Organisational Management Analysis

Organisational Management Analysis
(CW1)
Module: Strategic Management
Tutor: Dr Cicely Davey
Module Code: BM607
ID Number: 20901515
Due Date: 7th March 2012
Word Count: 3,626
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ORGANISATIONAL STRATEGIC ANALYSIS
TABLE OF CONTENTS
ABSTRACT................................................................................................................................................ 4
INTRODUCTION TO WH SMITHS ............................................................................................................ 5
MISSION .................................................................................................................................................. 6
VISION ................................................................................................................................................. 6
VALUE ...................................................................................................................................................... 7
OBJECTIVES ............................................................................................................................................. 8
GOALS ..................................................................................................................................................... 9
STAKEHOLDERS ..................................................................................................................................... 10
STAKEHOLDER MAP (POWER INTEREST MAP) ...................................................................................... 11
PESTLE EXTERNAL AND INTERNAL FACTORS ........................................................................................ 14
EXTERNAL FACTORS PESTLE .............................................................................................................. 14
POLITICAL .......................................................................................................................................... 14
ECONOMIC ........................................................................................................................................ 15
SOCIAL ............................................................................................................................................... 16
TECHNOLOGY .................................................................................................................................... 16
LEGAL ................................................................................................................................................ 16
ENVIRONMENTAL ............................................................................................................................. 16
PORTERS FIVE FORCES .......................................................................................................................... 17
CAPABILITY MATRIX .............................................................................................................................. 18
Threshold and Distinctive Capabilities .............................................................................................. 18
VALUE CHAIN ANALYSIS ........................................................................................................................ 20
Primary Activities Value Loss ............................................................................................................ 21
Support Activities Value Loss ............................................................................................................ 21
VALUE NETWORK .................................................................................................................................. 22
NUMBER SWOT ..................................................................................................................................... 23
SWOT .................................................................................................................................................... 23
THREE GENERIC STAGES........................................................................................................................ 24
Generic Stages Purpose ........................................................................................................................ 25
ANSOFF MATRIX.................................................................................................................................... 26
FOUR INTERNATIONAL STRATEGIES ..................................................................................................... 27
INTERNATIONAL PESTLE ....................................................................................................................... 28
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CAGE Model ...................................................................................................................................... 28
Business Level Strategic ........................................................................................................................ 29
International Level Strategic ................................................................................................................. 31
Recommendations ................................................................................................................................ 32
Business strategy recommendations ................................................................................................ 32
International strategy recommendations ......................................................................................... 32
REFERENCES .......................................................................................................................................... 33
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ABSTRACT
This report has critically analysed and reviewed the company WH Smith PLC. The marketing of WH
Smith has been thoroughly assessed both internally (capability matrix) and externally in the business
which has included models and theories such as SWOT, PESTLE, Five Forces and related theories.
Through the analysis undergone the organisations strategic position in the market against the
competition has been shown, as well future recommendations based upon the organisations
structure.
Key stakeholders of WH Smith have been identified and examined, showing the attitude assessing of
the stakeholders regarding potential changes through thoughts of evaluating the business which has
been achieved by the use of the SAFE method suitability, acceptability and feasibility.
The evaluation has included internal and external environment stakeholder expectations and critical
potential barriers to implicate WH Smith. The final part of the report has been evaluated of WH
Smith and recommend by the strategic choice and an explanation of how it will meet the
stakeholders expectations. A consumer wants and needs (consumer behaviour).
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INTRODUCTION TO WH SMITHS
WH Smith has a big chain in the retail industry founded in 1792 by Henry Walter Smith as a
newsvendor but now as of the 1970s onwards it became a retail chain store. The company has had
many owners since it opened. WH Smiths is also an international business with mostly their stores
in airports.
WH Smith PLC is one of the oldest retail businesses in the UK. They are one of the leading UK book
and sellers, along with competitors Amazon, Blackwells and Waterstones. The company sells more
than books.
Smith does also have the largest Newspaper and, magazines distribution. Also stocking and selling
tobacco, confectionery and stationary. WH Smith also are branded by selling own branded name
items for stationary.
WH Smiths has 573 stores in the high street and other stores in airports, train stations, hospitals and
motorway service stations with employing over 16,000 WHSmith( 2011) The company also are an
online retailer with their online website (http://www.whsmith.co.uk/). WH Smith has on average
1.5million customers per day. (Mintel 2011)
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MISSION
WH Smith aim to be Britains most popular bookseller, stationer and newsagent.
Looking at mission statement of WH Smith has shown that the company has accomplished their
purpose of being one of the most popular booksellers, stationary stores and newsagent sellers.
With over 573 stores on the high street and many other WH Smith drop in UK travel outlets such as
airports and motorway suppliers, it shows that the company are still a strong brand with the
strategic methods that are being used.
WH Smith has the busiest travel store which is located in London's Victoria station. WH Smith sells
an overall of 1.5 million magazines every week, with 24,000 magazines every hour they are open.
Yearly sell WH Smith in excess of 40 million books and an average WH Smith sell 3,000 A4 pads a
day. (Mintel 2010)
VISION
Vision for WH Smith is to continuously inspire our customers by embracing the fantastic legacy of
the WH Smith brand and our tremendous opportunities for the future. (WH Smith 2011).
Richard Handover, Group Chief Executive of WH Smith, states that At the heart of the vision lies the
WH Smith brand. With its associations of trust and accessibility, it has enormous untapped power
and potential.
WH Smith want to be the first destination for any customer who is seeking value for money, ethical,
environmentally proactive retailer with a broad product range and friendly, informative staff.
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VALUE
Customer Focus: WH Smith believes to Drive for Results: WH Smith has to trend
keep the customers as happy as possible against their competitors to differentiate
for this to keep loyal to the brand. If WH themselves. WH Smith could use this as
Smith gives a bad customer service their USP (unique selling point). WH Smith
experience to their customers they will believes to keep up with all that is a want
think to go to competitors and may find like technology eBooks.
Amazon or another rival cheaper and with
a better service as they are online and
easier to purchase once signing up.
WHSmith(2009)
Value our People: WH Smith has Accountability: WH Smith have belief in

