2nd November 2010
1. Construct a strategic group map locating House of Fraser’s competitive position within the United Kingdom’s department store industry. Make sure you provide a rationale for each companies or groups position.
The following table has been created to correctly understand the strategic characteristics of several market leaders as mentioned in the case study. This table will aid in the readers understanding of the differences and similarities between these market leaders and will act as a method of comparison.
Market Leaders Comparison
Company (market share)| Strategy | Price | Breath of products | Quality/styling | Number of stores| Self-Branded Lines| | Low Cost Strategy| Premium| Limited| Good| 685| High| | Broad differentiation| Above Average| Extensive| Good/superior| 26| Average| | Broad differentiation| Average| Extensive| Good| 144| Average| | Broad differentiation| Above Average| Extensive| Limited| 62| Low| | Broad differentiation| Premium| Extensive| Superior | 1| Low/Non-existent|
As is evident from the above table, House of Fraser offers a wide range of premium products and services from perfume to personal shopping. As a company which charges high prices, but not as high as some market competitors, House of Fraser is able to position itself as an affordable option within the upper half of the mass market. During recent years, particularly during the current economic climate, the success of the company has been well publicised alongside its continued growth in sales and with its ability to maintain brand loyalty, House of Fraser dominates the market above Marks and Spencer, John Lewis and Debenhams. Harrods, a large department store, is House of Fraser’s main competitor and it occupies a clear-cut position within the department store market.
Strategic group map of pricing policy and perceived quality of UK stores
Strategic group map of perceived quality and Breadth of range in UK stores
These two strategic group maps show a comparison for the UK department stores compared by the variables of ’number of stores’ and ’price’. The position of the circles Is directly proportional to how much market share they own. As is clear from the tables, Marks & Spencer have the highest number of stores and also have the highest percentage of market share; Harrods commands the highest prices as it sells premium and luxury goods and has only one store in the United Kingdom, therefore creating somewhat of an elusive atmosphere with its market share of just three percent and therefore can get away with charging high prices for its goods and services. Despite the fact that Marks & Spencer’s sells a wide variety of both clothes and food, it is considered in the same market sector as Harrods, due to competitive pricing, the fact that it only sells its own brand products and the. Debenhams and John Lewis however are in direct competition with each other as they do not sell food and Harrods and House of Fraser both sell premium products and are also in completion with each other.
2. What is the relationship between House of Fraser’s strategic group and its organisational focus?
House of Fraser’s has a strategic group position of selling premier goods at above average prices. The organisational focus therefore is to have concessions in place to sell unique and branded. House of Fraser decided to lead a repositioning exercise and an organisational focus to differentiate from its strategic group competitors, namely Harrods. House of Fraser is leading the same strategy as John Lewis in terms of an Extensive breadth of products at good/superior quality. The wide range of high luxury profile brands such as Armani, Hugo Boss and many more reinforce its image as a store of exclusivity in the UK. Consumers are willing to buy into...