Harrington Case

2430 Words May 17th, 2010 10 Pages
1. ISSUE AND DEFINITION OF SUCCESS
Issue: After three years of unimpressive sales and low margins, Harrington Collections must evaluate launching a new active-wear product line in order to increase profits and maintain industry leadership.
Definition of Success: Break-even must be achieved within one year of new product line introduction and sales must bring net profit back to 2005 level of $154 million in the long-term.
Positioning Statement: Harrington Collection provides high-quality professional and stylish attire for affluent, fashionable, college-educated, professional women ages 25 to 60 entering the workforce. 2. RECOMMENDATION
Harrington Collections should launch an active-wear line to be sold within the Vigor product
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* Harrington will need to sell 289 thousand units within the active-wear line to break-even in one year. Considering current unit sales are at 2.6 million, this would just be an 11% increase. More so, there are currently 222 million units sold at the $100-$200 price category. As 10% of Harrington’s consumers have voiced their interest in active-wear at this price, that is a 22 million unit potential (289 thousand is less than one percent of this market share). 4. SITUATION SUMMARY
EXTERNAL
Industry * Mature Industry with $133 million sales in 2007 * Trend toward less expensive, casual clothing * Trend toward both forward and backward integration
Within a mature and highly competitive market it is more crucial than ever that clothing companies listen and respond to consumer preferences. The response should be a reposition or new product offerings, rather than a strict discounting that could drive margins to ultimate decline.

Competition * Competition is highly concentrated, due to consolidation * Jones Apparel and Liz Claiborne are industry leaders, controlling the market; both house numerous diverse brands under their umbrella company
In order for other companies to hold market share in a competitive environment, they must continue to meet their target customers’ preferences with added value to maintain differentiation form direct competitor giants.

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