Introduction
Jessops was founded in 1935 by Frank Jessop Simmons well known around the world for its broad expertise and experience in the photographic industry. While Jessop was a leader in the industry for many years, technological and market changes over the last few decades led to a significant decline in its sales and profitability. By early 2013, it stores closed and it stock ceased being traded. However, soon after this British entrepreneur Peter Jones invested millions of pounds into the business and reopen 36 of the Jessops stores (BBC News Online a). He hoped to turn the business around. The following considers what strategy or strategies Jessop could use in order to actually accomplish this ambitious goal.
1.1 Explain strategic contexts and terminology – missions, visions, objectives, goals, core
Competencies.
There are several concepts that are essential when creating and implementing a strategy for any business. These concepts are described as the company’s mission, vision, goals and objectives. Often, these aspects of a company strategy are laid out in documents, such as a mission statement or a vision statement. The following gives more specific definitions for each of these terms. Keep in mind that these concepts are not mutually exclusive. In theory, a company’s mission and vision statements, its goals and the specific objectives related to all three should be closely linked together and work in concert.
Mission Statement: A mission statement describes what the company in question actually does. Such a statement should be brief and easy to understand. Furthermore, it should so specific that anyone reading the statement can easily discern the difference between you and any of your competitors. For Jessops, the company’s mission statement could be described by its position, which is as a highly respected and well-known name in the industry. This position and brand image provides it with certain advantages that could help it overcome its current difficulties.
Vision Statement: A big the statement refers to what a company (or rather the people who operated) ultimately desire that company can be in the future. This vision for the company can deviate significantly from the company’s current mission statement. Many companies use their vision statement to direct their goals and to help guide decision-making. The new vision statement for Jessops was built around the idea that it was to be “the first choice destination for everyone’s imaging needs.”
Goals and Objectives: Goals of the broader aims of the company, such as reducing debt, increasing profitability and so on. For example, in the case of Jessops, closing most of the stores and then reopening the more profitable locations could be seen as meeting the goal of increasing profitability. Objectives on the other hand are more specific than goals and give the company hard targets to aim for. For instance, Jessops might want to set a specific number for the amount of debt reduction it wants to achieve by 2018. This would be an objective. Of course, setting an objective does not necessarily mean the company will meet that objective.
1.2 Review the issues involved in strategic planning.
One of the keys to strategic planning is to consider what internal and external factors will affect the future performance or profitability of the company in question. There are many different ways to determine what the factors might be, but one of the most frequently used in SWOT analysis. SWOT stands for strengths, weaknesses, opportunities and threats. All companies have specific strengths and weaknesses in the current makeup. They also face both potential opportunities and potential threats. This type of analysis is particularly useful to managers (Dealtry 1992).
Jessops SWOT Analysis
Despite its recent problems, Jessops enjoys both strengths and opportunities it can take advantage of in the future. However, as those recent problems do make clear, the company also has certain weaknesses and faces a number of serious threats in the future. The following analysis considers this in depth:
Strengths
At this time, Jessops enjoys a very low barrier to entry into new markets. This is particularly the case in Europe because of its present membership in the European Union.
Another strength for Jessops is that it is a very well-known name brand in the UK with strong brand recognition.
The company is associated with high quality products from the best manufacturers.
Its staff is extremely well trained and experienced. Furthermore, it is renowned for its excellent customer service.
Weaknesses
Jessops faces a high level of online competition.
The company’s prices are too high compared to its competitors.
Customers take advantage of the knowledge base at Jessops stores to choose cheaper products from competitors.
Excessively high R&D budget.
Ineffective online presence.
Opportunities
Jessops could attempt to take advantage of the growth in on-demand services.
Expansion of the company’s online website to provide superior and less expensive products and services.
There is a tremendous potential for growth in international markets.
The company could seek to diversify into other related industries.
Jessops could attempt to address some of its weaknesses by acquiring some of its more efficient and modern competitors.
Threats
Ongoing innovations in mobile phone technology.
Economic instability or downturn.
Increased government taxation and regulation.
Reduction of the companies access to international markets or to other countries within the EU because of an affirmative Brexit vote.
1.3 Evaluate the effectiveness of techniques used when developing strategic business
plans that JESSOPS can use.
One of the most effective tools for Jessop to use when evaluating its current position and determining what its strategy should be is the BCG matrix. This tool considers what are known as the stars, cash cows, question marks and dogs in the business. The following is a BCG matrix for Jessops.
