Ruyi Lifestyle - PESTLE and SWOT Analysis - Case Study Example

RUYI LIFESTYLE Name Class Unit Introduction Ruyi Lifestyle is a start up firm that combines wellbeing, fashion and sportswear to come up with athleisure wear which is a current trend in the industry (Ran, 2015). This is a firm that has been able to grow to be a high end luxury active wear brand within 11 months in a category which is highly competitive. The firm faces competition from large scale as well as small scale designers. This includes firms such as Adidas who have been operating in the high end category in sportswear and fashion. The target market has been mainly on the UK women wear segment and has been considering expansion into men wear. The women targeted are expected to have high disposable income and between the ages of 25-40. Main issues focused by Ruyi have been on quality, costs and managing efficient processes. This summative essay is aimed at helping Ruyi to improve and make the operational side of her business smarter. This will include macro (PESTLE) and micro (SWOT) analysis of the industry and company respectively. The essay will also include a description and analysis of the operations for Ruyi lifestyle as a start-up. Lastly, the essay will provide key recommendations for the operations function based on what they can do better and why. PESTLE analysis Political Political factors play a very important role in the industry backend. This is the part which is not normally seen by the customers. Political environment determines how the firms in the industry produce their goods and services and the profit they make (Cumming and Zahra, 2016). UK has great policies for growth which are very valuable to the industry. This includes low interest rates for the industry as well as arranged international agreements on tax. Despite this, the recent break from EU might impact the business as it expands overseas in Europe (Cumming and Zahra, 2016). Economic A UK market collapse could mean bad news for the industry. This is especially in the high end athleisure wear where customers may switch to lower end products which are cheaper (Ran, 2015). The costs of labour have also been a major factor in the industry. With unpredictable economy, a lot of firms have been looking for new markets (Cumming and Zahra, 2016). Social The industry is highly reliant on having good public relations. In UK, health consciousnesses have been on rise. People have been moving towards having good lifestyles. This implies that there has been a rise in purchases of sports apparel which is very important for industries such as Ruyi. In addition, the industry has been under criticism for sweatshops. This is an area that the firm has to ensure they do not engage in (Jones and Hayes, 2004). Technological Technology in the industry has made it easy to innovate. This includes making it easy to interact with customers and enhancing design. Social media has been an important avenue to build the brand. Despite this, social media is a double edged sword and can build or destroy a brand. This has been well utilised by firms such as Adidas and Nike. Through technology advancement, it has become easy to have market metrics (Burns, 2010). This has made it possible for the firms in the sports fashion industry to innovate, increase revenue and optimise targeting. Environmental In UK and globally, environmental issues have gained a lot of importance. The sports fashion is affected by several environmental issues. This includes ensuring that the firms reduce pollution and adverse impacts on the ecosystem. The industry has been required to become more eco friendly. Legal UK has laws forbidding tax dodging and tax havens. The industry is expected to operate within the legal confines of UK. SWOT analysis Strengths Ruyi products have unique features like bespoke fabrics and prints. Sells directly to the customers through online, pop-up stores and collaborative events. Excellent social media marketing. Service delivery which exceeds the target market expectations. Efficient management practices. Quality products. Weakness High prices than the competitors. High unit costs. Challenge in fulfilling high demand due to the firm small size. Difficulty in keeping prices down and margins up. Lack of economies of scale such as those obtained by Nike and Adidas. Opportunities The rising trend in athleisure wear. A lot of people are participating in athletes and active wear to keep fit and for health reasons. Collaborating with other online retailers. Threats The rising competition in the category. This includes competition from new small scale designers to large firms such as Adidas. The rising costs of raw materials. Changing political dynamics in UK with separating from Europe (Cumming and Zahra, 2016). Low barriers of entry into the UK fashion industry. Description and analysis of the operations for Ruyi Lifestyle (as a start-up) Ruyi operations can be categorised into manufacturing and services. Through manufacturing, raw materials are converted into finished