confidence in their staff to respect their their brand promises to unsure customers,
customers demands this is the way the suppliers and other stakeholders that they
strategy works for WH Smith. are a strong minded company and if
something is wrong with the company WH
Smith will take the blame and put it in
consideration to perform a new strategy.
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OBJECTIVES
WH Smith intend on building on its position as the UKs most popular stationer, bookseller and
newsagent by continuing to grow its strongly performing Travel business and delivering its High
Street plan. The objective of the company is to improve their customer offer and grow the business
by renewing existing contracts and developing new formats and channels.
The key objective of the business is to ensure that every store is able to maintain optimum trading
conditions. After successful eight years of collaboration with facilities management supplier, WH
Smith undertook a market review to incumbents performance.
With a clear brief based on experience, WH Smith was eager to realise value for money around the
scope of activities in relation to the services provided. WH Smith SSS-support (2010)
WHSmith intends to build on its position as the UKs most popular stationer, bookseller and
newsagent by continuing to grow its Travel business and delivering its High Street plan.
We aim to improve the Companys profitability and cash flow generation, delivering
sustainable returns to shareholders.
We believe that a concentration on these factors will be reflected in a total shareholder

return that compares well with our peer group of equivalent listed companies.
We invest where we believe we will achieve a return on investment above our cost of
capital. While external economic and other factors might affect using the short term, we
believe that most of the markets.
We are focused on will deliver sustainable returns.
We aim to act responsibly towards all our stakeholders, including customers, suppliers,
business partners, employees and the communities in which we operate
WHSmith PLC (2011)

Travel is focused on delivering value to shareholders through organic growth in its existing
outlets, securing new contracts, trialling new formats, increasing average transaction value
and making improvements to trading efficiency.
The High Street plan concentrates on building on our authority in core categories,
optimising margins, controlling costs and ensuring we deliver the retail basics. High Street
continues to make significant progress in the delivery of its plan.
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GOALS
At WH Smith our biggest goal is to continue to build upon our own success growth and
position ourselves as one of the UKs most trusted and recognised names. We strive to be an
outward facing customer focused organisation that delivers on our promises.
Living our four key values is an important part of achieving this aim. The values are Customer
Focus, Drive for Results, Value our People and Accountability. (WHSmith 2009)
The main goal of WH Smith is to be one of the leaders in their segment; this will also come with the
standards of excellence in all what they market. With competitors focusing on the business
distribution, WH Smith will have to characterise from their rivals focusing on their skills and retail
selling figures.
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STAKEHOLDERS
The key stakeholder groups of WH Smith have been highlighted in the following table; it is of great
importance that these groups be identified to enable the organisation to implement strategies that
will impact these groups in a positive way keeping them engaged with the brand.
Owners
Government Managers
Suppliers Customers
Political
Competitors
group
Trade
associations Unions
Employees
CUSTOMERS
The customers of WH Smith are one of the key influencing stakeholders affecting the development
and implementation of corporate strategies, as essentially the sales revenue of the organisation is
maintained directly from this stakeholder group.
Failure to conduct strategies that possesses the ability to provide customer satisfaction and
retention could result in the loss of sales revenue and reputation to WH Smith and the companys
long term goals nit being met.
EMPLOYEES
These are other vital stakeholders of WH Smith; employees are an extension of the brand and failure
to keep employees on side can cause misalignment with the core mission and vision of the
organisation and the deliverance of the brand promise.
In addition to this miscommunication of the brands strategy to its employees can lead of the
miscommunication of messages and customer experiences to the consumers of Smiths again limited
the success rate of meeting end goals.
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STAKEHOLDER MAP (POWER INTEREST MAP)

The diagram below illustrates the various priorities of the stakeholders of WH Smith, as to what
needs to be done by the organisation to enable positive responses from each of the groups.
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STAKEHOLDERS EXPECTATIONS ENGAGEMENT
WH Smith regularly listens to their

