Stuck in the Middle: Business Failure At BHS | tutor2u Business

The fallout from the collapse of retailer BHS will be significant, particularly for the 11,000 employees involved.

With unsustainably high levels of debt, it was perhaps inevitable that BHS would fail eventually.

However, the root causes of BHS lie not so much in the financial structure of the company as its strategic positioning.

To borrow the classic analogy coined by Porter's model of generic strategies, quite simply BHS was "stuck in the middle". It competed neither on price, nor differentiation.

Using Bowman's Strategic Clock, BHS was firmly stuck in position 8: Loss of Market Share.

Customers of BHS could either get lower prices elsewhere, or better perceived value from the alternative department store brands.

The analyst quoted in this FT article sums the strategic weakness of BHS well:

"It is a firm that is out of step with modern consumer tastes, which lacks the finances to enact the major changes required".

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