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Strategic Management Assignment: Case Analysis of BACHI Barcelona



Write a detailed and well researched report on strategic management assignment examining the internal and external factors that could be the leading force for BACHI Barcelona.


BACHI Barcelona is a fashion industry selected in this strategic management assignment that sells accessories and handbags for both men and women. The company was founded by two friends Nuria and Meritxell who are passionate about the fashion industry, where they designed comfortable accessories with innovative designs(BACHI Barcelona, 2021). BACHI has two main leading competitors in the market Zubi and Afortunadas, and they are constantly competing to get the leading position in the market. The aim of this study is to understand the internal and external factors that could be the leading force for the company. Till the year 2016, BACHI had approx. 9 employees and an annual turnover of fewer than 2 million euros (BACHI Barcelona, 2021). This number has increased throughout the next years and also with the growth of productivity, the company have seen major growth in revenue. The strength, weaknesses, threats, and opportunities of the company, and at last the strategies the company could undertake to make sustainable growth.

It provides the following services: Complete catalogue for online sales, The filter price system and categories for customers to have customized searchers while shopping over the site, Offers temporary discounts for products on the website, Create a form for customers to request queries, Offer several discounts, free deliveries, and services for 5 euros, and It servers worldwide.

Mission, vision, and values of BACHI Barcelona


  • To create comfortable accessories without sacrificing innovative designs.
  • To commit and improve in the continuity of our production.
  • To know and understand the recent trends in fashion and design products, accordingly.
  • To know the relation between social era and fashion.
  • To deliver the best products to the customers.
  • To increase the sales per year.
  • To deliver products like handbags and other accessories with high quality
  • To deliver customized handbags as per the requirements of the customers that are unique.
  • To sustain environmental aspects by designing eco-friendly products that will suit any occasion
  • To use eco-friendly material in our merchandise.

Our vision is to be one of the renowned and leading brands in the production of unique, customised, and antique handbags and accessories in Barcelona. We also focus on delivering high-quality and eco-friendly products. Our vision extends to making clients happy and being recognized as the number one company in handbag manufacturing. We also have the vision to conquer social media and increase our competitive advantage. We look forward to engaging with our competitors and giving the best we can.


Quality: For any product to be displayed on the website, we make sure that it is of high quality, as the quality of the product is our primary concern. Creating and delivering a product that meets the needs and requirements of the customers is very important (Dermol & Širca, 2018). We take care of the smallest details in the production of any handbags and accessories of BACHI.

Commitment: We are committed to the delivery of any product in the given estimated time. We accept customisation in any product as per the requirements of clients. We inform our customers about the virtues of our products on our website so that the customers feel that the product is worth purchasing.

Passion: Our brand, BACHI came into the market as we were passionate about doing business in the production of handbags and other accessories of recent fashion trends. Our work is our passion.

Originality: For any leading brand, the originality of its product is of utmost importance and therefore we are keen to deliver the original product that differentiates it from other products. The originality of a product depends upon the material and process used in the production. Therefore, we make sure that whatever material we use is original and eco-friendly, so as to sustain the environment.

Elegance: We provide elegant and exclusive products to our customers. This is the reason why our products stand out differently in the market. We create products with unique designs that are ideal for any occasion.

Internal analysis based on evaluation of BACHI

Internal analysis based on the evaluation of both the website and any internal elements mentioned.

Competitive advantages and disadvantages
A company is said to have a competitive advantage only if it has great sustainability and unique ideas as compared to its competitors (Chatzoglou & Chatzoudes, 2018). These two factors are very essential in the development of a company. They are also important to provide maximum results or outputs (Ignasiak-Szulc, Juš?ius & Bogatova, 2018). In order to gain an advantage in the competitive market, the company would have to maintain its originality and uniqueness, and the story of every product should reach every consumer so that their interest grows for the company.

