Clothing Store Case Study

29/1/2009 Executive Summary: This work is an introduction to the fashion industry of Pakistan which has made quite a lot of progress in just a few years. Ten to fifteen years from now, this industry was still unknown to actually exist to the masses. Later with the formation of fashion councils and education centers under the enthusiastic few who wanted to make a difference and promulgate this very institution of fashion, did the very fashion industry took its concrete contour from the old tailor culture that formerly existed. Today it is one of the most progressing industries in the country. The fashion industry too, is influenced by external forces be they social, political, economic, technological or even competitive, which serve as a main driver for this industry. Moreover, relations with stakeholders – mainly suppliers, distributors and customers, and the strength and width of its competitors also define activities in the business. However, the relative strength of impact of these external factors on the industry varies (as in every industry) and is computed with analytical tools like PEST-C analysis and Porter’s five forces model. Nonetheless, fashion industry assures new arenas of growth and development; new opportunities for employment. This industry promises a different national projection that is serene and contemporary. Later, an extensive internal analysis of the company of concern is carried out, which in this piece of work is Maria B. Maria. B. is one of the most well renowned brands of Pakistan. A company formed to revolutionize the tailor-culture of apparel making in our society. Maria B. s a brand that reaches to all sectors of both the traditional and urban female fashion demand through a unique combination of pricing and the diversity in the fashion lifestyles that she offers. She is the only designer to have all the needs of different segments of the woman’s demographic covered under one roof. (Randhawa) She has been adopted by the modern Pakistani women along with the hip crowd as the latest cult label in recent years. This country previously never witnessed a true international pret-a-po rter collection before Maria’s infamous â€Å"Paris Collection† in 2001. Her clothes are a reflection of her own style. Fashion Avenue Quarterly, 2003) The top student from the first batch of graduates from the Pakistan School of Fashion Design, Maria was selected in 1997 to represent Pakistan at the international competition in Belgium, Europe called ‘Les Etoiles de la mode’, an annual young designers award. She made a major international media impact, and was the first Pakistani fashion designer who created awareness of Pakistani Fashion on the world circuit, when she finished top 3 in the final rankings amongst 22 participating countries including global fashion giants like, France, Italy, Japan, and U. S. A. A media darling of the local press, Maria B. opened her first outlet in 1998 in DHA Commercial Block, Lahore at a time when her peers and seniors were still operating from their homes, or at rented houses. Today, Maria B is immensely successful and is the largest selling brand under a fashion designer’s label in Pakistan. (Randhawa) Her lines are so exquisite and Maria considers them her strength. With her financial strength and international presence, Maria B intends to bring a change in the local fashion industry. [pic] Introduction: Fashion in itself is a very abstract term yet it embraces our everyday lives. The term has many different definitions and interpretations. According to The American Heritage College Dictionary, fashion is: the prevailing style or custom, as in dress or behavior; something, such as a garment, that is in the current mode; the style characteristic of the social elite. (Forbes Inc. , 1997). Fashion is an extension of self, an expression of individuality, of art and modernism. It has no borders or divides. Its passion and it is the constant evolution of society (Ghafoor, 2002). Fashion is a social phenomenon common to many fields of human activity and thinking. To some, fashion is an art form. To others, it is life. For most people it is a method of utilizing clothing, accessories and hair. Fashion is a mode to express yourself, to serve as an extension of your personality, or even to disguise your true self (Nellis, 1999). Fashion is a term commonly used to describe a style of clothing worn by most of people of a country. A fashion usually remains popular for about 1-3 years and then is replaced by yet another fashion. Even though there are a lot of changes in fashion, most people do not easily except the changes. A clothing style may be introduced as a fashion, but its use becomes a custom after being handed down from generation to generation. A fashion that comes and goes is called a Fad. (Fashion Forever: What is Fashion? ) A lot has changed and evolved in the history of fashion since the 1900s. As the century dawned, fashion was an exclusive enterprise, the pursuit of wealth. The average person in society settled for garments that were usually stitched at home. With time, however, networks of neighborhood tailors began to evolve into a retail history and the boom was followed by boutique selling. The 1930s were influenced by socialism, communism and fascism and women’s fashion became more and more feminine in keeping with these conservative ideas. However, this period also saw the emergence of the culture of clubs and hence dresses became more body-hugging and colors went more deep and dark. The establishment of Indian and Pakistani cinema has proved to be the strongest influence on the fashion in the decade. Due to western influence, the use of angarkhas, choghas and jamas had diminished considerably by this time, although the ceremonial pugdi, safa and topi were widespread as ever. They had been replaced by the sherwani, which is still a standard item of formal dress for Indian and Pakistani men today. Even though women were accepting change, they continued to wear the peshwaz, kurta, ghaghra and odhni at religious and ceremonial festivities, which