value chain

http://e3value.few.vu.nl/docs/misc/Porter.pdf
Anuradha

Jury 1 Member: Rahul Jain's Feedback

Dear,

There is a common saying that "Well begin is half done". I am happy about the class performance as it has made a good beginning.
The indicative grades for the groups (in Project management subject) are :
Himanshi's group: B, Vasudha: B+, Rahul Sharma: C+, Neha Goswami: A, Chaitanya: F, Ayesha: A-, Arshia:A-.
(Note: These grades are just an indicative grades and are subject to change depending on the future performance. So there are no winners and loosers.)

I will give detailed written feedback for improvement to each group on Monday's class. (29th September)

Road Ahead:
Class has to follow the Bottom Line time line for the future work. For project management, class has to follow the log process which has been completely synchronized with bottom line time line. Log process file -I has already been uploaded for your references on the Pearl Intranet.

Keep communicating and rocking,

Yours,

Rahul

PMM's Feedback on Jury 1 - 26 Sept 2008

Congratulations!
Clearly all groups (except one) won accolades in yesterday’s presentation. The hardwork of all of you was so evident. The aim of yesterday’s jury was to approve your concepts. All of you got that. So in that sense it was a great achievement.

However …still…we have a long way to go to get that 99.99% perfection. So here is the feedback.

Yesterday’s assessment was done on these parameters :
Concept
Defense of Idea
Market Potential
Competitor Analysis
Value Proposition
Fashion Value Chain analysis
Competitive Advantage
Consumer Need analysis
Overall Presentation

The clear winners were Sneakers and Men’s Intimatewear (MI).
These groups not only fully answered each parameter but also had that “extra” flavour in their presentations. Sneakers had visuals to show fashion value chain. MI had excellent presentation slides and oral communication.

All other groups had answered all parameters, but the “missed” to grab the attention of jury “distinctively”. Let me explain that.When I want to remember yesterday’s presentation, what do I recall? Here it is …

1- Sneakers :
The BATA value chain analysis pictures, the shoes (not sneakers!!!) ,
The female market which jury said is too niche,
Excellent perceptual mapping,
Age vs. income vs. readiness to spend graphs – crowded- confusing- still
informative enough…

2- Intimatewear :
Excellent product photos,
Excellent presentation of pricing of competitors,
The “crowded” fashion value chain table,
The analysis of a graph using chi-test and proposing competitive advantage,
clapping of jury…

3- Eco-friendly Clothing :
The bamboo slide background,
The me-too product visuals,
Excellent calculation of market potential,
Yet again argument eco-friendly natural product vs. eco friendly production,
Argument on who will buy the product- clear demographics of target customer missing….

4- Kidswear
First presentation of the day
Covered all points
Poor explanation of “safety”
Why Mother Care? Why not others…
Somehow loose...

5- Fast Fashion
What-Why-Who-Where ….well structured
Good analysis but crowded visual presentation
Excellent Value chain inputs but poor visual presentation
Good attempt on costing ...



6- Lingerie :
Exciting pictures of product – but wasn’t that bikini??? confused
Teens wear – Funky Trendy : Excellent analysis of gap in market
Dull body language-sleepy,
Dull visual presentation,
Voice of speakers was monotonous

Overall all of you have achieved 10% of the total project.

Leather lifestyle –needs to work much much harder to reach the high standards achieved by other peers.


What is expected now? Here it is :

1) Extremely thorough knowledge of target customer/target family
Can you capture a day’s life of your target customer? How does he/she look like? What does he/she do? Work? Where? Spend? Eat? Hobby? Leisure? Wear now? Watch TV – which channel? Weekends spent - how? Family life cycle? Maslow’s hierarchy motivation? Attitude? Beliefs? Personality? Self-concept? Learning theory – classical conditioning or instrumental or observation? Why will he choose your product over others – avoidance-avoidance or avoidance-acceptance theory? (Priya Mathew)

2) What is your product?
Ingredients in it – are they same as competitors….if yes why? If no, what’s different? How does it look like? Colours, Style, Fit? How will it be produced? Packaged? Cost? How many will be produced? How will you decide that? How will you distribute it? Sell it? (Rekha Dar, Rahul Jain, Anuradha, NS Uppal Industry Mentors)

3) What is your Brand Identity?
Differentiation strategy, Logo, Graphical Identity, Positioning as per customer profile (Tarun Panwar, Sharad, Anjuna, Amit)

4) What is your Promotional Plan?
products to be shown on ramp, models, logo, print media promotion designs -5, video of advertisement in TV, budget, execution plan (Amit, Sharad,Kurien Joseph Industry mentors)

5) Project Plan/Business Plan
The report that has it all: the background, the plan, budget, execution – with numbers…(Rahul Jain, Saurabh, Industry Mentors)

I have given indicators of mentors in brackets so that you have maximum advantage of all the intellectual capital we have made available to you. You are free to take as many opinions/advise as you want – but remember its YOUR decision on what to present finally. Don’t fall into trap of ‘pleasing’ all mentors. Please take ownership of your presentations. Mentors are there to direct. You are the actors. Audience will love you based on your performance- not mentors’.

