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Business context and background

Discuss about the Business Operations And Processes of Institchu In Australia.

The topic illustrates about the case study of a business organisation named Institchu in Australia, which has been introduced in 2012 and is a new company that wants to make it big within the business environment. The company’s focus is to make it big within the business environment and ensure that the business operations and processes are managed properly for delivering good quality products and services to the customers. The company holds an online store, which offers tailored suits, jackets and shirts for men (Ashworth, 2012). There are showrooms of the company in Sydney, Melbourne, Brisbane and has plans of expanding business in United States too.

Two friends, Robin and James, who are the business partners as well, launched the company in the year 2012. They both focused on starting an online business that would be easy for the customers to make purchases online as well as get delivery of products within quick time. InStitchu is considered as the future of online fashion and has been growing rapidly since its introduction in the Australian market (institchu.com, 2017). The company is located at 209/350 George St, Sydney NSW 2000 in Australia. The industry within which the company operates is an online retail industry. The company offers tailor made suits, which can easily help in fulfilling the needs and requirements of customers by maintaining proper sizes and ensure proper fittings too (Blázquez, 2014).

The online business offers good quality products in large numbers, ranging nearly up to 200000. Few of the offerings are suits, jackets, shirts, tuxedos and customers can also get custom made suits, jackets, shirts by measuring themselves. There are other accessories too like bags, bow ties, cufflinks, shoes, socks, sunglasses, etc (Magrath & McCormick, 2013). The customer segments include men and young adults too, whose fashion trends change from time to time and can allow the company to design according to their preferences. The company has a current revenue of $2.4m and nearly 50 employees. There are no products that are offered to women and girls by InStitchu. Robin used to work as a retail sales clerk whereas James previously worked as an Equity Advisor in an investment bank (McCormick & Livett, 2012).

The competitors of InStitchu are Chhabra 555 Fashions Pvt Ltd., Richard Harris, Men's Suit Separates, etc. The bricks-and-mortar strategy was implemented for meeting up the consumers' demands and preferences in the market and also allow the showrooms to act as an extension of the web site (Schniederjans, Cao & Triche, 2013).

Comprehensive description of the business

To expand the business, InStitchu has developed the customizable, made to order nature of the products within the Omni-channel business model or structure for staying ahead of competitors and overcome from the economic downturn as well. This would create loyal customers and would make the company sustain in the competitive business environment with ease and effectiveness (Shabanova et al., 2015). This has not only created enough scopes for the company to sell products online at a good rate, but also ensure the expansion of business in an effective manner. According to James Wakefield, to fulfill the changing demands of customers regarding their fashion styles, InStitchu has offered extensive styles for customising the fashion items and deliver more convenience and flexibility to customers (institchu.com, 2017). The company mainly offers products online, though the showrooms and stores are set up for the people who want to feel the fabric and discuss with the tailor about certain things before purchasing (Veit et al., 2014). 

InStitchu follows the vertically integrated e-commerce business model, which helps in delivering good quality products and services at lower prices without any involvement of third party. The niche online marketplace model is effective for making unique discoveries and explores various aspects to reach a global, fashion forward audience and create a large customer base (Magrath & McCormick, 2013). With prices of tailored suits ranging between $300 to $600, based on the customization level, InStitchu has gained recognition at a faster rate and gain positive mindset among customers too.  The products of InStitchu include suits, shirts, tuxedos, custom made jackets and accessories for men such as bags, bow ties, cufflinks, shoes, socks and sunglasses (McCormick & Livett, 2012).

Strengths

The strengths of InStitchu are its good quality tailored made suits available at lesser prices and the products are directly delivered to customers without any involvement of third party wholesalers. The e-commerce business has made customers aware and created a positive mindset among them regarding the ways of taking measurements and then apply for the suit that they want to be made (Schniederjans, Cao & Triche, 2013). The niche selling helps in creating a large customer base, and the cost of overhead is low, which creates a lack of barriers to entry as well.

Weaknesses

InStitchu, being a small business, often faces stiff competition from other companies. The search engine is unpredictable, which creates issues in gathering more traffic and increase sales. The search engine optimisation can also lead to various fluctuations in the placement of products and result in forming an unpredictable environment (Shabanova et al., 2015). 

SWOT analysis

Opportunities

The e-commerce components could allow the company to sell the products and services globally. The company has made approaches to expand in US. The operations in business are carried out 24*7, because of which the customers can purchase fashion items anytime. The company has a strong market presence due to its good quality products and has string business-to-business networking (Veit et al., 2014).