were even sometimes made of imported fabrics. The 1950s saw the dawn of art colleges and schools and due to the freedom struggle and the adoption of khadi by Gandhi, the dying and handloom industries got more business. The 1960s was one of the most shock-filled decades of the century, as it saw sweeping fashion and lifestyle changes. Tight kurtas and churidars competed with mini-skirts abroad and at the same time, designers began to understand the need for cheaper, ready-to-wear lines. The 1970s saw the export of traditional material with the result that export surplus was sold within the country itself and hence, international fashion came to the sub-continent. Synthetics became popular and the clothes even flashier. In the 1980s big money ruled. In Pakistan too, silhouettes became more masculine and the shalwar kameez was made with shoulder pads. The influence of cable TV became more prominent and the teenage market boomed with youngsters who were more fashion conscious. (Baig, 2004) Mid 1990s and the beginning of the 21st century was marked fashion designers that changed the way fashion was contemplated. Designers greatly influence what direction fashion will go. These designers design and define future fashion developments. They are the trend setters of change in a culture – through change in tastes and lifestyles of a community which is often characterized by changes in current trends and styles. And changes in fashion play one of the major roles in these transformations. The activities of these designers, collaboratively, form the fashion industry. The fashion industry of Pakistan is growing in volume with every passing day. The credit goes chiefly to the mainstream fashion people, who have been instrumental in this change. Nisar, 2004) The industry has witnessed quite a mature spurt in the last two decades evolved from a traditional darzi (tailor) culture into a mature and cutting-edge business (Imam, 2008). However the status of fashion designers in our country greatly owes to the fashion institutions, particularly the Pakistan School of Fashion Design (PSFD) – now called the Pakistan Institute of Fashion Design which was played its role in bringing out the potential and imparting training to young designers who today enjoy a reputed name in the retail market. Some of these recognized names include Maria B, Hasan Shehryar Yasin, Deepak Parwani and Maheen Khan (Qureshi, 2008). These are some of the few names which the fashion industry identifies with. Though the industry had been operating for quite a time, it actually got its institutional shape after the formation of the Pakistan Fashion Design Council. This council was an attempt by twenty five of the country’s top and established designers to create an infrastructure, a platform on which everyone could collaborate and represent their ideas and designs at the national and international level; a place where they could: ? Give structure to the expanding vital industry. ? To liaise with the government bodies on matters pertaining to excise duty, taxation systems, preferential tariffs for cargo etc. , and to work towards creating a fashion districts. ? To create an interface between the fashion industry and textile and crafts industry which are one of the most well-knit industries , which could revitalize them and in turn, benefit the designers greatly by incorporating ethnic methods of weaving, printing and ornamentation to produce up-market, contemporary creations of standardized quality and subsidized rates. To address the changing needs of the industry as it evolves and of creatively show-case the work of Pakistani designers and find a commercial representation for them both, domestically and globally. (About Us, 2004) Some of the attempts that the council made was the initiation of a Pakistan Fashion Week essential for business and trade linkages as well as for publicity purposes; studying the pres ent distribution/reselling network to see how designers could benefit from it; creating a trend forecast for domestic and export markets, and standardizing the pret-a-porter industry by having uniform sizing, accounting and labeling norms. About Us, 2004) However, the council’s main attempt to collaborate the efforts of fashion designers failed partly due to poor projection of there vision and partly due to the difference in the views of designers in the East and South – Lahore and Karachi, the main fashion hubs. This led to the creation of two distinct councils, the Pakistan Fashion Design Council (PDFC) in Lahore and Asian Institute of Fashion Design (AIFD) in Karachi. These two councils have carried out their separate activities despite unification efforts until lately. On December 1, 2007, a mall showcasing the creations of Pakistani fashion designers was inaugurated by the name of Boulevard in Lahore. It was for the first time in the city’s history that fashion designers from all over the country got to display their work under one roof (Rashed, 2007). Prominent designers displaying their work included Hassan Shehryar Yasin, Maria B, Nomi Ansari, Kamiar Rokni, Shafaq Habib, Karma, Shella Rehman of Unbeatables, Ammar Bilal, Asifa and Nabeel, Ahsan Nazeer, Sanya Qureshi, Sobia Nazir, Nickie Nina, Sana Shahid of Sublime and Naila Maqbool. It is hoped that such a platform will amalgamate the vital forces of our fashion industry making it the hub of Pakistani fashion houses as is envisaged (Farooq, 2007). An Industry Analysis By definition, industry analysis is business research that focuses on the potential of a firm. Basically, an industry analysis is conducted to addresses three important questions: 1. Is the industry accessible—in other words, is it a realistic place for a new venture to enter? 