WH Smiths customers expect customers and responds to their
that they manage their business feedback. They also conduct an
responsibly, and in doing so, WH independent customer
Smith offers a variety range of satisfaction survey twice a year,
CUSTOMERS
products at the best value. during their busiest trading
Customers expect WH Smith to periods. To ensure that WH Smith
respond to their needs and remain in what the customers
concerns. want with of changing needs, they
conduct additional research.
WH Smiths investors have an WH Smith engages with investors

expectation of continued creation in one-to-one meetings to discuss
of shareholder value through specific elements of the business
with profit margins, performance, and their corporate responsibility
INVESTORS other investments and cash programme. WH Smith also
management, and the assurance connects with shareholders over
that WH Smith operates with their results presentation, Annual
good governance and suitable General Meeting and investor
business development strategies. relations department.
Both trade bodies and

government departments expect
WH Smith is members of the
that WH Smith will uphold their
British Rail Consortium and
CR including managing the
Business Community;
TRADE BODIES AND environmental impacts,
organisations work to address
GOVERNMENT responding to local communities
DEPARTMENTS consumer, ethical and
and providing fair and family-
environmental issues that affect
friendly job opportunities.
the industry. WH Smith also
Government departmental so
provides insight on changes.
consult their business on policies
that affect their industry.
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WH Smith works with numerous

charities across the communities;
they engage with several
NGOs expect WH Smith to take organisations, such as the
NON- leading roles in CR issues, by Woodland Trust, the Employers
GOVERNMENTAL reducing carbon emissions, Forum on Disability and the
ORGANISATIONS supporting sustainable forests Ethical Trading Initiative to
(NGOS) AND and ethical trading. They expect improve the performance across
CHARITIES
WH Smith to understand their their CR programme. As a brand,
cause and support their efforts. WH Smith works with champion
literacy, the National Literacy
Trust to improve literacy levels in
the UK.
WH Smith engages with their

suppliers in a number of forums,
including training programmes
Suppliers have an expectation of
and one to one meetings. WH
air business trades with the
SUPPLIERS Smith work with key suppliers in
opportunity of growth in between
Asia to improve health and safety
the businesses
standards and support the set-up
of worker representative
committees.
WH Smith communicates regularly

WH Smiths employees expect to
with its employees via e-
be treated fairly, offered training
newsletters and regular updates.
and the opportunity to develop
WH Smith provide head office CR
EMPLOYEES their careers. They expect WH
updates at their Strategy Briefings,
Smith to take care of their well-
all staff are encouraged to give
being, offering a safe working
feedback on their CR
environment.
performance.
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PESTLE EXTERNAL AND INTERNAL FACTORS

EXTERNAL FACTORS PESTLE
WH Smiths operational costs are affected by underlying cost inflation and legislative and scal
changes in relation to, for example, paper, packaging, fuel, utilities, rates and wages.
POLITICAL
Group profit from trading operations and High Street and Travel operating profit are stated after
directly attributable share-based payment and pension service charges and before central costs,
interest and taxation.
The tax charge for the year was 20m (2010: 20m). The effective tax rate on continuing activities
was 21 per cent (2010: 23 per cent). We expect the effective tax rate to remain below the UK
standard rate over the medium term. The exact tax rate achieved will depend on the underlying
profitability of the Group and continued progress in agreeing outstanding tax assessments with the
tax authorities.
WH Smith (2011)
Taxation and employment law are affecting the strategy development in the organisation as well
because the government is continuously changing taxes and changing employment law for a better
control of the country so each time the government wants to change this WH Smith get affected.
The relations between the government and WH Smith are understandable. WH Smith has a good
relation but sometimes when government want to change something from the organisation a new
law or new alignments. WH Smith will have to follow what they say no matter in what position the
company is in.
As WH Smith have a lot of stores nationwide, WH Smith will suspect profits from each store that is
running. If a store or several stores fail to make profit (losses) WH Smith could have to call on
redundancy from many stores meaning staff members could lose their job. They will shut stores that
are least balancing the books.
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ECONOMIC
Directors have a reasonable expectation that the Group has adequate financial resources
to continue its current operations, including contractual and commercial commitments for
the foreseeable future despite the current uncertain economic outlook. For this reason,
they have continued to adopt the going concern basis in preparing the financial
statements.
Provisions represent the best estimate of the liability at the time of the balance sheet date,
the actual liability being dependent on future events such as economic environment and
marketplace demand.
The economic environment is important for WH Smith as inflation is a substitute to rapidly

increase prices could hurt the brand as it doesnt have a demand in the market place as
what WH Smith sales are not needs they are wants.
We had not been anticipating any improvement in the consumer environment during the
year and we planned accordingly. The Groups performance demonstrates our resilience
and ability to deliver in a tough trading climate as we continue to grow our Travel business,
strengthen our core categories in the High Street and create value for shareholders.
Whilst we continue to expect the economic environment to remain challenging, we believe