I hope you will take this feedback in a positive manner. Attend all classes. You will not get this chance later in life. A PR expert will be soon meeting you to discuss promotion. Amit is already doing it by covering advertising. Uppal sir’s inputs are needed to understand cost elements of supply chain. There has been constant feedback that your knowledge on product is low. In fact, this attribute is needed for your placement too. We have lined up Sharmila Katre and Simran to take such workshops for you in coming weeks. The other course team members – Rahul, Tarun, Anjuna, KJ, Anuradha, Sharad, Joshi, Hasan,Aditya, Vishesh……….. ghosh…have I missed anyone ….are there to put the beads of knowledge together for you as and when you intervene.

One last confession. EACH of you has demonstrated extreme hard work. Keep up the work. Don’t loosen up. Remember there is 90% more to be done…no time to relax…

All the best,
Love,
a-proud-Priya Mary Mathew

PWC report on Indian retail market

Dear All,

I have uploaded PWC report on Indian retail market on Pearl intranet. This will be useful to you for assessing the opportunities and threats.

Keep communicating ,

Yours,

Rahul Jain

Zara's Secret for Fast Fashion - Harvard Business Review

Zara's Secret for Fast Fashion
2/21/2005
Spanish retailer Zara has hit on a formula for supply chain success that works. By defying conventional wisdom, Zara can design and distribute a garment to market in just fifteen days. From Harvard Business Review.
by Kasra Ferdows, Michael A. Lewis and Jose A.D. Machuca

Editor's note: With some 650 stores in 50 countries, Spanish clothing retailer Zara has hit on a formula for supply chain success that works by defying conventional wisdom. This excerpt from a recent Harvard Business Review profile zeros in on how Zara's supply chain communicates, allowing it to design, produce, and deliver a garment in fifteen days.

In Zara stores, customers can always find new products—but they're in limited supply. There is a sense of tantalizing exclusivity, since only a few items are on display even though stores are spacious (the average size is around 1,000 square meters). A customer thinks, "This green shirt fits me, and there is one on the rack. If I don't buy it now, I'll lose my chance."

Such a retail concept depends on the regular creation and rapid replenishment of small batches of new goods. Zara's designers create approximately 40,000 new designs annually, from which 10,000 are selected for production. Some of them resemble the latest couture creations. But Zara often beats the high-fashion houses to the market and offers almost the same products, made with less expensive fabric, at much lower prices. Since most garments come in five to six colors and five to seven sizes, Zara's system has to deal with something in the realm of 300,000 new stock-keeping units (SKUs), on average, every year.

This "fast fashion" system depends on a constant exchange of information throughout every part of Zara's supply chain—from customers to store managers, from store managers to market specialists and designers, from designers to production staff, from buyers to subcontractors, from warehouse managers to distributors, and so on. Most companies insert layers of bureaucracy that can bog down communication between departments. But Zara's organization, operational procedures, performance measures, and even its office layouts are all designed to make information transfer easy.

Zara's single, centralized design and production center is attached to Inditex (Zara's parent company) headquarters in La Coruña. It consists of three spacious halls—one for women's clothing lines, one for men's, and one for children's. Unlike most companies, which try to excise redundant labor to cut costs, Zara makes a point of running three parallel, but operationally distinct, product families. Accordingly, separate design, sales, and procurement and production-planning staffs are dedicated to each clothing line. A store may receive three different calls from La Coruña in one week from a market specialist in each channel; a factory making shirts may deal simultaneously with two Zara managers, one for men's shirts and another for children's shirts. Though it's more expensive to operate three channels, the information flow for each channel is fast, direct, and unencumbered by problems in other channels—making the overall supply chain more responsive.

