s statement on areas for strategic change.

Superdry (2019) Financial results & strategy

Superdry is a genuine British success story. From our inception in 2003 we have grown into a global business with over £1 billion of Superdry product sold across the world each year. We sell on a truly global basis through a broad range of channels, including owned retail stores, franchise stores, our own ecommerce websites, partner ecommerce sites, large multi-brand store chains and smaller independent retailers. There are well over 500 Superdry branded retail locations in over 50 countries, and via our ecommerce and wholesale markets we have enabled the Superdry brand to reach almost every country in the world.

We have delivered incredible increases in revenue and profit year-on-year and are considered by investors to be one of the most exciting growth brands today.

We have gone from strength to strength in recent years, and our results for the financial year ending April 2018 are testament to how well we are doing as a business. Here are some highlights.

• Total sales up 16% to £872m.
• Global Brand Revenue increased by 22.1% to £1.604bn.
• Underlying profit before tax will be between £96.5m and £97.5m (exact number to be confirmed in full results announcement in July 2018).
• Ecommerce sales growth 25.8%.
• Wholesale sales growth of 29.6%.

Euan Sutherland, our former Chief Executive Officer, commented on the full year results:

‘Superdry has delivered another good year of brand revenue and profit growth as we have sharpened our focus on our successful Global Digital Brand strategy. We benefit from a clear brand positioning, an agile infrastructure that serves our global consumers through a truly multi-channel proposition and increasing operational excellence. Our multi-channel proposition means consumers can choose how they want to engage with the brand, allowing them to switch easily between our stores and our digital channels.

While the consumer environment remains challenging, we are confident that Superdry’s reputation for quality, design detail and strong value for money, underpinned by our continued investment in the business, leaves us well placed. We remain focused on the growth opportunities ahead and confident in the quality of sustainable earnings growth we can deliver over the long-term.’

Strategic Plans

In 2017 we launched our new strategic plan – Superdry 5.0. This approach, which has evolved organically from our previous plan, will see us become a truly global digital brand, utilising cutting-edge technology and influencer-led marketing to deliver continued growth though a multi-channel approach combining ecommerce, wholesale, owned retail stores and franchise stores.

The Superdry 5.0 name derives from this being the fifth major step change in the history of the company. From the creation of the Superdry name to its establishment as a standalone brand, to stock market flotation followed by an accelerated global growth phase, we’ve come a long way in 15 years. This strategic evolution will take us to the next level of success, as we continue our journey from Great to Amazing.

Source: Superdry (2019) Financial Results & Strategy. Superdry, https://corporate.superdry.com/

3.2 Resources and capabilities supporting channels to market

Read Superdry (2021d) pages 22–23 for a discussion of its routes to market and the underpinning resources and capabilities.

3.3 The path to the top of design talent at Superdry

Read Graduate Fashion Week (2018) for a discussion on design talent at Superdry.

https://corporate.superdry.com/media/3204/1jp_sd_ar2021_web.pdf

3.5 Sustainability

Superdry’s website presents three approaches to product sustainability.

• 100% Organic cotton – ‘All pure cotton items will be organic by 2025, with 20,000 farmers supported to convert to organic production…[read the whole section]’ (Superdry, 2021h).
• Recycled and sustainable materials – ‘In addition to moving to 100% Organic Cotton by 2030…[read the whole section]’ (Superdry, 2021i). 
• Animal welfare and vegan – ‘Superdry firmly believes it is not acceptable for animals to suffer in the name of fashion or cosmetics…[read the whole section]’ (Superdry, 2021j).

3.6 Superdry reviews its strategy

From Superdry (2021d) read the following sections: 

• Chairman’s statement on pages 4–5 (from: ‘Financial Year 2020 (‘FY20’) has been a tough year…’ till the end of page 5).
• The Chief Executive Officers review starts at page 28. You should read:
• Second paragraph on page 28 from ‘By focusing on the retail basics…’ to the end of the paragraph.
• Pages 28–30 from ‘Prior to the outbreak of the pandemic…’ to the end of page 30.
• Chief Financial officer’s Review starts at page 32. You should read the sections titled:
• ‘Our retail division’ pages 32–33.
• ‘Our wholesale division’ page 33.

References for Part 3

Graduate Fashion Week (2018) The head of womenswear design at Superdry, Siri Macdonald, advice on success.. Available at: https://www.graduatefashionfoundation.com/news/ siri-macdonald-interview (Accessed: 22 April 2021).

Superdry (2019) Financial Results & Strategy. Available at: https://corporate.superdry.com/(Accessed: 22 April 2021).

Superdry (2021d) Annual report and accounts 2020. Available at: https://corporate.superdry.com/ media/ 2821/ 27279-superdry-annual-report-2020-webready.pdf(Accessed: 14 April 2021). 

Superdry (2021f) Investors: financial performance. Available at: https://corporate.superdry.com/ investors/ financial-performance/ (Accessed: 14 April 2021). 

Superdry (2021g) People: Superdry supply chain. Available at: https://corporate.superdry.com/ sustainability/ reporting-policies/ people/ transparency-in-the-supply-chain-and-modern-slavery-statement/ (Accessed: 22 April 2021).

Superdry (2021h) Product: 100% organic cotton. Available at: https://corporate.superdry.com/sustainability/ low-impact-materials/ organic-cotton-recycled-and-low-impact-materials/(Accessed: 22 April 2021).

Superdry (2021i) Product: recycled & sustainable materials. Available at: https://corporate.superdry.com/ sustainability/ sustainable-materials-library/ (Accessed: 22 April 2021).

Superdry (2021j) Product: animal welfare & vegan. Available at: https://corporate.superdry.com/ sustainability/ reporting-policies/ environment/ animal-welfare-policy/ (Accessed 22: April 2021).