Apparel Brands: E-commerce Essay For Australian Clothing Manufacturing.

Apparel Brands, founded in 1901, is an Australian based manufacturer and distributor of generic clothing and footwear. The company takes orders from retailers and supplies retailers with clothing products that have been manufactured to retailers’ specifications. These clothing products are then sold to consumers under the retailers’ various brands.

Recently, Apparel Brands has found its market share in decline due to a strong Australian dollar and increased overseas competition. In addition, labour costs are eating into profit margins. Trends in the Australian textile industry suggest that the company, although it is in a strong financial position now, will struggle to make a profit within two years.

To ensure the continued existence of Apparel Brands, the company has embarked on a bold new strategic direction:

• develop own brands and product range and sell direct to consumers
• leverage e-commerce opportunities to reduce distribution costs and increase profit margins.

Company vision: In the next five years, Apparel Brands will establish a range of innovative and exciting online clothing brands and help secure a future for Australian clothing manufacturing.

Your team has been charged with the task of identifying an e-commerce opportunity for Apparel Brands and developing a proposal to put to the board of directors. For example, your team could decide to propose setting up an online business in which customers design their own custom t-shirts.

Your budget for setting up the e-commerce venture is $30,000.

For your proposed e-commerce venture, your team will need to determine:

• Value proposition: What will you offer consumers? What products? What price? What quality? How will the products benefit your customers?
• Who your target market is: What are the characteristics of the people who will buy your products? What do they need or desire?
• How you will gather necessary information for setting up the venture?
• Who you will consult or network with to benefit from others’ expertise?
• What steps you will need to take to set up the e-commerce venture? This will range from website design, to ensuring a system for payment, to establishing an online presence through web search engines, etc.
• How you will determine the benefit to Apparel Brands: What is the benefit? Reduced costs? Increased productivity?
• How you will determine cost?

Once you have determined the above requirements, your team will need to plan specific activities to carry out in order to obtain the required information for your proposal. Assign tasks to each team member. Consult with each member of the team to develop individual performance plans.

In response to a simulated business scenario, you will carry out the assigned tasks, as detailed in the performance plan, and participate in a team meeting to support your team in achieving team goals.

Challenges facing Apparel Brands

E-commerce is the process of making sales or purchases though the internet. It is also known as online selling or purchasing or e-business. It is currently one of the most common method of selling business products and offers best opportunities for the customers to purchase products and services easily (Zucchella and Hagen, 2012). It becomes one of the options that a business with low performance and with uncertain future productivity and success to undertake to secure its future and performance (Sanders et al, 2012). In the case study, Apparel Pty Limited has already realized that its future will be faced by serious challenges like lack of market and customers. Apparel Limited is a wholesale business whose operations revolve around purchasing of generic clothes and foot ware and selling them to retailers who then sell them directly to the customers. This means that Apparels customers are basically the retail trading companies. Being a wholesale business enterprise, Apparel designs, manufactures and distributes its products. However, the company has determined or rather predicted that its future is not bright because of the increasing in competition levels from other companies that sell the same products it sells (generic clothes and foot ware). The company’s profits are being taken by the business’s daily expenses especially the labor costs. In such a business, labor costs relate directly with employee salaries which include payments to the designers, manufacturers, drivers, managers, security officers to name a few. Besides having a strong financial status, the company has realized with certainty that in the next two years, it will be struggling to make sales and compete with its rivals in the industry.

Therefore, Apparel decided to come up with the idea of venturing in the online business industry. Just as mentioned earlier, it is currently one of the best and most effective business industries in the world today. This is because with the advancement in technology, the better it becomes easy and efficient for both customers and business enterprises. Apparel is thinking of starting its own product brand and line that it will be sold to the customers directly without going through the retailers. The business hopes to focus on a brand that will help it concur the market competition, increase its sales volumes and increase its profit levels. The company also hopes to secure its position in the Australian Clothing/Textile industry as well as secure the country’s clothing industry in the future. In that case, it will certainly use its new product brand to secure both and achieve its objective of beating its competitors, increasing its volume sales and profit margins in the future. For a business to continue to be ongoing and growing, it must be ready to develop its product brand by either developing its market venture or product itself. In this case, Apparel is focusing on developing and differentiating its products by expanding its product brand and product line. When Apparel decides to venture in the e-commerce business, it will have a wider market share and segment and will be able to reach more customers than its current customer numbers (Baršauskas et al, 2008). Therefore, the environment surrounding Apparel business involves close rival competitions but still a growing market. In that case, the business will be open at all times which increases its access and product availability as well (Ellis-Chadwick, 2008)