Zara's cadre of 200 designers sits right in the midst of the production process.
In each hall, floor to ceiling windows overlooking the Spanish countryside reinforce a sense of cheery informality and openness. Unlike companies that sequester their design staffs, Zara's cadre of 200 designers sits right in the midst of the production process. Split among the three lines, these mostly twentysomething designers—hired because of their enthusiasm and talent, no prima donnas allowed—work next to the market specialists and procurement and production planners. Large circular tables play host to impromptu meetings. Racks of the latest fashion magazines and catalogs fill the walls. A small prototype shop has been set up in the corner of each hall, which encourages everyone to comment on new garments as they evolve.

The physical and organizational proximity of the three groups increases both the speed and the quality of the design process. Designers can quickly and informally check initial sketches with colleagues. Market specialists, who are in constant touch with store managers (and many of whom have been store managers themselves), provide quick feedback about the look of the new designs (style, color, fabric, and so on) and suggest possible market price points. Procurement and production planners make preliminary, but crucial, estimates of manufacturing costs and available capacity. The cross-functional teams can examine prototypes in the hall, choose a design, and commit resources for its production and introduction in a few hours, if necessary.

Zara is careful about the way it deploys the latest information technology tools to facilitate these informal exchanges. Customized handheld computers support the connection between the retail stores and La Coruña. These PDAs augment regular (often weekly) phone conversations between the store managers and the market specialists assigned to them. Through the PDAs and telephone conversations, stores transmit all kinds of information to La Coruña—such hard data as orders and sales trends and such soft data as customer reactions and the "buzz" around a new style. While any company can use PDAs to communicate, Zara's flat organization ensures that important conversations don't fall through the bureaucratic cracks.

Once the team selects a prototype for production, the designers refine colors and textures on a computer-aided design system. If the item is to be made in one of Zara's factories, they transmit the specs directly to the relevant cutting machines and other systems in that factory. Bar codes track the cut pieces as they are converted into garments through the various steps involved in production (including sewing operations usually done by subcontractors), distribution, and delivery to the stores, where the communication cycle began.

The constant flow of updated data mitigates the so-called bullwhip effect—the tendency of supply chains (and all open-loop information systems) to amplify small disturbances. A small change in retail orders, for example, can result in wide fluctuations in factory orders after it's transmitted through wholesalers and distributors. In an industry that traditionally allows retailers to change a maximum of 20 percent of their orders once the season has started, Zara lets them adjust 40 percent to 50 percent. In this way, Zara avoids costly overproduction and the subsequent sales and discounting prevalent in the industry.

The relentless introduction of new products in small quantities, ironically, reduces the usual costs associated with running out of any particular item. Indeed, Zara makes a virtue of stock-outs. Empty racks don't drive customers to other stores because shoppers always have new things to choose from. Being out of stock in one item helps sell another, since people are often happy to snatch what they can. In fact, Zara has an informal policy of moving unsold items after two or three weeks. This can be an expensive practice for a typical store, but since Zara stores receive small shipments and carry little inventory, the risks are small; unsold items account for less than 10 percent of stock, compared with the industry average of 17 percent to 20 percent. Furthermore, new merchandise displayed in limited quantities and the short window of opportunity for purchasing items motivate people to visit Zara's shops more frequently than they might other stores. Consumers in central London, for example, visit the average store four times annually, but Zara's customers visit its shops an average of 17 times a year. The high traffic in the stores circumvents the need for advertising: Zara devotes just 0.3 percent of its sales on ads, far less than the 3 percent to 4 percent its rivals spend.

Excerpted with permission from "Rapid-Fire Fulfillment," Harvard Business Review, Vol. 82, No.11, November 2004.

Kasra Ferdows is the Heisley Family Professor of Global Manufacturing at Georgetown University's McDonough School of Business in Washington DC.
Michael A. Lewis is a professor of operations and supply management at the University of Bath School of Management in the UK.
Jose A.D. Machuca is a professor of operations management at the University of Seville in Spain.
For Fast Response, Have Extra Capacity on Hand

Excerpted with permission from "Rapid-Fire Fulfillment," Harvard Business Review, Vol. 82, No.11, November 2004.

Store Wars: Fast Fashion

Store Wars: Fast Fashion
In the second of a three-part special on Britain's shopping wars, The Money Programme looks at the battle being waged between clothing retailers as they rush to copy the latest celebrity fashions and get them to the High Street within days.

There's a fashion revolution underway on the High Street. From Kate Moss to Kylie, Britain's shoppers want to wear what the stars wear and retailers are rushing to provide it. Shops like Top Shop, Zara and H&M are battling it out at the heart of a £27bn clothing market.

