Introduction
The women’s purse and handbag industry is one of the largest in America and the world over; given the high consumption rate that it has received for the past two to five decades. This industry has caused a lot of others to thrive in their functions, especially in manufacturing associated with the raw products used in making the very purses and handbags. Industries like leather industries and international marketing agencies are great determinants on the economic growth of the handbag and purse industry. This research study attempts to investigate how the purse and handbags have fared in terms of economic growth for the past five years, and to try to analyze the state of the economy in the future concerning the same. Relevant factors that may disturb the industry will be analyzed and discussed and simple recommendations geared towards arresting the issues put forward.
Data collection
Now, considering that the industry is so big and a census is hardly done to come up with an efficient study, sampling techniques are used. These techniques were applied in this case to ensure that the data that would be collected were representative, reliable and valid in all aspects. In so doing, it was essential to collect data that was homogeneous both within it and without, that is, internal validity was maintained through the use of data collection methods. External validity was even further enhanced through selection of adequate and relevant data that would estimate the population parameters. Therefore, the use of multiple sampling techniques was applied, the quota sampling method and the stratified sampling method. The quota sampling method was applied especially in collection of a particular number of samples to be used in the study, the formula of selection was arrived at simply, thereafter, the samples were stratified in their various clusters, and random data collected from the population in the quotas. This ensured that the various quotas were completely independent of one another, and that the data were non-overlapping and randomly distributed. This would enable us perform various statistical manipulations which would guarantee precision, and offer a way of verifying statistical reliability. In this paper data collected is summarized, and the statistical analyses that will proceed apply to the summarized statistics gathered.
Statistical results
Analysis
The histograms, bar charts and cluster diagrams clearly show that the data collected over the past five years have increasing trend, the cluster diagrams particularly shows an upward trend.
In the analysis if revenue and the market size are indicators of the growth of economy, the regression analysis above would be fundamental in expressing the increased growth in the handbag and purses economy. The regression model under analysis is as below
Y=β0 + β1 X1 + β2 X2 + Ɛ
Y=26.233 + 0.03 X1 + 0.49 X2 + Ɛ
This model shows the relation between X1 (market size) and X2(revenue) as indicators of economic growth(Y). From the Anova analysis above a hypothesis is being tested to test whether both market size and or revenue have impact on the economic growth.
Hypothesis
H0: β 1= β 2 = 0
The market size and the revenue are equal and have no significance difference
H1: β 1≠ β 2 ≠ 0
The market size and the revenue have significance difference
Clearly from the figures above, the significance level of F-statistics, is 0.173, this is less than the P-value of 0.05, this shows that it is highly significant, and thus we reject the null hypothesis concluding that both X1 and X2 have a significant effect on Y. That is, both Market size and the revenue have an impact on the economic growth of the industry. The R-square shows that the tests are strong enough.
Description
Historically, women are known to shop at boutiques and department stores. Of most importance is that most women make their purchase on the basis of recognition of a designer and the style in trend. Earlier on, women used to take great importance in their appearance and a slightly extravagant life, this saw most brands that were expensive being proliferated. In 1980’s sales of handbags and purses doubled with an annual growth of about 8.0 percent. Later on, recession made an impact to the purchasing power of the women, along with the high rate of unemployment, resulting to customers becoming much conscious on the cost of goods.
In the analysis of the past five years, it is evident that there has been a progressive growth in the purse and handbag industry . This is due to the fact that after some time, shoppers started spending around 2000 when the economy seemed to stabilize and financial security maintained. New designs that were being continuously introduced into the market ensured that increased purchase was experienced, functional style bags like shoulder bags continued to perform strongly, coupled with accessories which elevated the status of the buyers. In mid-2000’s infiltration of counterfeit items caused a problem with the market. Some producers manufactured handbags and purses that resembled original products and the designers, and then sold them at considerably low prices compared to the original prices. Brands like Prada and Gucci were seriously affected; the increase to counterfeit products hit an all-time high of fourteen percent, compared to the three percent of the previous five years. Analysis showed that the level of counterfeit cost the U.S companies between three hundred billion dollars and three hundred and fifty billion dollars.
Returning to our situation, for the past five years, there have been an estimate of about 517 companies that are concerned with the manufacturing of the women’s purses and handbags made of either leather or other materials, apart from precious stones. The industries have for the past five years been estimated to value around 3.5 billion dollars, with an employment of approximately four thousand one hundred and fifty seven employees in the industries, of which two thousand, nine hundred and eighty two manufacture purses and handbags. In America, statistics showed that most of these industries were located in Texas, New York, and California. As shown in the market size in the diagrams, it is clearly evident that there was growth in the economy of the 58 billion shipment 48 percent accounted for the market share of purses and handbags.
