Entrepreneurship for the Creative and Cultural Industries - Coursework Example

Managing Financial Resources and Decisions Mission XFR’s mission is to provide quality, brand European wear in a collection of styles and sizes to fit all varying body shapes and styles Products The business will deal with products such as women wear, men wear and children wear. It will also enhance, and customers are and proper sewing of all the designs established in the business. The main feature of the products offered by the business will be making the garments using high-quality materials with attractive colors and good texture. The owner will establish silhouette color and kinds of materials that will be worn any season. XFR will carry nationally recognized British European wear brands. The selection varies from the basics of Wrangler to the popular European style of European Ethics. We will be procuring from manufacturers and using sales representatives in a variety of colors, sizes and style to fit the target market base. The ultimate percentage of products will be in clothing, followed by hats, accessories, and gifts. Management will rely on the feedback and suggestions from the customer, and sales reports to introduce new brands into the market or eliminate some styles, brands, and sizes. Location The business will be located in Sunderland City in Twin towers, on the ground floor in UK. The reason for choosing this location is it can be easily accessed. The area has very few businesses of this kind and has a high population where a number of people are working in government offices, and others are private practitioners, lecturers, Cowboys etc. The Industry The business will be under textile industry. Since time in memorial, the textile industry was the engine growth in the private sector which created numerous jobs and became the 2nd largest employer after the civil service. The industry was divided into three segments known as yarn, fabric and apparel manufacture. Market policies of the 1960’s to 1980’s ensued backward integration of the textile industry leading to the majority of the textile mills being composed. Small domestic markets with little or no exports lead to poor economies of scales in most factories. Objectives XFR’s main objectives are to: Create an exclusive clothing retail business in the city of Sunderland. Offer quality customer service and clothing at a reasonable price Create jobs Attain the largest market share in Sunderland for urban wear Be vocal and an active member of the society, and to offer continuous reinvestment through involvement in community activities through corporate social responsibilities Have a break-even within the first year Enhance average length of customer relationships and reduce the rate of customer turnover Consistently and continually increase total number of customers per year Market Analysis European wear clothing retailers comprises of various kinds of stores: Small Specialty Stores: Most of European clothing is sold through small family-run retail stores that are situated within or near neighborhood communities. 85% of the buying statistics for European clothing is gotten from these places. Big Multi-owned European Wear Retailers: These big stores mass market and sell to die-hard fans as well as the local vacationers and those who only buy during rodeo season Consumer Factors Consumer micro-environmental factors that may affect XFR include lifestyle, norms, population cultures, and demographics changes. These factors may affect the clothing industry in various ways. For instance, a clothing manufacturer has to come up with styles that appeal to those of diverse cultures, particularly if those cultural groups reflects significant segments of its market. On the contrary, clothing manufacturers, wholesalers and retailers evade making several clothing lines that do not fit into the societal norms, i.e. styles worn 100 years ago. An older population may demand more of larger pants sizes and jeans, such as loose-fitting or relaxed styles. Mostly, several people become more inactive when they get into their 40s and 50s. Waistlines of most of the consumers expand therefore they require larger sizes and more room for comfort. Moreover, reductions in birth rates in other areas will reduce the demand for baby clothes. Technological Factors Technological factors that may affect XFR include availability of resources, demand, and production. For instance, the scarcity of certain clothing line, such as leather jackets, may force the company to substitute leather products or sell more faux. XFR may raise the prices of cotton clothing if it experiences shortages of some brands since it has to pay its suppliers more. XFR’s competitors may introduce new clothing styles that can shift demand away from older fashions. Therefore, the business has to discontinue selling some clothing lines and sell those that meets the consumers’ needs. Legal and Political Factors Various legal and political factors have some effects on small businesses in the clothing industry. The clothing industry has continually been affected by issues like child labor and workers rights laws. Unionized workers who work in clothing manufacturing plants can picket their employers, particularly