2. Does the industry contain markets that are ripe for innovation or are underserved? . Are there positions that will avoid some of the negative attributes of the industry as a whole? (Barringer & Ireland, 2006) A complete industry analysis of a firm will include its PEST-C analysis which will answer the first two questions, its Porter’s five forces analysis which will answer the latter question, followed by its External Forces Evaluation (EFE) matrix on the basis of the opportunities available and threats faced by the company of concern Maria B. PEST – C Evaluation In this industry evaluation, P stands for Political, E – Economic, S – Socio-cultural, T – Technological and C – Competitive forces that impact the activities and opportunities and threats affecting an industry. Political forces These include any change in government laws – tax laws, labor laws, patent laws, government regulation and deregulation etc, political stability, safety and environmental protection regulations, international trade regulations etc. (David, 2005) Changes in tax and labor laws, can directly affect an industry’s revenue and growth structures. A rise in the rates of these laws can increase business expenditures and may decrease revenues. Sometimes, with industries with low profit margins, such change can become a barrier to profitability. Political instability in the country in terms of political parties or weakness in governmental policy can prove chaotic for the industry. Under such condition, this business, like any other business can be severely affected and eventually shut down. For e. g. , national political parties like MQM and MMA reserve a very unfavorable attitude towards the fashion industry. In case of power, any of these parties can adversely affect or even lead to a ban on this industry which could prove distressful. Similarly strict trade regulations and excise policies can affect international exports and hence, increase the overall trade deficit. Environmental degradation posses a great threat to survival of any industry. Hence, being a socially and environmentally responsible corporation is an essential for projecting a positive public image. Economic Forces Economic forces that impact an industry’s activities include interest rates, income levels and earning patterns, price wars, oil, currency and labor markets, inflation, unemployment, availability of credit, fiscal policies, consumption and spending propensity – living standards, international trade and cooperation policies etc. (David, 2005) Nowadays, there is a growing trend toward two-income households. Individuals place an increased premium on time; immediate availability and improved customer service (David, 2005). Customers are willing to pay more if they can obtain it with ease. There is an increase in the average standard of living in the country with a decrease in poverty level of 10. 6% during the past four years (Economic Survey of Pakistan 2007-2008). This can serve as an opportunity for the fashion industry to enhance profit margins through ‘add-ons’ provided that the income levels remain stable. Changes in interest rates often occur due to changes in the exchange and trade market. A deficit in trade can account for rise in interest rates. Similarly and rise in the international price of oil (as witnessed in recent years) can drastically impact the value of currency. This leads to changes in fiscal policy like an increase in the interest rate translated by inflation. High inflation can slow down business activities and at time generate no profit at all. The inflation rate the year 2007-08 was calculated to be 10. 3% as compared to the 7. 9% last year which shows an increased inflation that disadvantaged business performance country-wide (Economic Survey of Pakistan 2007-2008). However, in an economically active country with lower trade barriers, resultant price wars can increase competition and even and industry’s profit margins provided the industry is dominant as well as has international presence. Similarly, increased unemployment can provide an industry opportunity to project a positive image and provide training and employment to the depressed, hence positively contributing to the economy. Socio-Cultural Forces Factors in the socio-cultural front that can influence an industry’s operations include demographic trends, cultural changes, environmental patterns, population growth, business attitude, change in tastes and lifestyles, education, ethical concerns, buying habits, religion, family, values and attitudes etc. Pakistan, with a population growth rate of 1. % is the world’s 6th most populous country with an estimated total population of 160. 9 million. (Economic Survey of Pakistan 2007-2008) Out of this 74% of the total population of Pakistan lies in age group 15 – 34. However, 70% of the population resides in urban areas. (Federal Bureau of Statitics, 2005). With this came in increase in the literacy rate of the country which increased to 55% in the l ast four years (Economic Survey of Pakistan 2007-2008). Business activities have also flourished quite in the recent years, partly owing to foreign competitors entering the market. This has led to an increased change in the lifestyles and mindsets of people. There is an increased trend towards nuclear and dual-career families which serves as great opportunity for the industry as the buying power of the consumer is enhanced. Moreover, with change in lifestyles comes change in tastes. Nowadays people prefer using customized products and this is an opportunity for the fashion industry to pursue its target marketing strategy. Fashion industry is an industry for the youngsters. With such a large and lucrative target market, this industry can earn huge profits, provided it sufficiently focuses of their needs and interests. In view of this, fashion industry collaborated with the PBA (Pakistan Broadcasters Association) to launch a fashion channel worldwide last year by the name of ETNL (Style Dunia & Youth) which is being launched soon in the country (Pakistan Broadcasters Association (PBA), 2007). Religion and ethical preferences too, play a major role in shaping strategies and marketing products, especially if one moves from culture to culture. Fashion industry in Pakistan, therefore has to take into consideration the limitations that ethics, culture and religions imply on clothing nationally as well as internationally. Technological Forces Though fashion industry is not technologically driven, but is has now become a necessity; especially if an industry or company wants to maintain competitive edge or tap into international arena. The focus of today’s industries is on mass customization as well as mass production which are not possible to achieve if it is inept in technology. Several factors impact an industry’s technological consideration. These are, Government spending in research, changes in Information Technology, Internet and Mobile Technology, energy use and costs, and international transaction costs etc. Technology is one of the powerful sources of marketing in today’s era. The world is now a global village. Increase in technology, especially the internet helps cover a large number of consumers thus, helping a business reach a large target market in a short time span. According to estimates of 2006, the global internet usage accounts for 21. 