The environmental analysis is considered to be a crucial analysis which should be taken by the organization in order to ensure that the company is successfully able to form the strategies which would be useful for the overall welfare of the organization (Alkhafaji and Nelson 2013). The primary aim of the report is to undertake an environmental analysis of the chosen company, GHD Group Holdings with a special focus on its Hair Company. The analysis will be based on the performance of GHD Hair Company with reference to the product which has been chosen as the Platinum Black Styler (Ghdhair.com. 2018). The report will be conducting both the macro as well as the micro environmental analysis by making use of a wide range of tools like PESTLE Analysis, competency model, Stakeholder analysis and the Value Chain analysis. The latter half of the report will be using the tools of SWOT and OWS to analyze the standing of the company based on which certain recommendations will be provided for the same.
Macro Analysis
According to Hill, Jones and Schilling (2014), the macro environmental analysis can be stated to be the analysis of the company based on the external environment and the factors which might have an impact on the overall functioning of the company. The following section will be making use of the PESTLE Analysis as a tool to analyze the position of the GHD Hair Company as a whole.
The Pestle analysis is a useful strategic management tool which helps a company to analyze the different environmental forces as present. These forces can be of different categories like the Political, economic, social, technological, legal and environmental
The primary political factor which tends to have an impact on the GHD Hair Company is that there are considerably strict guidelines which are to be followed by the company in lieu of manufacturing the product in the market. Lasserre (2017), believes that as the hair product is in consider with the health and beauty segment, various legislatives have to be followed by the company which will then assure its successful operations.
The beauty industry is often faced by certain recession phases and hence, the GHD Hair Company would be required to ensure that they launch their product after keeping in mind these phases. Very often consumers often become price conscious and tend to go for the cheaper options and hence, the company needs to keep this aspect in mind (Team 2013). Additionally, the GHD Hair group also has to ensure that it needs to come up with competitive strategies as the hair and beauty market is one of the most growing industries as present.
The primary social factor which needs to be considered by the GHD Hair group is the loyalty of the customers. Martinsuo (2013), states that as the industry is a growing one, there are various products available who have a similar offering to that of GHD Hair straightener and hence, with respect to this the company would be required to undergo a differentiation strategy which will ensure that they are successfully able to meet the needs of the changing environment and either compete with quality or price.
The technological factors in case of the Hair styler of GHD hair can be of two types. The first is the technology with respect to the channel of distribution and the second one is the way in which the company has made use of the technology for the overall welfare of the company. Rothaermel (2015), states that the styler can make use of the modern technology as available and thereby ensure that the products are designed in a manner such that it makes them better than that of the competitors.
The hair and beauty industry has often been a concern with respect to its use of the environmental resources. Hence, the GHD Hair Company needs to ensure that the production of the products are made as per the set environmental standards and do not spoil the overall balance of the firm at large. Moreover, this also assists the company in uplifting the overall image of the firm.
The different legislative rules and regulations which have an overall impact on the company and its overall welfare are the legislations like the Fair Packaging and Label act, competitive legislations and other such related policies at large.
The micro environmental analysis is a useful tool which assists in understanding of the different factors within the firm which might have an overall impact on the functioning of the organization. The analysis on GHD Hair Company has been done in the following section.
The Mckinsey 7S is a useful model which helps in the understanding of the manner in which the overall performance of the company can be improved and the manner in which the changes which take place in the external environment of the business and may have a strong impact on the firm. The 7S analysis of GHD Hair Group has been done as follows:
The value chain analysis, is another useful model which assists the different companies to review their overall processes which goes a long way in assisting the company to alter its ways (Vogel and Güttel 2013). The Value chain analysis of GHD Hair Company has been done as follows:
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Firm infrastructure The infrastructure of the firm comprises of the following: E-commerce Strong financial position Emphasis on quality and health of the consumers |
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Human resource management The human resource management of the firm is as follows: It has a good management team It has a learning based environment |
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Technology Development There exists advanced product development In addition to this ,there exists customer oriented product development E-commerce website |
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Procurement The firm engages in local and bulk procurement In house production (Johnson 2016) |
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Inbound logistics The company locally purchases most of its raw materials Engages in specialized product imports |
Operations Outsourcing, packaging , labelling Research and development along with technological innovation (Darmawan, Putra and Wiguna 2014). |
Outbound logistics The company has a strong control of its global distribution channels which help the company to attain overall success. The expense of courier networks is also very high. |
Marketing and sales The brand identity of the firm can also be taken to be considerably high. The company can successfully engage in expensive marketing using public figures. |
Service The firm provides both pre and post sales services Extensive customer care is provided. |
The core competency model analysis can be used as a useful tool which can be used in order to understand the core competencies which the business would be required to possess in order to ensure that it is successfully able to engage in the different business operations (Gereffi and Fernandez-Stark 2016). The model focusses on the inside out view.
Jarzabkowski and Kaplan (2015), the model assists the different companies to fight off competition by building a strong firm. Hence, by making use of the given tool GHD Hair company can easily ensure that is successfully able to improve its positioning. Hence, the competency model in lieu of GHD Hair Company has been done as follows:
The stakeholder’s analysis is a useful tool which assists in analyzing whether the different stakeholders of the company are truly invested in the overall success of the organization or not. The GHD holdings is a corporation which has a large number of shareholders (Wheelen et al. 2017). Each of the shareholders will be examined and prioritized with respect to the shareholder analysis matrix.
