Whsmith's Strategy
From its humble roots as a family newspaper distribution business using horse drawn carts from the first newspaper distribution warehouse, expanding by taking advantage of the spread of the rail network for both distribution and later book stalls in the stations which, in turn spread to form the company we all now recognise as W H Smith.
The corporation is divided into W H Smith Retail (high street and travel stores), W H Smith News (distribution) and W H Smith Direct (online) businesses and for the purpose of analysis it is important to understand the division between business units as competitive advantage is achieved at the level of each strategic business unit (SBU) and understood through competitive strategy whereas achieving synergy through the combination and management of the SBUs is the goal of corporate strategy. A diversified company has two levels of strategy: business unit (or competitive) strategy and corporate (or companywide) strategy' (Porter, 1988)
The focus of this study is specifically on the high street retail stores which can presently be divided into 4 strategic business units, books, magazines and newspapers, stationary (including greetings cards) and entertainment. They are all served through the same channel but there is considerable variety in the competitors which they face albeit there is some cross over.
Two parts of an organisation should only be regarded as the same SBU if they are targeting the same customer types, through the same sort of channels and facing similar competitors.' (Johnson et al., 2005)
Although W H Smith high street retail as established above comprises 4 SBUs each facing different competitors, the threat of customers purchasing their products from other retailers who have staked out a more competitive strategic position is the same for each of them.
W H Smith is caught up in a pincer movement between the supermarkets, busy nibbling away in areas such as newspapers, magazines and music as well
The corporation is divided into W H Smith Retail (high street and travel stores), W H Smith News (distribution) and W H Smith Direct (online) businesses and for the purpose of analysis it is important to understand the division between business units as competitive advantage is achieved at the level of each strategic business unit (SBU) and understood through competitive strategy whereas achieving synergy through the combination and management of the SBUs is the goal of corporate strategy. A diversified company has two levels of strategy: business unit (or competitive) strategy and corporate (or companywide) strategy' (Porter, 1988)
The focus of this study is specifically on the high street retail stores which can presently be divided into 4 strategic business units, books, magazines and newspapers, stationary (including greetings cards) and entertainment. They are all served through the same channel but there is considerable variety in the competitors which they face albeit there is some cross over.
Two parts of an organisation should only be regarded as the same SBU if they are targeting the same customer types, through the same sort of channels and facing similar competitors.' (Johnson et al., 2005)
Although W H Smith high street retail as established above comprises 4 SBUs each facing different competitors, the threat of customers purchasing their products from other retailers who have staked out a more competitive strategic position is the same for each of them.
W H Smith is caught up in a pincer movement between the supermarkets, busy nibbling away in areas such as newspapers, magazines and music as well