Retailing and Supply Chain

Manufacturing. The manufacturing process is labor-intensive. The manufacturing process is relatively simple, and firms source their apparel from Asia, which has low wages.

2a. Consumers would certainly see a hike in prices on the imported product and in turn could affect the consumer’s ability to afford neither the domestic made clothing nor foreign made clothing.

Lululemon Athletica’s (LULU) competitive advantage hinges on the company’s use of the four management pillars; efficiency, quality, innovation and responsiveness to clients (Tsang et al, 2013). LULU achieves unrivalled efficiency through outsourcing and technological advances. Even though LULU continues to design their merchandises in Canada, the manufacturing is outsourced from countries such as Bangladesh, China and Indonesia. The company has benefited from technological advancements by allowing customers the comfort of buying merchandises online, through the company’s website, which comprises of free shipping straight from the manufacturing plant, and thus saves on shipping costs, time, as well as retail store resources like signage and employees.

When implementing project 1, you face technical and market risk. How would you assess the risks embedded in Project 1?

units both in the U.S. and abroad, broadening the scope of merchandise offered for sale, and

Richard Bell describes four stages that business strategies use today to grow larger and faster, as well as attracting and keeping customers. List these four stages, and discuss in detail how an International retailer would apply these today?

Lululemon’s ability to source profitably merchandise may be affected; if new trade restrictions are imposed by The United States and other countries where products are produced or sold. These may include additional quotas, duties, tariffs, or other restrictions or regulation. Moreover, China increased in labor cost and other factors associated with production could increase the cost of product. (“Lululemon Athletica Annual Report, 2012”).

C. The partners combine resources and capital to create competitive advantages in a new market

The business idea of Zara is to link customer demand to manufacturing, and to link manufacturing to distribution. And based on this general idea, Zara has several essential elements for its business model. First, speed and decision making, which means that in the external level, Zara need to respond very quickly to demands of target customers, and always keep in style. While for the inside, Zara treasure intelligence and judgment of common employees who enjoy a great deal of autonomy. Second, its marketing, merchandising and advertising strategy. Zara does not spend on virtually advertising, while it spends heavily on stores, and no selling online because of

Our approach was to facilitate the demand with respect to the market. We penetrated the market by building factory in Fardo and building warehouses to the respective regions, Caleopeia, Sorange, Entworpe, Tyran. Another component that we had to consider was finding the optimal cost to increase market share and increase our profit margin. Discussion on the logistics will be discussed thoroughly, which affected our decision points and our overall outcome. There are a few questions we needed to answer before we built a road map to our strategy i.e. figuring out where to build the factory and warehouse, estimate the demand of the four regions and Fargo region, should we change capacity, adjust ordering point with respect to quantity, and also

The global manufacture chain is helpful to reduce the cost because the apparel production is highly labour-intensive (Z02). For example, a jacket was produced among many countries to make a good use of the price advantages of different areas.

No business in this type of industry has total control over the market price and there are no barriers to entry and exit. Because of its monopolistically competitive playing grounds, Zara’s conduct is to increase its market power by producing demand for its heterogeneous products. Through differentiation and cost leadership, Zara attempts to increase market demand by offering new items weekly while keeping a low inventory, thus making its products unique and attractive to consumers. Because of its backward vertical integration model, Zara creates a strong synergy throughout its production process. Zara has sustained a competitive advantage globally by expanding into new markets and becoming more efficient. In a monopolistically competitive industry, Zara is expected to make profits in the short run but will break even in the long run because demand will decrease as average total costs increase. This means in the long run, a monopolistically competitive firm, such as Zara, will make zero economic profit (AmosWEB, 2001).

Richard Dana Associates (RDA) was brought in by the owners of a family-owned business with complex relationship issues at a time preceding an anticipated leadership transition. Following individual and group coaching sessions, RDA was able to help the leadership separate personal issues, and codify practices through formal policies to allow the leadership group to focus on business issues without personal complications. At the end of RDA's engagement, the client was well-positioned to begin developing a transition plan.

It can be inferred that there are committed fixed overhead costs in retailing, not short-term adapting to lower overall sales. Harrington shows a high level of vertical integration through the whole women’s clothing value chain (see Exhibit 4). The strong adherence to company-owned sale channels can be seen as a strong marketing advantage but is also a cost driver for Harrington. Through their committed fixed cost level the company is not able to adjust prices in reaction to the imported low cost clothing. The comparatively high operating profit of the manufacturing segment reflects that Harrington’s in-house Mexican production’s expenses aren’t a main reason for their current problems (see Exhibit 3). Also the company’s selection of external distribution channels is not a current problem, since department and merchandise stores still cover over 75% of the market. All in all, it can be summarized that Harrington is currently not mainly suffering from dropping sales but its overall weak efficiency.

To better understand how Zara developed its business strategy, we should look into the fashion industry competition via Porter’s five forces model.