Analyzing The Business Life Cycle Of Hangerworld

In this report, article on the hanger world has been analyzed to identity the business life cycle of the company.

This article has shown the key business issues and challenges which company has faced in its business life cycle stages.

This report has also revealed the growth aspects of the Hangerworld and how it has strengthened its busienss throughout the time. 

Hangerworld

The main objective of this paper is to study the growth aspects of the Hangerworld, an in-depth study of the business through its life cycle analysis for which, a 5 stage model has been used which helps in analyzing the business from seed stage to decline. For the purpose of this company, the model has been kept limited till maturity.  Further the paper discusses the future growth potential and challenges the company might face in near future. This report has revealed the key understanding on the business life cycle stage of the Hangerworld which company has taken in its business. However, the article on the hanger world has been analyzed to identity the business life cycle of the company.

Hangerworld was the idea of Jim Elliot and Jacqui Green; and was founded in the year 2008. This business was expanded to almost 53 countries and online platforms are also being used by company to cover window shopping through dashboard mechanism such as eBay, Amazon.  Elliot and Jacqui design their own hangers and these designed hangers are then sold worldwide. The company is based in Blackpool, England, from a single room enterprise the distribution unit area has reached to 60, 000 square foot unit. In order to have room for their growth, success they are now spread not only over a large area, but with a team of over seventy staff members (Bednarz, et al. 2018). This team supports the individual hanger buyers and the major buyers such as clothing brands and companies such as Selfridges globally. The Hangerworld has a wide variety of hangers in their store; their stock includes plastic hangers, wooden hangers, and metal and velvet hangers, for all age groups and in all sizes. Their motto is to keep safe what the customer’s love the most, without any delay though, company has gone to 53 countries, yet import and export is done from UK. Majorly, it is supplying through online retail stores. Due to their success and hard work they have been featured in the Sunday Times in top 100. Hangerworld has a success rate of 60% in just two years of time. The review shows that the company not only sells hangers, but also is a leading supplier of other products related to clothing care, solutions to storage problems (Hangerworld, 2018). This article was published with view to analysis the business activities and business life cycle stages followed by company.

In order to analyze the life cycle of the business, the 5 stage model/tool has been used in this paper (Bednarz et al, 2018).

The seed stage or the development stage is when the idea begins to germinate and crop up; it starts with just a thought process, which still requires some processing in terms of market demand analysis for the product/service to be launched in order to conclude if the idea is worth working on (Tukker & Tischner, 2017).  Hangerworld sells the quality clothes care products to its individual and company customers. In 2007, company came up with the regularly collected hangers from retail stores for their existing ironing business. The idea came from some past experience of already been a member of eBay. Jim Elliot already had an experience in online selling, therefore they thought of selling the spare hangers they had online through eBay. Initially, both of them had no plan to start off with this with an aim of making a living out of it. The short term goal has been to make just enough to make the ends meet. This stage is very crucial for the business success and growth of the organization (Bednarz, et al. 2018).

Life cycle of the business

When it has been seen and observed from the market analysis that the idea is worth chasing, it is then the business idea is made legal in the start-up stage. The products/ services are finished developing and procuring in order to start off with the market sales and marketing of the product.  However, the initiation of the future procurement and selling depends upon the first feedback from the customers (Burns & Dewhurst, 2016).  At this stage the importance is given to encourage profitability as well as customer satisfaction. Jim and Jacqui gained confidence when they saw that all the hangers they displayed over the internet are sold off. The first listing was gone almost immediately. At this point people around doubted that this cannot be an idea to earn because who will buy hangers online when they are easily available while shopping for coats and other clothes. Nevertheless, the growth reached to the point where all the hangers were sold off. The end of the hangers was the start of Hangerworld, when they decided to purchase off hangers from manufacturers and wholesalers to sell them through online retail to consumers and other companies. In this stage, company should strengthen its business by focusing on investing more capital and attracting more clients (Bednarz, et al. 2018).

Being a small scale company they faced multiple challenges, number one would be business idea profitability, they had to identify their niche, to sell off their product, second the acceptance from the market, and the market also must accept the products a small business owner is selling in terms of the quality and the required quantity (Bednarz et al, 2018).  Hangerworld therefore, had to keep enough stock to meet the demand of the market. Managing accounts is another major factor to be dealt with. Establishing customer base and market presence were other challenges they had to face, initially selling of hangers to individual customers won’t be enough to create a living out of this. They would either need to bring in more complimentary products or they would need to increase the customer base. However, if possible efforts and strategic plans are implemented by company then these issues and challenges could be mitigated by company in effective manner (Bednarz, et al. 2018).

At this point the business has crossed the initial two stages of market and product development and is now profiting in the growth stage. In this stage the business makes the returns along with adding new buyers and end users. These monetary returns on investing back into the business help expansion both horizontally and vertically. However, this is seen a difficult stage to reach and sustain. Most of the businesses are not able to survive till here and they close off. The competition in the market starts; it is either a net loss or a significant profit. Hangerworld has moved beyond UK to 53 other countries serving multiple customer bases and has been featured in the Sunday Times in the top 100 list (Smallbone, 2015). It is the stage when the earning of the company is very high and increased with a view to strengthen the business outcomes (Bednarz, et al. 2018).