9% of the total world population with Pakistan alone, having a total usage of 7. 2%. (UNDESA, 2006) This is a very attractive opportunity for the fashion industry in case fashion designers start e-selling. International marketing (e-commerce) is one of the major contributors to world economy. It not only helps in the development of the business but also helps in the development of the country’s economy. However, any business before tapping into international arena has to go through various study and research to adopt proper marketing mix, physical evidence and performance before launching itself worldwide. It also needs to be aware of all the rules and regulations (cyber) of its host country. Once capitalized upon, e-commerce can produce great profits. Competitive Forces This force is recently introduced in the PEST analysis. Keeping in view the growing competition world wide, analysis of one’s competitive forces has become an essential to success. Gathering information about competitors’ strategies and progress has become very important. Due to diminishing trade barriers, WTO, EEC, OPEC and collaboration with other world communities, national border are no more existent. Now every country is a part of a bloc. This in turn has fiercely increased competition as a result of lower labor costs, enhanced technology and internet facilities. Now production is done in one country, assembly in other, packaging and shipment in another due to advancements in transportation and e-commerce. Companies strive to achieve competitive edge as low-cost producers. In such a rapidly changing environment with international competitors invading every country, keeping pace with, in fact going ahead of ones competitors is the only key to progress. However, it is essential to have a track of strategies and policies of an industry’s competitors but ethical concerns in gathering intelligence data should not be neglected. Competitors of Maria B. The company that study under fashion industry is Maria B – the largest fashion house of Pakistan. The company when formed was the first to start business with a retail outlet while all her competitors were doing business from home. Today, after ten years in business, Maria B faces competition from direct as well as indirect sources. A list of her direct competitors include designers like Hasan Shehryar Yasin, Rizwan Beyg, Generationz, Deepak Perwani, Nomi Shahid, Nikki and Nina, Sehyr Saigol, Maheen Khan, Sonya Batla, Hajra Hayat, Nayna, Monica Piracha. With them there are indirect competitors too that pose a threat to Maria B. They include local textile shops, local tailors, and famous brands like Gul Ahmed and Bareeze that are dealers in un-stitched garments. PORTER’S Five (Competitive) Forces Evaluation Below a diagrammatic summary of the five important competitive forces is given: [pic] Rivalry among competing firms Fashion industry in Pakistan is yet in its progressing stages. It has moved ahead from being embryonic but hasn’t spurted. However, threat of competitors is still an important factor that govern the operations of this industry; particularly the rivalry between fashion designers of Karachi and Lahore in terms of ideals have prompted every company in the industry to strive to develop a competitive edge and nationally expand as large as possible. This is mainly because the few designers that exist at present are equal in size and capability. The internet is still not used as a primary source of doing business but there is a growing tendency among designers, particularly the established ones to use internet for trade purposes nationally and internationally. Inflation and changes in customers’ perceptions and attitudes is also a driving force toward increased competitive rivalry. In the beginning, fashion designers pursued all their efforts towards bridal dresses. But as customers are becoming more and more aware and demand of branded apparel is increasing, these designers are finding new areas of development by focusing more on casual outfits. However, this industry is still not mature enough in its life cycle that price cutting could be a common phenomenon. There is not much time before these few designers are faced with increased competition particularly as standards of living become high and international designers set up their business in the country. Competitive rivalry in this case is comparatively high. Threat of new entrants Threat of new entrants in Pakistani fashion industry is high. This is because the barrier to enter this market is quite low because no previous experience is required to start doing business in apparel, customers have low brand preference and loyalty, too is low. If a customer gets a better option else where and that too, for a lower price, s/he can switch to that option. Regulatory policies in the country are not very strong and hence achieving patents for a product or service is relatively easy. Moreover, the government itself promotes the setting up of new businesses. In regards to technological requirement, fashion industry does not require any cutting-edge technology to keep at pace. Therefore, if one needs to get into fashion designing, it is quite easy. Potential development of substitute