Strategic Analysis

Strategic analysis is the foundation to business strategy development and selecting the best choices among superior strategic alternatives available. The chosen business strategies should lead to sustainable competitive advantage (SCA) that can withstand current and future competitions. What contribute to SCA include:

1. a) the functional strategies and programs (i.e., the way you compete such as strategies regarding product, positioning, manufacturing, distribution),
2. b) valuable, rare, hard to imitate, and well organized (VRIO) assets and competencies (serving as the competitive basis),
3. c) superior value proposition, and
4. d) suitable selection of the market to serve, product to offer, and competitors to compete with.

All of these are interconnected and should be working together toward achieving SCA. Assets and competencies should support functional strategies and programs (and vice versa) to deliver meaningful and superior value proposition to target customers in the carefully defined market than the chosen competitors. Therefore, when talking about the firm’s SCA, some may refer to either a), b), c), or d) while others refer to the combination of elements or aspects relating to a), b), c), and d).

 

To give you a fresh perspective, this discussion focuses on a company that many of you may not have heard, Hermes. Yet, this world famous French fashion house has recently celebrated its 176th birthday in 2013. The company’s success spanning such a long period of time should ignite your curiosity of how Hermes has sustained its competitive advantage over the years. The more you learn about this company, you will also realize hard-to-match value proposition that Hermes constantly delivers to its target consumers.

 

1. Learn more about the company from the selected articles and websites with information about Hermes in the “Resources for Discussion” and other sources from your own research.

 

2. Identify and discuss the company’s sustainable competitive advantages (SCAs) and their sources (i.e., the a, b, c, and d above). Are there any synergies created? Explain.

 

3. Which philosophy (i.e., strategic commitment, strategic opportunism, strategic adaptability) does Hermes adopt? Explain.

 

4. Discuss the company’s target consumers and its value proposition. Who buys Hermes’ products? What Hermes stands for in the mind of its consumers? What value proposition (or propositions) is being offered that differentiates Hermes from its competitors? How does this value proposition relate to the target market, assets/competencies, and functional strategies?