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University of Guyana

Faculty of Social Sciences


Department of Business and Management Studies
MKT 4103 Marketing Strategy
New Directions Case Study

Group 1 Members
Minakshi Ramnarais
Richanna Staglon
Raphiel Singh
Zaphiel Singh
Omalita Balgobin
Anika Lambert
Tejwattie Persaud Ramnauth

New Directions Plc


Question 1
Prepare a SWOT analysis of the organization both for the period before the takeover and for the
period reached at the end of the case study. Having done this, discuss the implications of one of
your analyses for methods of marketing planning and control.

The case study is about New Directions, a high street fashion chain founded in Britain in the late
1960s which has had a high growth rate before it was bought out by a cash rich conglomerate.
SWOT Analysis before the takeover
Strengths
1. Loyal Workforce: The new employees were young and were more loyal to Thomas
Oakley.
2. More operating freedom among staff: This would give them a sense of responsibility and
greater job satisfaction which leads to higher level of performance.
3. High Market presence: New Directions had 400 stores in the market.
4. High Market share amongst young males and females: They were very popular in the
young (15-25, C1/C2) male and female fashion sector.
5. Good Reputation in the market: The developed product had a good reputation of having
a strong fashion element at popular prices.
6. Aggressive entrepreneurial Management Style: Under this approach the company
underwent a decade of explosive growth.
Weaknesses
1. Management and leadership tied to one person: The employees and even the organization
were too dependent on Thomas Oakley.
2. Quality of their product: New Directions focused more on popular prices than on better
quality for their product.
Opportunities

1. Overseas Market: Mr. Oakley talked about expanding the business to other European
markets, particularly Spain
2. Demographic age changes: According to the case study, a new target market of 30-40
year olds would have been beneficial as an annual growth rate of 12% was being
forecasted in that sector.
3. Targeting childrens market: Developing a new chain for the childrens market. Children
are the ultimate fashion accessory. We need to capitalize on this.
4. Change in the store design: Buyers were looking for a more exciting shopping
experience, so altering their current design would cater to that.
5. Grow and change with the fashion industry: Continuous changes occur in the fashion
industry which allows the company to take advantage of these changes and put forward
new and creative products to the market.
Threats
1. Emerging and existing competition in the fashion industry: Some competitors had already
adopted and changed their positioning to cater for the exciting shopping experience.
2. Inability to meet increasing consumer demands.

SWOT Analysis at the end of the case study


Strengths

1. New financial strength from the buyout by the cash rich conglomerate during the
recession period.
2. Good control and risk aversive management style.
3. Cost leadership strategy: Having popular prices for their products during the recession
period was appropriate for the economic conditions during that time.
4. Strong market research: This was previously done by Mr. Oakley on the demographic age
changes, overseas market, change in store design etc.
Weaknesses
1. Management had a very conservative and unimaginative style of operating the
organization.
2. Less freedom to staff: The new management did not care much of their staff and the ideas
put forward by them which eventually leads to low motivation among staff.
3. They were very reluctant to taking risks.
4. The managing direct lacks retailing experience and technical aspects of the managing a
fashion industry.
5. Lack of expert leadership.
6. Corporate Image was confused: They had no clear goals in which direction to go in, and
thus the brand image of the company was weakened.
7. Restrictions were placed on capitalizing short term opportunities which is vital in the
fashion industry.

Opportunities
Most of the opportunities previously stated remain the same but with the recession, the strength
of those opportunities may have decreased slightly.
1. Overseas Market: Expanding the business to other markets.

2. Cost leadership strategy: Due to the recession, people were more cost conscious and New
Directions already had a cost leadership strategy and can optimize on it.
3. Targeting childrens market.
4. Change in the store design: Buyers were looking for a more exciting shopping
experience, so altering their current design would cater to that.
5. Grow and change with the fashion industry: Continuous changes occur in the fashion
industry which allows the company to take advantage of these changes and put forward
new and creative products to the market.
Threats
1. Economic Recession: This plays a huge role in decreasing demand for fashion clothes
since it is a luxury item.
2. Increased Competition: Since most of the employees left the company, the competitors
that had snatched them up gained from their training and experienced they had been
previously exposed to.
3. No longer a market leader in the young fashion market.

Analysis of the case shows that time plays an important factor in this situation because in the
fashion industry, whether it be a huge recession or the ability to capitalize in short term
opportunities, fashion is an ongoing trend and it will keep on changing so the need to monitor
and control is strong.
One of Porters three generic strategies being used was Cost Leadership and it was done
successfully before the demand for quality in the products arose, a diversification strategy should
have then been implemented.