products In an apparel industry, there is no substitute for clothes, but there may be a substitute on the procedure of processing them. Fashion industry, too faces threat of substitute methods of processing. People, especially in a growing economy can easily get ideas from designer outfits and get them stitched through a neighborhood tailor instead of buying it from that very designer due to its high price. On the other hand, local tailors can give you the same design, though maybe not the same quality at a comparatively low price. Hence, the threat of substitute is high. Bargaining power of suppliers Bargaining power of suppliers is quite low in Pakistani fashion industry. The major raw materials required in this case are textiles and embroidery materials. These two industries – textiles and embroidery are one of the richest and profit producing industries of the country. Therefore a designer has the power and the choice to switch among suppliers and even negotiate prices as there are a large number of suppliers available to provide the same or even better raw materials at negotiable prices. Bargaining power of customers Bargaining power of customers is low in this industry. This is because there few choices to select from. Designers have there set prices that are quite high and fixed – they cannot be negotiated upon. If talked about competing brands, a buyer cannot easily switch to other options. Products are homogenous and the prices may either be uniform or else a buyer has to trade-off with quality of the product. External Analysis – SW(OT) OPPORTUNITIES |THREATS | |Expand into Emerging Economies |Competitors | |Enter New Product Markets |New entrants | |Acquire More Companies |Substitutes | |Ecommerce Sales |Economic Situation | |Expand Standalone Stores |Political situation | | |International Economies and trade restrictions | | |Brand Cannibalization | External Factor Evaluation (EFE) Matrix This matrix evaluates a company’s external environment – the opportunities and threats that are faced by an industry’s companies in the external environment. Our company of concern is Maria B. A summary of all the factors that are faced by this company and its ability to capitalize on them or tackle threats is given: | |External Factor Evaluation Matrix | | | | | |Opportunities |Weight |Rating |Weighted Score | |1 |Expand into Emerging Economies |0. 14 |3 |0. 42 | |2 |Enter New Product Markets |0. 12 |4 |0. 48 | |3 |Acquire More Companies |0. 04 |4 |0. 16 | |4 |Ecommerce Sales |0. 06 |4 |0. 24 | |5 |Expand Standalone Stores |0. 03 |3 |0. 9 | | |Threats | | | | |1 |Competitors |0. 12 |3 |0. 36 | |2 |New entrants |0. 1 |4 |0. 4 | |3 |Substitutes |0. 12 |4 |0. 48 | |4 |Economic Situation |0. 07 |2 |0. 14 | |5 |Political situation |0. 5 |2 |0. 10 | |6 |International Economies and trade restrictions |0. 06 |3 |0. 18 | |7 |Brand Cannibalization |0. 09 |2 |0. 18 | | | |1 | |3. 23 | Fashion industry provides a promising future of growth and development in Pakistan. Once established, it has the potential to contribute positively to the national economy. Company Introduction Maria B’s entrance into fashion world can be summed up in adage â€Å"she came, she saw, she conquered†. (Ghafoor, Face to face with Maria B. , 2002) Maria B. was the first fashion house in Pakistan. She launched first outlet in Lahore in 1998. Since then, Maria B. has grown leaps and bounds. With her vision always clear – to make Maria B. Pakistan’s first international brand name in fashion, today, she is the first and only women wear brand retailed across countries. She is the only local designer with a franchise outlet in London. The Label is also internationally stocked in Manchester, Birmingham, New Delhi, Dhabi, Orlando, Washington, New York, New Jersey, Dallas and New Delhi. By the end of 2006, she had retail reach to 5 outlets nationwide over Lahore, Karachi, Islamabad, and Faisalabad. (Randhawa) In 2006, Maria B. also launched her first range of accessories of shoes and handbags. (Randhawa) Maria learned that there was tremendous scope for Pakistani fabrics in the international market and was determined to make her mark globally. As she said, â€Å"I’m a staunch patriot – I want to take Pakistan’s name in the international fashion scene. I want to show people around the world what a great heritage we have. That really is the core philosophy of my business. We want to go into the international market and prove ourselves as a Pakistani brand name. (Maria B. – Fashion Designer) For her, fashion is simply an extension of self, an expression of individuality, of art and modernism. It has no borders or divides. Its passion and it is a constant evolution of society. It is transient and global. (Ghafoor, Face to face with Maria B. , 2002) She changed the previous ‘begum darzun’ (societal tailoring) culture and brought new horizons in the fashion, rather the apparel industry as a whole with her pret-a-porter collection of exquisite and elegant dresses that defined femininity with style. She believes that, â€Å"Fashion today is not dictated to woman. The modern confident woman chooses what she wears†. Ghafoor, Face to face with Maria B. , 2002) As a designer, she always felt her responsibility to translate and enhance each person’s natural style into fashion statements according to current trends. She believes in talent and dedication – if a person is not talented enough or can’t make fashion his or her life, s/he should be in another field. She strongly suggests, â€Å"Don’t be in fashion because you want to be fashionable or make money– be in it because you feel that you can contribute to it– otherwise you’ll be just one of the thousands w ho have kaarigars (tailors) at home and think that they are designers!! † (Ghafoor, Face to face with Maria B. 2002) Recognized by BBC, in 2002, over a three month running program for Asian woman as the preferred label for modern professional working woman of Pakistan, Maria B has been hailed as the pioneer in redefining woman’s fashion modernity in Pakistan. (Randhawa) No doubt Maria B has brought a revolution is the local apparel