that the Group is well-positioned for the year ahead and we remain focused on
implementing our strategy.
Walker Boyd
Chairman
As the statement from above the WH Smith chairman Walker Boyd reviews that WH Smith is doing
well in this economic climate. He also assesses that the economic environment will remain to be a
challenge but is focused to use their strategy to remain WH Smith as a strong retailer.
WH Smith have been looking at the current trends in the economic climate to make sure their
company has a backup strategy plan if sales start to fall. As the current climate is uncertain it is a
good time to look into other strategies as WH Smith are still doing well and can gain more from their
stakeholders.
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SOCIAL
WH Smith are repositioning the brand by using an old strategy to only sell books, Newspapers,
magazines, stationary and confectionery. Recently WH Smith have discontinued selling CDs, DVDs
and games as their sales showed it was not worth to stock these items. This could be due to
customers downloading illegal (piracy) and legal content online.
The growing aging of the population will present a larger financial crisis which WH Smith will have to
take into consideration, as people are living longer the spending habits of consumers are liable to
change due to tax rates and inflation etc.
TGI data shows the over 55s obtain the most purchasing power and in light of the changes in society
this demographic will become the main target audience. TGI Data (2010)
TECHNOLOGY
WH Smith have recently stop selling DVDs and games in 2011 as they are better known as a one
stop shop. WH Smith has had a new strategy this is to become better as an online service with
partnering with LoveFilm.
WH Smith have cooperated with LoveFilm to make an online service which started March 2010
called WH Smith Movies Direct. This is a service can be used to watch movies online or to simply rent
a DVD and games by via post, to suit the customers needs.
Knowing that their competitors Amazon had launched an e-book reader which contains many book
downloads to one format of a handheld LCD screen. WH Smith introduced in their stores a e-reader
in October 2011 called Kobo to lock competition with competitors such as Amazon also Apple with
the iPad as the tablet have book applications.
LEGAL
Government can put up prices for oil which may cost WH Smith to raise prices of items as they have
to pay delivery costs.
ENVIRONMENTAL
WH Smith have a lowered their carbon footprints and want to continue lowering energy in store by
3% per square foot. WH Smith (2011).
Also concerned other ethical trading they are committed to good labour and respecting the
environment in their supply chain. WH Smith regular monitors their labour standards by visiting
factories and plan action for improvement.
We provide support as suppliers make these improvements, and ensure that all direct source
suppliers and Asia-based suppliers of UK agents are audited at least every two years.
WHSmith (2011).
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WH Smith has an objective to use recycled material on their own branded products saving trees and
is a part of Forest Steward Council Scheme.
PORTERS FIVE FORCES

As means of accessing the potential risks and opportunity levels within the books and stationary
market, the Porters Five Forces model has been used to determine an appropriate strategic direction
for WH Smith.
The following diagram highlights the key findings from the undergone research of WH Smiths in its
competitive environment.
POTENTIAL ENTRANTS
The threat of new entrants measures the likeliness of
new companies venturing into existing markets. The
SUPPLIERS current books and stationary market is at a mature BUYERS
The power of suppliers is stage and in such existing companies have built up The power of buyers is moderately
moderately high within the books strong reputes and brand identities, making the high within this sector; there is
and stationary market with a strong likeliness of new entrants relatively low due to the little product differentiation
emphasis on the stationary consumer following that these brands sustain. In amongst the various retailers and
segment. The large number of in such buyers are able to move to
addition to this, the current economic climate,
retailers providing these products and from retailers providing some
provides suppliers the opportunity financially would present high risk levels for new
leverage over organisations.
to raise the prices of materials and entrants due to the costs of establishing themselves Brand identity plays a huge role in
products provided without suffering within the market such as distribution channels, buyers choosing which providers
from any decreases in the number brand identity and suppliers. to go to however price is a vital
of volumes sold. component in buyer purchase
decisions and in such brand
In addition to this the suppliers of HIGH COMPETITIVE identity is of a less importance in
this market have the potential RIVALRY the current market.
opportunity to change distribution
channels without any inclinations as SUBSTITUTES As a result of the economic
well as potentially even providing climate, consumers are reluctant
Competitive pressure from substitute companies is
these products to consumers to excessive spending and are
moderately high. Although the industry is at a
themselves gaining leverage over diverting from private labelled
organisations. mature lifecycle stage, the pressure of organisations brands and products towards
to provide competitive prices has resulted in cheaper versions, choosing price
alternative retailers providing similar products such over quality and with the number
as supermarkets and online providers. Buyer of outlets available are able to do
inclination in finding alternative channels is high as so with ease.
consumers are more in tuned with price comparison
and in such are consciously seeking lower priced
products. The switching costs for alternative
channels to provide these products are low, as most
of which are established companies, providing these
organisations with a competitive advantage as
mostly these are already trusted brands.
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CAPABILITY MATRIX
Strategic capability is the resources and competencies of an organisation for needed to survive and
prosper. (Johnson et al, 2008.pg.95.) The current resources WH Smith has are their exclusive
magazines and their own branded stationary. Their competences are that they are selling their own
brand and to make it cheaper than other shelved products.
Resources Type Competences

