The Fashion Industry and the New Consumer - Coursework Example

THE FASHION INDUSTRY AND THE NEW CONSUMER The Fashion Industry And The New Consumer Introduction The Tesco plc is fourth largest retailer globally after the Wal-Mart, the Home Depot and Carrefour, and the leading supermarket retailer in the United Kingdom. The corporate begun after the WW1, and is renowned for the expansion of its services throughout the 1990s away from foodstuff: groceries. In the final quarter of the year 2009, the company had a thirty-one percent share of the whole United Kingdom grocery market, with a gross turnover of about 59.4 billion for the financial year 2008/2009. The study looks into different scholarly works in a bid to explain the details of fashion industry in relation to new customers. Some scholars provide an alternative summary of the company communications through a historical angle, defining five core or central themes. The insight, by the 1990s, that the company had to adopt better communications with a number of target groups assisted it in remaining competitive in the market. For the greater portion of the 20th century, organizing communications had been tackled principally through marketing divisions and public relations, this being an inherently limited approach, consequently current forms of communications administration have incorporated these divisions into the wider company communications function. Moreover, the changes from inflexible to flexible market enabled the company to widen its market by diversifying its products. The move aimed at increasing competitiveness in the dynamic market and this saw Tesco investing in clothe line stores. Tesco Cloth Retailing The Tesco clothes vending company is amongst the largest clothing retailer, by capacity, in the UK and in 2008 it ranked third. 2008. Tesco clothes are dedicated to bringing a broad collection of clothes to men, kids and women. Its website developed swiftly and the sales had risen by almost 47% in the year 2009 as compared to sales at such a time in 2008. Consequently, Tescos rivals, e.g. Asos.com retailer, have felt the impact of from Tesco clothes retailer’s entry in the clothes market. The company parenting appears to work well as Tesco plc, provides a clear vision to the clothing retailer and promotes the business activity to maximize the total corporate turnover. It also assist this business unit to widen its strategic potential and helps all the other business units to ease cooperation and relations between themselves and urge them to share the competences, skills, and to assume and to maintain the same and main policy, which is the Tesco plc Company policy. In addition, Tesco plc continues to be the chief supplier of key services like human resources and provides capital to the Tesco clothing retailer. Tesco plc intervenes in its business units, ensures that company can operate appropriately and is profitable, as well sets levels of performance from all the business units. As a proof that Tesco plc’s clothes retailing fits well with the other units like Tesco banking, food, car insurance, home, health, clients can use the Tesco “club-card” for any service and make discount points that can be used as it suits any of them. For example, customers can spend their earned discount points over banking stores as discounts on the online clothing. In addition, when making a purchase on Tesco clothing website clients can use financial services like Tesco credit cards or other economic services. All the business units share the data collected when customers use the Tesco Club-card in order to find out if the others could offer extra services such as car insurance, dental care service or extra discount on cloth purchases. Therefore, Tesco plc continually works to bring uniformity into its business units, same as the synergy between them thereby enhancing value across all business units. Tesco plc, which is the overall manager, considers it an advantage to combine portfolios with different kind of activities that help the global business to reduce risks and to grow the corporate market share and profits. As a beneficial business unit, Tesco clothes retailer creates enormous profits through spectacular market growth and the ability to fix other units or to launch new business platforms. However, studies on performance show that, similar diversification pays better than unrelated diversification. As a result, Tesco plc always requires thorough research prior to starting a venture in any diversified area. Analysis of the macro environment In a company, many externals factors influence the decision making of the managers. These include tax and demographic changes, government policies, new rules and regulations, among many others. Therefore, to be in a position to analyze these factors better, PESTLE issues, political, social culture, economic, technological, and legal and environment, helps the managers in analyzing their organizations. As threshold competences, the Tesco clothes unit counts in marketing and management methods such as concession based on purchase-points system. Its financial service has a commendable effect on the clothes retailer unit’s sales because it offers credit purchasing system and installment payment. However, the key competences hang on the discount system and the Tesco club-card points, a loyalty card allowing clients to earn discount points for every purchase they make from any of the Tesco business units. The Tesco clothes retailing unit is proud of its low prices in the clothing market, which can be as a result of strategic process lines, enabling it to gain more market share, stand at an inimitable stage and increase the sales volume. The future strategic options As future calculated options, the clothes retailing strive to have the lowest production cost in the industry, in order to offer quality products at the lowest prices possible. The clothing business unit also tries to control its operational costs to gain the competitive price advantage over its rivals and consequently increase its profit margins. The unit has to developed, and continues to develop, strategic differentiations in order to deliver products with inimitable features and fashionable clothes to its customers. The role of technology in corporate communication Chaffey et al (2009) summarize Tesco’s strategy of diversification mainly in terms of internet implementation and marketing, citing the Tesco’s C.E.O, Terry Leahy. Terry, in one of her speeches, says that Tesco will be the world’s largest online grocery retailer and shows the company’s intension to become the United Kingdom’s leading e-commerce business. (Lorenz and Nuki, 1999). This further defines the way in which Tesco’s development was associated to its expansion in