Sankei Co. Limited: Company Overview, Business Opportunities, Proposed New Product Essay.

Company Overview

Sankei Co. Limited was founded in 1955. The company is headquartered in Tokyo, Japan. The company deals in clothing materials and accessories. Sankei is a supplier to several apparel companies. The company ventured into an overseas market by establishing Sun line Sankei Co. Limited in Hong Kong. This company was established in 1976. In 1988, the company ventured into men’s apparel business. Sankei established a logistics center in 1996 for handling domestic and international shipments. This logistic center was named as Mikuni Logistic Center. The company acquired stocks in Yokohama Co. Limited in 2013 (Sankei Co., 2017). Thus, Yokohama and its subsidiaries became a part of the Sankei group. Sankei targets several countries like Bangladesh, Hong Kong, Vietnam, China etc. because the fashion market has no boundaries. The company plans to extend its global presence by targeting North American, European and Asian markets. The company develops its products by taking into consideration the customer tastes and preferences. The company deals in production and sale of its products. The manufacturing units follow Oeko-Tex standard 100 and ISO9001 standard. The company provides its products in Japan and several other countries. Sankei has retail outlets in Tokyo, Yokohama, Dhaka and Shanghai (Sankei Co., 2017). These retail outlets showcase the products manufactured by the company. The stores have a pleasant ambiance with the products displayed in an aesthetically appealing manner. The customers can choose from the displayed ready-made garments, accessories, lining material, labeling material etc. Sankei Co. Limited makes use of JIT (Just in Time) strategy (Sankei Co., 2017). This strategy helps in supply chain management. The production activities are managed by several factories in Japan and other parts of the world. 

Sankei Co. Limited provides lining materials in different fabrics and colors. Lining material is made available for garments created for men, women, and children. The fabrics used for making lining material include sleek, taffeta, tricot, twill, satin, tulle mesh etc. The lining material is also available in different designs like jacquard, checks, stripes and prints (Sankei-gk.co.jp, 2017). The company offers interlining that helps to retain the shape of the garment and makes it easier to stitch the garment. Choice of interlining depends upon the clothing material like light, medium and heavy garments. The company provides slip-proof and stretch-proof tapes for giving the desired finish to the garment. Inside belts are available which are used in skirts and pants. There are different types of shoulder pads made available by the company. This includes raglan, semi-raglan, set-in and corner cape (Sankei-gk.co.jp, 2017). The button factory produces assorted buttons made from plastic, leather, wood, metal, shells etc. Sankei also manufactures braids, ribbons, lace tape, piping, spindle cords and frill tape. The company provides outer material for manufacturing ready-made garments. The outer material fabric includes chiffon, polyester, cupra sand wash series, lace, georgette, wool, and cotton. Sankei Co. Limited is famous for its stoles, bags, wallets, belts and neck pieces (Sankei-gk.co.jp, 2017). The company prints tags and labels. Sankei also offers ready-to-wear apparel products.

Business Opportunities

Figure 1: Organizational structure at Sankei Co. Limited

The bedding set will include one bed-sheet, one AC comforter, and two pillow covers. These items will be easy to maintain and fade-resistant. These bedding sets will be made available in different fabrics like cotton, polyester, and satin. The bedding sets will be manufactured in small lot sizes. Customers will have access to these bedding sets through retail outlets and online shopping facility (Fiedler and Welpe, 2010). E-commerce will help to increase market share because many customers prefer online shopping. The company will form an association with certain online shopping sites so that they can display the bedding sets introduced by the company. The bedding sets will be made available in different sizes, fabrics, colors and designs. The bedding sets will be available in geometric, abstract, checkered, striped and floral prints. They will also be available in 3D prints (Fiedler and Welpe, 2010). Bed sheets and pillow covers with intricate embroidery will also be made available. The bedding set will be economically priced because the replacement cycle of bed linen is short. 

