Essay about Whsmith's Strategy

2977 WordsMar 5, 200712 Pages
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…show more content…
‘We aim to return the UK High Street Retail business to its role as Britain's most popular stationer, bookseller and newsagent … Our plans encompass improved efficiency through cost savings and margin enhancement, while rebuilding the competitiveness and depth of our product ranges.' (Ms Swann BBC, July 2005) Due to the amount of similarity between the business units I am not going to separate them out to deal with them, they are all commodities on which similar forces are having similar impacts. To demonstrate and categorise these industry features I am using Michael Porter's 5 forces framework (Johnson et al, 2005) The five forces are not independent of each other and changes in one of the forces can have knock on effects with the other forces. The aim is to understand the nature and attractiveness of the industry, indentifying the drivers and allowing consideration of the impact of these forces on the SBUs on W H Smith. Competitive rivalry There is strong rivalry in each of the SBUs, there are many big brands including supermarkets and specialists as well as independent retailers and online retailers. There have been in the recent year's considerable price wars on books in an attempt to maintain market share in an increasingly cramped market. The book market is in fact growing ‘with the exception of weak fortnights in both March and April, sales figures for the overall book market have shown sustained growth in 2005. ...

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