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Influence/ Power of the stakeholders |
Meet their needs The general public The employees |
Key Players The customers The suppliers The government |
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Least important Middlemen (Eden and Ackermann 2013). |
Show consideration Investors Sponsors |
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Interest of the stakeholders |
From the given analysis it can be rightfully stated that, GHD Hair group needs to have its stakeholders aligned accordingly in order to ensure that the organization is successfully able to look out for the best group. The stakeholders for GHD Hair group has been divided accordingly and from this, it can be reflected that, the following strategies need to be followed by GHD Hair group for each group:
The SWOT analysis for GHD Hair group has been done as follows;
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Strengths |
Weaknesses |
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The brand awareness is comparatively very high The firm holds a high positioning in the Hair salons Endorsements by popular celebrities (Bull et al. 2016) |
The product can be harmful The rival companies seem to have a larger market presence (Bryce 2017) |
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Opportunities |
Threats |
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The company needs to broaden its offerings The company can increase the links with charity (Bettis et al. 2014) |
The brand could become stale It faces risk of counterfeits. |
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External factors/Internal factors |
Strengths S1-The brand has a good awareness in the market |
Weaknesses W1- The rival companies have a larger market presence |
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Opportunities O1- It can extend its product line |
S-O Strategies The company already has a good brand image in the market and with respect to this, it can easily take advantage of a successfully extended product line. |
W-O The Company can capture the market share and beat the rivalry presence by extending its product line (Barney 2014). |
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Threats T1-The company faces risks of counterfeits |
S-T Strategies The company can make use of its brand awareness and ensure that it is able to face the risk of counterfeited products (Williamson et al. 2013) |
W-T Strategy The company needs to ensure that it is able to maintain a standing in the market. |
Conclusions
Therefore, from the given analysis, it can be rightfully stated that the chosen company, GHD Hair groups with its product Platinum Hair styler have been performing considerably well in the specific market and is witnessing the benefits of performing in the growing hair and skin industry. The report analyzed the performance of the company with respect to the different strategic analysis macro and micro environmental tools like PESTLE, SWOT, TOWS, Stakeholder analysis, Competency Model and others. From the analysis it can be stated that the company has been performing considerably well but it is required to undertake certain measures which will assist in ensuring that the firm is able to maintain its standing in the market. After using the company by making use of the tools, the following recommendations can be provided to the company:
References
Alkhafaji, A. and Nelson, R.A., 2013. Strategic management: formulation, implementation, and control in a dynamic environment. Routledge.
Barney, J.B., 2014. Gaining and sustaining competitive advantage. Pearson higher ed.
Bettis, R., Gambardella, A., Helfat, C. and Mitchell, W., 2014. Quantitative empirical analysis in strategic management. Strategic Management Journal, 35(7), pp.949-953.
Bryce, H.J., 2017. Financial and strategic management for nonprofit organizations. Walter de Gruyter GmbH & Co KG.
Bull, J.W., Jobstvogt, N., Böhnke-Henrichs, A., Mascarenhas, A., Sitas, N., Baulcomb, C., Lambini, C.K., Rawlins, M., Baral, H., Zähringer, J. and Carter-Silk, E., 2016. Strengths, Weaknesses, Opportunities and Threats: A SWOT analysis of the ecosystem services framework. Ecosystem services, 17, pp.99-111.
Darmawan, M.A., Putra, M.P.I.F. and Wiguna, B., 2014. Value chain analysis for green productivity improvement in the natural rubber supply chain: a case study. Journal of Cleaner Production, 85, pp.201-211.
Eden, C. and Ackermann, F., 2013. Making strategy: The journey of strategic management. Sage.
Frynas, J.G. and Mellahi, K., 2015. Global strategic management. Oxford University Press, USA.
Gereffi, G. and Fernandez-Stark, K., 2016. Global value chain analysis: a primer.
Ghdhair.com., 2018. Beauty and hair products [online]. Available at: https://www.ghdhair.com/about-us?PID=PRO-026&CRE=AboutUs&PLA=1&TYPE=Footer (Retrieved on: 03 Dec. 2018).
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated approach. Cengage Learning.
Hubbard, G., Rice, J. and Galvin, P., 2014. Strategic management. Pearson Australia.
Jarzabkowski, P. and Kaplan, S., 2015. Strategy tools?in?use: A framework for understanding “technologies of rationality” in practice. Strategic Management Journal, 36(4), pp.537-558.
Johnson, G., 2016. Exploring strategy: text and cases. Pearson Education.
Lasserre, P., 2017. Global strategic management. Palgrave.
Martinsuo, M., 2013. Project portfolio management in practice and in context. International Journal of Project Management, 31(6), pp.794-803.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
Team, F.M.E., 2013. PESTLE Analysis. Strategy Skills. Free management ebooks, p.15.
Vogel, R. and Güttel, W.H., 2013. The dynamic capability view in strategic management: A bibliometric review. International Journal of Management Reviews, 15(4), pp.426-446.
Wheelen, T.L., Hunger, J.D., Hoffman, A.N. and Bamford, C.E., 2017. Strategic management and business policy. pearson.
Williamson, D., Cooke, P., Jenkins, W. and Moreton, K.M., 2013. Strategic management and business analysis. Routledge.
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