Lewis Jeans: Looking Forward in an Electronic World - Case Study Example

Lewis Jeans: Looking Forward in an Electronic World Prepared for: Bart Lewis, CEO, Lewis Jeans Prepared by: , a member of Consultancy Team 26 August 2007 Abstract An overall analysis of Lewis Jeans undertaken by my consultancy department head, Rupert, indicates a need to update your business to adopt new marketing methods in a global marketplace, where small companies are trying to meet major competition from big-business chains. It would appear from Rupert's findings that your business is failing, and the major problems he sees are lack of communication between you and your workers-with communication ending at the management level-a need to improve the quality of your product and a need to find a method of reaching a younger customer base. This calls for developing innovative designs and utilising information technology in your company to study the market. Introduction Rupert has asked me to address his findings which show several problem areas within your organisation that need to be evaluated. The first area covers the style of the product itself, and Rupert is concerned that the jeans produced by the company do not appeal to younger customers. This report will offer possible solutions to this problem by suggesting ways to establish positive brand recognition. A study of the market for jeans indicates the need to offer a unique style or marketing method that will bring younger buyers to Lewis Jeans. The next area of concern is the quality of the product. Because retailers are returning 15% of sales, it is important to test the quality of the jeans manufactured to see where the weaknesses are. By improving durability, the brand will eventually be known for its wearability in addition to style. One of the most serious problems to be addressed is the high turnover of the workforce. It would appear they might not have the incentive to commit themselves to the company. Because you communicate only with the managers at your different factories, you may be unaware of how your workers see the company. More interaction is needed with staff from your office to each factory to encourage employees to propose innovative ideas on how to improve sales. Finally, the cost of manufacturing your line of jeans is 25 per cent more than other clothing lines in the industry, and it is important to study the various stages of manufacture to see where savings can occur without impacting quality. The report will present suggestions on how to evaluate the company and show different methods of improving all aspects of your business by applying the SWOT Analysis and developing a balanced scorecard. As the CEO, you have the opportunity in such a small company to meet personally with all of your staff and make sure your managers are reflecting your beliefs on how the company should be run. Organization Structure and Culture In studying the structure of the company according to its diagram, it is immediately obvious that there are too many managerial positions at too many levels, and sales and marketing have no real connection to the rest of the company in any of its locations, including the main office. Restructuring after setting up a strategic plan for the future is recommended. The first step would be to apply a SWOT analysis, determining strengths, weaknesses, opportunities and threats (SWOT). Strengths: Although a small company faces competition from major companies such as Levi, the benefit of a small company is the opportunity for leadership to interact with all areas of the business. Another strength is that the product has been successful in the past and by establishing a different marketing method and improving quality, the company can be successful again. Weaknesses: One of the most serious weaknesses for Lewis Jeans is the dependency of leadership on the telephone in a technological society. Another weakness is the high turnover of staff and lack of connection with the leadership. Opportunities: By restructuring the company and establishing new communication equipment, the company would have the ability to increase its sales and improve marketing. By incorporating the company's Sales & Marketing into the overall culture of the company, the whole company can be involved in a sales campaign by encouraging innovative suggestions for such a campaign. Another possibility is to consider merging with another small company to expand the market for both. Threats: The benefit of running a small business can quickly become a detriment if the company does not keep up with all of the electronic advances in a global society. With online competition, catalogues, and advertising, a small company that doesn't take advantage of these improvements is not going to make it. Staff Motivation: Balanced Scorecard The Business Process Perspective, Sec.3-par.4 (Balanced Scorecard) Instead of organising the business from top to bottom with the sales department an entirely different component, it is suggested that you try establishing a balanced scorecard as shown above. Robert Kaplan and David Norton initiated the Balanced Scorecard in 1992 to create a balanced management plan that includes all members of the company and meets customer needs (Balanced Scorecard). The first question that arises in the scorecard is related to shareholders. Who are the shareholders in Lewis Jeans With such a small company, would it be feasible to offer shares to all employees as an incentive to improve performance The next part of the scorecard deals with internal business processes, and the present business diagram indicates several levels of management, making the communication between leadership and actual workers extremely difficult. Perhaps each factory could establish its own scorecard with input from all, and instead of calling managers on the phone, you and upper management might consider visiting your plants at least once a month, so that problems can be resolved and employees can feel a connection with you on a personal level. Eventually, communication should be brought up to date with the use of computers and this is when learning and growth become part of the strategic plan for the future. Finally, how do customers see the company and what are the demographics of your customer base Do you sell only to retailers or are you able to sell by catalogue to individual customers At this point, the scorecard goes full circle back to financial and each revolution should show company growth. Leadership Style The three