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Task1: Supply Fast Fashion
The fashion industry has been changing at a very fast rate. For example, in the past, most cloths used to be customized while currently only between 5-10 percent are customized. In light of this, businesses in the fashion industry must remain a breast with the changes in this market and also be competitive. In this regard, businesses in this industry must be creative in order for them to remain competitive in this market.
In order to remain competitive, businesses in the fashion industry have continuously adopted innovative technologies, designs, and manufacturing processes in order to remain competitive. On the same breath, they have also streamlined their distribution channels in order to ensure that customers can easily access their products. Similarly, enterprises in the fashion industry have modernized their retail stores by making them more attractive and welcoming to customers.
In terms of designs, the businesses in the fashion industry have reduced the number of cloths that are customized from 20% to between 5 and 10%. Accordingly, businesses now prefer to make cloths for mass consumption. Similarly, there has been a trend of reducing the seasonality in the introduction of fashionable cloths. In the past, fashion used to be based on the two major climatic changes; summer and spring. Currently, there has been a change in this trend. Major cloths manufacturing companies such as H&M and Zara are now continuously introducing new fashionable cloths throughout the year. In addition, these companies do not repeat past fashion designs, rather, they improve on these designs or introduce totally new designs.
Concerning manufacturing, the cost of this process determines the ideal location for these activity. For example, H&M has its suppliers from all over Europe and Asia who enable the company to access many raw materials needed in the fashion industry at a low price. In addition, companies in the manufacturing industry consider the lead time needed to complete an ordered batch. For high volume fashion cloths, the companies require a long lead time. However, companies such as Zara, which supplies a significant proportion of it materials enables it to be competitive by reducing its lead time.
Companies in the fashion industry also have an elaborate distribution channel. For example, Zara and Benottin have an automated warehouse system. H&M on its part has a sophisticate stock management which it uses to control its inventory levels and provides insight on the items that the company should purchase. Finally, most fashion business have uniquely designed their retail stores in a manner that they are spacious and attractive. This large spaces enables shoppers to easily trace the items that they are looking for and to be comfortable while shopping.
The quick adaption of modern designs and the failure to repeat outdated designs. Generally, the fashion industry is mainly marked with introduction of stylish designs regularly. In this regard, the constant introduction of new cloths by H&M and Zara enables these two companies to stay ahead of competition. This factor is also supported by the fact that unlike competitors who mainly introduce new cloths twice an year. The continual production and sale of the company’s items will enable them to increase their market share and dominance in the industry.
Task 2: Reflection Report: Supply Fast Fashion
The case study is highly insightful on the various strategies adopted by the major firms in the fashion industry namely, H&M, Benetton, and Zara. The common aspect among the three fashion retailers is that produce their major designs in-house. According to the class notes and discussions, one advantage to using this strategy is that the end products communicate a brand that is unique to the company. Additionally, the design stage of the supply chain is the most critical for firms in creative industry and hence the reluctance of these firms to outsource (Sehgal, 2009). In the high end fashion industry, the aesthetic and unique value of the product, an output of the design phase, is the most critical factor in the brand image.
Supply chain theory holds that one of the fundamental aspects of an effective supply chain is speed. It is critical that raw materials are delivered to the processing plant; the processing is done within the least amount of time, and the distribution process efficiently done to ensure that the commodities reach the client on time. Fashion firms such as Benetton and Zara deal in seasonal products and must therefore ensure the products are availed to the customer at the right time. For instance, winter clothing is supposed to reach the market as soon as the winter season commences and the same for summer clothing. Flexibility is another important factor in the supply chain. Companies in the fashion industry need to show great flexibility in their product designs in that they should be both fast and responsive to the dynamic market needs for them to remain both relevant and competitive.
In terms of distribution, none of the major firms directly performs the distribution of their products. These companies normally contract professional distributors able of transporting their products to the various global markets. However, the firms have invested in warehousing, which is a critical aspect in the supply chain. Warehousing for the fashion companies does not necessarily entail maintaining large storage spaces but performing the decisive operations of sorting the products. The firms therefore ensure that the goods do not stay for long at the warehouses by quickly splitting the batches and sorting them for delivery in the various stores that they are needed. Warehousing is therefore considered an extension of the factory and therefore a critical phase of the supply chain.
In terms of retail, the three firms have employed different strategies. Benetton has opted to set up its own retail stores while Zara and H&M have opted to have their apparel sold by specific retailers. The main advantage to setting up stores is that it provides the firm with overall control. However, such an approach is highly capital intensive. However, the use of franchising and private retailers to sell the goods enables a company to expand with minimal costs on its capital (Choi, 2014).
Therefore, in reflection, it is clear that the theoretical concepts identified in the class notes and group discussions are practically employed by corporate organizations. Benetton, Zara and H&M have practically employed the theoretical concepts of supply chain management to effectively ensure quality products are availed to their customers within the specified time and thereby achieving customer satisfaction. The firms have implemented the concept of outsourcing whereby they delegate some of their non-core functions in the supply chain to other professional firms and thereby left to concentrate on their most critical function. All processes within the supply chain are therefore executed with high levels of professionalism and consequently achieving high levels of customer satisfaction.
Choi, T.-M. (2014). Fashion retail supply chain management: A systems optimization approach. Boca Raton [u.a.: CRC Pr.
Sehgal, V. (2009). Enterprise supply chain management: Integrating best-in-class processes. Hoboken, N.J: Wiley.