Competitive Advantages

  • Unique and differentiated product: As BACHI provides its company’s print on both inside and outside of the handbags, it becomes differentiable from other brand’s handbags (Chatzoglou & Chatzoudes, 2018). Handbags manufactured by BACHI are handmade and unique that meets customer’s expectations.
  • Price of the product: BACHI’s handbag products are low priced which differentiates them from other handbags. This is the major point of attraction of the customers as they are getting customised handbags at a low price(Arce-Urriza et al., 2017).
  • Suppliers: BACHI has a close relationship with the material suppliers of the company which is a competitive advantage. However, not all companies are able to maintain a good relationship with their suppliers.
  • Environmental sustainability: The handbags manufactured by BACHI are eco-friendly products as compared to the products manufactured by its competitors. BACHI uses eco-friendly materials in the production of handbags.
  • National production: BACHI has a competitive advantage because their products have national production in Barcelona. Not all companies are able to get national production (RaventosGascon, 2020).
  • Competitive value: BACHI Barcelona has reached a point where it gives very tough competition to its competitors. As it has its elaboration in Barcelona, it has a major competitive advantage.

Competitive Disadvantages

  • Products are sold only on websites. There is no physical store available for BACHI products.
  • Similar brands like Zubi have a variety of products and innovative customization, thereby contributing to local trade (Hakobyan, 2019).
  • As Zubi is a recognized brand its presence is worldwide.
  • BACHI lacks knowledge of marketing and economics as compared to Zubi.
  • BACHI has a low presence in social media marketing as compared to Fortunate and Zubi.
  • It also has low bargaining power in transportation.

Identify the tangible resources (physical and financial), the intangible resources, and the capacities that we have.

Tangible Resources
To economize the use of financial resources, inventories, and fixed assets, different opportunities available for the company should be identified which will help in determining the tangible resources (Kamasak, 2017). Financial tangible resources include suppliers and customers, bank expenses and fees, utilities, and business accounts (Gürel & Tat, 2017).

Physical tangible resources include property, production space, equipment, raw material, machinery, and the manufacturing unit.

The Materials that are required for the manufacturing of handbags. For example, leathers, prints, zippers, paint, fabrics, etc. The availability of the bags should be checked from time to times like whether the stocks are ready or not, and they are ready for sale or not. Availability of physical property for manufacturing bags which includes equipment or machines used, vehicles, cameras to monitor, etc.

The company is owned by the two owners. Therefore, BACHI gets contributions from both partners. They have good clients and suppliers. In terms of bank expenses and commissions, they work with advantageous conditions for business account expansion.

Intangible Resources
Intangible resources are very difficult to inherit and it is also difficult for the competitors to initiate them. Intangible resources come into routine and practice after a certain time. This is because they are rooted in the company. These resources include close relations with providers, brand recognition, online store, design, legal experiences, technology, intellectuality of owners, eco-friendly material, fashion blogging, services, and passion for work (Khan, Yang & Waheed, 2019). Intangible resources can be classified into two categories; Human intangible resources and Non-human intangible resources. Human resources include both partners having great knowledge in fashion, marketing, promotion, legal resources, and sustainability of the company. It also includes a commitment to undertake the production of a particular project (Makadok, Burton & Barney, 2018). The relationship of BACHI with its suppliers has always been the best, thus the unique relationship could be regarded as the main source of human intangible sources. Supplier-company relationships and collaborations with marketing firms, social networks, and apparels are human intangible resources.

Non-human intangible resources include BACHI’s online catalogues, blogs to report news, brand endorsement, social pages on Facebook, Instagram, Twitter, etc. It also includes customer satisfaction, vision, mission, values, and newsletter publishing.

BACHI is managed by two successful women who share common ideas to create accessories and handbags that are antique and customized according to the customer’s needs and requirements (Rehman, Mohamed & Ayoup, 2019). They design eco-friendly products without sacrificing the idea of innovative designs (Vartanova & Kolomytseva, 2019). They have good relationships with 20 suppliers who provide raw material to BACHI.

Prepare a VRIO analysis of the resources of BACHI Barcelona
VRIO analysis is an analytical and useful technique used by BACHI to evaluate its competitive advantage and resources, brilliantly. VRIO is the accreditation for Value, Rareness, Limitability and Organization (Hernández & Garcia, 2018). The table below shows the VRIO analysis of BACHI Barcelona company

VRIO Analysis





Physical space for manufacturing of bags





Capital contribution by both partners





Suppliers and clients





Partners having knowledge about fashion and legal resources





Commitment and motivation for continuity of production





Materials for manufacturing of bags





Already available bags





Collaborations with marketing firms and social networks





Company-supplier relationship





Blogs to report news and activities





Online sales, online catalogs





Newsletter service





Social pages on Facebook, Instagram, etc.