industry. Today, after ten years in business, it is the largest fashion house in the local industry. Her company has risen and surpassed the semblance of mediocrity. A trend setter as Maria B. has always been, she is even more passionate and daring to set trends for the future and believes that she can go further than others in bringing Pakistan on the world map of fashion. Randhawa) â€Å"You have to aim high – and I do want to get to New York, Milan and Paris one day. † – Maria B. (Maria B. – Fashion Designer) In ternal Analysis of Maria B. : Zurain Imam, a renowned fashion critic said that Maria B. has become ‘a veritable couture quality household brand’. (Imam, The A to Z of Fashion, 2006) Maria B. has become a hot name with her exciting shoots and the rapid expansion of her outlets. Her success has single handedly shown that fashion can be successfully open in Pakistan as business. (Dawood, 2003) No doubt, Maria B. has put forward a splendid example a of successful business venture by expanding worldwide in just a short span of time. All of this requires planning and organizing strategically. Maria B. believe that it’s the company’s strategic vision of ‘promoting Maria B. as a Pakistani brand recognized world over’ has played a very important role in its success. She believes that with good management, marketing, leadership, research, cost and operative measures, a company can really go ahead. Management: Management at Maria B. like any other successful company is all about good planning, organizing, motivating, leading and controlling. The company has a strong management philosophy that believes is integrity, talent and dedication – if you can’t make fashion your life, choose another field. (Ghafoor, 2002) Planning: Maria B. irmly believes that good and forecasted planning is essential for achieving a desired goal. Planning is all about preparing for change by bridging the gap between the present and the future. It enables a company to gather the necessary resources and c arry out tasks in the most efficient manner. (David, 2005)At Maria B. planning is thoroughly done before the beginning of any new activity or the launch of a new product. The company also relies on competitive intelligence in order to make comparative decisions. With no fear on local competition from brands like Hasan Shehryar, Nomi Ansari, Ammar Bilal, Deepak Parwani, Rizwan Beyg and Nilofer Shahid etc. the company formulates strategies in view of the international market and international competitors like Armani, Prada, and Louis Vuitton etc. Organizing: Organizing is really important for defining task and authority and effectively and efficiently allocating resources for any company. (David, 2005) At Maria B. defining line of authority is important. The company started off with a functional structure with Maria being the CEO as well as the controller all designing and marketing activities. With the company’s expansion across the borders, Maria B. now is developing towards a more divisional structure with line of command spreading internationally. Since the Maria B. Accessory launch in 2006, and the company’s aggressive intensive strategies through market and product development, it won’t be long till Maria B. starts working at each production line separately at the organizational level. At present, the company employs more than 50 management staff in its outlets across Pakistan alone. (Randhawa) Allocation of resources is also another important decision for the company. The company is financed completely by the CEO –Maria. Moreover, the use of skilled labor for the job also is carefully selected to give every single piece of work ‘the designer finish’. Motivating and Staffing: Motivation means influencing people to accomplish specific objectives. Staffing, on the other hand is the essence of human resource management. It includes activities of recruiting, interviewing, testing, selecting, orienting, training, developing, evaluating as well as rewarding. (David, 2005) The Maria B. factory currently employs over 200 workers, all recruited after specific procedures that test there credibility to the profession. Because Maria B. wants to give the best in terms of quality and versatility, hence every worker needs to know how to give the perfect finishing to a Maria B. dress. Each employee is required to make a sample of embroidery or hemming etc that s/he specializes in. In case of training, the company’s HR manager is responsible for developing and grooming the workers for perfection. The company believes in Equal Employment Opportunity and every individual be it a man or a woman is selected merely on the basis of his or her talent/skill. (Shaukat, 2009) In terms of wage and safety issues, Maria B. conforms to the Labor Laws, be it in Pakistan or across the borders. In terms of motivations, the company always grants a pay rise every month on the basis of performance. Moreover, the in lieu of employee safety, every process in the factory is automated. Training is given to operate the machinery. (Shaukat, 2009) The production rate of the factory is the highest among the local designers for formal couture, pret-a-porter lawn on a monthly basis. (Randhawa) Controlling: Controlling at Maria B. is done through monetary incentives given based on performance. Employees are first trained and the standards of performance are set. Individuals meeting these standards are considered for the incentives. The company believes in its employees as an asset and retaining them is essential if it wishes to avoid further training and hiring costs. It believes employees become experienced with time and this increases their loyalty to the company which is very essential particularly in present times of economic slump. Marketing: Marketing can be described as the process of defining, anticipating, creating and fulfilling customers’ needs and wants for products and/or services. This is exactly what Maria B. invested upon. The company created the demand of branded designer clothes through awareness. Maria B. made people shift from the traditional tailor-culture to demand more. Its