Domino’s Pizza
The business was founded in the 1960s in America as a fast food company that specialized in the delivery of pizza. The company was founded by two brothers, Tom and Monaghan after they purchased Domi-Nicks pizza store in Michigan. Over the years, the company has grown to be one of the leading fast-food companies in the US. Currently, it has over 13,800 franchise stores that are operated by about 900 franchisees (Domino’s, 2016). The company also participates in community social responsibility programs within its environment. In particular, the company has the Partners Foundation, which is a nonprofit making organization (Domino’s, 2016). This NGO assists members of the team when they have special needs such as a natural disaster, work related accidents, unexpected afflictions or any other emergency that can arise.
The company believes in assisting its employees to improve the social and economic situation and overcome any emergencies that they may face. Since its formation, the company has issued over $6 million to its not well off employees. Generally, this assistance is provided through the Partners Foundation. In terms of culture, the company has an inclusive culture (Domino’s, 2016). In this case, the company accepts individuals from different societies as its employees, team members, or suppliers.
With regard to the company’s financials, the company’s shares have been trading highly in the recent past. Currently, its stock is trading at $192.29 per share (Domino’s, 2016). According to Dominos, its main reason for success is its advertisement and continued culture of offering high quality goods and services. Nonetheless, the company faces risks of litigation form employees, suppliers, and franchises due to cases on claims for compensation, vehicle accidents, and accidents that occur in the delivery of foods. Of major concern, Dominos has a challenge on its future existence due to its inability to attract and retain skillful employees (Domino’s, 2016). This problem can hurt the business and affect its ability to grow and make profits in the long-term.
Since Domino’s has franchises from all over the world, exchange rate differences pose a major challenge to the company. Basically, global economic factors such as a recession or an expansion in the global economy can result in the company making huge profits or losses. In addition, the differences in by-laws and employment requirements in various countries makes it difficult for Dominos to have a uniform set of laws and regulations for all employees.
An analysis of Dominos’ store shows that the company has become competitive mainly due to its ability to minimize its operational costs and increasing its advertising and marketing efforts. Generally, the company ensures that all its retail shops are spacious and attractive, In addition, it always ensures that its retail businesses are established in strategic openings where they are easy to locate and that exemplify the company’s brand.
The current high performance of the company, both in terms of profits as well as a high price for the company’s shares indicate that the business has been excellent in its overall performance. Generally, this is an indication that the marketing efforts of the company have been successful in enabling it to attract more customers. In addition, it also shows that the company has been prudent in the use of its finances and has implemented measures that minimize on the wastage of resources.
Task 2b – Reflection Report: Domino’s Pizza
In reflection, it is quite evident that Dominos has effectively employed the theoretical concepts of marketing management to become the market leaders in the Pizza industry. An analysis of the firm’s operations reveals that it has developed an intricate marketing mix in the various aspects of product, place, promotion, and price. The distinctive strategies employed in each of the 4p’s all work together to achieve a common goal. Important to note is how the firm has been able to achieve the normally conflicting strategies of product quality and competitive pricing. Conventionally, firms that focus on product quality normally adopt the premium pricing model as the high profit margins associated with the model are used to cover the high costs associated with product quality. However, Domino’s has been able to exploit the economies of scale due to its size and thereby achieving using the associated cost savings and high profits to cover the expenses of maintaining product quality.
An analysis of the Domino’s case study brings to light how theoretical knowledge is practically applied in the corporate world. Domino’s exhibits a practical example on how to market the firm’s product’s effectively. The core of the marketing strategy is the marketing mix, which is the combination of the aspects of price, product, promotion, and place (Kotler, 2013). In accordance with the class discussions and notes, it is evident that the firm has adopted all three factors of the marketing mix in its operations. The product in the firm’s marketing mix comprises of both the quality and fresh pizzas and the splendid packaging. The packaging is specially designed to ensure that the pizza’s fresh and hot when delivered to the customers. Additionally, the firm has attempted to cater for the various customer groups by offering non-vegetarian and vegetarian varieties. Additionally, the pizzas are offered in a wide variety of sizes ranging from small, medium, and large. The wide product ranges enable the company to best meet the needs of its target market and consequently guaranteeing satisfaction.
The pricing strategy of the firm’s products is mainly based on its target market. Domino’s mainly focuses on customers from the middle class and lower middle class income groups (Llanas, 2015). The main credo is to provide quality products at competitively low prices. However, such a pricing strategy is quite challenging to accomplish given that the delivery of quality products is normally associated with high operational costs. On the other hand, it possible to provide quality products at low prices provided that the firm is able to leverage on other aspects such as economies of scale. As one of the leading firms in the industry, and operating in the global market, the firm is able to leverage on economies of scale such as bargaining on its purchases and maximizing on the profits associated with high sales volumes.
In terms of place, the firm maintains a direct channel with its main customers. The various outlets make arrangements of outside catering where the products are delivered directly to the customer at their convenient locations. Moreover, customers are also able to remotely place their orders using the company’s website or through a phone call. As part of its promotion strategy, the company maintains direct contact with its customers. The pizza delivery services enable the company to not only deliver quality products but also interact directly with the customers. Quality service delivery is key to word of mouth promotion that has enabled a wide percentage of the market to become aware of the firm’s activities. Moreover, the company employs other promotional avenues such as sales discounts to develop and strengthen a loyal customer base.
Domino’s. (2016). About Domino’s. Retrieved from
Kotler, P. (2013). Marketing. Frenchs Forest, NSW: Pearson Australia.
Choi, T.-M. (2014). Fashion retail supply chain management: A systems optimization approach. Boca Raton [u.a.: CRC Pr.
Sehgal, V. (2009). Enterprise supply chain management: Integrating best-in-class processes. Hoboken, N.J: Wiley.