Challenges/difficulties faced

The major challenges for the small businesses, however, are managing the revenue, increased and diverse customer base fight against the market competition and managing effective and efficient management (Ciambrone, 2018).  It has been seen from the market research and study through articles that Hangerworld in order to curb the issues has created a 60.000 square foot unit to keep the products for sale. The procurement and safe keeping of the products in stock is necessary to meet the ever increasing need of the customers. With the increase in customer’s number the company also had to hire more people to manage work effectively and efficiently such as accounting, customer issues, procurement, capacity management, quality standard status. The company has grown from two people working independently in a team of more than 70 employees working for the company. In this stage, company might face high risk of its business growth and may find may hurdles which may negatively impact its business outcomes (Bednarz, et al. 2018).

At this stage the company has now launched its presence in the industry. The business is now ready to expand; Hangerworld has expanded in terms of unit area and in terms of the customer base of individual buyers to corporate buyers of products (Yeger & Shenhar, 2016). In this stage, expansion strategies such as merger, amalgamation and other strategies would be adopted by company to increase its business outcomes (Bednarz, et al. 2018).

The Major Challenges that comes with this stage are, adding new markets, increasing the variety of products, majorly focusing on complementary products for buyers to stay at your place for a bit longer time and lastly to expand the existing product variety and business (Muzellec, Ronteau, & Lambkin, 2015). These were certain issues that Hangerworld also faced during this stage, it was difficult to attract buyers for a single product and it was more difficult to make them stay for longer. In order to get over this issue, the company launched its own website. The company introduced a variety to their existing business by adding broad categorization of products in adult and children hangers, which are further divided into, metal, plastic, wooden, padded, velvet, extra-large hangers in the adult section and the same in children hanger segments. The company further gave a horizontal expansion by introducing a range of garment covers, cloth care items such as lint remover and anti-moth products, other products to curb home storage issues, in hanging, travel and wedding storage boxes and bags. Laundry and ironing products are also added to the list (Bednarz, et al. 2018). In order to fight the upcoming and existing competition in the market the company has introduced three methods, one to keep the prices at par and affordable. Secondly, the company introduced products for the entire market segment, including kids, adults and teenagers (students). And lastly, they also brought up a new variety of anti-theft security hangers (Hangerworld, 2018).

After the expansion and success the product reaches its maturity stage, which is the final stage for any business when they dominate the market for their niche or through monopoly (Gopalakrishnan, & Matthews, 2018).  Hangerworld is yet to reach this stage; however, they need to plan for future prospects in order to avoid staying for long in this stage.

With the increasing business outcomes, company could face various issues such as business issues, innovation and creation issues and strategic planning issues. There are a few possible challenges that the company might face in the near future such as (Bednarz, et al. 2018).

1. Use of mobile application to buy products
2. Increased market competition with some USP, which might affect the product sales.
3. Increased supplier power due to increased competition, which might affect the raw material shortage.
4. To maintain the same quality and same pricing.
5. The company website is not much responsive; the user interface is poor, which affects the user experience (Lonergan, Patterson, & Lichrou, 2018).

The company can invest in creating its own application and also in manufacturing Hangerworld labeled hangers to avoid the supplier power; this will also help reduce the product cost. Improving company website for a better user experience and finally to introduce products in other segments such as cabinet separators, small plastic and wooden boxes and bed side boxes and tables. Small living room and bed side furniture.  Portable cupboards for people who are travelers and also for kids room for their toys (Bloch, & Bhattacharya, 2016). After assessing all the details and business functioning, it could be inferred that company should focus on entering into the strategic alliance which will not only strengthen its business outcomes but also helps in strengthen the business outcomes.

References 

Bednarz, A., Beier, J., Grünenwald, T., Himmelreich, B., Hundt, B., Jaeger, F.A., Kirchner, M., Krinke, S., Létinois, U., Merz, C. and Mohr, L., 2018. Life Cycle Management in Industry—Supporting Business with Life Cycle Based Assessments. In Designing Sustainable Technologies, Products and Policies (pp. 351-363). Springer, Cham.

Bloch, H. and Bhattacharya, M., 2016. Promotion of innovation and job growth in small?and medium?sized enterprises in Australia: Evidence and policy issues. Australian Economic Review, 49(2), pp.192-199.

Burns, P. and Dewhurst, J. eds., 2016. Small business and entrepreneurship. Australia: Macmillan International Higher Education.

Burns, P., 2016. Entrepreneurship and small business.UK: Palgrave Macmillan Limited.

Ciambrone, D.F., 2018. Environmental life cycle analysis. UK: CRC Press.

Gopalakrishnan, S. and Matthews, D., 2018. Collaborative consumption: a business model analysis of second-hand fashion. Journal of Fashion Marketing and Management: An International Journal.9(1), pp.192-199

Hangerworld. 2018. About us [Online]. Available from https://www.hangerworld.com/about-us/ [Accessed as on 4 Novemeber 2018].

Lonergan, P.P., Patterson, M. and Lichrou, M., 2018. More than clothes hangers: cultural intermediaries in the field of fashion. European Journal of Marketing, 52(9/10), pp.2052-2074.

Muzellec, L., Ronteau, S. and Lambkin, M., 2015. Two-sided Internet platforms: A business model lifecycle perspective. Industrial Marketing Management, 45(1), pp.139-150.

Smallbone, D., 2015. Small firms in transition economies: challenges and opportunities. 4(1) pp.139-150.

Tukker, A. and Tischner, U. eds., 2017. New business for old Europe: product-service development, competitiveness and sustainability. Australia: Routledge.

Yeger, D. and Shenhar, A., 2016, March. An integrated framework for the analysis of business model transformation (BMT): The Case of Midsized Firms Locked in a Growth Setback Stage. In ISPIM Innovation Symposium (p. 1). The International Society for Professional Innovation Management (ISPIM).