Small Business Management of PARADA Company - Report Example

Small Business Management Report 17th August, Small Business Management Family owned businesses are one that are started by any two or more family members, all of the share are held within the family, the investment are also made by the members. The shareholding is divided as the percentage share of investment made. PARADA is also one of the small businesses owned and run by the family. In the recent past due to the good performance of the company, the shareholders have decided to take their business into the market of Asia. In order to achieve the same goal the company needs more investment and thus they have decided to sell the part shares to the public and list the company on the stock exchange. The company dealt with accessories and apparel, and belonged to the industry of lift style and retail. It had product lines for both male and female, strengths of the company included establishment of a fashion house, the quality of product and the innovation of product was one of the biggest strengths of the company. The company was able to build a strong brand name in the existing market, and this was due to effective and strong advertising and branding. However, the weaknesses of the company included there is high competition in the industry, customers are not loyal to the brand, they would easily switch between one brand to another in the similar industry and they don’t have much of their brand awareness in the emerging markets. Few of the opportunities that the company can think in their future endeavor is expanding their business and entering into the emerging markets, these markets have a large customer base and have a strong sense of fashion, and the company can use the digital and online media to reach out to customers where they are not presence. The business model is cost effective because the company does not need to have a physical presence they can operate by reaching out to them online. Another opportunity that can help the company to progress is to either acquire or merge with other fashion house to promote their brands with a variety of product. Along with opportunity the company also has to face few threats in the market, and the first of the threats is to face intense competition in the market and industry of fashion. There are many upcoming and existing brands which are constantly developing and creating new products and thus the entire industry has to face though competition. The second of the threats is the substitute for the same product is available. If the company is high in cost the customer would switch to brands with lesser price and affordable product. The economy of each country has seen a negative impact which has led to the increase in the cost of living, and the increase in the cost of living has resulted in the preference of fashion brands which are lower in cost and even to no fashion product at all. In the initial years of the business the company had to face several issues of marketing and developing a strong brand name, they had limited amount of human resource and limited amount of investment funds. They had to regulate their product and business in a manner that would help them generate healthy amount of revenues. When the company decided to expand its business, the management had to overlook many of the financial and business constraints. These included how to generate funds for the expansion, should they only move with their own brand or acquire another brand to help them increase their sales. These also included which market to expand and what is the customer type. To have and completed an in depth research of the new market and the success of their product in the similar market. The company had to make decision regarding their sells of IPO and registering the company with the stock exchange, these required change in management and the policies of the company, PARADA and its existing board of directors had to make critical decisions before they finally decide on the new investment opportunities and what are different alternatives they can utilize to generate funds. PARAD aims at becoming the one of the world’s biggest leaders in terms of design and production. They want to be the biggest and best distributor of the luxury fashion industry. The group wants to be the customer’s first choice of fashion products with respect to ready to wear, foot-ware, leather and others. The company wants to eliminate the high completion that exists in the market. It is important for any luxury fashion brand to value brand’s cultural value, as well as the spirit and personality. Marketing strategies include focusing on fashion shows, window displays, strong public relationship activities, product packaging and sponsorships. The value positioning of the company is to target people who are found of innovative and different product lines, the audience of the product is intellectual and creative fashion esters; the range of authority includes leather goods, clothing, eye ware, fragrances, handbags, foot-ware and jewelry. The company has selected a strong niche for the product and that is why they have a strong audience of loyal customers, these are fashion lovers who are found of products which is different from the regular fashion, they are found of abstract designs and color. In 2011 the company decided to sell its IPOs into the company, and in order to do so the company needed to upgrade its management and find a seat for the public representation on the board of directors. Furthermore, in order to list the company on the stock exchange the company has to make proper legal documents along with Memorandum of Article and Association. It needs to prepare proper financial statements which have to be audited by the auditing firms. These books have to present to the public on quarterly and yearly basis to keep a transparent reforms of the company. In order to expand its business, they would further acquire firms such as car shoes and churches because after a thorough analysis of cost and benefits, the team decided that it was more convenient