Their targets are consumers like Louise Hitch. Louise works in one of Leeds' premier restaurants and claims that for her, image is everything. "It's really important to me to get the right look for each season, you have to look right for your customer and give them the right first impression," she says.

Louise shops every day, looking for styles and outfits like those her favourite fashion icons wear.
Julian Linley, deputy editor of Heat Magazine, is not surprised by Louise's shopping habits: "We've become more obsessed with the way that celebrities dress because it's just become so much more accessible. Stores are much better at cottoning onto the things that celebrities wear and reproducing them very quickly."

From catwalk to shop floor
Retailers are locked in a battle to try to get key catwalk trends from the drawing board to the shelves as quickly as possible.

Shoppers have become much more savvy, claims Top Shop brand director Jane Shepherdson: "They want to be able to buy the things celebrities are wearing or they want to be able to buy into the trends that they've seen from the catwalk as quickly as possible."

Top Shop's move towards fast fashion increased sales by 20% last year. The chain is part of the retail empire owned by billionaire Philip Green, which also includes BHS, Burton, Wallis, Evans, Dorothy Perkins and Mark One.

But Top Shop wasn't always so successful - or so quick off the mark. In the days of separate winter and summer collections, high-street retailers often had lead times of up to 18 months on their designs.

Swedish revolution
It was Swedish firm H&M which changed all that. It appointed young designers to make high fashion clothes as cheaply and quickly as possible. According to fashion journalist Hilary Alexander, H&M launched 'disposable fashion'.
"I'm not entirely convinced that that is such a good thing because some of the things in H&M are so cheap that literally you'd be lucky to get two or three wears out of it and then you'd chuck it away," Alexander says.

Spotting the threat to its business, Top Shop fought back and started to produce clothes much more quickly. Its masterstroke was to hire young and trendy designers like Hussein Chalayan to design clothes for the store.

But there was a second threat. A former dressing gown manufacturer, Amancio Ortega, was to transform the High Street with his formula for fast fashion and his chain, Zara.

Spanish nights
"We certainly knew about Zara and were extremely impressed by them. They're very quick to get designer-influenced products into their stores, so when we heard they were coming to the UK we knew it would be a big challenge for us," says Top Shop's Shepherdson.

The key to the Spanish company's success was a state-of-the-art headquarters with designers, factories and distribution centres all on site. While other retailers had moved production to the Far East to save money, Zara knew that it could make best selling clothes faster in Spain.
Changing stock frequently means customers come back to check what's new and that means added sales. The Zara shopper drops in 17 times a year, the High Street average is just four.
Zara's fast fashion model had so revolutionised the industry that Harvard Business School wrote a report on it. Struggling British retailers like Marks & Spencer and BHS studied the store's success and based their own recovery plans on Zara's model.

"I think Zara is a very, very sharp looking business," says Philip Green. "Everybody is trying to move more quickly I think they've actually got their own model, they've got their own production, they've got their own factories and if you develop that over 25 years as they've done, you're [going to be] brilliantly good at it."

Spinning around
With retailers copying the latest designer styles and celebrities like Kate Moss, Victoria Beckham and Liz Hurley popping into Zara and Top Shop to pick up a bargain, the fast fashion wheel has come full circle

"It's just got faster and faster, spinning not entirely out of control but certainly spinning at a rate that can make you dizzy," says Hilary Alexander. "If you want to be in fashion, you've got to stay in the race."

This programme was first transmitted on Wednesday 19 February 2003.

Vertical IntegrationunTha nguoi dung noi se yeu minh toi mai thoi thi gio day toi se vui hon. Gio nguoi lac loi buoc chan ve noi xa xoi, cay dang chi

Dear All,

http://www.quickmba.com/strategy/vertical-integration/

Anuradha

Value Chain

Dear all,
some useful links for value chain.
http://it.toolbox.com/blogs/enterprise-solutions/michael-porters-value-chain-analysis-technique-20672http://www.12manage.com/methods_porter_value_chain.html
http://www.quickmba.com/strategy/value-chain/
http://www.netmba.com/strategy/value-chain/
http://www.valuebasedmanagement.net/methods_porter_value_chain.html
Bye
Takecare
Anuradha

Understanding Value Chain Analysis

For those of you with doubts even now of how to interpret and use Porter's Value Chain, here is a site that explains it in great detail:
http://www.netmba.com/strategy/value-chain/
Incidentally netmba is very useful for all the different management-related subjects that you have. Use it well.

How Retailers Outsource Apparel?