Efficient production line Physical Efficient production method
(Machinery) (Cost effective)
Brand image Physical Well established family brand

Head office Physical Long serving base
Own recycle factory Physical Partnership with Forest Steward
Council Scheme that WH Smith
now recycles in their factory.
Steady cash flow Financial WH Smith are still one of the top
retailers as from sales have beaten
the recession
Revenue 455million Financial Better revenue than 2010
(452million)
Over 16,00 staff members Human Effective human resource
management skills & Training
Customer loyalty Human WH Smith use to have a club card

but now have vouchers that given
to loyal customers.
Threshold and Distinctive Capabilities
Resources Competences
Threshold Capabilities Having a various range of Having an online presence
magazines and books.
Gives customers vouchers to shop
Over 500 stores throughout UK in at WH Smith the next time.
nearly very high street and
stations. WH Smith sells some magazines
with exclusive items inside the
Online services magazines.
Brand
International
Distinctive Capabilities Having books as competitive Marketing and sales

prices, also with their stationary
brand.
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Johnson et al (2011, p.85)
The table above shows what WH Smith does and how the company does it. This also shows how WH
Smith differentiate themselves from competition in store and online. WH Smith has over 500 stores
throughout the UK in most high streets, some stations and airports.
This will give WH Smith an advantage as located busy areas and also online. WH Smiths weaknesses
are competition competitive prices which WH Smith will have to keep a close eye on rivals and
online prices are cheaper than high street prices.
WH Smith have their own brand in stationary which growths their respect as a brand to put their
own name on their products. WH Smith distinctive capabilities are their marketing and sales unit as
they are one of the most successful brands still on the high street that has beat the recession
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VALUE CHAIN ANALYSIS

In establishing the key variables that WH Smith obtain in creating differentiation from its
competitors, the Value Chain Analysis has been applied which focuses on the core activities of an
organisation. In doing so it is possible to identify the competitive strengths that WH Smith sustains.
FIRM INFRASTRUCTURE
Structured hierarchy allows WH Smith to make use of a multitude of specialist knowledge in order to gain
SUPPORT ACTIVITIES
competitive advantage over downsized firms.

HUMAN RESOURCE MANAGEMENT
Gives employers Learning & development for career development to strengthen levels of experience and skills in
the work force. Source: WH Smith PLC (2011) WHSmith PLC Annual report and accounts 2011.
TECHNOLOGY DEVELOPMENT
WH Smith invested in self-service checkouts. E-books now available from WH Smith
PROCUREMENT
Due to the size and historical business relationships and alliances, WH Smith is able to leverage suppliers and
through economies of scale make efficiencies where competitors may fail.
PRIMARY ACTIVITIES
INBOUND LOGISTICS OPERATIONS OUTBOUND MARKETING POST SALE
LOGISTICS & SALES SERVICE
Stock control Ethical trading
stance Store location Promotion Customer service
On-going relationship with suppliers section
Online retail Packaging
code of conduct supplier
programmes. business Advertising
Customer
Sell service management Store layout
In-house supplier audit teams in
sourcing offices.(WHSmith PLC (2011) Store policy
Vouchers
WHSmith PLC Annual report and development
accounts 2011)
Store operations
Back of store
operations
Whilst the Value Chain highlights the primary and support activities that add value to WH Smiths,
there are a number of inefficiencies within these activities that arguably reduce the amount of value
provided.
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Primary Activities Value Loss

PRIMARY ACTIVITIES
Inbound Logistics Relationships between suppliers been cut due to sales
Operations/Outbound Logistics Cutting stock will cost more is needed to ship more stock.
The 570-store high street division saw like-for-like sales drop by 4 per cent,
though the firm said gross margins continue to grow, helped by cost savings.
Marketing & Sales
Dailymail.co.uk (2011) WH Smith reports dip in sales but rate of decline is
slowing
Support Activities Value Loss

SUPPORT ACTIVITIES
WH Smith has bad service as got voted one of the worst high street
Service shopping experiences. Dailymail.co.uk (2010) WH Smith shamed: Once-great
name is now rated bottom by high street customers
WH Smith has failed to gain internet status with online competitors.