Customer satisfaction





Conclude the exercise with a small matrix that reflects the resulting Strengths and Weaknesses.



  • Original and unique handbag designs
  • Excellency in completing legal formalities
  • Intellectual capitalism is good
  • Innovative designs
  • Provides eco-friendly products
  • Good quality of product
  • Environmental sustainability 
  • Good stock and marketing strategies
  • Good online catalogue sale
  • Great customer services
  • Good experience in the fashion industry as ideas come from two experienced individuals of fashion background 
  • Less engagement in social media marketing
  • Less presence in international markets
  • No financial accounting support
  • No strategic direction
  • No implementation and use of recent technologies
  • No bargaining in transportation
  • No availability of BACHI’s physical store

External Analysis

PEST Analysis


  • The politics of Spain becomes a leading force in the generation of trade policies (Cohn & Hira, 2020).
  • Factors leading to the generation of integrating management system


  • Spain has gone through a major economic transformation throughout the last few decades (Harrison & Corkill, 2016).
  • The industrial sector especially the manufacturing and service sectors contribute to most of the GDP of the total employment (Prados de la Escosura., 2017)
  • Spain makes sure that the policies and other important factors concerning the facts can reach the European Union as effectively as possible (Telò,. 2016).
  • BACHI almost outsources manpower from other countries as well as from the population of Spain by keeping in mind the different aspects of the clients and the factors of productivity in terms.


  • Social structure helps in the overall growth of the contemporary fashion business of the country (Solov'eva et al., 2018).
  • The impact of the trending fashion sector on the social economy of the country.


  • The innovation of the country regarding the new technologies that would help in making it largest e-commerce platform (Soto-Acosta et al. 2016)
  • Uses of electronic commerce to make online sales easier for the companies and purchasing also became easier from the consumers end (Valarezo et al., 2018).


Figure 1: PEST Analysis

(Sources- Created by Learner)

Political factors: The Spanish constitution (1978) helps in the process of establishment of industrial organisations. After that, different policies have been made to improve the trade policies for the betterment of the companies. The democratic laws of Spain help in establishing the fundamental rights to co-exist in the society. Due to the help of the trade policies, the company could also manage an integrated management system in their organisation to manage all the operations of the company through one particular smart system. This whole process helps BACHI in their future growth.

Economic factors: The different economic factors that help or affect the company's overall productivity growth. Spain has seen major changes in its economic growth throughout the past years. From a completely agriculture-based economy, it accepted a more diversified economy based on the manufacturing and service sectors. The industries in Spain have contributed a lot to the GDP of total employment. The industrial sector almost contributed 15% of the total economy and especially the manufacturing unit contributes almost 11% of the total GDP. The country maintains proper international relationships for foreign direct investments. They especially maintain their relationship with the European Union through a permanent representative who effectively delivers the message of the nation and follows the proper structure which in return helps for the betterment of the companies in Spain. BACHI as a significant organisation in Barcelona helps the population of the country by making them engaged in the total productivity of them, they also outsource skilled employees from other parts also which helps in the overall economic growth of the company as well as the country.

Social factors: The latest trend of any country could be referred to as the introduction of the new modes of fashion. The fashion industry, be it clothing, accessories, bags, shoes have become globally the leading industries in recent times. The transformation of the industry could be seen in the latest usage of the new and improved materials for the best quality products. The social engagement of consumers has made it easier for companies to promote their business to the world. BACHI has introduced a social media marketing strategy to reach their target customer as the majority of them would be easily available on social networks like Facebook, Twitter, Instagram, and Pinterest. They also use a blog named ‘Stories by BACHI’ where they report many announcements and product-related news of the company (BACHI Barcelona, 2021). It would help the customers to check the reviews of the products which in return help them to trust the company. In recent times, most of the companies' profit growth would be largely dependent on their positive marketing strategies and the social responses they would get from the campaigns.