Excellent Report by www.just-style.com Its in PAF Library. You may request Kalyani ma'm to send CR the soft copy. Or check in your Intranet. I have uploaded it.
Priya

The contents of the report are:


The world of apparel retailing........................................................................................................2
Where does apparel go?...........................................................................................................2
Who buys it? .............................................................................................................................2
The importance of strategies to retailers...................................................................................5
What’s in a strategy?.................................................................................................................6
So what are the hot sourcing topics? ...........................................................................................9
The crucial background – rise of the discounters .....................................................................9
Exclusive brands.......................................................................................................................9
Range count and product life ..................................................................................................10
Outsourcing production.................................................................................................10
Outsourcing design .......................................................................................................11
Outsourcing procurement .............................................................................................11
Commitment doctrine and production timetables..........................................................11
Ethical issues ................................................................................................................11
Information technology..................................................................................................13
Geography ..............................................................................................................................15
Centralisation ..........................................................................................................................15
Key strategic sourcing topics......................................................................................................17
Inventory levels .......................................................................................................................17
Exclusive brands.....................................................................................................................18
Commitment and production cycle..........................................................................................19
Direct versus indirect sourcing ................................................................................................21
Limited Brands ..............................................................................................................22
Geographic strategy................................................................................................................26
The retailer attitude .......................................................................................................26
JC Penney published views on sourcing post 2004......................................................26
Do retailers mean what they are saying?......................................................................28
The fog of quota abolition .............................................................................................29
But surely some places are more vulnerable than others?...........................................31

Internet tools

Dear All,

You can use following websites for doing and analyzing surveys:

www.zoomerang.com
www.opinionpower.com/startSurvey.html
www.freesurveysonline.com
www.freeonlinesurveys.com,
www.custominsight.com/demo/free.asp
www.createsurvey.com

Unleash the power of internet,

Rahul

Document on Material Costing

DearAll,

Keep the good work continuing. I have uploaded a document on Material costing on pearl intranet which will be helpful in value chain analysis. All the best and keep communicating.

Rahul Jain

Super Juniors

Dear All,
Its great to learn from gurus. Its greater to learn from shishyas. Here is a Consumer Behaviour (researching) blog that FMG1 students (one group) has initiated. I had asked all groups to have blogs. This one is superb. See it and learn a few innovative ways for reseraching, especially CB.

http://stunningfour.blogspot.com/

Priya

SCM Ppts Part 2

SCM Presentations Part 1

Hi.Mandatory work for all groups

Finally kavya taught me how to post blog..There are few value chain questions you ready to answer me in next jury...
1. Buy a typical merchandise of competitor
2.Put all costs in table format :
a:Selling Price
b: VAT /Local Sales Tax
c:Margin of Retailer : Detail Franchisee terms Minimum Guarantee etc
d:Distributor Margin
e: Central sales Tax
f: C&FA margin
g: Octroi
h: Vendor : CMT Cost or conversion cost on that garment:
i: Deconstruct Garment and add all material cost:
2.Study rental & Lease const in leading areas where you want to open stores: Super area v/s carpet area
3; Spend Saturday /Sunday peak hours for studying walk ins and conversions for lead competitor
4.Import duties: and levys: in case u want to import garments and how much price differentials:
Want to write more but my daughter is calling so...u lucky..

All the best .. Bottomline Rocks...

d:

The Five Forces revisited

For those of you who want to hear it from the Master himself, here it is.

Porter's Five Forces

For those of you who are not quite clear about Porter's Five Forces Theory or how to apply it, here's a useful website:

http://www.mindtools.com/pages/article/newTMC_08.htm

Socio Economic Classification of India

Please check intranet to get details of SEC A, B, C, D of India

Priya

Just one observation about the presentations to the Jury. I think ALL groups need to understand better (a) the mechanics of Oral presentation and (b) the EFFECTIVE use of Powerpoint.
As you know, virtually all of you have made good-to-excellent) Oral presentations in the first Sem. As we learnt there you have to get to the point quickly - and select, select, select. Don't make it a verbal reading of your Written Report - the structures are ENTIRELY DIFFERENT (as you know).
Re Powerpoint, remember this is essentially a graphic medium, not words - words -words. You have to interpret many of the words into graphic language. Also, my own experience is about 12-15 slides for a 3-hour lecture, 4-5 slides (preferably animated) per hour - that's all. If you like, you can always keep back-up slides, to be presented ONLY if asked for by a juror. But your main presentation, if you are allowed a prepared presentation, should be much, much shorter.

