Leisure Sailing Clothing - Essay Example

Introduction The Leisure sailing and clothing industry is an industry with relatively small economies of scale. However, this industry has its own audience because it can fulfil a function that other industries cannot. The Company is also at an advantage because, there is already a supplier that has been secured, and this means that the Company does not have to incur manufacturing costs. However, a foreign investor must look into a number of macro and micro issues that affect the Company. This will be examined in detail in the subsequent sections of the essay. (UDEL, 2007) Pest Analysis A pest analysis is normally done with the purpose of establishing the macro environmental factors that may affect a business either in current operation or one that is yet to begin its operations. The Company under analysis belongs to the latter scenario rather than the former one. There are four factors that will be examined under the titles shown below as follows; Political factors There are both big and small political forces that affect the way a company runs. This is especially in regard to the leisure sailing industry. First of all, since the person considering opening up the business under study is a foreign investor, then government regulations concerning foreign investment in the UK should be considered. This is because there will be some tariffs that have to be paid by the investor. But there are relatively few regulations in this area of trade currently in the UK. (Assmus and Farley, 1984) The government passed a competition policy in the year 1998 to regulate players or investors within industries that may have undue advantage over others in their arena of operation. This is an advantage for the investor because he is protected from unfavourable competition. Besides this, the investor also has to consider the fact that the UK is a signatory of the Kyoto Protocol; therefore he must make sure that the Company complies with environmental regulations set up by the government. The investor has to consider the country that will be supplying him with the imports. He has to make sure that it is politically stable and that the relationship that country has with the UK is positive. This is because if the two countries are political rivals, then there may be restrictions on conducting trade between them. Economic factors There are many economic factors that will affect the new investment. These may either be related to national issues or may be caused by some international factors too. There are very many players in the leisure sailing clothing industry and some of them may not be seen directly. This is because most companies in the UK that offer leisure sailing clothes do this as only apportion of their product offering. It may therefore not be very easy to detect such Companies as competitors in the market. The investor must put this in mind because he can be able to adjust his marketing strategies depending on what some of these competitors do. (Assmus and Farley, 1984) Another important factor that the Company should incorporate into its operation is the fact that the UK economy is relatively stable. This means that consumers have strong purchasing power. The Company can therefore engage in mass supplies because there is a ready and able market in the UK. In addition, the economy has long term prospects of improving. This implies the Company also has an opportunity to expand into there areas that have previously not been dealt with. The investor has to remember that the United Kingdom is part of the European Union. There are a number of implications that this has on any business running in that area. The first is that there may be stiff competition from other countries that belong to the region since trade barriers have been lifted. Also the introduction of a common currency will also affect the strength of the pound if the Company will be located in Britain. The Company can deal with stiff competition from other members of the EU through incorporation of outsourcing and knowledge management. The Company will also have to consider the kind of system it will use to manage its employees and also its suppliers. For the suppliers, it has to consider whether it will use inventory management or chain management. The former is a more appropriate system to use as it is what current retailers in the leisure sailing clothing industry are using. (Porter, 1985) The Company also has to deal with the fact that credit markets are now a common phenomenon in the UK. This could prove to be negative aspect for the Company but it can offset that cost by improving its marketing strategies and establishing a good name for itself in the leisure clothing industry. Social factors Many people who engage in leisure sailing may be of different ages. This is mostly because this past time activity is relaxing and does not cause much strain on the body, it can therefore be conducted by any age group or any gender as long as one understands the intricacies involved. Therefore, the Clothing Company should put this in mind during market segmentation. It should not try to provide clothes for one category of people and neglect all others. Because the UK has some water bodies, then it would be advisable for the Company to set up the business near those water bodies. This is because it will be near its market and will also have employees who are very knowledgeable in the field of leisure sailing clothing. The investor must also consider the culture of the people of the UK. This is because it is very necessary for one to determine their preferences so that he can meet the present need. The people of the UK are not very conservative, therefore the investor can provide some 'revealing' clothes for his consumers because the market will be receptive. The people of the UK have a relative rate of adjustment to change. This signifies that when the Company starts its operation, it must try as much as possible to endure the tough times because it will take it sometime before it establishes a name for itself in the industry and in the region generally. The investor should also be aware that in UK, sweatshop labour has been rejected. He must therefore avoid doing business or getting supplies form manufacturers who engage in unfair employment practices. He