Embarking on a new strategic direction

Therefore, since the business has decided to pursue a different idea, which is to start an e-commerce business by producing its own product brand and product range to sell directly to consumers which means that it will act as a retailer or direct customer seller (Doherty and Ellis-Chadwick, 2010). Therefore, the business can focus on the business of designing its own household materials or items like beddings, linens, comforters, curtains, pillows, rugs and mats to name a few and selling them online directly to the customers. This will change Apparel’s consumer demography from retailers to focus specifically on selling directlyfinal consumers. This online business venture (designing and manufacturing its own household items and beddings) is very closely related to the business that Apparel is currently operating with (manufacturing and distributing generic clothes and foot ware) but will focus on a different direction which will be on an individual’s/customer’s housedecoration. The company can focus on this because they are frequently needed products, by every individual. These products will be designed by the customers with help from Apparel designers which means that their quality will certainly be high. By focusing on this specific products, the business will also be able to receive specifications and comments from the customers which will help them manufacture the exact type and quality of product that the customers desire. However, the products’ prices will be determined by comparing the prices of such products from other businesses that operate through e-commerce. Additionally, the prices will also be determined by the costs of manufacturing the products (Kropp et al, 2008).

A target market is simply a specific market or customers to which a business aims at selling its products or services to. In that case, the new Apparel product brand will target the middle class customers especially the ones with a family which means that their prices will certainly be fair but reasonable and realistic (Benwell et al, 2008). The reason to target mostly the customers with families is to aim at increases orders or volume sales and high frequency for ordering. The likely wood of customers with families to order these products more than those without are very high. Also, one other main aspect of the intended customers is that it will target customers that love house decorations and will be willing to change their house appearance in regular intervals, maybe 6months to one year period. Also, these customers have the desire and love for colorful household items because the items will be made of various patterns and colors. This will relate to those customers that have young kids who require colorful, attractive and appealing rooms. Research has shown that in most cases, middle class earning individuals have always considered quality of a product over its price (Yuan et al, 2011). Therefore, this is the best target market for Apparel’s new product brand. Also, it will be able to focus on just these kind of customers.

E-commerce venture proposal

For a business to succeed in any business venture, it must conduct thorough research on the product market, product brand and product line, competitors in the market, costs related with the business venture, profit estimations, skills required among other things (Frishammar and Andersson, 2009).The information about Apparel’s business venture will be gathered from potential customers and also from the retailers. Apparel employees will be given the responsibility of consulting with the current retail customers and enquire information on possible buyers of the product, types and designs of household items desiredand product market itself. These information will be used to determine the possibility of the product succeeding in the market (MacGregor et al, 2008). However, the management team should be ready to use the information in an e-commerce scenario.

Additionally, the IT management team will be will be given the responsibility to research and enquire from other IT specialists about the requirements of setting up such an online venture.Also, they will have to use other business websites to learn and identify certain requirements that are needed for the site to be functional. These research will include issues on costs of designing and programming the websites, maintenance costs, type of technology required, required knowledge, skills and expertise, functionality of the website among other things. All of these information will be aimed at creating and implementing the most attractive site for customers to shop and view products as well as for the business to post its products (Smith et al, 2012). The IT department team will be tasked with designing and programming the business website. The team will have to use the modern technology to create the site. This means that it should be ready to creates even applications for the products that can be used in mobile phones to access the product information. The It team will also be responsible for preparing an effective payment system that can be used by any customer in any part of the country, e.g. payment through electronic means, or credit card. By creating a product and company website, the target customers will be able to access the company’s and products’ information from the internet which is currently the easiest way for business to advertise, market and sell their products or services nowadays (Kassim and Ismail, 2008). In addition to that, the It team will be ready to create pages for the company’s product in the social media networking sites, like Facebook, Instagram, Twitter, Pinterest, You Tube among others. The team will avail all possible information on the new product including its price, benefits, quality standards, material quality and type and advantages over its substitutes. Additionally, the website will give an opportunity to the customers to comment and provide their own product specification to be designed and manufactured for them.These sites will help the business market and introduce the public to its new product brand effectively.

Determining requirements for the proposed venture

Furthermore, the business’s designers will be tasked with the duty to research, brainstorm and create new and unique designs that can and will be used for the products. Every business should ensure that its employees are skilled, experienced and knowledgeable in the filed they work in (Klotz et al, 2014 and Whatley, 2009). Therefore, in the case of Apparel Pty Ltd, the cloth designers certainly have experience, knowledge and skills on designing therefore, they will be able to come up with creative designs for the new business venture, so will the IT employees. However, these designers will have to learn some techniques and designs from more experienced experts, especially those that design household items. Technically, there is a difference between designing clothes and designing household items like comforters, sheets, curtains, table cloths, rugs etc. Therefore, the current Apparel designers will be expected to learn and come up with their own designs for the new products.

