Report on e-strategy for Berkberry

Transition from a traditional organization To a contemporary firm Through e-strategy

Contents Introduction ............................................................................................................................................................ 3 Task 1: Understanding the value of e-strategy in organizations ........................................................ 3 1.1. 1.2. 1.3. Value of e-strategy in organization............................................................................................... 3 Contribution Of An E-Strategy To The Achievement Of Berkberrys Objective .......... 4 Aligning an E-Strategy with Overarching Organizational Strategy .................................. 5

Task 2: Developing e-Strategy for Berkberry ............................................................................................ 5 Company Introduction.................................................................................................................................... 5 2.1. 2.2. Business Factors for determining the e-Strategy.................................................................... 5 Benefits of e-Strategy within Berkberry ..................................................................................... 7

2.3. Plans to implement e-Strategy within Berkberry for retaining its competitive advantage............................................................................................................................................................. 7 Task 3: Implementation of the e-Strategy ................................................................................................ 10 3.1. 2. 3.2. 3.3. Resource Requirement for Implementation of the Strategy ........................................... 10 Marketing through Social Media ..................................................................................................... 11 The Implementation Schedule for the e-Strategy implementation for Berkberry . 12 Adapting the present business at Berkberry to meet newer strategies...................... 12

Task 4: Managing the e-Strategy .................................................................................................................. 13 4.1 & 4.2. Implementation and Monitoring of the e-Strategy to the organization with respect to Berkberry .................................................................................................................................... 13 4.3. E-Strategys Contribution To Ensuring An Berkberrys Competitive Advantage In A Global Market .................................................................................................................................................. 14 5. Conclusion .................................................................................................................................................... 15

Introduction Business has taken a drastic change from the earlier mom-and-pop stores and has become much more sophisticated in the past couple of decades. Technology has made these changes prominent, and the way businesses are carried has become an entirely different process. Information and the digitalization has become an important element for success of all business to cater to the changed customer requirement (Yunker, 2003). Relationship management too has gained much importance and all this calls for moving from a traditional organization to a technology driven organization. This change can be well implemented through an e-strategy. This case study is aimed to look into the company Berkberry, currently struggling under a multitude of issues, and improving suggestions through the implementation of e-strategy.

Task 1: Understanding the value of e-strategy in organizations 1.1. Value of e-strategy in organization

E-strategy involves utilizing the already existing capabilities of the business, but reinventing the factors that shape the final result. It is all about understanding the important values and focusing on these values for obtaining better results (Chan, Lee, Dillon, & Chang, 2007). Also e-strategy help the firms adapt to the latest technologies and utilizes the worldwide web and also exploits all information sources to understand the organization and all related stakeholders effectively. Thus e-strategies, in simple words, improve the competitive advantage of the company through the implementation of the latest technology and use of information (e-Commerce Land, 2004). The benefits of e-strategy are innumerable as the e-strategies usually combine innovativeness, technological advancements and competitive advantage into one single strategy (Laudon & Traver, 2007). It helps in successfully implementing e-business technologies thereby developing organization structures and improving the overall technical framework of the company. Some of the most sought out reasons for implementation of e-strategy within the organization are (Reynolds, 2000):

1. Efficiency The purchase orders, the sales bill and the order processing are done by the computers and software making the whole system more effective and efficient. Also these systems require a one-time cost for setting up, and thus become more economical and easy to manage. 2. Any time work With e-business strategies especially with web based selling, it becomes possible for the companies to carry out business 24X7 without the requirement of a sales person. The same is applicable to all systems that are linked to computers such as web advertising. 3. Speedier With the integration of technology into existing organization strategy, the processes used for routine sales procedures become far easier and speedier than the traditional system. This is yet another benefit of using e-strategies within the firm. 4. Accuracy It is a well known fact that technological advancements and use of computers for business has made business processes more accurate. This accuracy is also a key benefit of using e-strategy. 5. Easier update on the real time position of the firm - With e-strategy in place, instant notifications on major processes can be attained by anyone who has access to the system. 1.2. Contribution Of An E-Strategy To The Achievement Of Berkberrys Objective

The company has its vision to become a Design Led Retailer and this can be achieved only through a stronger strategy that is backed up by technological advancements. The estrategy currently designed aims to reach this objectives through different modes as explained in the below sections. Thus from the same we can see that through the implementation of e-strategy more than one objective is obtained. With proper implementation as per plan and schedule the company would be able to Improve profits Increase Sales Increase the margin through better operations Better marketing and better visibility of the brand

Increased understanding of the expenses and costs through better reporting through the use of ERP.

1.3.