Technology Development
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VALUE NETWORK
Other Consumers
branded
stationary
WH Smith
Advertising
Consumers
agencies
WH Smith has a good value network as most of their items are straight to their consumers. WH
Smith have a lot of suppliers but have their own brand they can push forward if WH Smith cut more
off from their suppliers and just sell their own stock this could save the company money as
customers will buy WH Smith as it is a heritage brand.
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NUMBER SWOT
Strengths Weaknesses
SWOT
1. Established over 200 years ago 1. Less than 50% of customers recommend
them
2. Household name
2. Less than 50% of customers are satisfied
3. Strong distribution network
3. No Online Director
4. Has presence in 399 out of top 400 High
4. No co-ordinated marketing for all Stores
Streets in the U.K.
5. Lack of presence on air (T.V. and Radio)
5. Brand is well known
6. Smaller stores have insufficient range and
6. Staff are experienced depth (SKUs)
7. Large customer base 7. No discernible USP (unique selling point)
8. Has an online presence www.bookshop 8. Dependence on few suppliers
9. Strong ethical trading stance
10. Highly regarded for social responsibility
11. Generous giver to Charity (Children in Need)
12. Strong Environmental strategy
Opportunities Threats
1. To position WHS in the mind of the consumer to
be first choice retailer in several key categories
1. More in digital sells which means less people
2. To drive more business within the U.K. especially buy (paper) newspapers and books
online
2. Sluggish growth in UK consumer spending
3. Digital collection points
3. Growth of free newspapers
4. To rationalise store portfolio
4. Growth of online phone news/podcasts of
5. To target potentially lucrative markets books
elsewhere in Europe where retail competition is
less intense 5. Piracy of Books and Magazines
6. Environmental issues 6. Online stores Amazon etc.
7. To forge strong strategic alliances (Post Office) 7. Supermarkets
8. To develop better services for customers (e.g. 8. Spiralling costs

ATM machines)
9. Specialist stationery stores Staples
9. Educational issues national literacy initiatives
10. Specialist book chains Waterstones
11. Specialist card retailer Clinton or

Moonpig.com. 23
12. Barriers to entry for core products is low
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THREE GENERIC STAGES
Lower Cost Differentiation
Cost leadership Differentiation

WH Smith their own
brand in stationary
Broad Target and books which
makes the company
different from their
competition.
Cost Focus Differentiation Focus
Narrow
Target
WH Smith differate themselves by having their own brand in stationary which is great for brand
loyalty. More people shop in WH Smiths as its a trusted brand as it has been going on for many
years.
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Generic Stages Purpose

Lower Cost Differentiation
Cost leadership Differentiation
Broad Target
WH Smith should
become the cheapest
retailer for books and
also stationary to
wear off competition
and this will create
more brand loyalty.
Cost Focus Differentiation Focus
Narrow
Target
WH Smith should become the cheapest in their market this will give Smiths a high market share.
Also this will create more brand loyalty and more customers will come as they are will be cheaper
than the rivals.
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ANSOFF MATRIX
To determine the current strategy of WH Smith the Ansoff Matrix model has been applied, by doing
so the product and market growth of WH Smith can be analysed to enable appropriate
recommendations for future strategies.
WH Smiths current corporate strategy is intending to go well as from their mission statement. WH
Smith discontinued DVDs sales to focus more on to have the greatest market share for books and
stationary selling.
An alternative is to focus on digital sells online not just retail for books as e-book and tablets are
getting more popular this is now a trend to have either. WH Smith can benefit from this before its
too late in the market.
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FOUR INTERNATIONAL STRATEGIES
High
Global Complex
Coordination export
Of
activities
Multidomestic Simple export
Low
Dispersed Concentrated
WH Smith has been placed in the multi-domestic four international strategies as they are involved in
overseas development airport stores in France.
WH Smith central purchases such as stationary and books can be cheaper because of languages
changes in global suppliers.
Using national production will not be a problem as WH Smith can sell newspapers which are being
sold in the country that WH Smith can go in to.
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INTERNATIONAL PESTLE
Political- Different taxes could be issued in the country WH Smith could be going in. This could be
high in taxes which mean prices for items could be higher than the UK.
Economic- Manufacturing labour could be more expensive to make WH Smith own branded
stationary. Cost for raw materials could be pricey.
Social- New employment means new training but different laws could affect the way WH Smith have
to train their staff.
Technology- New software for the till system could have to be installed which me employers will
have to have more training.
Legal- Some WH Smiths sell cigarettes so WH Smith will have to look into selling these. Laws may
affect them to sell items like cigarettes and adult magazines.
Environmental- WH Smith does recycle but a country that they can go into might not recycle or have
enough space for WH Smith to make a new recycle plant.
CAGE Model
Cultural Distance Administrative and Political Distance
Religion: various Government policies
Language:
Main French-Others English, German, Arabic and Political hostility
Spanish.
Social norms and Ethnicity:

Similar social and ethnicity that is in the UK.
Geographic Distance Economic /Wealth Distance

Good sea and river accesses. France has a better economy as the country is
Good size country bigger than UK. getting out of recession.
Good transportation.
Climate is not much different than UK. Differences in costs:
Consumer income
Currency
Staff wages
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Current business strategy Proposed business strategy
To become UKs best book retail seller. To become more technical (digital collection
SBU: Buying points) and to push their own brand forward.
Business Doing this also by being cheaper in the retail
WH Smiths current business strategy fits industry.
Level into the differentiation on Porters generic
Strategic strategies. SBU: Marketing and product development
The proposed strategy for WH Smiths also fits