most important areas for change are brand recognition, improving quality of goods, and encouraging innovative ideas and suggestions from staff. At one time, jeans were only for informal wear, worn as a casual item during vacations or at home. Today, they can be worn in any setting-even as evening wear. The manufacture of jeans is one of the most competitive areas in the clothing industry. Some of the different styles are slouchy jeans, skinny jeans, slimming jeans, and the latest-smart jeans, being introduced by Prada, and Sculpt jeans in "cup" sizes A to C for different shaped behinds (Coulson). Once Lewis Jeans establishes a strategic plan for manufacturing a new, improved product, a study of marketing trends in the jeans industry is recommended to answer the following questions: Product - too conventional at present. How can the company attract young people What kind of advertisement would appeal and what is the best way to reach potential customers What study can be made to determine why Lewis Jeans is losing its customer base Recommended: With so many different styles of jeans, the company must come up with a truly innovative idea. One possibility is to consider merging with a t-shirt company such as Europeanwear.com (Custom Made). This is a Web site with an online catalogue that offers custom clothing but no jeans-just t-shirts, leisure shirts, underwear, headwear, childrenswear and babywear. If Lewis Jeans could come up with an original design for a customised set of jeans and t-shirts in a unique package, and is able to sell a small t-shirt company on the idea, a merger could be made with the addition of online catalogues encouraging customers to order tailor-made sets. Another possibility is for Lewis Jeans to develop its own tailor-made sets and utilise online advertising and a Web site to sell them to the public. Quality - What is causing retailers to return 15% of sales How can the jeans become known for durability while a sales campaign is underway How can Lewis Jeans motivate staff to improve output and product Suggestion: By restructuring the company to enable all employees to contribute innovative ideas and unique designs to the manufacturing of the product, the quality of the product will improve as employees feel more and more involved and take pride in what they do. It would be helpful also to offer a flexible work schedule and available courses to educate employees on use of electronic equipment, giving them incentive to stay with the company. Management courses should also be available to apply the most up-to-date management methods intended to offer more positive interaction with staff. Cost - Because it costs you 25% more than anyone else to make one pair of jeans, it is important to find out why and how to resolve the issue. Does the company manufacture its own material or does it buy from a supplier Is there just one design for all jeans What made Lewis Jeans popular in the past and what has changed in the marketplace Suggestion: It might be feasible to look into the possibility of making custom-made jeans for individual customers or even retailers, utilising what has come to be known as mass customisation, the ability through use of computerised codes to provide products tailored to individual customer needs on a large scale (Heiskala et al). Conclusion In the past, leadership worked with management in an organisation and depended on managers to keep the company ahead of competition. However, with the wide use of computers and the Internet in the 21st century creating a global marketplace, far more has to be done to keep up with the competition. Present business methods call for interaction with all staff members and understanding of what customers want by developing a strategic plan. In the case of Lewis Jeans, once a plan has been put in place, it is suggested that the company follow up with the addition of a company Web site that visualizes the product and gives customers the opportunity to order from a catalogue as well as providing a virtual showcase for retailers who might want to order from Lewis Jeans (Custom Made). Such a Web site offers the opportunity to be innovative in presenting the product, with colorful descriptions such as Baja blue jeans, faded American, midnight blue or charcoal. Give employees the opportunity to name different styles. It is also important for the company to know its customers. This need for information technology extends to a system within the organisation for tracking customer and shopping interests with a follow-up sheet to keep marketing trends updated. Because the various factories are not close to each other, use of computers would allow constant and immediate communication in all facets of the company. It appears from the business diagram that the company does not have an information technology department, nor are they using computers in the company. By installing such a system, it will slow down business activity for a while, but in the long run, there will be growth in the company. It is obvious that you care a great deal about your company and take pride in its growth. However, in order to continue growing, the company must utilise its strengths by making the structure more personal and looking for ways to beat the competition. Because the company is small, with proper planning, it could become a hallmark for jeans, known for quality and style. This calls for research into the industry to determine what has been done and what still could be done to attract customers. Once you establish your goals, you can work with the rest of your staff to meet those goals. Works Cited "Balanced Scorecard: The Business Process Perspective." 12 Manage. Last updated 19 June 2007. 14 August 2007. http://www.12manage.com/methods_balancedscorecard.html Coulson, Clare. "A Leg-up in Your Search for the Ideal Denim." Telegraph.co.uk. Last updated 27 July 2005. 17 August 2007. http://www.telegraph.co.uk/fashion/main.jhtmlxml=/fashion/2005/07/27/efdenim27.xml&sSheet=/fashion/2005/07/29/ixfashion.html "Custom Made T-shirts and Clothing." Europeanwear.com. 2007. 17 August 2007. http://www.europeanwear.com/wholesale/custom_made_t-shirts.htm Heiskala, M., Kaija-Stiina, P. and Tiihonen, J. 2005. Mass Customisation of Services: Benefits and Challenges of Configurable Services. Frontiers of e-Business Research. Available from: http://www.ebrc.fi/kuvat/206-221_05.pdf "SWOT Analysis." Wikipedia. Last modified 8 August 2007. 11 August 2007. http://en.wikipedia.org/wiki/Swot_analysis Read More