Entrepreneurial Opportunity for Pelco, Major Problems to Be Addressed, Value Proposition of the New Apparel Line - Case Study Example

Name Class Unit Table of Contents Table of Contents 2 Introduction 2 Brief description of Pelaco 2 Entrepreneurial Opportunity for Pelaco 3 Major problems to be addressed 3 Value proposition 4 Mini case 5 Problem definition 5 Solution proposed 5 Challenges 6 Protection 7 Value proposition and financing 7 Stakeholders analysis 8 Conclusion 9 References 10 Introduction Brief description of Pelaco Pelaco is an Australian apparel industry which manufactures clothing in Melbourne. The company is well known for their men’s shirts. The company products include shirts, shorts, suits and women wear among other apparels. The company has been able to succeed from its humble beginning to become one of the most known brands in Australia and globally (Pelaco.com, 2015). In the recent past, the apparel industry has faced a lot of criticism due to unethical supply chains. This is one of the issues that have affected Pelaco in their operations. Entrepreneurial Opportunity for Pelaco With the rise of ethical consumerism, there lies a great opportunity for business. The pressure on consumers to shop ethically is on the rise in Australia. This is due to the rising cases of exploitation in the supply chains (Carrington, Neville & Whitwell, 2014). One of the sectors that face the criticism is the apparel industry. With the rise in criticism for ethical sourcing, the company can take it as an entrepreneurship opportunity and introduce new line of products that are ethically branded. This is through engaging in ethical sourcing in their supply chain and establishing a new ethically produced apparel brand. This is a great opportunity for the company since it will benefit from ethical consumerism. Major problems to be addressed In order to benefit from the opportunity, the company has to address the following problems. Unethically produced apparels The risk of damaged reputation due to unethical sourcing Probability of child labour in their supply chain Failure to follow minimum wage laws in the supply chain Ensuring that all suppliers comply with the code of conduct and are ethical in their operations Poor working environment in the supply chain Value proposition The value proposition acts as a promise of the value that is being delivered by the company. This is through creating a reason why the customers should buy from the firm. The main aim of this value proposition is to make the customers make purchases for ethically produced apparel from the company (Anderson, Narus & Van Rossum, 2006). Through use of the 6 stage thinking framework, a value framework is created which acts as the core competitive advantage using the few words possible (Lumsdaine & Binks, 2003). The following is the created value proposition framework by the firm: Ethical Apparels Ethically sourced and manufactured apparels Why buy from Paleco This is an ethical produced apparel brand sourced through a green supply chain. The brand ensures that the consumer is able to utilise ethically produced wear which will enhance customer experience. The apparel line ensures that the consumer is not exposed to illegal sourcing activities such as child labour, sweatshops and employee exploitation. Benefits and features Ethical Affordable Free shipping Durable High quality Mini case Problem definition Paleco has been in the apparel industry for a long time. Despite the success in the market especially in the male clothing sector, ethical sourcing has been a major problem. The apparel industry in Australia has been under a lot of criticism for the ethics in the supply chain. A study carried out proved that some of the apparel manufacturers were engaging in unethical sourcing. This is through use of suppliers who had links with child labour, sweatshops and unsafe working standards. Some of the apparel manufacturers were found to lack information on where they get their cotton from. Paleco has been under an increasing threat from ethical consumerism. This is with an increase in consumers demanding goods and services produced through ethical supply chain. The main problem with Paleco is the fact that their products may face boycott if they do not prove they are engaging in ethical sourcing (Joergens, 2006). Solution proposed Paleco has to come up with ways in which they can tackle the problems brought by ethical consumerism. This is through coming up with a solution that will ensure the company is able to prove that they are engaging in ethical sourcing practices. Paleco has to start by understanding what the consumer want, why and when. In this case, Paleco customers want ethical sourced and produced apparels. This is a great opportunity that the company can exploit and gain a competitive advantage through introduction and branding a product line which is ethical. Ethical consumerism is being driven by the guilt and increase in social pressure. Consumers have been boycotting unethical companies products based on the supply chain activities. There has been an increase in the public awareness on ethical issues. Consumers are exercising their ethical conscience through not making purchases on shops which are unethical. Research has shown that firms which adopt ethical sourcing benefits a lot in the long run. This is due to fact that they can pass the savings to consumers leading to reduced prices (Carrington, Neville & Whitwell, 2014). Paleco supplier relationships will improve through ethical sourcing. This is through ensuring that the suppliers