Strategies For Growth And Competitive Advantage At Just Jeans

Overview of Just Jeans and its Market Position

Discuss About The Configurations Governance Structure Strategy.

Just Jeans is a clothing chain store operated by Just Group headquartered in Melbourne in Australia and is a denim destination for customers. It operates via online exclusive stores and has over 246 stores operating in Australia. It was found in 1970 and the organization evolved from small retailer of denim jeans to much loved and recognized brand in both the countries (justgroup.com.au, 2017). It has been the most trusted and creative denim provider that has a critical understanding of the casual wear and denim market accompanied with its ability and dedication to meet needs of customers.

Over the year, Just Jeans has delivered strong growth in denim business resulting from the implementation of strategy of “Anchored in Denim”.  Opening of Mid-City Sydney CBD helped in delivering results that are ahead of expectations and improved experience of customers. A strong brand campaign was delivered from launching of new brand ambassador together with Stenmark twins. Just jeans are owned by premier Investments that remained the leading player in year 2016. Sales of jeans are impacted by at leisure trend that shows no signs of slowing down. The main drivers of trend are women with purchasing decisions are influenced by fashion, brand and style. Current value growth of 2% is recorded by jeans as it is positioned as a staple item in the wardrobe of customers. It is anticipated that selling of jeans would record modest overall value of growth of 2% value compounded annual general growth at constant 2016 prices to 2021 (justgroup.com.au, 2017).

Just jeans have been expanding their business in countries with strong economical positions and they have captured fashion market in countries like Australia. The geographical diversification of country has made a remarkable progress. Graph presented below depicts the present condition of market in Australia. Different products market trend has been shown in the bar graph.

Fashion industry is provided with a great scope in Australian market and it is demonstrated by growth rate of Just Jeans. Organization has recorded a growth rate of 3.3% annually and in a year more than fifteen outlets were added. It is believed by company that their overall performance will improve in Australian market by following business strategies of mergers and acquisition (Peteraf et al. 2014). Merger of company with Smiggle is one of such instance.

One of the prime objectives of Just jeans is to provide shareholder with long-term wealth creation. Superior returns to shareholders have been delivered to shareholders in financial year 2016. A record sales and earnings before interest and tax is reported by Just jeans due to its disciplined approach to inventory management, cost and rents and targeted capital investments accompanies with string performance in their sales figure. There was a surge in online stores and retail stores. Earning before profit and tax was more in year 2016 as compared to year 2015 with the total earning of group at $133.3 million compared to $ 129.2 million in previous year. Total value of sales was up in the current year. Just jeans in achieving growth in value of total sales and like-to-like sales (justgroup.com.au, 2017). The sourcing capabilities of organization have been enhanced due to continuous improvement in products along with maintaining a sound hedging position of foreign exchange. Organization is committed to deliver long-term goal through effective use of relationship and resources.

Strategies for Growth and Performance at Just Jeans

Just jeans have expanded in several markets of different countries and in order to increase their market share and growth rate, they continue to open new stores. Diversification is regarded as the most risky strategy that an organization adopts for increasing their share of market. It is certainly possible that when an organization diversifies, there products might not be accepted in new markets and thereby fail to make desired sales. However, Just jeans have diversified into several markets by emphasizing on a range of brand through a target demographic breadth and appealing sufficiently to enable a national footprint. Continuous investment is made by organization in their different products so that they remain relevant to changing taste of customers and remaining at front position of their target market (Tanwar 2013).

In order to identify the areas where change is required needs to perform situational analysis of Just jeans.            The expanding future market size of clothing is one of the weaknesses of Just jeans. It is perceived that for maintain seamless working capital, organization might avail loans at higher rates. Increasing cost of production is another issue of organization. Income level in Australia is at constant increase that would help in increasing sales of product. However, there are some issues faced by Just Jeans resulting from its unstable cash flows and growing market and new entrants in cloth retailer business.

The final recommended strategy would be the implementation of model of Porter’s generic strategies. It is recommended to Just Jeans to follow strategies proposed by Porter that will help them in gaining competitive advantage over their competitors and new entrants in the fashion market. Nonetheless, Just jeans has acquired reputed market position in its home country that is Australia by providing quality and diversified range of retail products and by focusing on differentiation focus strategy.

