Principles of Business Strategy

Principles of Strategy

Name

Institution

Principles of Strategy

Introduction

In any enterprise, competition that is geared towards winning consumers should remain different if the set goals are to be achieved. In the current global market, several companies have adapted to the trend of establishing working strategies that would ensure fair competition and make it relevant to the market. Hummel is one of the most famous private corporations, which has adopted its unique trend that has propelled its monopolistic competition in the sportswear industry by luring consumers through sports. In this regard, this paper seeks to discuss how Hummel’s structure, strategy, style, systems, and super-ordinate goals coordinate to contribute to the firm’s success.

Strategy

Hummel is a company known globally for exposing new, first year students to the Corporate Social Responsibility (CSR) that is annually conducted to engage them in a case competition. The teams involved are always presented before the jury with an aim atfinding a solution from the IBP team. The resolution found was based on the Karma Capital that has an objective of winning the consumers through the use of the contemporary social media; this is primarily achieved by involving the Mega Trends and the marketing through the word of mouth as the focal point (Poter & Kramer, 2002). In an attempt to sell out the platform of Karma Capital, the students carry out competition involving the university learners and the volunteers. During the competition, there has been an argument by the IBP that half of the consumers prefer companies with strong CSR during shopping as a way of backing their case.

The following is the BSc (Bachelor of Science) SEM (Search Engines Marketing) group, which discovered the idea of categorizing Hummel into three primary organizations: Hummel Clothing, Hummel SCM, and the Kama United as a non-profit company. In many instances, the Kama United uses the ‘Kamar Trader’ certificate as a way of compensating the suppliers and sorts it to other vendors; hence, allowing them to use the same brand name.

Structure

The organization’s structure is defined by how it manages both the society and its stakeholders. The CSR is majorly concerned with the actions that can either affect its customers and the shareholders; therefore, they work towards responding to their needs. The CSR has a pyramid that defines its structure, which is based on four main categories (Poter & Kramer, 2002). From the top are the Philanthropic responsibilities, followed by the Ethical responsibilities, after that are the Legal responsibilities, and, finally, are the Economic responsibilities.

It has been discovered that the Hummel Company cannot easily sustain its economic responsibilities because of its unstable financial ability. The management has no sufficient finance to cater for thebills and, consequently, might not work on its operations. The second level of the pyramid from the bottom is the Legal responsibilities. The level is marked by significant differences depending on the country, its size, and operations (Poter & Kramer, 2002). The corporation is required to adhere to the laws that are based on the employment and the work ethics. According to the research carried out, it has been discovered that some firms violate the employment regulations by employing children. In as much as young people should contribute towards the family economy, their employment in the firms is a child labor. Various casesexhibit corporations to have involved children in the production to generate more profits. For instance, Nike Company has been a victim of such actions. The third level is the Ethical responsibilities, which require firms to abide by the work ethics to ensuring that the moral standards that are expected of a corporation are upheld even if it entails making less or running at losses. It is within the mandate of the managers to ensure that firms are involved in the good dealings even if they are geared towards achieving their goals. Finally, at the top are the Philanthropic responsibilities where the companies are interested in incorporating the citizens. In as much as a corporation would want to be pleasant to the customers, it is usually short-lived, considering the failure of consumers to abide by the conditions of a company. As result of this, many firms fail to achieve their strategized plans that are meant to assist them to achieve their goals.  

System

Hummel is a private company that mainly deals with the sportswear as it enjoys its marketing opportunities in the competitive environment. In working out its strategies, the firm utilizes five main plans that involve the potential entrants, industry competition, substitutes, buyers, and suppliers (Laczniak & Murphy, 2012). There is a broad range of competitors that has made the competition stiff; they include Nike, Adidas, and Puma among other businesses.

 According to the Euromonitor International Statistics of 2013, the market share differs from one company to the other with the largest share of 62.8%, which involves the small brands in the world sportswear industry. Among the brands are 18 particular products that make the biggest share, which includes the brands owned by the retailer like Stadium Sportmaster and Wal-Mart that place orders in their names (Laczniak & Murphy, 2012). The resultant of the significant market share has been caused by an equal consideration between the large market share of others and the big brands such as Puma and Adidas. The major response from the consumers from the looming trend is that most consumers have become price sensitive because of the economic crisis, and they prefer purchasing products of the highest quality because of the value for their money. The impact of the emerging situation is that there has been a pressure from the clients mounting on both the Hummel and the big brands demanding the high quality of their services. Therefore, the largest market share is still lying on the private labels though there are also a few individuals who belong to it. It is worth noting that Hummel has been sidelined as part of the largest market share brand thereby being grouped as others. According to the Euromonitor International, the Hummel Company is possessed neither by the producer nor the manufacturer rather by either a supplier or a retailer who obtains goods from a contract manufacturer under the owner’s name known as the private band.

In addition, Hummel is a little firm in comparison to the other companies such as Nike and Puma in the North America and the Western Europe in the apparel industry. This makes it appear inferior. However, the organization seems to be gaining ground in the Eastern Europe, the Middle East, and Africa (Laczniak & Murphy, 2012). These geographic zones seem to be its future consumers; the fact is attributed to the Blue Ocean market like in the case of Saharan geographic region in Africa that is enjoying stable economic growth. The International Monetary Fund research concurs that the region stands to be a potential beneficiary of the CSR initiatives that would make the Hummel Company to gain the market in the region