The reasons to the growth of the leather industry and consequently to the handbag and purse industries in U.S is attributed by a lot of factors, ranging in different domains. The manufacturing of purses and handbags is more expensive in terms of the number of laborers that are required to offer their man power and skills. In respect to this, most companies have encourage the use of new technologies to actualize profitability and growth, and increasing the level of employment in U.S. of more importance is the use of computerized programs and integrated designs, computerized manufacturing and management, and improve marketing strategies via media and other technologies. Products have been made at a faster rate over the past five years, efficiency in production have been maintained, and the production have allowed the manufactures to emphasize non-price issues for instance quality and faster delivery to ensure that they compete well with the imports. Computer aided design (CAD) have offered a software that can improve tooling and link to milling, auto-stitches and turning machines. The cost of labor is decreased as the computers are able to integrate operations of machines in different capabilities under one operator. This has additionally decreased handling time and the number of people employed, not mentioning improving quality. The developments of robots, which are computerized to handle the operations in and out of the modules of production, have continued to ensure the economic growth of this industry.
Other contributors to the increased growth rate are the increase in particular brands’ demanded oversees; acquisition and consolidations have also contributed to this large growth that has been seen over the last half a decade. This was through joining of large departmental stores, and manufacturing companies and consolidating the buying strategies. The manufactures benefited largely especially because a trend of using a particular vendor rather than several was developing, responding to this, the handbags and the purses manufacturers increased their activity of acquisition even the more, and in doing so, they came up with new brands and broader product range. Other strategies that were used in selling the bags, for instance the use of multiple purchases for multiple uses, used by Coach, included a package that coupled staff like weekend bags, travel and casual bags and so forth.
As the world is continuously transforming, industries are being transformed. In the previous years, the competition in bags and purse industry was evident in China, and many other European states. This is because, there were a lot of cheap labour, considering that they were still developing, the amount of revenue that they gathered was enormous, and they could produce surplus to sell to other countries like U.S. This eventually resulted to the decline in the growth of U.S leather and handbag economy. However, as countries continued to develop, it was essential to increase the amount paid to the labour force, especially because of the new skills that they were bringing on board. This resulted to a decrease in the competition, and a result of increase of exports to the very countries. Needless to say those exports have been a major source of the economic growth in this particular industry.
Now, according to the analysis, it is clearly shown that the industry have experienced increased upward trend in economic growth. The prediction is that most companies in the U.S owing to the high level of technology will shift to wholesaling and designing, this may result to a further increased growth in the industry or a decrease in the economy. However, the general trend shows that the demand is expected to increase for another five years, as the conditions continue to strengthen, for instance, the market security in U.S, that have improved, a sharp decline in unemployment rates, and stable political states under the Obama administration, is expected to ensure a stable growth in the industry. Considering that U.S is recovering from the recent recession that hit hard over the years, and considering the growth in the disposable income, and the consumer sentiments. It is likely that these consumers will start purchasing the items that they postponed in the event of recession, thus it is safe to focus increased growth of the industry over the next five years. International markets that have opened up in U.S will further offer an opportunity of trade. This is also supported by the fact that most of these countries are locating to low cost countries, this will ensure increased revenues due to decreased labour charges, and decreased cost of raw materials. Of most importance is the level of technological advancement that he world continues to display, this will increase the effectiveness of products produced, and production methods.
Conclusion
In summary, the leather, handbag and purse industry have experienced high growth in the past five years, it is an indication, through the analysis, that the large market share of the U.S products have resulted to such increased growths. Over the past several decades, the industry experienced a lot of challenges, ranging from recession, counterfeit of goods and increased competitions from other developing countries. However, several factors ensured that the industry was up and running again, some of them were the technological advancement, re-location to countries that offered low cost labour, decreased competition, increased exports, acquisitions and consolidation and improved market strategies resulting to up spring of these industries again. Other countries that used to compete with U.S have for the past five years recorded a decrease in growth of the handbag and purse industry, this research paper did not take into consideration of the factors that affected those countries, however, in reference to our study, are the same factors going to affect the performance of U.S industry? the main purpose of this study was to analyze the growth of the industry over the past five years, and to estimate if further growth is susceptible in the subsequent years. As discussed in this work, growth is likely to be seen further in five years to come, however, issues of shift by manufacturing industries owing to the high technological advancement to other related services, and the high rate of development of countries threaten to dampen the growth that is likely forecasted. If the same trend is to be maintained, serious considerations needs to be made in order to strategies on the challenges that have been highlighted. Encroachment of counterfeit products needs to be put to a stop, to allow the rightful owners of the products to amerce their returns. This can only be done through proper legislative intervention, and regulation of such cases.
References
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Outlook, B. (1994). U. S. Industrial Outlook, 1994: Business Forecasts for 350 Industries. New York: DIANE Publishing.
