Team Work in Business Negotiations - City Casual - Case Study Example

Executive Summary

City Casual is a leading multi-channel retailer located in Hatfield town Hertfordshire, England. It specializes in retailing of women’s fashion clothing and lifestyle products with a span of 200 outlets. The company aims at joining hands with ACE. ACE is a Far East supplier that supplies CC products and has its headquarters office in Hong Kong serving as a sourcing facility. Based on the market analysis, specialty stores are flourishing because of the market segmentation, targeting and product specialization which the two companies aim at achieving. The Australian market has swimwear designers who have consistently worked towards producing swimsuits that conform function and innovative designs for all beach goers and home relaxation.

The aim of the negotiation is to ensure CC designers to work closely with ACE and buyers to select available fabrics for the fashion demands and customer behaviors. Also, shortages will be dealt with by ACE carriers in advance to assist with proper logistics which the company will also be assigned. The companies will achieve better designing with quality as a prerequisite taking into account trends and market response. On the other hand, the market is currently suffering from the weakness of being open to new entrants in the market which may take up some market share. On the other hand, population growth and emerging markets serves as opportunities for the companies.

The responsibilities for each company will be that ACE will be charged with the designing and production of the agreed-upon products while CC will market and promote the products. Thus, the negotiation uses drivers and levers such as establishing an end-to-end review of the process for the establishment of procurement and sourcing, management of data and knowledge transfer among others to ensure a reliable association and best outcomes. The association desires to actively be involved in the sale of swimwear/jerseys.

2. Contents

3. Introduction to the project scenario, the brief

City Casual is a leading multi-channel retailer located in Hatfield town Hertfordshire, England. It specializes in retailing of women’s fashion clothing and lifestyle products with a span of 200 outlets. The challenges facing the company is the stock buying and merchandising relating to our Spring/Summer 2016 range of deliveries. Our product areas for the designers include casual outerwear and sportswear. However, we have had little time for the investment in the designing of our products. We are also faced with a problem of implementing a new decision relating to jersey-wear products we sell. Above all, there is a shortage of stock especially in the June- September period. The Supply Chain Director has made a decision to move nearly all jersey-wear production from the UK to the far East in favor of better pricing and quality production.4. Research Methodology

The aim of the research is establishing a proper appeal of the target groups while maximizing market quality. Research methodology will involve examining and sampling of the product lines by the CC company and its relevance to the current mode of design, its cost and potential customers target group. Auditing purchasing and merchandising processes regarding customer demand, including price and availability, market trends, our store policy and financial budgets. Qualitatively, we analyze the e-commerce and m-commerce purchasing and merchandising efficiency.

In reviewing of existing items to ensure products remain competitive, we will examine our fabric used in swimwear on its failure to pass colorfastness test by an independent testing laboratory to ascertain the quality of the materials we use and on the proper channels to be followed to solve the problem.

Lastly, we examine the current design team and the reasons behind the little attention given to the development of swimwear styles in the past and the impact the New Lifestyle Capsule Range will likely cause considering the little stock available for June-September period. Analyzing consumer buying and predicting future trends and how to better manage for stock levels. How to better maintain working relationships with existing suppliers which is fundamental for any retail business (Lu et al.,2009), and liaising with other departments within CC to ensure smooth running.

5. Summary of your company and its position

City Casual has been a longtime outstanding multi-channel retailer with current 200 outlets. CC has embrace technology and has consequently employed e-commerce and m-commerce business in it retailing chain. The company has different departments including a CC design team which specializes in the development of styles contracted to our suppliers, and the Buying and Merchandising department that regularly reviews buying patterns and predicting future trends. On our new transitional range, the company is focused at implementing a new decision between the heads of Buying and Merchandising and the Buying and Merchandising director.

6. Summary of the other company and its position

ACE is a Far East supplier that also supplies CC products. It has its head office in Hong Kong, which acts as a sourcing facility, and 3 fully owned factories in Hong Kong, the Philippines and China. CC liaises between the CC buyers and manufacturers through all stages from sample development to development. Currently, the company is taking into account a possibility of entering into an agreement with an American company to take over a factory in Taiwan. Currently, ACE is committed to its growth and is working on logistics that come with the financial obligation of such an agreement.

CC received complaints from the DC about deliveries from ACE carriers. The problems being the late arriving of lorries without advanced booking and the incorrect location of barcode tickets on hanging and boxed underwear.7. Consumer & Competitor research

Today, specialty stores are flourishing because of the market segmentation, targeting and product specialization. However, because of changing consumer lifestyles and the augmenting number of two-income households, many customers have higher incomes but less time to spend shopping consequently opting for specialty stores that have high quality products, longer opening hours and excellent services (Armstrong et al.,2014). There is little price competition possible for retailers since the manufacturers control the channel (A. M., 2002). In order to understand the challenges facing retailers today, origins of the present patterns of retailing need to be known. The historical development is important in solving current consumer problems and future market intelligence (Bengtsson, & Nielsen, 2015).

