Management report
Introducing a business
A business that is going to be explored is a store that offers vintage clothes and accessories. Vintage clothes and accessories can be worn in a daily life or specifically targeted for some events, such as costume ball or a farewell night at school. Apart from selling clothes and accessories, a store will accept orders for creating retro-style clothes and accessories foe different events. First, a single store will be opened. Then, it is expected to create a chain of stores, continually expanding US-wide.
Industry analysis
The retail store “Retro” functions within the clothing industry. The shop can be classified as a fashion retailer. Industry analysis is conducted with the help of Porter Five Forces Analysis.
The bargaining power of suppliers can be estimated as low for the fashion industry in general. There are many producers of clothes worldwide, so retailers have a significant choice of goods. However, it is worth not forgetting that a proposed business concentrates on retailing vintage clothes and accessories, and can also get engaged into agreements with other stakeholders to produce retro-style clothes and accessories, meeting specific requirements of customers. The number of vintage clothes’ suppliers is definitely limited. That is why, such suppliers may have a higher bargaining power than suppliers in fashion industry in general. However, in case clothes are created according to a customer’s, a bargaining power of suppliers can be considered lower, because there are many individuals and entities, capable of creating clothes, despite the retro-style requirements.
The bargaining power of customers can be also estimated as low for the fashion industry in general, because virtually all the people require clothing and can be viewed as customers for the purposes of this industry. Given the proposed business’ focus on vintage and retro-style clothes, the bargaining power of customers gets higher, because the group of customers, interested in vintage clothes, is much more limited than the general pool of customers in a fashion industry.
The threat of substitutes is high in fashion industry. There are a lot of producers and retailers of clothes, and customers have a broad range of products to choose from. However, given the focus of a shop, there will always be customers, who have a special interest in vintage clothing that is hard to substitute.
The threat of new competitors is high in fashion industry in general. However, fewer stakeholders are expected to focus on vintage clothing and accessories.
In general, the competitive rivalry in a fashion industry is intense due to a large number of suppliers and retailers, as well as the influence of the economies of scale. The vintage clothing store can be viewed as competing both with other stores, selling vintage things, and clothing stores in general, because vintage clothes can be substituted by usual ones.
Direct and indirect competitors
Direct competitors of the store, offering vintage clothes and accessories, are other stores that offer vintage clothing (including online stores), as well as independent ateliers that offer the creation of retro-style clothes. Indirect competitors of the store are all other stores (including online stores) that offer clothes and accessories, because other clothes may serve as substitutes for vintage ones.
Competitive advantage
The competitive advantage of the new “Retro” store is to be formed by several factors. Firstly, the store will offer a broad range of clothes and accessories due to broad supplier networks. Secondly, the store will make special arrangements to be able to realize customers’ ideas and dreams related to retro-style parties, farewell nights and weddings. Thirdly, the promotion of vintage fashion (e.g., via special fashion events) can be viewed a strong tool, capable of attracting customers. Finally, the attractive pricing policy is a crucial element of differentiation. Sustainability of competitive advantage can be also achieved by the combination of above factors.
SWOT analysis for business
The strengths of the business are as follows. Firstly, the store “Retro” has a strong focus on vintage clothes and accessories and, therefore, is capable of attracting specific groups of customers, interested in such type of clothes and accessories. Secondly, the shop has a broad network of suppliers. Thirdly, it has special arrangements with design studios, allowing to create retro-style clothes, fully meeting the needs and wants of customers.
The weaknesses of the business can be described in the following way. First of all, a strong emphasis on vintage things leads to the fact that a shop loses some customers, who may buy clothes from a shop, but do not want vintage ones. Secondly, it may be hard to ensure low prices due to the fact that high-quality vintage things can be found quite rarely.
The business has a lot of opportunities to develop. Firstly, it can promote vintage fashion by launching retro-parties and sponsoring local events, dedicated to vintage clothes and accessories. Secondly, the shop can offer services related to creating concepts of different events, such as costume balls, farewell parties and weddings, including those, going beyond retro-style ideas. Thirdly, the shop can also go online, and ensure timely and cost-effective delivery to different points USA- and worldwide. Finally, geographical expansion represents a good opportunity for the store to develop and get its goods present beyond the original location.
The threats for the business can be viewed as follows. Firstly, vintage clothes are currently not so popular in the USA. Therefore, a store has to invest a lot into their promotion. Secondly, an effort, aimed to maintaining the balance of high quality and affordable prices, can lead to financial difficulties. Thirdly, an important issue is represented by the significant threat of substitutes, especially constituted by usual clothes.
Positioning strategy
The positioning strategy of the store will rest on four major factors. Firstly, it will try to combine highly elegant vintage goods and affordable prices. Secondly, the store will emphasize marketing, especially with regard to the promotion of retro-style events, such as parties and balls. Thirdly, the store will offer realizing customers’ ideas and dreams by facilitating the creation of unique retro-style clothes and accessories. Fourthly, soon following its opening the store will start offering services related to conceptualizing and conducting thematic events, such as parties, balls and weddings. The factors, listed below, are capable of positioning a store as a place worth visiting and promoting vintage fashion in a specific area and USA-wide.