heavy marketing approach and use of appropriate mix of marketing made it develop a brand name, an identity which no other designer had before. Customer Analysis: It involves the examination and evaluation of customers’ needs and wants. At the time of the company’s start up, Maria B. researched on the need of fashion industry, found a considerable target market for her product and then launched the first Pakistani fashion house. She changed the concept of fashion from the dress of the working women to everyday wear. Today her clientele are spread across the globe and includes teenagers to 70 year-olds. Maria B. takes care of the need of each and every age group. Her contrast and selection of colors defines that each and every line is tailored to specific clientele’s needs – wild and bold prints for the youngsters and neutral and serene ones for adult target market. Her customization to the needs of the customer is an important variable of success of Maria B. (Ghafoor, Face to face with Maria B. , 2002) Planning and Selling Products/ Services: Maria B. has the designer need of ready-to-wear dress line for each age-group and every occasion catered effectively to. She take care of everyone’s needs and desires and relies on adequate promotion activities to retain previous as well as capture more market. Maria’s pret line of clothing includes formals, semi-formals, party line, Mafia line, bridal line and her new MGirl line. Together with this, she also started her own accessory and jewels line in 2006. Mafia line: this is a casual, ready to wear line. Mafia is made mostly in pure cottons, khaddars, lawn, linens and embroidered cottons. This line is primarily day wear which is affordable and trendy. Semi formals: This range is primarily evening wear- slightly more formal, it plays with exquisite embroideries in resham and crystals on chiffons, silks and georgettes. Formals: Perfect for wedding needs, this line consists of silks, jamahwars and heavy hand embroideries in crystals and salma dapka (traditional eastern embroideries) Maria. B Brides: A purely couture line which is available only at the bridal studio in Lahore. It is a made to order line for brides and their families. Mgirl: this is the new hip and trendy line by Maria B. offering everything from clothes to bags and shoes to accessories. It guarantees satisfaction to the woman who wants it all. It caters to the fun and fearless and is certainly not for the fainthearted. Maria. b Jewels: Introducing semi-precious jewelry for weddings, this jewelry in platinum coated with semi-precious stones such as topaz, tourmaline, amethysts and zircons. Official Facebook group of Maria B. ) According to a recent survey, Maria B. lawns have been the largest sellers in terms of number of units in all of Pakistan. (Mansoor, 2008) All this is the result of Maria’s daunting effort to promote her brand at every level possible. Being a media darling, she relied heavily on print media and PR activities for the promotion of her brand. Some the names in print media are Dawn News, Visage magazine, Instep magazine, Fashion weekly, SHE and others. For PR, Purple Arts have been Maria B. ’s official consultants. (Shaukat, 2009) Besides these, fashion shows, ramp events have also been another very important source of promotion. But due to governmental issues, these events are snubbed and not promoted to the adequate promotional level. However, the recent Lux Style Award’s Red Carpet and Ramp Events (Imam, 2005) and 2007 National Day Ramp Show held in Washington D. C. (Embassy of Pakistan, 2007) served as a very important awareness and marketing tool, provided they continue. Besides, Maria B. also holds her own fashion shows at the international level. Besides being business-minded, Maria B. is also a socially responsible person. She holds ramp events at the national as well as international level to help the deprived class of the society through foundations like Kashf. In 2001, on the launch of her Paris Collection, Maria B. held a fashion show in Marriot, Karachi for raising money for Afghan refugees in the country. (Malik, 2001) In a nutshell, Maria B. ’s success is a fusion of excellent dress designing as well as sophisticated promotion done nationally as well as internationally. Pricing and Distribution: This is an important decision in marketing. As for Maria B. this decision of pricing and distribution is a task well done. Maria B. always wanted to make her name in the international market. Since the launch of her fashion house, she has been constantly working to promote her product internationally. At the national level, Maria B. as expanded to almost all the major cities of the country – Lahore, Karachi, Islamabad and Faisalabad. She has plans of opening her outlet in every city of the country. But her main goal is to export her product around the world. She wants to make Maria B. the ‘brand of Pakistan’. And she has been very successful in doing that. Within ten years of business, Maria B. has outlets in U. K. , U. S. A. , India, and Dubai. But export being her strategic vision, Maria B. wants to expand to other cities of the world. â€Å"I want to send haute-couture items such as evening wear, bridal wear etc. to UK/Europe, and then eventually to the US/Canada, Singapore and Australia. She remains undaunted by the global competition and says â€Å"you have to aim high – and I do want to get to New York, Milan and Paris one day. † (Maria B. – Fashion Designer) As for pricing, it is well adjusted to the need of the local market. Maria B. has unit- priced her product very intelligently – neither very high nor very low – or ‘somehow affordable’ as on critic says. (Ghafoor, 2002) She believes her lines are of the top-most quality and hence, relies on skimming strategy for pricing. Regarding the international market, prices are decided in accordan ce with the trade regulations of the country, by adding a mark-up to it. (Shaukat, 2009) Market Research and Opportunity Analysis: Maria B. elieves in fashion as a constant transient change. New tastes keep on developing which gives rise to new demands in the product market. Research hence, is always critical to success. Maria B. no doubt has always successfully catered to the needs to its market through research. A recent example is her launching of the new M Girl line with its bold, wild and vibrant colors, keeping in mind the aspirations of the young women of today. (Official Facebook group of Maria B. ) Finance/Accounting Functions: With increasing divisional structure of the company, the need of a full-fledged independently operating financial department was necessary. Maria B. has fully handled that. The company has an independent accountant who is responsible for all the financial matters of the company. Thought most of the information was confidential, however, Maria B. ’s net profit margin was found out to be 6. 