Company Overview
Nas-T-Shirts will be the talk of the town! This new t-shirt line will allow people to wear their attitude, cause, idea or general informative messages on their shirt! Nas-T-Shirts will allow verbal artists to treat an ordinary shirt as his canvas, stating crafty messages that are brought to life using cutting edge shirt-print technology done with high quality ink, resulting in very professional looking and long-lasting works-of-art.. Nas-T Shirts will make your thoughts and musings an everyday, accessible fashion accessory!
Nas-T-Shirts Corporation is headed by founder (name of student) and its office is located at (address of student). Nas-T-Shirts will be sold through a very user friendly website and through select retail stores. Nas-T-Shirts, will offer customers many options for designing their statement shirts, apart from a standard crop of shirts that are available in a variety of colors and sizes. An album of standard designs is ready for review on the website while samples shall be proudly displayed in each retail store.
Nas-T-Shirts will position itself as the t-shirt provider of choice for young adults aged 12 to 26. These customers are in school or are starting their professional careers, listening to new music, have radical urban ideas, and are highly vocal about their current social statuses. These shirts will act as an extension of their psyche and will provide them with creative outlets to share their thoughts in a real-life setting, an extension of being able to post your thoughts, ideas, and beliefs on social media sites like Facebook, Twitter and Instagram. The difference is that unlike social media sites that work only when relevant people in your life are online; your answer to the question “what are you thinking” is on your chest, ready for your friends and others to see.
Industry Information
T-shirts are universal products. They transcend age, gender, social status, religion, educational attainment, functions and other stratifications. Walk around and you will notice at least one person wearing a t-shirt.
The T-shirt industry is one of those industries that are in a state of monopolistic competition. Monopolistic competition means that there are many producers and consumers in the market place but no one has total market price control; there are very few barriers to entry, producers have a degree of control over their price, and there are non-price differences perceived by consumers of the products. In the long-run, the t-shirt industry’s monopolistic competition structure is very similar to a perfectly competitive market structure. However, the t-shirt industry will never produce a homogeneous product; there will always be subtle differentiation among t-shirt products in the market. In London, the number of t-shirt manufacturers and large ranging from top designer t-shirts to generic, every day wear.
Nas-T Shirts will compete in the London market and cultivate brand loyalty, to enable it to price is shirts accordingly. This means that in terms of elasticity, the company will have a down-ward sloping elasticity curve. Unlike the directly proportional perfectly elastic curve for firms in a perfectly competitive market, Nas-T Shirts will have the luxury of being able to raise its products without the risk of immediate market share loss.
The T-shirt market can be put into two group types, the first being pre-fabricated t-shirts and the second being customized t-shirts. Customized t-shirts have gaining popularity because of their originality (the concept is bourn from the customer’s mind), their specialized reach (they are favored by market segments that are not served by pre-fabricated designs), and by the fast turn-up and variety of designs.
The business will be very profitable. The net present value of the enterprise given the operating and capital assumptions is 8.48 million pounds for a cash-flow projection covering 5 operating years. The Project IRR is 187%.
Recommendations
Because of the profitability of the business, the following strategies will be implemented to ensure sustainability and long-term profitability.
1. Increase net income through increasing revenues
a. Increasing the number of units sold through continuously pushing for a larger market share. This would include aggressive yet low-cost marketing through social media (such as starting up a Facebook fan page and Twitter account), networking with specific interest groups and persons fitting the profile mentioned above.
b. Providing credit and discounts for group sales. This would encourage volume buying by clients. By providing credit to loyal customers and by offering discounts for bulk purchases, sales volumes will be increased.
c. Differentiating the product for loyal customers. Tie ups with special interest groups or loyal customer clubs could be developed to come up with premium T-shirt items at higher selling prices.
2. Increasing net income through minimization of costs
a. Most of the back-room functions can be outsourced to third party service providers. This includes accounting, human resource management, delivery and logistics, etc. Only the critical production processes such as marketing, actual t-shirt production, and finance should be kept in house.
b. Tie-ups with large print companies would decrease costs and provide cross-branding and advertising opportunities.
3. Non-price strategies include
a. Active participation in on-line media campaign such as those in Facebook will promote the company and help protect market share, as well as minimize costs.
b. Providing exposure by participating as a sponsor to activities supported by loyal clients from cause-oriented groups, student organizations, and the like.
Environmental Impact
Nas-T-shirts will use ink and t-shirts that are produced by environmentally conscious companies. While the cost of these materials may be relatively high, this facet of the shirt would enable the enterprise to sell at a better rate than its competitors and add another layer of differentiation. Not only will clients of Nas-T-shirts be making a statement with their bold declarations, they’d be making an environmental statement as well!
References
Investopedia. 2012. Net Present Value Analysis. Retrieved from http://www.investopedia.com/terms/n/npv.asp
Free Index. 2012. UK T-shirt Printers. Retrieved from http://www.google.com.ph/search?q=t-shirt+industry+london&sugexp=chrome,mod=1&sourceid=chrome&ie=UTF-8
Prentice-Manela, S. 2011. New Business Ideas. Retrieved from http://articles.bplans.com/starting-a-business/new-business-ideas/305
Wikipedia. 2012. Profit Maximixation. Retrieved from http://en.wikipedia.org/wiki/Profit_maximization
Wordans. 2012. Custom T-Shirt Printing in London. Retrieved from http://www.wordans.com/local/london-ontario-custom-t-shirt-printing
Appendix: Spread Sheet Calculations
