A future business model for Westfield UKObjectiveThe objective of this paper is to present a business report on a new venture into a new area of merchandise within Westfield UK’s retail outlets. Based on different business models and theories, an attempt is made to carefully examine different strengths and weaknesses of the present set up, strategy and business model of the firm, as well as an evaluation of it’s core competencies. The objectives of expansion into the new area of merchandise include a higher growth in terms of revenues and enhanced profitability, a diversification of production line as well a potential and platform for further expansion.
A side objective is to build up the brand value, which the company had not given much priority so far. An overviewWestField is in the business of fashion retail trade, with shops and brand name throughout the UK since 1997. It has expanded well in Europe, but is restricted in terms of product categories (fashion garments only), as well as has not entered either US market or China. Although, the company has a mail order system as well as an online catalogue and ordering system.
In Europe, it has created a niche for itself by strictly following the consumers requirements in real time. The company responds quickly to customers' wants and desires, and that is their USP. The company draws its strength from its unusual structure and extreme flexibility in responding to ever-changing fashion trends. Catching the fashion trends and converting them expeditiously into a product available in retail is the company’s Mantra. It introduces 3,000 new designs into its stores each year, none of which stay there for more than a month.
To substantiate it, the company believes in keeping simple looking outlets, minimal advertisements and continuous re-doing of the product location within the store- thus creating an ‘ever fresh’ impression on the customers. Obviously, the company enjoys a good ‘visit again’ ratio of its customer, although there is no data to authenticate it. The operational strategyWestField is a typical value chain company, with certain modifications. It is based on a vertically integrated business model, spanning design, just-in-time production, marketing and sales. Company just doesn’t grow cotton or produces yarn, everything else in just in-house.
WestField dyes or prints 40 per cent of its own fabric and produces 80 per cent of its merchandise by value in-house. Similarly, the feedback and information flow to the company is also strongly based on the value chain model. WestField is mostly driven by consumer feedback. The store managers are responsible for placing the orders with the production line and the store managers get their information directly from the customers. They decide on the basis of sales over last few days and trends that appear to be emerging.
They also discuss with the customers. On the basis of information passed on by the store managers, the firm's commercial sections then ensure with the designers and factories that the production meets the needs of the customers for each store. This internalised information, design and production line is the backbone of the company’s operational strategy. Barring it, everything is too flexible.