if their medical benefits or wages are not favorable as compared to those who work in similar industries. Workers who picket their clothing employers affects production. This causes delays for retailers in receiving spring or decrease fashions on time. Human rights activists who are not working in the companies may also picket vendors who buy clothing from countries popularly known for violating child labor laws. This kind of negative publicity may have an effect on sales and profits of small clothing vendors. Similarly, a trade ban on imports of another company may force clothing wholesalers to look for other suppliers. Economic Factors Economic factors can positively or negatively affect the clothing industry. During booming economic times, most consumers have more disposable income. Therefore, they may make more clothing purchases, increasing clothing sales for manufacturers, wholesalers and retailers. Nevertheless, economic downturns have the opposite effect. Sales for these many clothing businesses may be considerably lower. As a result, retailers may have large amounts of stock. And they are forced to sell the clothing at considerably lower prices. Clothing manufacturers and retailers are also forced to sell lower-priced clothing brands in order to compete with more generic brands in the market. Consumers frequently go for inexpensive brands every time they have less disposable income Market Trends Many people around the globe directly recognize and identify with European clothing. It is synonymous with British and is a true classic. European wear has endured many years. Current Cowboys look after cattle in helicopters, but they are still in the same jeans, hats and boots their forefathers wore. There will always be a better future for European clothing. For the last couple of years, the South European and European look has re-emerged in the fashion industry. XFR intends to use its position in the community to increase the awareness of the American-British cowboy culture in Sunderland. With the increasing participation by professional American-British cowboys, many people are becoming aware of American-British’s role and contribution to the cowboy community. Entry barriers Economies of Scale These are a reduction of a product’s unit costs as the total volume per period rises. These makes the entrant come in either at a large scale (risking strong opposition from incumbents) or a small scale (making a cost disadvantage). Product differentiation XFR will have brand customer loyalties and identification. This makes new entrants spend heavily in overcoming these loyalties. Startup business may bring a different product line to the market, but its benefits must be communicated clearly to the target consumer. Startups have to find an effective way of positioning themselves, which mostly requires marketing strategies and resources beyond their means. Capital requirements These include the financial resources needed for infrastructure, advertising, machinery, R&D. New entrants may get capital requirements by subcontracting some of its operation to companies that can control current investments. Switching costs These are costs that a consumer faces when switching from an already existing supplier’s product to a new entrant (for instance, new equipment, employee retraining, and technical support). Accessibility to distribution channels XFR will create a barrier of logical distribution channels to prevent others from entering into the clothing industry Cost difficulties free of scale XFR will have cost competitiveness that cannot be imitated by any potential entrant. Factors include favorable locations, access to raw materials, the experience or learning curve, proprietary product technology, and government subsidies. Main Competitors XFR has three competitors within a radius of 15 miles away from its location. Cavenders Boot City, which is situated approximately 7.1 miles far from the location of the business, is one of the closest competitors. Cavenders is among the leading European wear clothing stores in Sunderland city. They have 42 stores and sell ordinary European wear clothing and boots to the entire mass market. Strengths Because of its size, they own a bigger percentage of the market share but still only furnishes what the clothing industry regards it to as the average size. Finding together with size clothing for women and tall and big sizes for men can be very difficult. They also tend to be the market leader in supplying more fashionable European styles. Weaknesses Due to the Cavenders size, the company has also lost some of its customer service skills due to its high rate of employee turnover Barbecue Hall of Fame, which is located about 9.3 miles from XPR. The Barbecue Hall of Fame retail combines Goode & Co. BBQ’s atmosphere of the restaurant that have shopping and a leading tourist attraction. Strengths The company offers a various mix of old west matches new west with clothing, cookware, grills, and gift items. Weaknesses It does not do any promotions or advertising of their retail outlet so if you dont visit their restaurant you cannot know about the retail business. Turner Saddlery; the company, is nearly 12.1 miles from XFR and is on the farthest