For the new product, people of Japan will be targeted for the initial 1 year. After analyzing the business success after 1 year, the company may choose to target overseas market. On the basis of demographic profile, married/ unmarried women belonging to the age group of 20-45 years will be targeted because women are more interested in home decoration (Hao and Jeffrey, 2011). Customers belonging to the low-income bracket and medium income bracket should be targeted for selling the bedding set. Tech-savvy people who are active on social media and prefer online shopping will be targeted (Weinstein, 2014). 

It is important to create differentiation for achieving competitive advantage in the textile industry. Sankei Co. Limited creates differentiation through product quality and innovation. The company tries to enhance the customer experience by providing superior quality products. Sankei ensures that the products follow quality standards established by the company. Eye-catching patterns, designs and color combinations help to increase the perceived value for money. The company relies on eco-friendly and lightweight packaging material (Capsey, 2010). Sankei can offer bedding sets at affordable prices by bringing down marketing costs. The company can control the marketing costs by choosing cost effective promotional tools. This can be achieved by adopting social media marketing techniques and reducing expenditure on advertisements (Capsey, 2010). The USP of the bedding set will be its reasonable price, quality, look and feel. The company will not compromise on the finish and stitching of the items.   

Proposed New Product

Value chain consists of suppliers, organization (Sankei Co. Limited), distributors and end-consumers. Thus, various linked are involved in the value chain of an organization. The product gains some value as it moves from one link of the value chain to the other. It is the responsibility of the managers to analyze the value chain before planning in order to gain competitive advantage. In-depth knowledge about the value chain can help the managers in taking initiatives that may result in new product development or improvement of existing products. Market research and competitor analysis are important for expanding the business and targeting certain market segments. Analysis regarding existing and potential competitors helps the managers in making informed business decisions. Competitor analysis can be done through annual reports, official websites, social media accounts and press releases (Harris and Kor, 2013). PESTLE (Political Economic Socio-cultural Technological Legal Environmental) analysis helps in understanding the external factors that impact business operations. It is the responsibility of the managers to develop a business plan after understanding the trade regulations, labor laws, consumer laws and environmental laws. Technological factors like increasing popularity of e-commerce, the company should focus on promoting online sales (Charles, 2003). Production activities should be carried out while paying attention towards environmental concerns and the legislations pertaining to the given industry. For example, the choice of fabric may depend upon the climatic conditions. This is a business opportunity through which Sankei can make its products available in different parts of the world. With the recent developments in Information & Technology, the company can utilize online marketing for promoting its products. Porter’s Five Force model helps to analyze the five different forces that affect the competitiveness of an organization- rivalry among competitors, a threat of new entrants, a threat of substitutes, bargaining power of buyers and bargaining power of suppliers (Harris and Kor, 2013). Due to intense rivalry among competitors, the company should use online marketing to increase its reach. Due to the high bargaining power of buyers, the company should offer unique and high-quality products to its customers. SWOT analysis should be conducted before formulating business strategies. The existing strengths include raw material sourcing, inventory management, distribution strategies and human resource management (Siqueira, 2007). Lack of online presence is a weakness for the organization. While doing internal and external analysis, it is the responsibility of the management to identify business risks. Risk management is an important aspect of running a business. Sankei may face risks associated with financial resources, manpower, technology and economic changes. Thus, it is the responsibility of the management to develop a contingency plan to mitigate business risks. The contingency plan should be developed by taking into account workplace crisis, financial loss, natural calamity, the shift in market trends, the manufacturing defect in products etc (Davis, 2011). Time and resources should be invested in the development of contingency plan. It is important for the management of Sankei Co. Limited to explore the available business opportunities in the clothing and textile market (Davis, 2011). There are immense business opportunities as the demand for clothing and accessories is increasing in almost every part of the world. Home décor trends keep changing. This increases the frequency of purchase related to bed linen. Demand for stylish bed linen, easy access to products, expanding network of retail outlets are responsible for creating business opportunities. The company should target North American, European and Asian markets as they have huge potential (Van Auken, 2005). 