Aligning an E-Strategy with Overarching Organizational Strategy

e-Strategies are not new strategies that aim to change the whole business outlook, rather they are strategies that provide easier ways to achieve already established objectives of organizations. Through e-strategies the goal of the company to improve the sales and profit can be more easily gained and thus it provides solution to improve all functions of the organization. It can improve the manufacturing processes; manage better relationships with suppliers, and improve customer relationship management; all in one go, without changing the organizational objectives at all (Yunker, 2003). The e-strategies thus act as a contemporary approach to meeting set objectives through use of technology and helps gain a competitive advantage in the midst of high competition.

Task 2: Developing e-Strategy for Berkberry Company Introduction Berkberry has been a known and recognized name since 1965 in the fashion industry. Today, the high competition and contemporary fashion houses have taken up the limelight and the sales and profits of Berkberry is spiraling down day-by-day. The industry involving the high fashion and designer clothes is tough and getting the upper hand is not an easy task. Trends come and go quickly making the items obsolete in a matter of days, making continuous and quick response necessary for survival for the firms. Keeping these characteristics in mind a strategy has been planned for taking the Berkberry brand to newer heights. 2.1. Business Factors for determining the e-Strategy

In such a context, Berkberry has a long way to go to reach the epitome of glory that it had enjoyed in the past years. Berkberry still has the advantages of brand presence and recognition. Using these as weapons for the future growth a good strategy needs to be developed where in the company is made into a productive unit by cutting down unwanted

expenses, outsourcing work and developing a new distribution system. The product line needs to be refurbished and a new range of products pertaining to the current fashion trends needs to be designed. Berkberry has been into the luxury ended accessories market, and has been able to make a significant mark in the area. With time the number of products too has increased, but presently the number of products has gone up to the extent where it has become unmanageable and calls for a complete redesigning. The fashion mantra followed still is of the 1980s which is despised by the youth of today. Traditional clothing and styles needs to be thus done away with and this calls for appointing of new designers with present day fashion sense. So, to begin with the shortfalls of Berkberry need to be looked into. Taking up the SWOT analysis would be the best option here to weigh the strengths, weaknesses, opportunities and threats of the company as per the present stature is being analyzed below: SWOT Analysis of Berkberry Strengths Long Heritage dating back to 1965 Reputed and recognized brand name Loyal Customer base Loyal retail chain ready to absorb new products Opportunity Luxury brands and accessories has still a good market The sales opportunity through newer channels like e-commerce is on the rise More disposable income for younger generation who can be targeted Weaknesses Reliance on old manufacturing units, deeply increasing the overall costs Quality declining day-by-day with large number of rejects Designs outdated and used only in suburban areas Threats Concession stores and discount stores at a rise High Competition Low importance for overcoats and increased concentration on accessories Global players entering into the market

Thus the challenge here is to bring about a complete change in the business structure and bring about a business with increased market share, fast moving products, and feasible and cost friendly production planning. 2.2. Benefits of e-Strategy within Berkberry

Berkberry is now lagging behind due to the many reasons mentioned in the SWOT analysis above. With the implementation of e-Strategy the management hopes to bring around the following major benefits to the organization (Burns & Stalker, 1969): Increased profits through better sales Better management of the product line through cutting down of unwanted products Increased area of operations through e-commerce Better retail management through dedicated software Increased understanding of the expenses and costs incurred by the company through better reports and visibility. 2.3. Plans to implement e-Strategy within Berkberry for retaining its competitive advantage Looking into the various issues that has been causing the Berkberry brand to stagger has revealed that there is no one single reason for the failure. The whole system currently in existence needs to be revamped and the right tools needs to be identified for tackling these problems. A series of options can be first looked into, and the best and the most suitable of the available alternatives can be chosen for the actual implementation. Each alternative should be weighed based on the pros and cons and the results of using these tools in the context of Berkberry should be forecasted for choosing the best among them. The chosen strategy should be able to meet the current competitive pressures and at the same time be feasible in terms of the budget availability and other requirements of the firm Berkberry. For the company Berkberry three major segments have been identified that requires immediate attention:

Berkberry's Strategic Areas

Product Designs

Better Operational Capabilites

Accelerated Growth through better distributor

1. Quality Designs The first area that needs to be looked into is the designing segment of Berkberry. Berkberry grew from a small overcoat retailer to a national brand through its excellent quality and wide range of products. But the last decade saw the sudden change in trend which has not been adapted by the company. This is one fallout, which needs to be immediately rectified. For this recruitment of experienced and well trained fashion designers needs to be immediately carried out. Designs and the right product range alone can help in taking up the lost brand image of the company. Even now traditional methods of designing and producing bulk products are being followed by Berkberry. Bulk products are sold cheap through discount stores and supermarkets and thus the value for Berkberry too is perceived to be very less. Today customers are looking for unique patterns and being a premium brand, Berkberry should have designers capable of creating unique premium products for the customers entering the store. Thus the whole motto of the firm should be to go forward through Design Led Revolution. 2. Better Operational Capabilities: The operations section of the company too needs to be looked into. The technological advancements have made the textile manufacturing take huge leaps in the past few years. Berkberry has not taken up these changes into its stride, and this is being heavily reflected