I'll be happy to help any group with their PPt. All the best!

Check out Value Chain Images

http://www.market-modelling.co.uk/Images/MMSV2_ValueMap.jpg
Other than above website, do a google image reserach on applied research done on value chain...there is a goldmine of data...

Jury 1 Feedback

Lessons from Jury 1

Make presentations to the point. We had 15-minutes to present our “Idea” and “Defend” it. Amongst us the only ones who could do it was the group launching brand on “Safe Kids wear”. Actually the beginning of this group’s presentation was on bull’s eye --- need of safe apparel for Indian kids and unaware Indian mothers. They had answers – precise answers to every question of jury
What is safety in kidswear?
Who decides it?
Where is the deciding body?
How do a country’s safety norms differ from others?
This group had heeded advice of mentors and met teachers of other departments. They had inputs from earlier dissertation projects done.

Sneakers is another group which had solid defence thanks to their interpretation of market potential. Their perceptual mapping also was strong. This group’s work again shows how academic and industry mentors together make “sense” if students work hard on filtering and analysing all kinds of input. In other words, mentors give multiple inputs, that too different from each other. But we have to use our own intellect to analyse and filter inputs, process them and defend them with in depth research.

In text citations and referencing was very strong in both the above groups – both in slides and verbally. Jury immediately got convinced when defence was done with mention of sources accurately. How many times one has to remind you importance of citations and referencing?


The groups of Organic clothing and Fast (disposable) Fashion could demonstrate their ‘concept’. However the defence was extremely poor. In depth research was missing thoroughly. The ‘feasibility’ of the concept was not convincingly coming through. The groups body language itself was shaky and wavering. In fact, the latter group was slightly aggressive against industry jury. That’s not welcome since it’s not professional.

The groups who are doing Lingerie and Men’s Intimate Wear came across as ‘me too’ products. Research was done…but originality and creativity was amiss, so was referencing. Also the former group had no enthusiasm in their body language.

For improvement, all groups have to passionately do deep research - go to Textile and Merchandising Departments, talk to teachers there…..Go to library of FORE management (or others) and read more …..Get IIM , Harvard journals….read more….
Do thorough consumer survey …30 questionnaires are not enough….target 500….also questionnaire by itself is not enough……..take photographs, focus group discussions, interview store managers, designers, production managers, …..plan your trips to meet vendors, manufacturers, fabric sources, dye makers, trims makers, craftsmen, supply chain middlemen …….anybody and any one who are concerned with your product.

Having said that, in addition to academy mentors, each group has been assigned an industry mentor. Before you fix up an appointment with them (please let Anjuna know when, where, how long was your meeting…whenever you meet them) you have to email them:
1) 2-page concept note
2) Report you submitted for Jury 1
3) Agenda of meeting (points which you want to discuss with them during your meeting…your questions, doubts, direction needed…etc)

Vishesh Singh : vishesh.singh@gmail.com
Lingerie
Men’s intimate wear

Sharmila Katre : SharmilaKatre@hotmail.com
Fast Fashion
Organic Clothing
Safe kids wear

Aditya Vij : pria@sify.com
Sneakers


Whatever said and done, all groups were professionally dressed and demonstrated good learning attitude. I am sure just like me, all other teachers present , were proud of each of you. Busss thoda aur mehnat and lagann…


Priya Mary Mathew

Fashion Value Chain Analysis

Fashion Value Chain Analysis

Identify the main components of the business. This should include manufacturing and operational activities, order-taking, marketing, sales, delivery and customer support. Next to each component, list the crucial elements to improve.

Value chain is a chain of activities. Products pass through all activities of the chain in order and at each activity the product gains some value. The chain of activities gives the products more added value than the sum of added values of all activities.

Meet people in each component/ department. Have them describe their department's current operations. Then charge them to create at least one strategy they believe can improve department activities. For example, the Human Resources department might devise a strategy for bettering recruitment and hiring.


Students have to investigate from the customer's perspective also. They should identify which "Value Elements" of each business activity customers consider critical to their needs. For example, if the activity is order taking, most customers would regard getting a swift answer to their request as a top priority.

Students have to study this value chain starting from retail outlet to merchandise to warehousing to manufacturing to raw material sourcing. This they have to do using research methods : survey, interview, field visits, observations etc. Each group has to pick one closest competitor of their brand and study the value chain of that competing brand.


Students must first visit their competing brand, study the 4 Ps, and then work backwards.
(Competitor analysis and Porter 5 forces analysis are all part of this)

valu