77% after taxes and interest. And the company’s gross profit margin was found out to be 98. 25% which is quite operative especially in today’s era of economic slowdown. With the pursuance of her already implemented strategies and adequate control, Maria B. , no doubt, can become one of the most successful brands of Pakistan. Research and Development: Research and Development (R & D) has become a necessity in today’s constantly changing era. Unfortunately, at Maria B. no specific R & D department exists despite its expansion. All research decisions are made during periodic meetings or by the CEO. However, in lieu of arising need and global expansion, Maria B. is making decisions on having an R & D department. Production and Operations: Maria B. works on all types of clothing, from cotton, linen, silk, hand woven khaddar and organdy garments. She prefers working on colors that are bold and vibrant. Colors and material that are bland are not her preference. The cloth is always acquired from the textile hub, Faisalabad. In case if the desired cloth or quality is not available, it is also imported. The production process at the Maria B. factory is highly mechanized and up-to-date. She does not fear local competition because her processes are highly automated and recent. 200 employees in the factory work on monitoring production and focusing on embroidery. Though no special MIS software is in place, the company plans to have one installed soon as market size and demand increases. (Shaukat, 2009)Moreover, all the activities in the company’s value-chain is covered by the cost of sale of goods. (SW) – INTERNAL ANALYSIS Below are a list of all the strengths and weaknesses that are faced by the company. The strengths are of an advantage to the company while the weaknesses pose threat and need to be minimized and converted in order to prove beneficial for the company. STRENTHS |WEAKNESSES | |Wide product line |No mission statement | |Strong Brand recognition |No written vision statement | |Almost all brands have a niche focus |Brand cannibalization | |Decentralized management |Lack of focus | |Diverse brand portfolio |Lack of Brand Idea Sharing | Int ernal Factor Evaluation Matrix (IFE): The IFE matrix evaluates the strengths and weaknesses of the company in relation to the ability of its management to capitalize on the strengths and minimize the weaknesses. Company: Maria B. : |STRENGTHS | | | | |Weight |Rating |Weighted Score | |Wide product line |0. 21 |4 |0. 84 | |Strong Brand recognition |0. 15 |4 |0. 6 | |Almost all brands have a niche focus |0. 08 |3 |0. 24 | |Decentralized management |0. 06 |3 |0. 18 | |Diverse brand portfolio |0. 03 |3 |0. 9 | |WEAKNESSES | | | | |No mission statement |0. 18 |4 |0. 72 | |No written vision statement |0. 16 |4 |0. 64 | |Weak advertisement efforts |0. 05 |3 |0. 15 | |Lack of brand idea sharing |0. 04 |2 |0. 08 | |TOTAL |1 | |3. 54 | Competitive Portfolio Matrix (CPM): The CPM identifies a firm’s major competitors and its particular strengths and weaknesses in relation to a sample firm’s strategic position. Company: Maria B. Local Competitors: Hasan Shehryar Yasin (HSY), Nomi Ansari, Rizwan Beyg, Nilofer Shafid, Deepak Parwani. |KEY SUCCESS FACTORS |W |Rizwan Beyg | |OPPORTUNTITIES |1: Expand to the northern areas of the country |1: Increase print advertisement and e-marketing | |1: Expand into emerging economies |S4,O2, O5 |to attract markets like India, China as well as | |2: Enter new product markets |2: Increase online selling to Italy and France |the local market. W4, 04, 01 | |3: Acquire more companies |S3, S4, 04 | | |4: E-commerce sales | | | |5: Expand stand-alone stores | | | |THREATS |1: Target niche markets in the country that is |1: Work on making a written vision and mission | |1: Competitors |not being targeted by competitors. S4, S1, T1 |statement and project it to make the MARIA B. | |2: New entrants |2: Advertise on brand quality and corporate |identity. W1, W2, T1, T6 | |3: Economic recession |social responsibility to increase customer |2: Increase collaboration, cohesion and idea | |4: Political situation |loyalty. S2, S4, T6, T1, T2 |sharing between local designers at the platform | |5: International economies and trade | |of the BOULEVARD. W3, W4, T3 | |restrictions | | | |6: Brand cannibalization | | | Conclusion: In a nutshell, Maria B. is conquering the land in the name of Pakistani fashion with her unique and bold styles. And one day, she surely plans to become Pakistan’s top international fashion label. Bibliography: David, F. R. (2005). Strategic Management – concepts and cases (11 ed. ). South Carolina: Prentice Hall. Dawood, T. U. (2003, May 1). The future of fashion. Retrieved January 11, 2009, from Dawn – The review: http://www. dawn. com/weekly/review/archive/030501/review1. htm Embassy of Pakistan. (2007, August 26). 60th Independence Anniversary of Pakistan. 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Retrieved December 30, 2008, from Internet World Stats – usage and population statistics: http://www. internetworldstats. com/asia/pk. htm ———————– Salwa Shaukat – L1S06BBAM0001 Javeria Maqbool– L1S06BBAM0032 Sana Azhar – L1S06BBAM2024 Kanwal Tariq – L1S06BBAM2037 Submitted To: Professor Nasir Riaz |external and internal analysis |Industry : Fashion Industry | | | Company: Maria B. |