Fashion industry overview and competition analysis
In the recent time the fashion Industry has attain a fast growth in the world, and is undergoing vast transformation and growth. This industry is one of the highly competitive industries with large brands operating under this industry.
The nature of the fashion industry is that consumer preferences change rapidly. So with the changing needs and trend of the consumers the fashion industry need to focus on innovating and developing new designs and fashion trend so as to fulfill the needs and demand of the consumers. The company has a strong focus on fashion, quality and price of the products that are offered to its customers across the world. “Men's warehouse competitive advantage, however, comes from its world-class supply chain management skills and its ability to re-engineer the clothing supply chain”, Cravens (2008). The company's strategy of speed and flexibility has enabled Men's warehouse to shorten the fashion cycle to the point where it no longer exists. Store managers and roving observers use handheld devices to collect and send information regarding which designs are being well received by the buying public, which ones are not, and what will be the next hot trend. “Men’s Warehouse uses information technology and advanced supply chain management techniques to maintain tight control and integration of the various elements of the entire process, from textile mill to the retail store”, Cravens (2008).
Men’s Warehouse focuses on growth strategy and diversification strategy under this. The company is able to focus on growth strategy through horizontal integration which focuses on integrating with the companies operating in the same level and vertical integration which focuses on integrating with is distributors.
The Channel Conflict of Men’s Wearhouse can be seen when one member’s actions prevent the entire channels from fulfilling its set objectives. These conflicts can arise when:
Company chooses to purchase products directly from manufacturers rather than through manufacturers’ agents.
There can be conflict over the distribution of profit margins.
Manufacturers believe wholesalers or retailers are not giving their products adequate attention.
A manufacturer engages in dual distribution and particularly when different retailers or dealers carry the same brands”, Cravens (2008).
Men’s Warehouse strongly focuses on its services and the quality of products that it offers to its customers. Despite of high competition the company has witnessed high growth in the market. They are a mixed apparel company whose offerings have traditionally been in the dress/professional sector. They have consistently added to their casual offerings. Their customers tend to be value conscious looking for quality, service and price. They divide their customers into two segments: wardrobe buyers and item specific. The wardrobe buyers come to the store to buy a suit, tie, socks and other accessories. The company strongly focus on innovation, As a result of these innovations, Men’s Warehouse can design merchandise inspired by and similar in style to what appears in fashion shows of the world's most prestigious fashion brands in Paris and Milan—and can have the merchandise on sale throughout the its chain long before the original designer's products have reached the market. it holds a strong position in the global market with a focus on fashion.
With a focus on high inventory turnover rate, the company is able to sell the inventory on a speedily manner and the holding cost of the inventory is quite less. It removes its product lines because of high inventory turnover which enables the company to have a near-continuous stream of new merchandise, always offer fresh styles, and help its customers to never feel out of fashion, Albaum (2006). It follows the culture of reacting very quickly to new fashion trends means that each time a customer walks into a the store,
The most successful size of the store is 6065.82 square foot as it is able to generate maximum sales and revenue.
The part worthy utility score of the wardrobe customers tells that the wardrobe customers are highly conscious about the name of the brand and the assistance that is provided by the sales person to the consumer. The customer also focuses on wide variety of selection of products and quality across the market with least importance to the check out time.
The item specific customers give the highest weight age to the variety of product available for selection followed by the check out time and quality of the product offered. These customers do not give much importance to the brand names and the assistance that they get from the customers, Coughlan (2007).
No, the prices should not be reduced more than 10% as the demand of the shirts or suits will be highly affected as the elasticity of demand is relatively elastic so with a slight change in the prices of the goods the demand of the goods will be highly affected.
As compared to the wardrobe the percentagr change in the quantity demanded is less in case of specific customers.
a. Point of service/scanner theft system
Answer: The system is based on a new scanner/weight measurement system in which all merchandise is weighed and given a unique scanner code when it is stocked in the store. The corporate office maintains a database containing the codes, weights and manufacturer supplied information. All of the merchandise is ordered through a computer based system depending on what gets scanned through the registers daily.
i. Evaluate the impact of this system.
This system will help in proper estimation of inventory. Adoption of this reduces wait times and eliminates the need for extra sales associates. Customers will only be able to check out if they purchase the items with a credit card. Thus, those customers who use cash, personal check or have returns will still need to use the regular terminals. Additionally, the system is expected to decrease theft in that all scanner tags also serve as security tags. Thus, anyone who leaves the store without deactivating a tag will set off an alarm. Historically, each store loses an average of $150,000 in sales revenue from employee and customer theft. It is estimated that this system will be able to reduce theft by 80%.
ii. Which customer segment is most likely to use the system?
This system will be used by specific customers.
b. Formal wear expansion
i. In what stage of the product life cycle is formal wear service?
Formal wear is in maturity phase of formal wear service.
ii. How could Men’s Wearhouse increase the adoption rate for the formal wear service at its stores?
The formal wear should come up with more designs and colors which will help in increasing the demand of the product. “It should focus on industry standards on such dimensions as time to market, order fulfillment, costs, and customer satisfaction, as well as the ability to manage the linkages between these factors”, Cravens (2008).
iii. Do we break even on the formal wear option?
iv. What are the pros and cons of the service (address both qualitative and quantitative issues)?
The market of formal wear is quite limited, so expansion in formal wear might affect the profits of the company.
i. How would this strategy impact potential sources of channel conflict? How do recommend the company address these issues?
There might be a possibility of conflict between the supplier and the manufacturer. So, as to avoid the same, the company can form a contract between the two.
ii. How would implementation of this strategy change the profit margin at Men’s Wearhouse?
Men’s Warehouse would protect is profit margin through the implementation of backward integration and improve its market share by ensuring better access to input materials, Roger (2010).
iii. What are some of the inherent risks associated with this strategy?
The main risks that may entail channel conflict between the supplier and the producer on the basis of price and market.
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