Technological factors: Throughout the years, Spain has developed many new technologies to improve the past experience of the usage of the technologies. The new improved technologies have made it easier for companies like BACHI to make different strategies for the betterment of profit growth of the company. They started to make different strategies for the promotion of their products or services, it also helped them to reach the customers through an easy way. The company has made different advertising campaigns for the customers to make them understand about the brands and earn their trust. The usage of the internet has made it clear for the consumers to take up the courage to buy products from the ecommerce platform. It is the fundamental aspect of the online sales and access policies. Throughout the process BACHI has invested most of the investment for the online sales purposes.

5 Porter Forces:

  1. Bargaining power of the suppliers: BACHI could be regarded as one of those companies which maintain good relationships with their suppliers. Currently, they have 20 suppliers as they use diversified materials for the final production of their product, however, in recent times, they have been planning to take up the help of the local eco-friendly suppliers. This strategy could help them in gaining local market, however, the cost of those raw materials would be higher than the price of the normal materials as they would have to be imported from the countries at some point and those countries would make the overall cost prices higher (Ciani., 2017).Thus bargaining power of the supplier in this scenario would be higher than any other situation as the company would need as many materials available from the suppliers to keep their business running smoothly. It would give the chance to the suppliers for the negotiation of the prices.
  2. Power of negotiation of the consumers: BACHI has been using several methods to reach the customers. They have been using social networking as a mode of delivering relevant information and messages to consumers. They mainly believe in creating a proper storyline for all their products so that the customer relates it to their life and understands the significance of those products. The company could also make the consumers understand the added value of their products by creating different improvements in their products along with the innovation of new products (Marino, 2016). Therefore, normally the consumers would not get the chance to ask for negotiation, they could easily accept the price of the products by looking at their added value and significance.
  3. strategic-management-assignment-2

    Figure 2: Fiver Porter’s Forces

    (Sources- Created by Learner)

  4. The threat of substitute products: BACHI has always used new and trendy designs for their products. These products would be totally unique and particularly made in Barcelona. They have always maintained the originality of their products thus it would not be easy for any other company to make substitute products to give competition to the products of BACHI. They have limited product sales for all the star products and they would all be totally limited edition products. Therefore, the task of making substitute products would not be possible.
  5. The threat of new competitors: The threat of new competitors would be quite less for BACHI as they mainly deal with unique and original products specially made in Barcelona. The products would not be that easy to copy for other companies. Handbags and accessories could have an impact on uniqueness thus the entry of a new competitor for the same product could not be there properly. However, the market would always be full of competitors as BACHI is not the only company making handbags and accessories in the whole market. Thus, the threat of a new competitor would always be there, however, the winning or losing of the company would depend on the products they produce.
  6. Rivalry among competitors: The market would always be full of competitors thus very strong competition would also persist. BACHI has a lot of competitors namely Zubi and Afortunadas. They co-exist in the same market and the competition between them has always been remarkable. They would always try to win the consumers over other companies so that their product’s valuation can be uplifted. The competition in the market could also be strong due to the entry barriers of the different companies. The companies could start up a business with a few physical stores and create competition for the existing companies. If the products of those companies would cost less, at one point in time, the consumers would turn their back on the previous companies. If many companies provide the products, then there would be a chance that the consumer would feel the complexity to select the products (Spiegler, 2016).

Opportunities and Threats:



  • New innovative products
  • Impact of marketing through social media
  • Participation in many events and campaign programs
  • Uniqueness and originality of the products
  • Solely made in Barcelona
  • Adaptation of new rules and regulations to make further growth
  • Competition in the market
  • Trying to adapt eco-friendly suppliers
  • High cost of materials due to change in suppliers
  • Different political and economic factors affecting business
  • New rules and regulations for the e-commerce platforms

Strategy proposition

Defensive Strategy: Defensive strategy in this analysis means creating different strategies to keep the strengths of the company intact and to lessen the threats through this (Dandage et al., 2019). There could be a few strategies that the company could undertake to mediate the facts. Such as:

  • BACHI could try to make more and more products for both men and women so that the requirements of all of them could be checked.
  • The company could also try to make strategies to maintain the cost of the marketing department and try to participate in more organised campaigns.
  • Different sales techniques could be added to minimize expenditure.
  • They could try to adopt new effective strategies to draw the attention of more consumers to mitigate the risk of new competitors in the market.