The stars are those products or services the business offers that are both high market share and high growth. Cash cows are those areas where there is a low growth but high market share, meaning the company makes a good deal of money from these products. Question marks represent products or services where the business has only a small market share, but it is an area with a good deal of potential growth. Finally, dogs are those products or services that are both low market share and low growth. These last items are things that should be dropped from the company’s offerings, particularly in bad economic times.
2.1 Analyze the strategic positioning of JESSOPS by carrying out an organizational
audit.
Determining why any company goes on the decline and ultimately fails can be a fairly difficult process. Beyond suggesting that management decisions were to blame, there is rarely a single reason for a company’s decline. This is certainly the case with Jessops, where years of success and prosperity gradually slipped away (BBC News Online b) and saw the company close its doors in 2013. However, it seems clear that the following factors contributed to the problems that Jessops experienced.
Uncompetitive Prices
Under any circumstances, businesses want to ensure that their prices are at least relatively competitive with those of their competition. However, during difficult economic times consumers are always on the lookout for bargains. Under these circumstances, businesses need to be even more aggressive in ensuring that their prices aren’t so high that they drive away customers. Unfortunately for Jessops, not only were its price is not competitive with online retailers (a difficult thing to achieve given the reduced overhead costs for online retailers), Jessops prices were uncompetitive with those of other brick-and-mortar stores. This is certainly one of the things that went wrong with Jessops.
Failure to Close the Sale
Jessops also failed to capitalize on the fact that their customers (or rather potential customers) would often enter their store to take advantage of the considerable experience and expertise of their staff. With these potential customers actually in the store, it should have been possible to convert more of these inquiries into actual sales. Instead, these customers would get the information they wanted and then by the product at a less-expensive local retailer or online. This failure to convert store visits into sales was a significant one.
Low Quality Website
Another mistake that Jessop made was to create a low quality website and to poorly integrate that website with its brick-and-mortar stores. For instance, the occasional low-priced deals or sales that customers could find in the stores did not necessarily apply online. A customer wanting to get that bargain price while avoiding a trip to the store would be frustrated and might then turn to another online retailer to satisfy his or her needs. A quality commercial website is vital these days (Miller 2011).
Rise of Online Retailers
One of the most significant problems that Jessops face over the last decade was the rise of online retailers that offer lower prices and superior return policies. It has proven extremely difficult for brick and mortar stores to compete with this new retailing phenomenon (Bell 2012). Amazon is the prime example of this kind of retailer, having not only reduce sales for niche retailers like Jessops but also for major general retailers like Walmart or Target. The innovative approach that Amazon has brought to online retail sales is shuttering the doors of businesses in the US, Europe and around the world. This seems likely to continue in the future (Brandt 2011).
2.2 Carry out an environmental audit for JESSOPS.
The following provides an environmental audit of Jessop’s, considering the internal and extra forces that can affect its future operations and strategies. Both a PESTLE analysis and Porter’s five forces will be used for this purpose.
Pestle Analysis
The purpose of a pistol analysis is to carefully consider the various external factors that might have an effect on the operation or strategy of a company or other large organization like Jessops (Cartwright 2002).This analysis should can be used by Jessops managers to better understand the political, economic, social, technological, legal and environmental factors that can impact their business.
Political Factors
There are various political factors that can have a very significant impact on any business. This is as true of Jessops as it is of any other company. The following reviews some of these factors:
Political actions are also of great concern to a business, and can significantly affect a retailer like Jessops. For example, a decision on the part of the UK to exit the EU (which is currently being contemplated) could close off European markets to Jessops for make it much more difficult for them to operate in those markets.
Political pressure can be brought to thereby international organizations and agencies on businesses with regard to their sustainability practices. Private activist organizations can protest companies which they feel are operating in an unethical way.
Economic Factors
Obviously, the economy is perhaps the most important factor in the operation of a business. The following factors are the ones that are of greatest concern to Jessops.
Demand for the product is clearly a principal concern for Jessops, since reduced demand leads to reduce sales and ultimately reduced profits. While the demand for the products that Jessops currently offers are not necessarily in decline, it does face the pressure of keeping up with the latest technological trends toward this possibility. The photographic industry is an extremely fast changing one.
Cost of production is not a direct concern for Jessops, but Jessops does have to be concerned about the cost of production for its suppliers. Naturally, if it suppliers find their costs rising they will pass these costs along to Jessops. Jessops intern would have to pass such costs along to the consumer.