are upholding the highest moral standards and are executing their responsibilities. This leads to an increase in the share value for the company. Due to the problems associated with sourcing in Australia apparel industry, Paleco will enjoy a competitive advantage (Joergens, 2006). This will act as a differentiation for the company hence increasing their market share. The new apparel line will require collaboration between the suppliers and the firm. This is through a well-coordinated team work. Challenges There are several challenges that Paleco will face in their move for ethical sourcing. Resistance from the stakeholders is a major challenge. Another challenge for Paleco is linking the business objective to ethical sourcing. This can derail the best intentions by the firm. Lack of a structured assessment process is also another challenge. The above challenges can be solved through coming up with a code of conduct and a structured assessment process. This will make it possible for Paleco to carry out ethical sourcing in their supply chain and manufacturing. Suppliers who do not comply with code of conduct will be eliminated. Then, the firm has to launch branding for their product which will emphasize on ethical sourcing (Joergens, 2006). After the launch of new brand which is ethical, the firm has to seek collaboration with wider audience. This is a move that will enable the company efforts in ethical sourcing to reach a wider audience. The company has to increase their use of International Labour Organisation (ILO) guidelines. This is a move that will ensure that the firm activities are in line with the current labour standards. The image management for Paleco has to extend to whole audience. Protection The brand will be having a unique designed logo that will act as the identity to ethical sourcing. The company will patent their new clothing line logo to ensure it’s protected from the counterfeits. It will ensure other firms cannot use the company ideas, when they are fully exposed. Value proposition and financing The value proposition of the new apparel line is to ensure that consumers are able to purchase ethically produced apparels (Anderson, Narus & Van Rossum, 2006). This ensures that the consumers need for apparel free from child labour, sweatshops and exploitation is met. Ethical consumers requires guarantee that ethical attributes are met. Through ethical clothing line, the company image will be improved. The consumers purchase behaviour is influenced through the ways in which the company conducts itself (Carrington, Neville & Whitwell, 2014). The move will also help the firm in reduce service failure rates and improve cycle time. This is innovation Pelaco requires additional revenue. When embarking in ethical sourcing program and branding, the firm can use its shareholders capital to implement. The additional revenue required is not high since the firm has adequate resources. Stakeholders analysis The stakeholders’ pushback is a major issue that faces Paleco as they engage in ethical sourcing and new product line. The internal stakeholders may see the move as costly and hence resist it. This is the group that requires being convinced first. The company will have to ensure that resistance from the stakeholders is minimised. This is through informing the stakeholders on the benefits of introducing an ethical products line and how the firm image will improve (Clarysse & S. Kiefer, 2011). Stakeholders should be made aware the risk faced by the firm due to reputation which is at stake. Use of third party accreditation for the new ethical product line is a great move that can communicate the ethical attributes of the product to the consumers. Conclusion Ethical consumerism presents a great entrepreneurship opportunity for apparel industry. This is through coming up with products that are ethical and can attract consumers. Paleco can seize this entrepreneurship opportunity and engage in production and branding of a new apparel line which is ethical. This is a move that will require critical thinking and problem solving skills. Through consumer value creation, it will be possible for the firm to gain a competitive advantage. This is through explaining to the customers how the new product will solve their problems and improve their situation. The value proposition shows why consumers should buy from Paleco and not from the competitors. This is due to fact that Paleco products are ethically produced. The mini case has shown how Paleco can take the entrepreneurship opportunity, solve the problem, address the challenges and come up with a viable ethical product. This is through protecting their innovation, value proposition, teamwork, financing innovation and ensuring all stakeholders are satisfied to reduce resistance. References Anderson, J. C., Narus, J. A., & Van Rossum, W. (2006). Customer value propositions in business markets. Harvard business review, 84(3), 90. Carrington, M. J., Neville, B. A., & Whitwell, G. J. (2014). Lost in translation: Exploring the ethical consumer intention–behavior gap. Journal of Business Research, 67(1), 2759- 2767. Clarysse, B. & S. Kiefer (2011).The Smart Entrepreneur, 2nd Edition, Edgar & Thompson. Joergens, C. (2006). Ethical fashion: myth or future trend?. Journal of Fashion Marketing and Management: An International Journal, 10(3), 360-371. Lumsdaine, E., & Binks, M. (2003). Keep on Moving: Entrepreneural Creativity and Effective Problem Solving. McGraw-Hill. Pelaco.com, (2015). Shop, retrieved 14th November 2015 from, http://www.pelaco.com.au/wsm/shop?tab=? Read More