Just Jeans build their brand awareness and were successful in increasing their total value of sales by targeting demographic of casual wear buyers. Organization has been able to serve the need of target segments by providing differentiated products that is different from segments of other industry.  Focus of cost differentiation lacks within the organization and therefore, they need to exploit differences in behavior of costs in their segmented markets. The market segments needs to be clearly defined that will enable them to target specified markets by differentiated range of product lines. Focusing on differentiation will help Just jeans exploit specific needs of buyers in certain segments (David & David, 2015). On other hand, focusing on target segments by buyers should be able to serve some unusual and specific needs of buyers. Therefore, Just jeans are required to focus on differentiation that will seek differentiation in their targeted segments. Furthermore, differences in behavior of cost in different segment should be identified that will help in gaining advantage in terms of cost in their targeted segment over their competitors. In nutshell, it can be said that organization needs to focus in building cost leadership strategy to sustain in retail fashion industry.

Expanding into New Markets and Diversification

Three strategic options are determined using suitable criteria that comprise of acceptability, feasibility and suitability.

Acceptability- Strategies of cost leadership can be implemented by organization in successful way in short time period. After the suitable strategic option is implemented, there is a fair chance of increase in company’s financials. It is indicated from cost benefit analysis that there will be benefits to company where market oriented strategies are opted and there is upgraded technology in stores.  Therefore, cost leadership strategies and focusing on differentiation within the targeted segments should be opted by company.

Suitability- Suitability deals with integration of weakness and strength of several sought strategies and their effective implementation. The implementation of strategies of cost leadership is assisted by market orientation and environment of Just jeans.

Feasibility- Feasibility indicated the operation of organization in an environment where such strategic options have already been implemented. In this regard, strategic options need to be supported by development of competencies and other factors such as internal skills of employees. Just Jeans can occupy leading position in fashion market if they focus on strategies leading to gain a leadership position.

The strategy of cost leadership and differentiation focus within their target segments is considered to be strategic fit for company to deal and overcome the issues they are facing in current scenario. It is depicted by efficiencies in their operation and various environmental facets of Australian market. The measurement and control of recommended strategic option can be done clearly communicating the objectives and determining role and employees along with periodically reviewing the outcomes after strategy implementation. Control can be exercised by incorporating stakeholders’ views as ownership helps in bringing accountability. Progress of the implemented strategy can be tracked in a systematic and deliberate manner regularly during implementation process.

The performance measurement and rewarding employees for success of the implementation can be done by executive compensation system. Employee performances in context of successful strategy implementation and performance of organization should be rewarded by way on monetary benefits or non-monetary benefits. Rewards for performance would include compensation, appreciation, recognition, perks and benefits. The selected strategy has the fair chance of successful execution if it is backed by appropriate style of leadership in organization (Freeman & McVea, 2015).

Implementation of strategies as provided by porters can faced some challenges such as poor coordination among some functions of organization, rampant change in technology and ongoing change in references and taste of consumers. Technical leadership can be regarded as another issue that might be faced by company in strategy implementation. Some internal challenges of organization creating difficulty in implementation of strategy are skills and ability of managers, regulations of government and community expectations (Thomas & Stephens, 2015).

Implementation of strategic option requires staffs to upgrade their skills in accordance with strategy requirement. Management system should be formulated according to business strategic requirements. Skills of staffs and employees need to be upgraded so that it leads to seamless strategy implementation. A new technology development group is required to be promoted by business for implementation of strategy (Mishra et al. 2014).

Conclusion:

Just Jeans is one of the trusted and creative denim providers that has been experiencing continuous growth and expansion of their business. However, it is required by organization to push up their sales and profitability position in today’s competitive scenario prevailing in retailer world. From the analysis of their financial and corporate performance, it is perceived that they would experience remarkable growth opportunities. Therefore, they have built up the strategy of cost leadership. This will enable them to identity cost behavior of different segments and taking steps to reduce the cost and boosting sales and thereby profitability figures.

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