products. Ruyi objectives in their operations management is based on customer service and resource utilisation. Through properly managing their operating systems, the firm has been able to utilise their systems to satisfy the target market. Efficient use of resources at Ruyi can be credited for the firm success. This has been attained by minimising loss and ensuring that there is no under utilisation of resources (Stevenson and Sum, 2002). Ruyi life style has been doing impressive in their manufacturing and service operations as a start up. This is a start up that has dependent on Abi Imasekha combining wellbeing, sportswear and fashion. It is clear that the firm has been able to capitalise on athelisure wear in a great way. The firm has taken the opportunity and made profit out of it. Abi is an entrepreneur who is able to give the company the best leadership in its operations. This is a leader with the capacity to ensure that all rules are followed to attain goals (Burns, 2010). Passion is what makes the entrepreneurs get started as seen in this case (Burns, 2010). It seems that Abi passion has made it possible for her to convince her team on her vision. From the case, Ruyi charges higher costs than the competitors. This pricing strategy is based on revenue maximisation. In this case, the firm has negotiated for the highest price in each of their sale. The prices are higher than those of most of the competitors. Despite this, the firm has been facing a challenge of keeping the costs down and margins up. Start-ups face a dynamic market where changes happen very quickly (Burns, 2010). At the moment, the firms face a sports fashion industry where consumer demand for quality product is high. This implies that there is need for fast production of clothes in a cheap and quick manner. Ruyi has high market responsiveness and agility which is obtained through taking into consideration the consumer preferences. The firm has been targeting on the women with high disposable income. Despite this, the target market for Ruyi seems to be small. The target market is highly informed and wants products that meet their quality expectations. Key recommendations for the operations function There is need for Ruyi to step up their operations management. This is through bringing together a production plan to utilise materials, capacity and knowledge available to the finished product. This will help in addressing the existing competition in the market which requires efficient management of materials. There must be control of parameters such as costs, quality and the firm inventory levels. In addition, it would be advisable for the firm to reduce their level of inventory for them to increase their saving. This can be attained through enhancement of the online stores and manufacturing based on demand (Stevenson and Sum, 2002). The costs saved through this method can help the firm in reducing their operation costs hence prices. As the firm expands, it would be prudent for them to manage their resources more efficiently. This is due to fact that resources are vital to the firm success. At moment, the firm has a small team of workers. It would be important to ensure that human resource is well trained since they are a key asset. The firm should invest more on technology so that the human resource will be based on the planning and controlling activities. It would be important to apply systems management to the organisation. This is through a consistent and integrative approach which will lead to optimisation of the overall Ruyi system goals (Stevenson and Sum, 2002). Ruyi can expand their target market to include men wear. This is due to fact that the current target limits them compared to the competitors. The firm is competing in the UK market where other firms such as Nike and Adidas have a large target market (Jones and Hayes, 2004). Since the firm has been able to do well in the woman category of leisure wear, it will be possible for them to succeed in the male category. There is need for Ruyi to exercise strategic planning. This is a process of thinking which is based on the firm mission and the environment conditions facing it. This will help in coming up with a decision which is based on results. It will also ensure that the firm current decisions are based on future results and conditions (Stevenson and Sum, 2002). References Burns, P., 2010. Entrepreneurship and Small Business: Start-up. Growth and Maturity. Basingstoke: Palgrave Macmillan. Cumming, D.J. and Zahra, S.A., 2016. International Business and Entrepreneurship Implications of Brexit. British Journal of Management, 27(4), pp.687-692. Jones, R.M. and Hayes, S.G., 2004. The UK clothing industry: extinction or evolution?. Journal of Fashion Marketing and Management: An International Journal, 8(3), pp.262-278. Ran, Z., 2015. Athleisure runs up the score with ever more designers & collaborations thleisure. China Textile, 3, p.011. Stevenson, W.J. and Sum, C.C., 2002. Operations management (Vol. 8). New York, NY: McGraw-Hill/Irwin. Read More