Also, it is important to note that the unit cost of production is substantially higher in Australia than Asia (Schmidt, 2009). In a study of the global swimwear market, brands are held with high regard with consideration of; fibers that can stretch and control, the aerodynamics of fabrics body shaping, style and cut and advertising offer.

Examples of popular companies include LVMH (Met Hennessy- Louis Vuiton) and Gucci Group which own large brands including swimwear in their collections. These companies have been designed with as stable of brands that are designed to appeal to different categories of the consumer market (Schmidt, 2012).

8. Trend Research

Swimwear designers in Australia have consistently worked towards producing swimsuits that conform function and innovative design to provide fashion swimwear for fashion for the beach and pool (Schmidt, 2012). Schmidt further notes that the designers are striving to be at par with trends since Australian women wear and purchase swimwear more than their European counterparts. Companies seeking to be successful need to source for unique textiles from Europe and Italy in particular.

9. Preparation for Negotiation Product Development & Pricing

CC designers to work closely with ACE and buyers to select available fabric. Concerning product shortage, ACE carriers need to book purchases in advance to assist with proper logistics. CC has already partnered with Global Logistics company and bar-code price tickets to all its suppliers.

Increasing the profile of underwear and swimwear products.

10. Costings

Application of dynamic pricing strategy to increase profits during season and off-season times to regulate business returns and revenue management policies as associated with production and marketing. 11. Quality

Better designing with quality as a prerequisite taking into account social media fashion trends to ensure that designs are in line with the customer behaviors and expectations.12. Logistics

The supply of garments will use the ACE logistics as they have proven to be reliable over the period CC has been doing business with the company. However, in order to concentrate on building a stronger and focused business model, negotiations will be held with other industry players if the need arises (Yang, 2015).13.SWOT analysis of your position

Even though e-commerce and m-commerce did not register high sales, their target plan was reached over by 14% and 19% respectively which serves a strength for the companies if they joined businesses. New entrants in the market serve as weaknesses since the market is an open one. Population growth and emerging markets serves as opportunities for the companies. Government control and financial uncertainties serve as a threats for the business but through adherence and simulation of forecasts, volatility of the latter can be avoided (Öberg, 2015).14. Negotiation Strategy

• Establishing the supplier negotiation strategy; this will spearhead the collaborative process.
• Establishment of offering and expectation from both companies; commitment and the expectations that the retailer has.
• Segmentation; it provides a guideline for determining the behavior that delivers the highest return investment in each supplier relationship.
• Developing supplier relationship guidelines (Koester, 2014).

Both companies will present their reports in which better working methods will be developed from. Both companies need to consult in terms of management of resources, acquisition of materials, report quarterly performance improvements or otherwise.15. Aims for the Meeting

How to grow sales and profits. How to enhance shopping experience. Developing an integrated business model for eliminating competition of the two companies and acquiring more market power. 16. Agenda for the Meeting

To align business goals and objectives with increasing market dynamics such as customer demands in order to develop a joint venture for better performance and enhanced profit generation. 17. Designated company roles

ACE will be charged with the designing and production of the agreed-upon products to ensure that the designs meet the market demands and also take into account the value-maximizing production.18. Negotiation Levers and Drivers

Establishing an end-to-end review of the process for the establishment of procurement and sourcing, management of data and knowledge transfer, phasing and prioritizing short-term and long terms essentials first, forecasting and performing effectiveness analysis of both companies, and setting up a reliable technological support.19. Proposed solution

Swimwear / Jersey and Most desirable outcomes since they target a majority of users and also will come in different sizes that are not discriminant of age unlike the previous business approach which targets 25-35 years old age group. Nonetheless, diversity to these age cohorts will be developed on later date.

20. Anticipated Response

Although the negotiation to join hands in the procurement and control of the joined market share is a win-win situation, ACE will be expected to attach a markup on the production costs either by taking advantage of the marketing skills of CC.

21. Way Forward for both Parties

The way forward is for the companies to enter a trial period to launch the first set of joint products to analyze and monitor the market response.22. Conclusions

Although the lists reveal that the designer fashion wear market is crowded, European and American designers still exhibit a powerful industry force. As a result, the companies at hand look forward to committing in the production and marketing of cost effective products internally while offering the market trend-sensitive and affordable clothing.