Offensive Strategy: Offensive strategies are basically the combination of the strengths of the company with the opportunities that the company could undertake (Hunger., 2020). The company could take certain initiatives to combine these facts in a way that could lead to productive growth of the company. These are:

  • They could try to expand their business to the local level which might be helpful as well as possible for the company.
  • BACHI could try to involve more local suppliers which would return help in the expansion of the business as well as in the marketing of the business.
  • New product launches other than handbags and accessories could also be helpful as they would draw the attention of more consumers.
  • Physical outlets could also be important for the promotion of business.
  • Proper market segmentation and positioning of the products could make a difference in the overall growth of the company.

Survival Strategy: If the weaknesses and the threats could be merged then the survival strategy for the company could be made easily. Such as:

  • The bargaining with the suppliers could pose a threat to the company, therefore, if the bargaining could be done in the company's support, the company would enjoy the benefits of them.
  • Diversification of materials and products would be good for the business, however, it would be expensive. Therefore, if those expenses could be checked in a proper way, it would in return help the company
  • The inefficiency in work should be removed to stop consumers from making a complaint.

Reorientation Strategy: The combination of weaknesses with opportunities could be referred to as the reorientation strategy. These are the points to be taken into consideration for the positive growth of the company in the overall market. This could include points such as:

  • Merging with international companies in order to gain more profit in the future.
  • Brand new market strategies to add points to the company’s marketing and also to draw different consumers.
  • The reorientation of the whole product market should be taken into consideration to make a future profit and maintain growth profit.

Develop a BSC in the form of a matrix.
A Balanced scorecard also known as BSC, is a tool used to measure the performance of action against any strategic plans of the organization (Al-Zwyalif, 2017). They are often used for strategic plans to ensure the company’s efforts are structured with strategy and vision. It was developed to help the organisations to reach their targeted financial goals. The company's measurement system affects the behaviour of the employees and managers. This scoreboard was created to help the business to evaluate its activities using costs, profits, and revenues. The balanced scorecard addresses the organisational issues such as the measures taken by an organisation to reach the strategic goals and implementation of strategies for the effectiveness to reach the goals (Marimin, Wibisono & Darmawan, 2017). A traditional BSC helps to examine the initiatives made for the company from different perspectives. The four perspectives used in balanced scorecard are Growth, Financial, Customer, and Business perspectives. The perspectives used for BACHI Barcelona are Financial, Customer, and Business Processes.


Figure 3: Balanced Scorecard

(Sources- internet)

Customer- The company should examine the activities from the customer's point of view. A negative perspective of BACHI products or business could lead to a decline in sales in the future. A few businesses claim that balanced scorecards of the traditional approach do not fit all businesses and industries. Due to which some balanced scorecards will feature a new set of perspectives.

Business Process- The Business Process is important to evaluate the company's internal processes to focus on areas for improvement (Morschett, Schramm-Klein & Zentes, 2015). The main aim is to evaluate the inabilities and recognize the errors in the business. Some BSC relies on strategy maps where they portray smaller strategic goals of the company.

To draw a balanced scorecard one should use a template. With all four perspectives add what applies to the organizations.

Learning and Growth Perspective - To achieve sustainability we need to change and constantly improve the qualification and training of the employees.

To develop the process of the Balanced Scorecard in BACHI Barcelona the company should involve in several steps such as: create a clear vision for the future, explain the strategic goals, critical success components, select indicators to monitor and measure performance, and set action plans, initiatives and goals.

All the above steps refer to the 4 perspectives where these points help in setting a goal and choosing indicators.

The balanced scorecard represents the hypothetical form of table where it usually contains more initiatives for goals and objectives.

Based on the contribution of Michael Porter, you must propose and justify the following
Michael Porter, a Harvard Business School professor wrote several books about strategies for business. He believed that businesses should implement and identify a strategy to stay in the race of competition and remain in the long run.

Strategy in Cost Leadership
Porter's cost strategies are a way of gaining competitive advantages to the company. Cost leadership helps in increasing the profit by lowering the costs (Kharub, Mor& Sharma, 2019). The Cost Leaderships used by companies to be successful have:

  • Efficient logistics
  • Low-cost labour, facilities, material, and sustainability to cut the cost to those competitors in the market.
  • They have access to the monetary funds to invest in current technologies that will gradually reduce the cost down.

