Michael Kors internal audit
It refers to the set of shared values that influence behaviour and direction over time. The style of management and the beliefs and assumptions commonly held by people in Michael Kors must be determined in order to ensure alignment and execution of the strategy. (Is the culture results- oriented? Bureaucratic? Flexible?).
• What values were the company founded on?
• How important are these values to their brand personality?
• What are the leadership & culture aspects to deliver this strategy? How has this changed over time? How does it need to change to secure the vision?
• What impact or influence has the company culture have on business performance and will it influence the scope for change to the strategic direction?
– Luxury Business Model:
What type of Business Model is it?
Does it fit with the brand’s strategies and Culture? If not what needs to be changed? (for reference and similar analysis, please refer to examples on luxury business models such as Burberry’s (2004).
– Communication Strategy
You need to assess the current communication strategies followed by Michael Kors and whether they are helping the brand achieve its strategic goals and objectives.
– Resource-Based View (RBV)
The external environment in which Michael Kors operates can create opportunities which the
brand can exploit, as well as threats which could affect its performance. However, to be in a position to exploit opportunities or respond to threats, Michael Kors needs to have the right resources and capabilities in place. You need to identify such resources.
– Value Chain Analysis (VCA):
Porter’s Value Chain Analysis describes the activities that take place in the context of Michael Kors and relates them to an analysis of the competitive strength of the business. VCA helps in:
1- Identifying which activities are best undertaken by Michael Kors and which are best provided by others (“outsourced”).
2- How is customer or client value being added and where are major costs being incurred?
3- Identifying the basic steps that all companies follow in taking a raw input and turning it into a product and delivering it to a customer or client.
You can look at the work of Michael Porter on Value Chain to identify:
• Primary Activities – those that are directly concerned with creating and delivering a product
• Support Activities, which may increase effectiveness or efficiency
– Core Competence Analysis (CCA) / Competitive Advantage:
Core competencies are those capabilities that are critical to a business achieving competitive advantage. The goal of the brand’s management is to focus on core competencies that really affect its competitive advantages. What are the sources of competitive advantage that exist in the business and how are these being used?
– Note that competitive advantage occurs when a firm earns a profit greater than the average for the industry.
– Sources of competitive advantage that the firm uses to compete and to provide customer value.
– Activities in the value chain or in terms of core competences and capabilities that exist in the organisation.
– The Strategic Capabilities
￼￼￼￼Capabilities are bundles of separate skills required to deliver the products or services that give a brand its competitive advantages. Such capabilities are needed to execute the strategy, so it is important to assess the current level of ability in terms of those capabilities. Without knowing what capabilities should be focused on and improved, competitive advantage will be difficult to achieve. The resource audit, value chain analysis and core competence analysis help to define the strategic capabilities of a brand, to evaluate the overall performance of the business. These questions include:
– How have the resources deployed in the business changed over time
– How do the resources and capabilities of the business compare with others in the industry?
– How has the financial performance of Michael Kors changed over time (Ratio Analysis of Michael Kors’s Financial Statements for the last 2 years.)