Target Market

The marketing approach consists of STP (Segmentation Targeting and Positioning). Market segmentation is important for expanding the business. Segmentation helps to divide the market into different sections where the consumers belonging to a certain section have similar preferences. Segmentation can be done by Sankei Co. Limited on the basis of different factors like demographic profile, geographical location, and consumer lifestyle (Slater, Hult and Olson, 2010). Market segmentation on the basis of demographic factors includes age, educational qualification, gender, a size of family, economic status etc. Segmentation is followed by targeting strategies that are based on the presence of other brands in the market and strengths of the organization (Abdullah Saif, 2015). The positioning of product/ brands involves creating a positive perception in the minds of consumers. Highlighting the USP of the product or brand helps to create a top-of-mind recall. Positioning statement will be created for the bedding set that conveys the credibility of the brand and distinguishes it from the competitor brands (Abdullah Saif, 2015). The positioning statement for the bedding set should be- “We intend to touch the lives of people on an everyday basis. Our brand wants to help you in giving your room a makeover through our designer range of bedding sets. We strive for excellence through every product offered to our customers and believe in continuous improvement (Kumar, 2015).” Marketing positioning can be achieved through marketing mix strategies. Marketing decisions related to products/services are based on marketing mix or 4Ps. Marketing mix (also known as 4Ps) takes into consideration the four different aspects of business- product, place, price and promotion.

Marketing communication objectives should be set for the initial 12 months after launching the bedding set in the market (Slater, Hult and Olson, 2010). The marketing objectives should be SMART (Specific Measurable Achievable Realistic Timely). These goals should be within reach and time-bound. The following objectives will help Sankei Co. Limited in monitoring the effectiveness of the IMC (Integrated Marketing Communication) plan:

• To use advertisements and social media for increasing awareness about the bedding set launched in the market by 80% in a time period of 1 year.
• To persuade 45% of the target consumers to buy the bedding set in the initial 12 months.
• To create a preference for Sankei bedding set in comparison to other brands by 10 percent. (Simmons and Becker-Olsen, 2006).

According to the five product level model, each product consists of five levels on the basis of utility. These levels are: core product, basic product, expected product, augmented product and potential product. The core benefit of the bedding set is to make the bed look aesthetically pleasing. The basic product represents its features like anti-fading property and anti-wrinkle property. The expected features include comfort. The augmented product will include the choice of colors and designs. The potential product can be light in weight. The product managers should focus on the design, finish, and durability of the bedding set. Special attention should be given towards packaging of bedding sets. It should be neat, compact and attractive. Packaging material should be chosen carefully (Nakahara, 2001). The bedding set should have a proper label. Every product label should indicate a number of pieces, weight, dimensions, price, color, fabric, washing instructions etc. Pricing will be done on the basis of target consumers, market trends, competitor strategies, production cost and expenditure on promotional activities. Prices will be set after deciding the profit margins (Kumar, 2015). Economy pricing strategy will be adopted for the bedding sets. This technique will be suitable for attracting price-conscious customers. Moderate pricing will help to generate huge sales volume. Sankei should create a promotional strategy to attract the customers. Competitor analysis helps in reference pricing strategy. Since the company is launching a new product, the price of competitor products will serve as the reference price. Reference pricing helps the customers in making purchase decisions. Offering discounts on the original price can help to boost sales. The communication mix for the company should consist of advertisements and social media for promoting bedding sets. Creating advertisements will emotional appeal will help to increase product awareness (Kumar, 2015). The advertisement for bedding set should convey a feeling of joy and comfort. Television channels should be selected for airing the advertisement. This will help to create the top-of-mind recall. The advertisement should be given in magazines related to home décor. The print advertisement should contain high quality images of bedding sets that showcase the designs and color combinations. Sankei should use social media to create buzz about the launch of bedding sets. The social media manager should handle the company pages on Twitter, Facebook, and Instagram (Marvel, 2011). Appropriate content should be designed for sharing information with the customers. The information posted on social networking sites may be related to the raw materials, latest designs, manufacturing techniques, quality control mechanism, green initiatives etc. The quality of content should be given preference over quantity of content. High-quality images will help to attract customers. This will help in relationship building and customer engagement. Social media pages will help to understand the customer preferences in a better manner through their likes and comments (Latzer, 2013). The company can even conduct consumer surveys on social media and capture customer feedback. Sankei can maintain healthy public relations by displaying responsiveness to social and environmental needs. The company should disclose information regarding the green initiatives taken towards conserving the environmental balance. This will help to create a positive brand image (Marjani and Ardahaey, 2012). Marketing channel is the route through which the product can be made available to end-consumers. The channel should be designed to reduce the levels of intermediaries. The channel will consist of the manufacturing firm, retailer and consumers. Thus, indirect channels will be used for the bedding set. The retail outlets will be used to reach the consumers. The company may decide to increase its retail presence. The place is the point where consumers can have access to the bedding set. The product will be made available through offline and online modes. The consumers will be able to conveniently purchase the product through retail stores and website.    