Just like any other business enterprise, an online business venture requires its own official license. An online venture also aims at selling goods or services to the consumers hence generating income from those sales. Therefore, it needs to be governed and guided by country laws that relate to incomes generated by businesses and taxes to be paid. This includes applying for official businesses licenses, permits and zoning approvals to be able to operate the business legally. Also, these licenses and permits can be used to protect the business assets, avoid penalties and fines as well as boosting the business credibility to the public (consumers, authorities and rivals). In this case, Apparel business should be ready and capable of ensuring the new online venture has the required licenses and permits. The business will require these things so that it can indicate that it follows the country’s laws as well as those that govern the products being sold. For instance, the licenses and permits will indicate that the business adheres to the laws that govern product manufacture, e.g. product quality standards. Additionally, the business will be able to show that it adheres to the laws that govern employee safety, employee salary or compensation registration and taxation rules of the country.

The cost of producing the brand and venturing into the business will be determined by estimating all the expenses involved from product designing to product selling stages. This will include the cost of the raw material, manufacturing the product, marketing and advertising the product, costs involved in creating the websites, consultation fees incurred to enquire information on the venture, licensing and permit fees paid to authorities and other costs that may have been incurred in ensuring the product is produced and sold in the online market. To be clear, the costs related to site building should not go beyond $30, 000 which means that the products produced should be few but of good quality. The benefit of the venture to Apparel’s products is that the product will be able to reach a larger market which means that more consumers will discover the products, especially the customers to its current products. The customers will be able to share their opinions on the products and provide various ideas on how to improve the product quality.

Carrying out necessary activities to obtain required information

The Apparel business manager will be responsible for evaluating the whole project venture to ensure that it is capable of achieving business and project objectives. A business manager is always the person to give a final say on a certain business project. Therefore, he will be responsible for approving the project’s requirements, deliverables and financial uses among other things (Weiss and Hoegl, 2016). The manager’s responsibility will not cause additional expenses to his salary simply because that is the manager’s job.

The designers will be chosen from Apparel’s cloth designers. These designers will be responsible just for helping out the customers when providing their product specifications. They will be used just like a helping hand to the customers especially clarifying customer specifications may not be clear and helping them come up with the best but simple designs for the business to manufacture. The designers will be in charge of the manufacturing process to ensure that the process does not tamper with the customer specification and that it produces exactly what the customer has specified.

The project manager will be chosen from Apparel’s list of managers, especially from the manufacturing and marketing department. The project manager will be in charge of the whole project, i.e. the process of creating and manufacturing the new product brand for the business. The manager should ensure that all the operations that relate to the completion and success of the new product are effectively and efficiently done by the people responsible.

The IT experts are responsible for designing the website and program it according to the requirements provided by the project manager and the research conducted about online business websites. The experts are supposed to use their skills, knowledge and experience to create the most effective website for the product. This means that the website should be able to attract more customers and give opportunities for them to order and provide product specifications. Additionally, the team is responsible for ensuring that the products have a page in the most popular and commonly used social media websites in the internet.

The sales manager will be in charge of the marketing, advertising and sales operations of the new venture. The manager should be well updated with the strategies of marketing and advertising in the social media sites, e.g.displaying product images and videos in the product websites and in the social media platforms. These managers should also be able to portray a good image of the new product by providing attractive, pleasing and valuable content about the product’s features in the websites and the social media platforms. The sales manager will take charge of all the sales operations, including how the customers will receive their products and payment procedures.

Target market for the new product brand

The above plan will be used to allocate the responsibilities for every business venture member (Nancarrow et al, 2012). Every member has their roles and responsibility but they are all working towards the same objectives set for the venture (Nancarrow et al, 2013). The objectives will be achieved when the business succeeds in the proposed business venture and manufacturing the new product brand. These objectives are:

• To reduce distribution costs of the product by use of online sales.
• To increase the business’s profit margins which are being cancelled by the costs of labor

To beat current competition by creating a new product brand and in a different market

Conclusion

Every business aims at increasing and improving its performance and productivity through many ways. Apparently, Apparel Pty Ltd, has realized that the probability of its performance declining in the next few years is very high. This will certainly mean that the business will decrease its profit margins which will be as a result of  the stiff and close competition cause by the business rivals (businesses operating overseas) and the strength of the Australian dollar. Therefore, the business has decided to venture in a similar business which will focus on different products, different target market and different customer demography. The company has decided to venture in an e-commerce business whereby it will be manufacturing and selling household items and beddings which will be designed by the customers (with the help of Apparel cloth and foot ware designers and manufacturers). The business will develop a website for the products and create social media pages to use in making sales, advertising and marketing the products. Through this type of business and business venture, Apparel will not incur a lot of costs for the venture and therefore will be able to achieve the objectives that are set for it.

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