Both of the above points lead to the other economic concern of Jessops, which is maximizing profit. It is all too easy in the current economy for company to fall into the mistake of depending on debt to see it through the hard times. Ensuring that Jessops maintains profitability even in a difficult economy is essential.
Rising interest rates also have to be a concern for Jessops, since many of its customers use financing to purchase its products. Higher rates will make customers less likely to buy the things Jessops offers.
Social Factors
Social factors are also a major concern for any large business, and certainly for one like Jessops that has to stay attuned to changes in our society and in customer preferences and interests. Below are points that Jessops has to consider in this regard:
Maintaining a line of up-to-date, sophisticated products, since no customer wants to buy an out of date product. These days, customers consider anything older than two years to be virtually obsolete.
Providing unique (or nearly unique) products that customers have a difficult time finding anywhere else (either in brick-and-mortar stores or online). Although customers want to be up with the latest trends, they also want to stand out from the crowd.
Appealing to the potential customers and throwing them into the stores. From a social standpoint, this is a far more complex process than it was in the past. There are many more places (both online and off) where customers can be found. On the other hand, this array of potential marketing opportunities is something Jessops should take advantage of.
The societal trend in which people are choosing to do more from their homes using the Internet also makes them less likely to be out and about using photographic equipment. Why bother to go out and take a photograph of a beautiful lake or famous monument if you can easily find it online?
Technological Factors
Technology is a key factor in determining the success or failure of Jessops, which means it has to be central to the company’s overall strategy. Over the last 30 years the technology of photography has leapt forward, and those companies that have failed to keep up with these technological innovations have fallen by the wayside. This includes the manufacturers as well. (Hans Greimel Associates 2006). Below are the things that Jessops needs to consider:
Planned obsolescence should be a key consideration when Jessops is introducing new products to its stores. The company should assume that within two years the new and highly exciting product will become yesterday’s news.
Working closely with manufacturers is another key aspect of the technology factor. Jessup should know years ahead of time precisely what manufacturers have in the offing so that they can prepare their marketing plans and strategies. Only by maintaining a close relationship with the companies producing these products can Jessup assure this is the case.
Legal Factors
Naturally, legal factors and new legislation by the national government can have either a positive or negative impact on Jessops operations and long-term strategic plans. The following looks at two of these points:
One of the most significant factors that could affect Jessops is taxation. Changes in taxation laws or increased taxes could easily transform an otherwise profitable financial year into one in which the company suffers a loss.
Regulatory decisions regarding issues like the environment, treatment of employees and sourcing of goods and supplies are also of great importance to Jessops. Greater environmental regulation or the requirement that Jessops stop purchasing from suppliers who violate human rights could negatively impact the company’s bottom line.
Environmental Factors
Environmental factors are not related to sustainability or recycling, but to the way the location of a business can affect its operations. For example, farmers have to be concerned about the climate of the region, while steel manufacturers have to be certain they have access to the iron ore they need. In the case of Jessops, environmental factors play a very small role:
The inclement weather frequently found in the UK might tend to make some shoppers less likely to go to traditional brick-and-mortar stores. For these shoppers, Jessops should make sure they know that the Jessops online stores available.
Porters Five Forces Analysis
The above information make it possible to analyze the Jessops situation using Porter’s Five Forces. The following chart reflects the results of such an analysis.
2.3 Assess the significance of stakeholder analysis when formulating new strategy for
the JESSOPS scenario. Stakeholder analysis provides a systematic means for analyzing a businesses stakeholders by the power they have and their specific interests. Whereas stakeholders with low interest and willpower are considered the least important in stakeholder analysis, those with high interest and high power are the most important. The following is a stakeholder analysis of Jessops.
External
Customers- Outcome Oriented
Creditors- Outcome Oriented
Suppliers -Outcome Oriented
Community -Activity Oriented
Internal
Stockholders- Outcome Oriented
Employees- Activity Oriented
Stakeholder Analysis Matrix
2.4 Present a new strategy for a JESSOPS.
New Strategic Objectives
In order to address the problems that Jessops currently faces, including the weaknesses and threats discussed above, the company needs to take immediate action in several different areas. Their short-term objectives should be as follows:
Increase the number of online customers by 300 each month, with the goal of an average online customer expenditure of £50 with a profitability per sale of £1.
Increase customer satisfaction from its already excellent rate of 88% to 95% within one year by focusing on customer service and after sale support.
Raise the on-time delivery rate for items purchased to 98% within one year.
3.1 Analyze possible alternative strategies relating to substantive growth, limited growth
or retrenchment for JESSOPS.