in the companys statement of accounts. The industrial area where is the production is being carried out is run-down and revamping the industry would need huge capital. This is not feasible in the current financial position of the firm. Thus, as per the alternatives available, the best option is to outsource the work to other manufacturing units. 3. Distribution Strategies: Till now there has been a wholesale-retail trade which is not feasible as per the strategic report. For better performance three brands are being planned of which two of the brands would be sold only through the in-house stores and company owned online store. The third brand would be sold through the retailers who are planned to be directly managed. This would mean that only a single link of distribution needs to be managed, again helping the company gain an advantage in the margin front. Owning flagships stores is not very economical. But owing to the premium brand and premium pricing being planned, flagships stores with uptown settings are a must. Also in-house designers for each store to provide and help customers with expert advice in-store is being planned which would add a glitter to the service offering of Berkberry. These are the three major traditional business functions to be catered by Berkberry at the time of revamping. Other than these the major e-strategies for helping the firm change itself to a contemporary organization are given below: 2.4. Technical Requirements for implementation of e-Strategy

The e-strategy and its implementation would require a huge capital as the company is now a technologically weak company with no new computers or systems to operate on. For the e-strategy to be successful dedicated computers, servers, database management system, and networks should be invested into immediately. Software vendors need to be reached out and quotations called for, as per the specifications required for the company. Beta testing of the e-tools planned to be used has to be carried out before the final release to ensure no hiccup happens during the process.

Task 3: Implementation of the e-Strategy Suggested e-Strategies suggested for re-branding Berkberry For improving the position and the brand identity, a complete set of strategies for digitalizing the brand is being planned. Accordingly five sets of immediate plans are charted out, based on which the future strategies would be planned. As per the current studies, the major drawback, apart from afore said disadvantages, is that of technological incapability - not just in the manufacturing front, but also in the marketing and distribution functions too. Keeping this is mind four major areas that needs immediate attention are: 1. Launch of a corporate website 2. Marketing through social networking 3. Introduction of the brand through virtual games and virtual fashion shows 4. Investing more on digitalization of the brand The actual procedures for implementation are being discussed below: 3.1. Resource Requirement for Implementation of the Strategy

1. Launch of a corporate website The first objective is to create and launch a fully functional website with all details. Today websites are a primary source of information disseminator among the different public communication modes. Through a well designed and well developed website, the customers across the world would be given a chance to get connected with the brand and would be able to feel the brand through different senses. To make the experience more thrilling music, virtual dressing room, virtual walk-through wardrobe and product review of all categories should be included in the most innovative way. A good media company with reputation in rebranding of fashion products needs to be chosen for outsourcing the job of website design. Once the website is ready for public viewing a grand launch ceremony has to be planned with a fashion show to attract as many viewers as much possible to the website. Also the website should be able to engage and entertain the viewers and at the same time be able to provide a platform for easy interaction. For this web-chat facility, and easy mail facilities should be included. All these additions would help serve multiple customers at a single time and also help build a stronger brand accessing from any part of the world.

2. Marketing through Social Media Today social networking and social media engagement has become a critical factor for showcasing the brand. To connect with the youth and to further build a name in the luxury segment, a brand presence in all leading social networking sites is immensely important. A Twitter followership and a Facebook fan page costs only a very minimal percentage of the advertising costs, but the results and viewership data can become overwhelming. Also some social networking sites on the purchase of the brand can be planned too, with additional offers and gifts for helping the brand gain importance in the virtual world. Social media is now being dominated by the internet savvy business houses and this needs to be effectively banked on by Berkberry too. This would enable an easier penetration in the minds of the young customers. 3. Showcasing through virtual games and fashion shows Virtual games are another new trend on the internet. With apps and Facebook games taking up the time of the youth, these can also become a very important weapon for marketers. Virtual games like Farmville, Fishville, Fashionista have all taken up the interests of the netizens and similar games with Berkberry products and branding can be used for initial marketing. This is an innovative marketing strategy that has not been much used by the competing firms. A well designed game is easy to be sold for free on the Apple and Android markets. Also some apps and games relating to the fashion shows can be included for further marketing the brand. This would help create a new image in the virtual space which is an important media for advertising in the present scenario. 4. Increased digitization through other modes So far, the three strategies used aimed at marketing and showcasing the brand to the youth through the internet. Another important concept that needs to be taken up is the ecommerce, which has become an omnipresent distribution media for all types of consumer goods. Fashion goods and accessories are now being sold like hot cakes through various internet websites and this factor cannot be ignored while planning an e-strategy. For ensuring a strong presence among the customers, an e-store run by the company itself needs to be opened. This would require a team of well trained staff and good relation with