into the cost leadership strategy on Porters
generic strategies.
Suitability The current strategy of WH Smiths The proposed strategy for WH Smiths relates to
associates well with their companys the mission, vision and culture of the brand.
mission, vision and culture. This shows that With this strategy proposed to cut stationary
WH Smiths has great potential about of and bring more of their own branded products.
becoming the best book seller. This can make WH Smith sell cheaper items as
there will be no middle man.
Constraints
Established trusted brand Constraints
Oil costs could go up which means If failure W H Smiths will not be able to
more costs for set products. get other brands back.
Existing customers might have liked old
Opportunities products and might not go back as WH
WH Smith to come retail number Smith no longer sell the product.
one book and stationary company in
the UK. Opportunities
If successful this could lead to life long
loyal customers
WH Smith could differate themselves by
making their own brands and cutting
other manufactures.
Digital collection creates more
opportunities and more other sales in
the store.
Acceptability Stakeholders expectations Stakeholders expectations
Customers will want to buy WH Existing customers might not like own
Smith own branded products as they branded products
are well established trusted brand. Shareholders will want to analyse new
Shareholders will be looking for the strategies looking at previous own
company to make a new risk could brand selling figures.
see more profit.
Returns
Staff members will get more
By targeting to more students will give
knowledge about products.
greater market share also when
Returns products are cheap.
As WH Smith will have more ethical 29
more customers will come this will
gain the large market share.
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Improving will increase own profits.
Feasibility The recycled products can help WH WH Smith have funds and loyalty to
Smith make more products cheaper provide this strategy
than suppliers sell. There are already own branded
Technological items like eBooks will products but WH Smiths strategy is to
save on paperbacks, make them the cheapest.
Less staff will be needed. Potential to be achieved
Definitely achievable
Innovation:
Product
development;
Market
development;
Business Model
development
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International Level Strategic

Current business strategy Proposed business strategy
Establish across France. To become not just a UK brand.

SBU: Buying SBU: Marketing and product development
WH Smiths current business strategy fits The proposed strategy for WH Smiths also fits
into the differentiation on Porters generic into the cost leadership strategy on Porters
strategies. generic strategies.
Suitability The current strategy of WH Smiths The proposed strategy for WH Smiths relates to
associates well with their companys the mission, vision and culture of the brand.
mission, vision and culture. This shows that With this strategy proposed to open more
WH Smiths has great potential about of stores.
becoming the best book seller.
Constraints
Constraints If failure W H Smiths will bring W H
Become better international brand Smith mass debt.
More expansion
Opportunities
Opportunities
If successful this could lead to life long
WH Smith to come retail number
new loyal customers
one book and stationary company in
Existing customers tourists that have
Europe
shopped in UK
More mass market share.
Create more jobs
More known brand for tourists.
Acceptability Stakeholders expectations Stakeholders expectations

Customers will want to buy WH Customers will want to buy WH Smith
Smith brand as it has heritage. brand as it has heritage.
Shareholders will be looking for the Shareholders are happy that company is
company to make a new risk could expanding.
see more profit. Staff- will create more jobs in France.
Staff members will get more
Returns
knowledge about products.
By targeting to more international
Returns customers but customers might not
People are likely to come to WH know what WH Smith is.
Smith as they are based in a air port
Feasibility Airports shops are expensive Technological items like eBooks will
save on paperbacks, (online)
Profit could gain as France not in the
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recession
Innovation:
Product
development;
Market
development;
Business Model
development
Recommendations
Business strategy recommendations
The business strategy that is proposed is to cut stationary suppliers from WH Smith and push
forward their own brand. This strategy will make WH Smith a cost leader as shop branded goods are
cheaper than normal branded. Also this will be like cutting out the middle man so more profit in the
sense that its WH Smith own value. The other purpose is to make WH Smith more technological with
digital postage as some Smiths had a postage service. WH Smith can convert post offices to digital
collection points which can generate more customers to come in the store and more of a chance to
buy an item whilst collecting their mail. By doing digital mail this will also bring new customers and a
new target audience to the retailer and hopefully make them the most popular bookseller,
stationary and newspaper sellers in the UK as their objective from the mission statement.
International strategy recommendations

The international strategy will focus on moving into France. This will gain more company value as
WH Smiths only have a store in France in the travel sector (airports). Expanding to local stores will
be new for WH Smith and simple as France border is near England so manufacturing should not be a
problem. Also by selling French literature will not be a problem as France has their own newspapers
which WH Smith can stock. By opening stores will create more jobs and indorses a positive
suggestive impact on the social needs of children with education and books.
32
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REFERENCES
Boddy,D. (2008) Management An Introduction 4th ed. England: Pearson Education Limited
Dailymail.co.uk (2010) WHSmith shamed: Once-great name is now rated bottom by high street
customers | Mail Online. [online] Available at: http://www.dailymail.co.uk/news/article-
1281686/WHSmith-shamed-Once-great-rated-high-street-customers.html [Accessed: 10 Jan 2012].
Dailymail.co.uk (2011) WH Smith reports dip in sales but rate of decline is slowing | Mail Online.
[online] Available at: http://www.dailymail.co.uk/money/markets/article-2012132/WH-Smith-
reports-dip-sales-rate-decline-slowing.html [Accessed: 12 Jan 2012].
Johnson, G., Whittington, R. and Scholes, K. (2011) Exploring Strategy. Text and Cases 9th ed. Harlow;
Pearson Education. Chapter 3 useful. 8th edition
Johnson, G. Whittington, R. Scholes, K. (2011) Exploring Strategy. 9th ed. Harlow: Pearson Education
Limited
The Guardian (2011) WH Smith buys 22 British Bookshop stores. [online] Available at:
http://www.guardian.co.uk/business/2011/feb/08/wh-smith-buys-22-british-bookshop-chains
[Accessed: 5th November 2011].
Personal Stationary in the United Kingdom [Online], Available from:

https://www.portal.euromonitor.com/Portal/Pages/Analysis/AnalysisPage.aspx [Accessed 28
February 2012].
UK Retail Briefing February 2012 [Online], Available from:

http://academic.mintel.com/sinatra/oxygen_academic/search_results/show&/display/id=590090/di
splay/id=612557/display/id=612515#atom13 [Accessed 28 February 2012].
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BM607-11SB
WH Smith (2011) WH Smith Annual report and accounts 2011. [online] Available at:
http://www.whsmithplc.co.uk/docs/reports/WHSmith_AR2011_FINAL1.pdf [Accessed: November
7th 2011].
WH Smith PLC Media Centre. 2007. FAQ No.6,(Whsmith's mission statement){online}Available at:
http://www.whsmith.co.uk/grp/WHSPLC-MC-FAQ.htm
WH Smith sss-support (2010) WH Smith working with SSS Management Service. [online] Available
at: http://www.sss-support.co.uk/documents/SSSWHScsestudyv4.pdf [Accessed: 13th November
2011].
WHSmith(2009 WH Smith Value. [Online] Available at:

http://www.whsmithcareers.co.uk/fe/tpl_whsmith01.asp?newms=info2 [Accessed 14th November
2011
WHSmith PLC (2011) WHSmith PLC Corporate Responsibility report 2011. [online] available
at:http://www.whsmithplc.co.uk/docs/reports/WHSmithCR11_FINAL.pdf [Accessed: 5th January
2012]
WHSmith PLC (2011) WHSmith PLC Annual report and accounts 2011. [online] Available at:
http://www.whsmithplc.co.uk/docs/reports/WHSmith_AR2011_FINAL1.pdf [Accessed: 21st
November 2011].
34

Organisational Management Analysis - WHSMITH

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Value our People: WH Smith has Accountability: WH Smith have belief in

We believe that a concentration on these factors will be reflected in a total shareholder

We are focused on will deliver sustainable returns.

WHSmith PLC (2011)

STAKEHOLDER MAP (POWER INTEREST MAP)

STAKEHOLDERS EXPECTATIONS ENGAGEMENT

WH Smith regularly listens to their

WH Smiths investors have an WH Smith engages with investors

Both trade bodies and

WH Smith works with numerous

WH Smith engages with their

WH Smith communicates regularly

PESTLE EXTERNAL AND INTERNAL FACTORS

The economic environment is important for WH Smith as inflation is a substitute to rapidly

Whilst we continue to expect the economic environment to remain challenging, we believe

PORTERS FIVE FORCES

Resources Type Competences

Brand image Physical Well established family brand

Customer loyalty Human WH Smith use to have a club card

Threshold and Distinctive Capabilities

Distinctive Capabilities Having books as competitive Marketing and sales

VALUE CHAIN ANALYSIS

competitive advantage over downsized firms.

Primary Activities Value Loss

Inbound Logistics Relationships between suppliers been cut due to sales

Support Activities Value Loss

WH Smith has failed to gain internet status with online competitors.

7. Large customer base 7. No discernible USP (unique selling point)

8. Has an online presence www.bookshop 8. Dependence on few suppliers

9. Strong ethical trading stance

10. Highly regarded for social responsibility

11. Generous giver to Charity (Children in Need)

12. Strong Environmental strategy

6. Environmental issues 6. Online stores Amazon etc.

7. To forge strong strategic alliances (Post Office) 7. Supermarkets

8. To develop better services for customers (e.g. 8. Spiralling costs

11. Specialist card retailer Clinton or

THREE GENERIC STAGES

Lower Cost Differentiation

Cost leadership Differentiation

Cost Focus Differentiation Focus

Generic Stages Purpose

Cost leadership Differentiation

Cost Focus Differentiation Focus

FOUR INTERNATIONAL STRATEGIES

Multidomestic Simple export

Social norms and Ethnicity:

Geographic Distance Economic /Wealth Distance

Current business strategy Proposed business strategy

The proposed strategy for WH Smiths also fits

International Level Strategic

Establish across France. To become not just a UK brand.

Acceptability Stakeholders expectations Stakeholders expectations

International strategy recommendations

Personal Stationary in the United Kingdom [Online], Available from:

UK Retail Briefing February 2012 [Online], Available from:

WHSmith(2009 WH Smith Value. [Online] Available at:

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