must also make sure that within his Company, employees are treated fairly. Failure to do so may result in bad publicity for the Company or it may result in low production. Some employees can also take legal action against the Company if they feel that they have been wrongfully accused. Decision making structures in the UK have to be considered by the new Company. This is because most Companies have moved towards a democratic system that must integrate all stakeholders in the Company. It is a common feature to find that some employees have taken action against certain retailers when they make corporate decisions without consulting them. One such example was the John Lewis Company that was facing action from its employees because they were unhappy with the way the Company had decided to float its shares in the market without consulting them. (Margolin, 1979) Technological factors There are many technological innovations that affect the leisure sailing clothing industry. The first is the way information is distributed within organisations. This will also apply to the Company under analysis. The Company should include technology in the process of distributing information to its staff members. It should also include technology in management of customer relations as other retail Companies in the sector are doing the same. The Company should consider the effects of online shopping on purchases made within the Company. Online shopping could increase the Company's customer base and may even enable the Company to sell its wares to some other countries that are outside its Continent. However, online shopping can be disadvantageous because it denies the Company an opportunity to display its good customer relations. (Assmus and Farley, 1984) The Company should also ponder over the issue of automating its services. Other retailers in the UK have engaged in the practice. Here, customers simply pick what they may require and pay up using electronic cards that have sensors installed within stores belonging to the Company. This allows for faster service delivery and efficiency when dealing with clients. The new Company should consider marketing itself using technological methods. It can establish online sites about the Company and its products. It can also conduct customer surveys through technology and improve its position in the leisure sailing industry. SWOT analysis of competition in the industry Strengths The Company will specialise in the provision of clothes for leisure sailing. This is an advantage because the Company will have a specific market and can therefore analyse this market easily. Besides, it can come up with strategies that improve its position in the industry. Some Companies like Crew Saver (located in Hampshire) deal with all types of items that are related to sailing. These include sailing footwear, sailing safety lines, sailing gloves and lastly sailing clothes. Another Company in the industry is Douglas Gill. This Company also engages in almost all types of sailing items ranging from accessories, fleeces and even sailing clothes. All these Companies offer a wide range of items related to sailing. This means that the new Company will have an advantage over others since it is only focusing on sailing clothes. The other competitors have diluted their brand image especially for sailing clothes as a product by engaging in so many other products. The New Company will therefore have a very strong brand image. (Barney, 1997) Weaknesses The Company will have to establish a reputation to its consumers that it is reputable enough. It has to face competition from some Companies that have been in the sailing clothing industry for years. One such example is Crew saver. This Company has been engaging in the provision of sailing items for fifty years and has a firm customer base. Besides this, the Company may face challenges in the selection of employees who will work for the Company since it may have to undergo a mass recruitment exercise. Opportunities There are a number of factors that could favour the Company as it begins its operation. The first is that; the Company is located in the UK which is part of the EU. This implies that the Company could decide to expand into those parts without facing too many restrictions. The leisure sailing clothing industry has relatively small economies of scale. Therefore the Company can engage in mergers with other similar Companies in the sector. (Barney, 1997) Threats The Company has to tackle stiff competition from well established Companies in the UK. It can therefore deal with this by looking for a unique selling point to the market such that it can stand out from the crowd. The Company also faces the possibility of not gaining recognition in the market as a first timer. But this can be prevented by aggressive marketing, offering lucrative prices and ensuring that the Company sells quality products. (Porter, 1985) Possible factors influencing the industry in the future There may be future changes in tastes of clients. These will mostly affect three aspects of the sailing clothes; nature of design of the clothes may vary with time. Nature of Fabrics may also be another factor that may change both with regard to customer's choices and supplier's availability. Another factor that may affect the sailing clothing industry is the manner of construction of the sailing clothes. Segmentation, targeting and positioning Segmentation The industry is segmented depending on the following factors; Segmentation by age Some Companies offer sailing clothes for children, teenagers, adults and the older generation. This is normally differentiated by the size of the item. Sometimes, the design of the clothing item may also give one a clue of what age bracket a particular garment was intended for. For example, in the Douglas Gill Company, there are sailing clothes for juniors and for seniors. (UDEL, 2007) Segmentation by function Here, clothes are marketed to groups that may apply the different types of clothing for dissimilar sailing purposes. For example, there may be clothes that are meant to act as protective garments. These may include waterproof jackets or immersion suits. Besides this, it is also possible to find some clothes are warm in nature to be worn in the evening while some are light for daytime. An example