for the company to purchase the royalties of an existing company instead of opening their stores and marketing the product to a new market. The company formulated a strong business model, which focused on the style and design and product development, these included the model formulation of shoes and the showroom presentations of the store, the company than focused on the collection of the product order; these include the sales from the retail as well as the wholesale stores. The third phase of business model is sourcing and production which looks at the quality controls and logistics and the final stage is the distribution. The close coordination is an essential requirement between the teams, including the design, production, manufacturing and post evaluation team. The originality of the product and constant innovation in the product lines are the core of the success in the business of PARADA. The main inspiration behind the innovation and creativity of the company is its deep observation and curiosity about the world and the society that existed between them. These were the motivations that pushed the company to take risks and go beyond limits. This was also the inspiration behind the company at moving its product through different cultures and boarders. The company has developed itself through a steady growth and once they have established a strong brand name in the existing market they have now decided to move forward to markets outside their existing geographical region and explore markets in the region of Asia. In order to do so the company decided to take over other fashion companies like Car Shoes. The shoe company was developed by Gianni Mostile, and his passion for racing cars led to the creation of the name Car Shoes. These were handmade high quality shoes; these were mainly suitable for driving sports car. The company also won the award for its designs in the driving car industry. PRADA has been all about fashion, luxury and style. Their imagination gathered from the world has given them the edge over the other brands and a handful of loyal customers. They are in the apparel and fashion industry and thus they have expanded themselves into different kinds of product lines including products for male and females. Once they have expanded in the range of products now they have also started expanding in the geographical regions. The company has targeted itself as a cultural creative, intellectualist and innovators. They have target themselves as a product for the class who are willing to pay a premium for high quality, classic and elegant product line. They have divided the product line into emotional which target the stylish and sexual part of the customer, descriptive which targets the classical and elegant phase of the customers and brand functions which target the self-expression of the customers. That is why PARAD only target a small niche of the market, by providing high quality specialist product and to reinforce their brands through new and innovative collections. The core business of the company is generated through retail business which accounts for the 78% of the sales whereas, the wholesale business of the company only accounts for 22% of the revenue sales for the company. Most popular range of is the leather product for the company which accounts for 57% of the sales, the ready to wear accounts for 20% of the sales, 22% of the revenue sales is generated through the foot-ware and the rest of the 1% of the revenue sale is generated by other products of the company. After a thorough analysis of the new market they have discovered that if they expand with their product in the Asian market they would be able to develop a customer base and generate a good base of revenue sales. The Middle East market is expected to develop by the year 2015 and even with high competition they can develop a good market share in the market. This would not only help them generate and increase their profits but at the same time would help them discover new cultures and markets. This could also include selling themselves through the use of internet; instead of establishing physical outlets which would be costly they can use the internet channels to deliver the product. IPO is the best option for the company, this would not only help increase the quality of management but also increase the quality of work, the company will be more motivated to continue and develop its existing business strategy. The requirement of funds is high and the way to achieve these funds along with other sources of funds is through IPOs. The addition in the management would also increase the innovation process of the business. Thus, with all difficulties that the company might face this is the best option if they want to expand and increase their sales with respect to new market. Bibliography Advisorgate. (2014). Prada - SWOT analysis. Strength, Weaknesses, Opportunities, Threats for over 40,000+ companies and industries. Retrieved 2014, from Advisorgate : http://swot.advisorgate.com/swot-p/30768-swot-analysis-prada.html Control, C. &. (2011). Church’s & Car Shoe Under Prada’s Control. Retrieved 2014, from Church’s & Car Shoe Under Prada’s Control: http://thisfacade.com/design/churchs-car-shoe-under-pradas-control.html Group, P. (2014). Business Model. Retrieved 2014, from Parada Group: http://www.pradagroup.com/en/group/business-model MBASKOOL. (2014). PRADA. Retrieved 2014, from MBASKOOL: http://www.mbaskool.com/brandguide/lifestyle-and-retail/3574-prada.html Parada. (2014). Car Shoe. Retrieved 2014, from Parada Group: http://www.pradagroup.com/en/brands/carshoe PRADA. (2014). PRADA. Retrieved 2014, from PRADA Group: http://www.pradagroup.com/en/brands/prada Share, S. (2011). Parada. Retrieved 2014, from Slide Share: http://www.slideshare.net/openinnovation/prada-business-model-evolution-and-future Share, S. (2014). Parad Competitive Strategy. Retrieved 2014, from Slide Share: http://www.slideshare.net/olgadyachuk/prada-marketing-strategy Shoe, C. (2014). History of Car Shoe. Retrieved 2014, from Car Shoe: http://www.carshoe.com/it/en/history Read More