Longer-term objectives would involve higher expenditures and significant planning. Some of these would include the following:
Making Jessops the preferred store for digital photography products within the UK by opening an additional 15 stores within the next two years.
Reduce prices on average 35% in the coming two years was to better match (or at least approximate) the prices being offered by Amazon and other online retailers.
Focus on segmentation, ensuring that the company targets those geographic and demographic areas most likely to purchase its products.
Increase use of social networks (Facebook, Twitter, etc.) for marketing purposes.
Increase the “Britishness” of the brick-and-mortar stores by making the décor and furnishings more elegant.
Recent indicators are that the company ownership recognizes the need for significant change within the company. In fact, the opening of new stores, as well as smaller stores, are clear evidence of this. Furthermore, Jessops in 2014 revealed that it had experienced solid profits during the year following its collapse in 2013 (Devlin Online). This bodes well for the future of the company.
3.2 Based on the theories of strategy and evaluation select and justify an appropriate
future strategy for JESSOPS.
In business, prognosticating about the future is always a difficult and tricky task. The best approach is to attempt to combine predictions about the market with projections as to what your company’s future product line might look like. For Jessops, the following Ansoff matrix helps to clarify what future strategies the company could use.
4.1 Assess the roles and responsibilities of personnel who are charged with strategy
implementation for JESSOPS business scenario. With the acquisition of Jessops in 2013 by UK entrepreneur Peter Jones, the company entered into a new phase of its existence. Jones’responsibility to the company is to guide it from its terrible decline to better and more prosperous years. Accomplishing this will require Jones and his subheads at the company to think outside the traditional brick-and-mortar box in which Jessops has operated for so many decades. He needs to define new marketing strategies and take advantage of the many online opportunities available to the company. The same time, he has to peel away inefficiencies and those parts of the company (as well as products) that are dragging it down.
4.2 Analyze the estimated resource requirements for implementing a new strategy for
JESSOPS. Despite its recent collapse, Jessops still possesses considerable resources for turning the situation around. The company has an excellent brand image and is well known throughout the UK. One of its principal assets is its highly experienced and knowledgeable staff. Holding on to the most effective of these staff members during the recent store closures and then the reopening was essential for the future of the company. Its acquisition by Peter Jones brought a whole new set of resources to the company, with additional funding being only one of these. Jones was able to bring his experience with running a modern, 21st-century business to the job of resurrecting Jessops. The company has an adequate and growing online store and a number of still useful locations throughout the UK. It is also engaging in joint venture efforts with a number of other companies. For example, it recently made a deal with Sainsbury's to place a number of small Jessops stores in their larger establishments.
4.3 Evaluate the contribution of SMART targets to the achievement of strategy
implementation in JESSOPS.
SMART targets provide a way for a company like Jessops to clearly lay out its objectives and how it hopes to achieve them. The acronym stands for Specific, measurable, achievable, realistic and time-bound. The following is a SMART target chart for Jessops.
Conclusion
In conclusion, it is clear that Jessops needs to massively overhaul the way it does business in the UK, a broad and online. The old traditional approaches clearly have failed it. Otherwise, it would not have been forced to shut its doors to begin with (The Sun Online). Hopefully, the new ownership and management will be able to take the greatly trimmed down company in a new direction. But it is only by taking advantage of the company’s strengths and opportunities (which are considerable) that these executives can hope to succeed.
References
BBC News a, 2013. Jessops brand sold to Dragons' Den's Peter Jones. BBC News. Available at: http://www.bbc.com/news/business-21285587 [Accessed June 19, 2016].
BBC News b, 2007. BBC NEWS | Business | Jessops to cut shops and workers. BBC News. Available at: http://news.bbc.co.uk/2/hi/business/6225070.stm [Accessed June 19, 2016].
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Devlin, E., 2014. Jessops pictures future growth. Insider Media Ltd. Available at: https://www.insidermedia.com/insider/midlands/125302-jessops-pictures-future-growth [Accessed June 19, 2016].
Hans Greimel Associated, P. w. (2006, Apr 10). Digital revolution challenges old guard; once-prominent camera makers now trailing pack. Columbian.
Miller, M. (2011). The ultimate web marketing guide. Indianapolis, Ind, Que.
The Sun. (2013). Camera chain Jessops collapses into administration. The Sun. Available at: https://www.thesun.co.uk/archives/news/401590/camera-chain-jessops-collapses-into-administration/ [Accessed June 19, 2016].