end compared to the other competitors. It is a family-owned European clothing line and has two stores in the Sunderland. Strengths Their number of customers tends to be more elaborate as they carry more of high-end European labels. They undertake bedding and housewares items of which BBQ Hall of Fame and Cavenders does not engage Turner Saddlery does carry out extensive advertising and promotion. Weaknesses They have few big and tall for men and plus sizes for women Competitive advantage of XFR • XFR will offer big and tall sizes for men and plus sizes for women. • The XFR Shopper Card which allows the customer a 15% discount on ten purchases. • XFR’s location in the society will provide a closer access to the business’s target customer base. XFR Marketing Plan Marketing Strategy XFR’s marketing strategy will heavily focus on niche positioning in the market, sales promotion, and customer service with retention and loyalty in sales. The marketing budget of the company will not go beyond 5% of the total gross annual sales. Promotions will all the time stay in line with the mission statement and objectives of the company Pricing Strategy XFR will adopt a flexible pricing strategy. Product lines being undertaken will be based on their quality and reputation as European clothing wear. Most of the product lines come with a recommended retail price that is supposed to be followed. The standard practice of key stoning will be also utilized as well. Promotion Strategy XFR will adopt a creative yet aggressive promotional plan. This allows direct focus on the company’s target consumer while still being conventional with our advertising pounds. A press release kit will be circulated to all major media outlets in Sunderland emphasizing the grand launching of the first American-British owned European wear clothing retailer in the city. This kit will comprise of a press release, color postcard/flyer, pictures of the interior space, and a business card. 5,000 4x5 color flyers/postcards will be circulated all over the city at local clubs, rodeos zydeco and cowboy dance halls, and trail rides Radio advertisements will be made on two famous FM radio stations A direct mail program that focuses on and target the top 50% customer base with special in-house sales and promotions. Distribution Strategy The retail location will act as a foundation for building a customer base. In addition, we will manage a direct mail program that will focus on the company’s top 50% customers highlighting any inbuilt sales and promotions. Marketing Programs XFR marketing programs will comprise of the distribution of at least 6,000 color flyers two weeks before the grand launching event. Positioning Statement For the full-bodied people who are looking for European clothing, XFR will provide a brand name European wear in a larger variety of sizes and styles that are not always readily available in large quantities among other European clothing retailers. Competitive Comparison XFR has various competitive advantages that will allow the company to add value to its merchandise, build its brand identity and create a loyal customer base distinctive from its competitors. We will be the first American-British owned European wear clothing retailer in Sunderland The XFR Shopper Card will allow customers up to a 15% discount in every ten purchases they make. We will provide clothing of all sizes that fit big and tall men and plus-size women. We will make a sense of bonding and culture with the local community by supplying products that combine both the cowboy and American-British cultures. Our location is strategically placed to our target customer base. We will keep a detailed record of every customer, their purchases, size, and brand logging addresses for customer follow-up, in-house and promotional purposes. SUMMARY XFR will adopt a strategy of total market service. The company’s promise is its location and the kind of products it sells, the people it attracts, and the atmosphere they create. XFR will create an environment that lures the "Die-hard" town clothing fans. Eventually, we are not only selling clothing and accessories but also we are selling the look. We anticipate to be part of the activity, part of the dressing tradition in the newest fashions and part of the memory, Some of the strategic assumptions of our business is: 1. Every individual is a potential buyer, and all potential markets are growing. 2. Marketing done to one segment of the population will lead to an expansion in entire market development. References Ansoff, I., 1957. Strategies for Diversification. Harvard Business Review,, 35 ( 5), pp. 113-124. AYGLON, C., 2009. Consumer Adoption of a New Product Launch.. Oxford: Oxfam Trading. Grönroos, C., 2010. From marketing mix to relationship marketing: towards a paradigm shift in Marketing, Management Decision. s.l.: Edward Elgar Publishing. Kolb, B., 2015. Entrepreneurship for the Creative and Cultural Industries. New York: Routledge. Magazine, E., 2012. Clothing Store and More: Entrepreneurs Step by Step Startup Guide. s.l.:Entrepreneur Press. McKeever, M., 2014. How to Write a Business Plan. s.l.:Nolo. Porter, M., 1986. Competitive Strategy.. Boston, MA; : Harvard Business School Press.. Read More