logistics company as these two factors are crucial for the success of the e-store. This e-store should be able to exist in addition to the other retail stores and flagship stores, as e-stores of fashion houses cannot always replace a traditional brick and mortar store. This needs to be planned well, and the e-store should be efficient and acceptable in terms of value, delivery time and ease of shopping. 3.2. The Implementation Schedule for the e-Strategy implementation for Berkberry The report has come with a series of ideas for bringing about the much needed change within the company. The schedule as per the report is as follows: Recruit and train young designers (in two weeks time recruitment procedures should start) Take quotations from ERP vendors and come up with the best solution provider for specific needs (To be finalized in three weeks) Send a team to India and China to choose the best manufacturer for each product (report weekly on the various suppliers met, and their terms and conditions and suitability) Shut down and liquidate the existing plant in 3 months Choose a media partner for successfully re-launching the new brand both through virtual media and traditional media (To be started immediately). 3.3. Adapting the present business at Berkberry to meet newer strategies

Adapting to newer business strategies will not be easy as a through re-structuring of all functions of the businesses are being planned. This would mean informing and equipping the employees with a good training session on the new strategies and the need for the same. Currently the organizational tradition has been to stick to a manual way of doing things. With the new strategy in place the following actions would be needed to be done immediately to help in achievement of the companys objectives: Review the workers at the industry and select the ones who can be trained to be placed within other industries.

Train the office staff to be equipped with the new system of doing daily work through the ERP Choose from the existing retailers and let them know of the new distribution agreement. Tie up with the best retailer and offer new services for portraying the brand in the best manner. Task 4: Managing the e-Strategy

4.1 & 4.2. Implementation and Monitoring of the e-Strategy to the organization with respect to Berkberry 1. Designers and design studio: The primary strategy that has been pin-pointed is the revamping of the product line through better designers. This requires a design studio to be built up at the head-quarters with the latest technology in designing being installed for ensuring that the company stands out in the technological capabilities. Also care should be taken to have in-house designers as outsourcing of the designing function would not be in line with the company objectives. 2. Outsourced production: Another disadvantage of the company is the highly expensive production units. The old industrial area and the out-dated manufacturing capacities are one withholding factor of Berkberrys success. To counter this, good manufacturers should be chosen from outside UK. India and China is now the global hub for exporting textiles and garments. These places should be visited and good suppliers sought out for manufacturing goods as per Berkberry designs. Care should be taken to validate and ensure that the legal formalities and patent rights are all signed and agreed upon, as piracy and selling of export surplus is now a big threat to outsourcing fashion companies. Strict rules for ensuring quality standards should be kept as the idea of quality is different in the Asian countries from that of the European countries. 3. Distribution and Retailing: The retailers are the final link, but a very important link as the customers are served through these retailers. The idea has been framed to have a flagship brand for two brands and one brand for retailers alone. This has to be rolled out in phases and the retailers chosen through a good market study. The

flagships stores have to be refurbished and made to cater to the current tastes of the customers. Interiors, lightings, dressing room and the general layout have to be planned and designed to cater to the premium pricing of the product. The physical appearance of the outlet too has a very important role in attracting customers and this has to be kept in mind while designing the stores. Managing the retailers can be done through software supported system such as a Supply Chain Management Software. Utilizing this from the time of re-launch would help create a system right from the beginning and thus help the company in understanding and quickly responding to market trends, enabling easier and quicker stock replenishment, better logistics handling, easier order processing etc. This would also help the company have the competitive edge that is highly important for successful businesses today. 4. E-Strategies Implementation: The major implications to be kept in mind while designing the website has already been discussed through section above. Throughout the implementation the objectives of the organization should be kept in mind. The organizational culture, the ethics and the initial objectives have been highly important in helping the company reach the success it had enjoyed in the past years. 4.3. E-Strategys Contribution To Ensuring An Berkberrys Competitive Advantage In A Global Market Fashion industry has now evolved into a very competitive industry that depends heavily on technology. With a good mix of designers, manufacturers, retailers and a good management along with a strong strategic plan for revamping the brand Berkberry can reach back to its lost glory. In this global market, a technologically advanced marketing is the best weapon for going against the competition and this can be reached through the mentioned strategies above. Also globalization has seen the price war happening, with the manufacturing being done in developing countries, with the current e-strategy the competitors can be fought off well.

5. Conclusion Berkberry is an organization with immense potential and good brand presence. Sticking on to the e-strategies and developing the company through the contemporary methods would be beneficial in reaching newer heights in the days to come. The brand has a good customer base and this can be further developed through strategies that are aimed for better returns and higher profits through newer ways. The e-strategies if implemented and monitored in the right way can help the company attain its goals (Evans, 2006).

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