Industry Facts:
Specialty Retailing Sector -Women’s apparel industry in Japan seasonal industry
products have short life cycles and extremely uncertain demand International Competition
3 Distribution Alternatives- company-owned stand alone stores, shops in fashion malls, and shops within department stores “store-within-a-store”
Company Facts
Operates in women’s apparel industry
Company uses both wholesale and retail distribution methods Wholesale items are sold in other stores (retailers)
Specialty store Private-label apparel (SPA) merchandise which includes the OZOC and Untitled brands was sold at stores owned by World Uses SPARCS, a business process system that allows World to monitor sales trends and focus on customer demand to maximize the efficiency of store support operations By late 1990’s World sold over 40 different brands in approximately 7,000 shops and stores World’s divisions are organized by product (brand name)
1998- World Employed 2,394 workers
Net sales $1.8 billion and net income of $32million
Company held a 3.5% share of the Japanese apparel market
Major U.S. competitors are Gap Inc., The Limited
Rooted in Domestic Manufacturing
Brand Facts
Targeted at female customers 25-29 years of age
Annual Sales 2.2 million
Introduce new collections twice annually (Spring-Summer; Fall-Winter) Introduced New Products Every 2 Weeks
At the end of 1998, Untitled Brand could be Found in 110 Stores
The Essay on Bargaining Power Industry Companies Apparel
The Asia retail apparel industry is a large, highly fragmented. There are sizeable companies which conduct by number of chain stores and small companies run by individuals. The profitability are driven by many factors, such as cost control, pricing, economic conditions, fashion trend and etc. Porter! |s five forces model analysis: Threat of Substitutes Clothing is common known as the basic needs ...
Qualitative Analysis
Industry Analysis:
Threats:
Lack of Channel Power
Uncertain Demand
Seasonality
Inventory Risk
Opportunities
Fewer Variations In Store Assortments
Fast Changing Fashion Trends (Social)
Low Inventory Levels
International Manufacturing
Company Analysis
Strengths
World’s High Inventory Turns (5/year) (Operations)
47% Gross Margin
Keen Competitive Intelligence- reviewed competitor’s brands every six months (Marketing) Decentralized Merchandising Operations- each brand was autonomous (Operations/Marketing) High Responsiveness (Operations)
Versatile Line Workers
Recruited talented individuals who were unafraid of change and could motivate others (Management) Weaknesses
Weak Pay-for-Performance System (Management)
Low Brand Awareness
Left over inventory is markdown 50%
Quantitative Analysis:
Wholesale net sales=(total net ales- net spa sales)¥1,643,130,000 World’s private label spa brands ¥250,000,000
Net Sales Of World Corporation¥1,893,130,000
Cost of Sales ¥983,610,000
Gross Profit Margin at 47% ¥909,520,000
World’s private label Spa brandsNet Sales: ¥250,000,000 SPA’s Cost of Goods sold: ¥130,500,00 Purchases @ 97%¥126,585,000
Other¥ 3,415,000
G. M. of Spa brands at 47.8% of Sales Gross Margin: ¥119,500,000
Cost of Goods sold include merchandise inventory, purchases, (purchase discounts), total merchandise available for sale
Average Inventory for World Co., Limited and SPA Brands
World Co., Limited
Average Inventory = Cost of Goods sold = ¥983,610,000 = ¥$96,722,000
Inventory Turns 5 times a years
SPA Brands
Average Inventory = Cost of Goods sold = ¥130,500,000 = ¥15,294,117.65
Inventory Turns 8.5 times a years
Cost to Retail Ratio
Problems
How to overcome Bargaining power of suppliers- retailers charge high prices for retail space Poor implementation of push (or pull) strategy
The Research paper on Brand Comparison Betwen Apple and Samsung
First, we would like to thank our supervisor, Carl Thunman, for his continuous support and guidance; he has made our work easier and more interesting. We are also thankful for our seminar colleagues for criticizing our work and exchanging constrictive discussions. Finally, we want to thank our beloved families, for helping and supporting us through the last months, without their love and ...
Inventory Markdowns is second greatest variable expense accounting 24.10% of total Sales staff does not enter shipments into the computer upon receipt How to overcome compromised information accuracy during semi-annual sales
