BACHI Barcelona is a Company that Sells Medium-high Range Handbags: Strategic Management Assignment, UCD

BACKGROUND

BACHI Barcelona (http://www.bachibarcelona.com) is a company that sells medium-high range handbags and accessories for men and women. This project has been created by two friends, Meritxell and Nuria, passionate about fashion and fully orientated to the satisfaction of their customers through their products, and it has been in the market for one year.

These two enterprising women have a common idea: to create comfortable accessories but without sacrificing innovative designs. Therefore, their products seek differentiation through originality, because their patterns are visible both inside and outside of the bags, thereby creating a different product.

BACHI Barcelona stands out for online sales through a website that tries to be intuitive and with high navigability whilst, of course, gaining visibility for their bags and accessories. In addition, it has the following services:

• The complete catalog of their accessories for online sales.
• Filtering by categories and price system, to customize searches.
• Offers and temporary discounts on some products.
• Form for potential customers to request information.
• Delivery service of 24-48 hours. Cost: € 5 (other costs assumed by BACHI Barcelona). However, they offer several promotions with free deliveries.
• National and international shipments (European Union), although they are still not very clear how to penetrate international markets.
• “Stories by Bachi” blog, where they report announcements and related news.
• Newsletter service (previous subscription with welcome gift).
• Access to their social media: Facebook, Twitter, Instagram, and Pinterest.

In relation to other information of interest:

• Human capital is composed only of them: Meritxell and Nuria. They both have extensive knowledge of the fashion industry and new trends. Also, they have earned a degree in Law, so they have great knowledge of legal matters.
• High involvement, enthusiasm, desire to grow and meet the needs of customers in the fashion and accessories sector.
• They have external consultants in different areas such as Marketing, Community Manager, Web Positioning, Accounting, Photography, Web Programming, or Modelling.
• Clear awareness of the importance of the presence of BACHI Barcelona in social media to obtain a good position in the market.
• Low bargaining power of the price of the deliveries until they start getting a higher number of orders.
• A very close relationship with their suppliers. Currently, they are working with 20 suppliers because of the many details that their accessories have. These are local Eco-Friendly suppliers, thus contributing to the sustainability and development of local commerce, even though this may translate into less competitive prices than if they worked with suppliers from countries with different labor rights cultures.
• All their designs are unique and handcrafted in Barcelona.
• The stock policy is very clear: refuse to work on request. They prefer to have a surplus for all their star and classic products. They will only work on requests for cost or limited edition designs.
• At a financial level, they work with a Business Expansion Account for SMEs with advantageous conditions in terms of fees and bank charges, but they do not have financing.
• They often base their strategy on participating in fairs and events to bring their product and brand closer to the public, at strategic points such as Barcelona, Tarifa, and different Italian cities, avant-garde in the latest fashion.
• Currently, BACHI Barcelona faces stiff competition. Their main competitors are:
  • Zubi (http://zubidesign.com/es/)
  • Afortunadas (https://shopafortunadas.com/tienda/)

Meritxell and Nuria have some priorities related to gaining a presence in social networks and increasing their competitive advantages over their main competitors. They consider it very important to increase the number of subscribers on the web, get more followers to increase visibility, try new ways of online communication (guest posting, banners, collaboration with bloggers and other national and international friendly companies) and increase sales from the promotions they make.

Although they are very aware of these facts, they have never stopped to elaborate on a strategic plan that helps them achieve their main goals for BACHI Barcelona. For this reason, they’re contacting you to help them with this task.

RESOLVE

1. Create the mission, vision, and values of BACHI Barcelona

2. With the information provided, we need to carry out an internal analysis based on the evaluation of both the website and any internal elements mentioned.
   • Describe and explore the competitive advantages and disadvantages of BACHI regarding its competitors.
   • Identify the tangible resources (physical and financial), the intangible resources, and the capacities that we have.
   • Prepares a VRIO analysis of the resources of BACHI Barcelona
   • Conclude the exercise with a small matrix that reflects the resulting Strengths and Weaknesses.
3. Perform an external analysis (macroenvironment and microenvironment) of the current situation.
   • PEST analysis
     1. 4 elements of the economic structure.
     2. 2 elements of the technological structure.
     3. 2 elements of the political structure.
     4. 2 elements of the social structure.
   • Analysis of the 5 Porter Forces
     1. Bargaining power with suppliers.
     2. Power of negotiation of the consumers.
     3. Threat on the income of substitute products.
     4. The threat of new competitors.
     5. Rivalry among competitors.
   • End the exercise with a small matrix that reflects the resulting Opportunities and Threats.

4. In accordance with the Weaknesses, Strengths (internal analysis), Opportunities, and Threats (external analysis), propose the following:
   • Defensive strategy.
   • Offensive strategy.
   • Survival strategy.
   • Reorientation Strategy.

5. Develop a BSC in the form of a matrix.
6. Based on the contribution of Michael Porter, you must propose and justify the following (one of each):
   • Strategy in Cost Leadership.
   • Differentiation Strategy.
   • Focus Strategy.