Threats

There are threats of competitors, innovation that can lead to negative impact on e-commerce business and fraud in online business can also emerge sometimes. There are privacy concerns, as there are chances of leaking personal information and the imposing of tax on online sales can further create major threats to the company (Ashworth, 2012). Consumers prefer checking out the fabric and then give measurements to tailors for making the suits, which can hamper the online business too.

Political

The US markets are stable, and due to this, expansion into developing market will require investment partners who hold 51 percent of the company. InStitchu must adhere to the rules and regulations properly for maintaining good political activities and ensure abiding by the Government rules and regulations, thereby creating a better and stable political environment too (Blázquez, 2014).

Economic

The customers often look for good quality products at lower prices, and with the changes in economic conditions, customers will remain loyal to the brand and spend more. The increase in labour costs can also increase due to the welfare of shareholders and rules and regulations followed to maintain ethical working conditions (institchu.com, 2017).

Social

The social factors include increased scopes for learning about sewing and designing of clothes. With the improvement in the health of the modern population, there are more chances for the company to sell its products to a large group of ageing population, i.e., over 55 years of age. The fashion blogging has also allowed in enhancing the brand name and image of InStitchu and furthermore enable recycling of wastes, thereby ensuring environmental awareness too (Magrath & McCormick, 2012).

Technological

With the advancement in technology and communication nowadays, the mobile and online shopping has become popular, and this has created enough opportunities for InStitchu to sustain in the marketplace. The online shopping web created by the company will allow customers make purchases online easily and make secure payments as well (Shabanova et al., 2015).

InStitchu has followed the niche market business model for making the customers aware of the tailor-made suits available online at an affordable price. The word of mouth business strategy has attracted more customers and allowed the customers to experience good quality fashion items at reasonable prices too (Veit et al., 2014). The business model allows combining the product or technology with the different kinds of business strategies for delivering value to the customers in the form of products that they purchase.

PEST analysis

It is also important to assemble or combine the purchasers and sellers in a particular virtual location. This would provide the sellers of InStitchu with a large number of buyers and vice versa. The cost of tailor made suits is quite affordable, though the reduction in prices can help in targeting a huge market and deliver products at lower cost. This would allow the company to grow, expand the wide range of products, negotiate the volume discounts with the suppliers, manage proper investments in technology and furthermore improve the response time of customers (Blázquez, 2014). The essentiality of business models is that the survival of customers depends upon the products that are sold by nobody else. This can allow the customers to spent a good amount of money and even spend in large amounts, without any need to focus on what other companies want to deliver.

Conclusion

The topic focused on the various concepts of how a new business organisation, which has been introduced five years back can think as well as make it big within the competitive business environment. The case study demonstrated the business model along with the strengths, weaknesses, opportunities and threats faced by the company. The background of business illustrated about the products and services offered, industry within which the company operates, customer segments, competitors and its various strategic implications for deriving a good conclusion in the end.

References

Ashworth, C. J. (2012). Marketing and organisational development in e-SMEs: understanding survival and sustainability in growth-oriented and comfort-zone pure-play enterprises in the fashion retail industry. International Entrepreneurship and Management Journal, 8(2), 165-201.

Blázquez, M. (2014). Fashion shopping in multichannel retail: The role of technology in enhancing the customer experience. International Journal of Electronic Commerce, 18(4), 97-116.

institchu.com. (2017). Custom Suits Made By Institchu – Online Tailored Suits Made For You!. [online] Available at: https://www.institchu.com/ [Accessed 1 Aug. 2017].

Magrath, V., & McCormick, H. (2013). Marketing design elements of mobile fashion retail apps. Journal of Fashion Marketing and Management: An International Journal, 17(1), 115-134.

McCormick, H., & Livett, C. (2012). Analysing the influence of the presentation of fashion garments on young consumers’ online behaviour. Journal of Fashion Marketing and Management An International Journal, 16(1), 21-41.

Schniederjans, M. J., Cao, Q., & Triche, J. H. (2013). E-commerce operations management. World Scientific Publishing Co Inc.

Shabanova, L. B., Ismagilova, G. N., Salimov, L. N., & Akhmadeev, M. G. (2015). PEST-Analysis and SWOT-Analysis as the most important tools to strengthen the competitive advantages of commercial enterprises. Mediterranean Journal of Social Sciences, 6(3), 705.

Veit, D., Clemons, E., Benlian, A., Buxmann, P., Hess, T., Kundisch, D., ... & Spann, M. (2014). Business models. Business & Information Systems Engineering, 6(1), 45-53.

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