of a Company that differentiates its sailing clothes by that method is the Pier 32 Shirts and jackets Company. Segmentation by size This method of segmentation is especially common to a Company like Multixi. This Company has different sailing clothes for different sizes. This is especially in regard to the fact that its slogan is associated with this type of grouping., the Company holds that it's function is to measure and supply to any size whether, big, tall, oversize or small. Targeting The Company will mostly target the UK market. This will mean that will be different age groups that the Company will be targeting. It will be making trendy sailing clothes for teenagers or young adults, it will make colourful and fun clothes for children going sailing and it will make comfortable clothes for the mature generations. (Barney, 1997) Besides this, the Company will also focus on provision of sailing clothes that can be used by the classier category of those engaging in leisure sailing. These clothes will be characterised by exceptional quality of the fabric and simplicity in design. Positioning The Company will be associated with quality items that can befit their function. It will establish itself as Company that only deals with leisure sailing clothes and not other apparels that may divert attention from the main item. This implies that most customers will be coming to the Company when they want a wide range of clothes to choose from. Since the Company is only dealing with one type of product then, it will have all that is needed in that area. The Company will also position itself as one of the most innovative. This will be incorporated by conducting market research and finding out what consumers want. This will then be included in its product offering. Lastly, the Company will also be associated with comfort and usability. Some sailing clothes lack the ability to withstand unfavourable weather conditions which are characteristic of the sailing experience. This means that during the manufacture of those latter products, quality of the product was not assessed to see how applicable the product will be. But this will not be the case for the Company in question because it will employ experts to check on the usability and quality of the product. Marketing Communications When making a marketing communication plan for the Company, the investor should have the following objectives in mind; Creating a strong brand image for the new Company-there are plenty of Companies that offer sailing clothes and these Companies are also well established. Therefore to stand out from the rest, the new Company ought to impact their clientele through a lucrative brand image The product should be able to stand-the new Company should make sure that it has something out of the ordinary that it can offer its clients. The Company should communicate to consumers in such away as to show them that it is the finest choice. (Margolin, 1979) There are various marketing tools that are available to the Company but the Company will zero in on three important ones. This is because most of its competitors are using these methods. The first marketing communications tool will be the internet. This is the most common form because there are minimal restrictions to entry into that market. Besides, the internet reaches a wide number of people and can allow the new Company to penetrate new markets. The second marketing communication tool that will be used is magazines. Magazines allow the audience to review the message context and the Company can include other technical details bout its location and product range. Lastly, the Company will also use advertisements placed on sports channels. The advantage of advertisement is that they allow the Company to display its creativity and to capture its audience in a unique way. (Porter, 1985) But all these marketing communication tools will have the same message content in them. This is quite important because customers need to identify the new Company with something similar throughout its marketing communications. Before the Company starts using the above communications tools, it needs to come up with a theme that will be conveyed. Other competitors like The Crew Saver Company use the theme of providing comfort to its clients. The new Company could use the idea of quality. It could adopt a concept like 'our clothes make your sailing experience magical!' The Company could display two people wearing the Company's clothes on a boat that is sailing but is not touching the water surface i.e. it is almost flying. This will enhance the image of magic. The idea could apply to all the three areas chosen for marketing communications. (Assmus and Farley, 1984) The target group of the advertisements, internet displays and magazine posters will be all age groups that engage in sailing. It will appeal to the youth who are attracted by trendy items, it will appeal to the classy market because of the high quality and it will appeal to the average sailor because of the clothes' comfort. Conclusion The foreign investor has to consider numerous factors that may affect the way he runs his business. But the most outstanding in the current market is competition from well established companies. But there are two factors that will give this new company an edge over the rest; first it only deals with clothes unlike other companies that offer a range of sailing and sporting items. This will allow the company to focus on product improvement and choice. Besides, the company has the opportunity to create a new image of sailing clothes different from the traditional concepts. Coupled with aggressive marketing and proper staff management, the company can be well on its way to establishing itself in the leisure sailing clothing industry. (UDEL, 2007) Reference: Margolin, V. (1979): The Promise and the Product; New York: Macmillan Assmus, G U. and Farley, D.L (1984): How Advertising Affects Sales: Meta-analysis of Econometric results Journal of Marketing Research 65-74 UDEL (2007): Understanding consumer behavior; Retrieved from http://www.udel.edu/alex/chapt6.html accessed on January 2008 Porter, M.E. (1985): Competitive Advantage: The Free Press, New York, 1985. Barney, J. B. (1997): Gaining and Sustaining Competitive Advantage. Reading, MA: Addison- Wesley. Read More