offering wider range of products and services. In the year 2000, the online services diversified, providing numerous non-food artifacts and several monetary services. The conditions of diversification are understood chiefly in connection to online shopping and service advances. By 2003, more than 90% of the United Kingdom’s residents could shop over the internet with Tesco.com providing the common 65% of the United Kingdom online grocery market and additional diversification of merchandise ranges, such as telecoms and financial services. Particular innovations included DVD services by a rental film DVD service, energy utilities that allowing clients to save on their bills, schemes and initiatives to promote improved health such as online –diet services enabling clients to adjust their diet and food shopping, and telephone services. At the moment, Tesco focus on the growth of TESCO direct, which offers clients a broad range of non-food products as well as launching a variety of own brand computer software. In the current day market, Tesco accounts for about 66% of all United Kingdom are online shopping market. Oliver (1997) claims that a communications structure in relation to a technology eventually aligns the terms of cultural beliefs and values of a company with the company’s vision. Oliver present a model designed by Goldberg & Sifonis (1993) and titled the “communication framework”. The model depends on the assumptions of management which assumed on an instinctive ground and that require to be communicated with external and internal stakeholders. , as described; from that, a vibrant communication framework or campaign plan is formed which unmistakably represents the beliefs and cultural values of an organization associated to its vision. Considering the diversification and expansion of Tesco’s products and services, in addition to the increase of its prospective targeted market, the originally defined terms of company communications devised by Hargie D & Tourish D (2004) and Cornelissen J (2005), in which are ideas of integration lies, and the crossing of practical boundaries, appear most suitable. Despite the wide range of products and services presented by Tesco, there are a quite a number of unifying terms to which the company would need follow, such as an overall brand value and Corporate Social Responsibility. The organizations give a number of terms, which encompass the main purpose of Tesco as a business. The terms include Value via competitive prices, high food quality, availability and customer communications, helpfulness through customer service, inclusiveness through the means of ensuring that the company appeals to a wide range of clients, and innovation through new artifact advancement and retails services technology. Market Penetration strategy In order to attain success, Tesco company has a three-way strategy. First, Tesco takes customers from its rivals such as Morison, Sainsburys, Somerfield, ASDA, among many others. Secondly, by offering the high quality products and better level of services, Tesco company could attracts and retains more clients, who obviously feel that Tesco is the product and best service provider. Such situation makes a clear distinction among Tesco units and their competitors. Third, appealing to more non-users of services and products to some business, through promotion and advertising or other relevant marketing methods, creates a wide customer base, which in return gives competitive advantage. Marketing Penetration strategy is extremely important for Tesco company because the cost of retaining existing clients is far far much cheaper than that of attracting new one. A good example is notable in the Tescos international growth strategy that responds to satisfy the all needs of customers. It is responsive to local needs in different countries, by entering into combined ventures with local stakeholders such as the Samsung Group in Korea, and Charoen in Thailand, appointing an exceptionally high proportion of local personnel in the managerial positions. Tesco has access to the lowest material cost for both supply and efficient production thereby influences the retail market largely. By identification of low cost suppliers, Tesco is privileged to offer products and services to its clients at cheaper prices in the market. For Tesco having good experience in dealing with huge sized and diversified of the customers and customers cultures, is an advantage for the company as a retailer in retaining its in the relevance in the dynamic market. This has enabled TESCO to successfully create its Brand loyalty. The company operates as an Internet system provider (ISP), and currently it is in home phone and mobile phone business, and Volp businesses. In a joint venture with O2, Tesco could bring up diversification in telecommunication and it this would increase its businesses over internet with Freshtel Australia. Conclusion Certainly, the Tesco clothes retailing, still has great opportunity, via its corporate parent’s economic situation, to surpass the market segment dominators. The business unit should also bring up more tactical options and utilize the differentiation based costing to raise its profit margin. For this reason, it must properly control all of its operating costs to ensure the product sells at a relatively to not only attract new customers but to also retain the current clients. Tesco can quite be acquainted with technological and infrastructure changes mainly on its e-tailing business. Apart from Tesco’s use of internet as main technological infrastructure, changes are to be expected and the managerial personnel should be able to tackle the swift changes in technologies. Tesco should advance technological infrastructures by innovations to boost efficiency as well as amount of the products and services. Innovations will also ensure that the cloth retail unit give to the customers the most recent, unique and affordable fashion. The Tesco’s senior managers, who are the think tanks of the company, ought to consider how to coin their own logistics than using the widely recognized ones in expanding the company. To achieve this, they will require a good understanding of the basic principles of good logistics as well as investigate new logistics capabilities. A tactical model will enable Tesco company achieve its goals and maintain competitive advantages in the markets. In addition, the model will enable the company to understand the trends in the market and help to identify its main rivals in every location. Recommendation Tesco clothes retailing should focus more on the cost leadership because during recessions, customers are more worried about the price than any other feature of the product. 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