Unique Selling Points

Financial planning should be done while considering the MM (Modigliani-Miller) model. According to this model the market valuation does not depend on the capital structure. This model suggests that the market value is associated with the operating profits. Market value will increase with increase in growth opportunities. Sankei Co. Limited will require additional machinery and packaging material for manufacturing bedding sets. The company will require financial investment for hiring and training the additional workforce. Approximately, 60-75 additional workers will be required for manufacturing, distribution, sales and marketing of bedding sets. The average salary for the workers will be 35,000 Japanese Yen on a monthly basis (Batjargal, 2007). Thus, the approximate monthly expenditure on a human resource will be 2,400,000 Japanese Yen. The company will be required to invest 350,000 Japanese Yen on promotional activities for the initial 12 months. The purchase of additional machinery/ equipment will cost more than 200,000 Japanese Yen. The profit margins are not high because the bedding sets are reasonably priced (Batjargal, 2007). According to the demand forecasting, the company is expected to generate revenue of more than 29,000,000 Japanese Yen in the first year due to the sales of bedding sets. 

Sankei Co. Limited will have to hire additional employees due to the introduction of new product. The additional human resource requirement includes textile designer, operational manager, social media manager and quality control staff. The hiring of employees should be done on the basis of work experience, qualification, and talent. While hiring new employees, there should be no discrimination on the basis of gender or race (Bhandarker, 2014). The compensation offered to the employees should be according to industry standards. The pay package should be designed in a manner that includes monetary and non-monetary benefits. The fringe benefits may include housing facility, transportation facility, health insurance, sponsored trips, club membership etc. This will help to attract qualified and talented professionals (Bhandarker, 2014). After hiring of human resources, adequate training should be given according to the job responsibilities. This training will help them to become familiar with the company policies and procedures. Mission, vision, and values of Sankei should be clearly communicated to the hired manpower (Dakhli and De Clercq, 2004). It is the responsibility of the HR department to create awareness about occupational safety and well-being of employees. The HR professionals should create awareness about the code of conduct amongst the new employees. The new employees should be made familiar with the whistle blowing policy of the company. It is the responsibility of the quality control staff members to ensure that the sewing of items in the bedding set is done according to the CSM2000 standards (Bala and Koxhaj, 2017). The performance of the hired workers should be evaluated on a regular basis in order to increase the workplace productivity. Key Performance Indicators (KPIs) should be set by the HR department to monitor the performance of employees. Rewards and recognition should motivate the employees to perform to their best abilities (Ronning, 2011). The employees at Sankei should be empowered to take creative decisions that can help in the growth of business. There should be a two-way communication between the employees and the management to create a positive work culture (Latzer, 2013). The employees should not hesitate in giving their feedback or creative inputs to their managers. Employee engagement will help to reduce idle time and absenteeism. Employees indulging in unethical practices should be penalized by the HR department. Every employee should be given growth opportunity according to his qualification and expertise. Internal issues and conflicts should be handled by the HR professionals on a priority basis. Fair treatment at workplace will help to retain efficient workers. They should ensure that the employees are not exploited or overburdened with work (Marjani and Ardahaey, 2012).

Business Opportunities

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