BACHI should use this strategy to make its presence available in the competitive market (Mortazavi, RasoliGhahrodi & Rostami, 2017). In order to attend the positive growth for the company, there would always be the need to do the analysis on the strength, weaknesses, threats, and opportunities of them in the market (Ameer & Othman, 2021). Organizations try to acquire a competitive place by offering customers the best price and value for their product which benefits them to hold a greater position in the market (Subrahmanyam & Azad, 2019).

For BACHI Barcelona it will have to negotiate the price with the local suppliers for the raw material, the price of subcontracting services, and the price for the whole. The company is contracted by making an agreement that is transferable and reduces the price of its products. The company should possess the ability to reduce the cost at least 10%. With this ability of reduced cost the company should evaluate the obtained raw materials in different countries with lesser tax burdens. BACHI Barcelona should generate contracts with the distributors where it can receive semi-finished products from all over the world to Barcelona. BACHI should make the final contract where it receives a product that maintains its ingenuity and differentiation. The strategy requires optimizing all the aspects of the company's operations. To be the lowest-cost producer, BACHI should follow the steps:

  • Productivity B
  • Bargaining Power
  • Technology
  • Distribution
  • Production Methods

Although BACHI Barcelona has been operating for so many years, it is enough to know which products have the chance of reducing the costs. This brings a greater opportunity for the company in market share and brings higher profit gain. These actions help to achieve the targets, increase sales and reduce the price without compromising the product quality. The greatest risk in studying the Cost Leadership strategy is that it is a source of lowering cost which is not unique and is followed by many other companies as well.

Differentiation Strategy
The differential strategy is based on manufacturing unique and exclusive products where customers are ready to pay higher prices for the conditions (Jyoti, Arora & Kour, 2017).BACHI as one of the most unique producers of handbags and accessories have always been different from the other competitors in the market. They have also developed different strategies to make their story different from other companies to attract more consumers. The organisations which succeed with the marketing strategy plan need to possess creative and talented product development employees (Semuel, Siagian & Octavia, 2017). They should have the ability to survey the current markets and reach potential customers to attract them to purchase the product for more. Having a unique product is not enough, it requires a great sales team where they have the skills to explain the unique features of the products and assure customers that the product purchased is worth their money (Chelanga et al., 2017). The importance to create a brand value of their products would be the most significant part to differentiate their products from others as most of the consumer values the brand. The importance to properly position their product in the market after properly segmenting the market to their target consumers could also make difference. There would always be the requirement to create promotion of the products in a way that the consumers would be eagerly waiting for the product launch

For a successful approach the organizations need to meet certain needs:

  • A certain amount of research, innovation, and development is required to gain more profit for the company.
  • The organizations should possess the ability to deliver high-quality products and give quality services to the purchasers.
  • Make high sales in the market, where the market understands the benefits obtained from the differentiated strategies.

Focus Strategy.
Focus strategy is based on the concentration where the company concentrates on displaying its products in a well-defined structure (Helmold, 2019). It would be the responsibility of BACHI to divide its market into small parts so that the target consumers could be approached through the strategy. The main aim of the company would be to use different tactics to expand their business through marketing and it would always need to be done in a way that new relationship could be built with the target consumers. Choosing the products with high profitability and starting a high standard manufacturing product without losing the quality of the product (Islami et al., 2020). The generic strategy will focus on two variants where

  • A firm seeks a price advantage in its targeted segment.
  • A firm focuses to seek differentiation in its targeted structure.

With the broad market strategies, it is important to decide whether to pursue a differential strategy or Cost Leadership strategy. Once a company has selected the Focus strategy as the main approach then only Focus strategy is not enough for the market.

This strategy focuses on adding something extra to serve the results to the markets required. The extra what you can add will contribute in reducing the costs or increase the differentiation.

In this report, we have briefly discussed the strengths and weaknesses of BACHI Barcelona. We have also highlighted the opportunities and threats that may affect the development and sustainability of the company. The company is managed by two women is a leading brand in the manufacturing of custom and unique handbags as per the needs and requirements of the customers. The company markets both a high and a medium range of products. Moreover, the handbags manufactured are handmade and unique. Apart from this, the report also highlights the competitive advantages and disadvantages along with the identification of tangible and intangible resources. There is a lot of competition for BACHI as it does not have any physical store. Therefore, the company must take a serious step to sustain itself in the competitive market.

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