Brand Analysis and Sourcing Plan free essay sample

.Ralph Lauren is one of my personal favourite brands and the reason to why I have chosen to write about this fashion company. To me it feels natural to think about the brand as an affordable yet fashionable brand, since it is quite common to see many shirts or other R. L. apparel on the streets of my hometown Gothenburg in Sweden. During the process of learning more about fashion and fashion sourcing, I have however come to realise how much more that lays behind the reasons why I chose to wear this brand and how much more diverse the company’s product portfolio really is. The first part of this paper is going to present a brief outline about the history of the company, the company’s market share and positioning. The main focus will however be on how they try to convey the message of meaning to its customers. The second part presents a suggested sourcing plan for three different product lines, discussing routes, different natures of relationships and how to perform production activity control in the different types of manufacturing processes. Part 1: Ralph Lauren More than just a Brand Company background The Polo Empire began in the late 1960’s when the creator Ralph Lauren decided to create his own line of ties. At the start everything did however not go all smoothly. In the beginning Lauren went to a variety of stores to present his product, but was many times rejected. At Bloomingdale’s he was told that he should make them narrower and remove his name from the label. Lauren luckily refused and soon after Bloomingdale’s saw how successful the brand was doing and agreed to start retailing his products under his conditions. ehow. com/about_5114046) Even though the design of Ralph Lauren may have been seen as something slightly unconventional at the very beginning, it certainly found its niche early. To quote renowned fashion critic Bernadine Morris: Hes acquired a certain reputation for clothes that are, you know, with it. But not too with it. Not enough to shock the boys at the bank. (http://www. fundinguniverse. com/company-histories/PoloRalph-Lauren-Corporati on-company-History. tml) This approach led to his designs being perceived as sophisticated, distinctly American and just enough fashionable to attract a large group of customers. After the first successful collections Ralph Lauren moved on and started to open up his own clothing stores and to create apparel for women. Today the company includes many different categories of brands and have grown to become one of the worlds largest fashion businesses. Company information Polo Ralph Lauren operates within three different segments: Wholesale, Retail and Licensing. As can be seen below in the table presenting the company’s revenues Wholesale and Retail accounts for almost fifty percentages each with the Licensing making out roughly three percentages. The reason for the licensing making out a much smaller proportion could have to do with the fact that Ralph Lauren prefers to have more control over its value chain and therefore refrains from licensing a too great proportion. Source: Polo Ralph Lauren annual report 2011-05-26, p. 2 (http://investor. ralphlauren. com/). During this era fashion was usually created by these selected few and then spread to other parts of the population through the so-called trickle-down effect (Brandchannel. com). Many things have however changed since then and today we can see a huge variety of different luxury brands that are pertaining to different categories, targeting different customers. This has been enabled by different factors out of which I consider the emerge of a mass class of relatively wealthy people to be the most important one (Brandchannel. com). This has also had the consequence of fashion being able to spread in a new manner both from above and below. I consider Ralph Lauren to be a part of the middle segment of the Luxury brands. The brand aspires to be a prestige and luxury brand but they are targeting a much wider group of customers. It is hard to define exactly who the target consumer of Ralph Lauren is since they have such a huge variety of different brands. Some would perhaps say that it is a middle-aged man, pertaining to the upper middle class who likes to associate himself with the classic yet innovative fashion of Ralph Lauren. I think this might have been the case when the company first started its endeavours to attract a group of customers but many things have changed since then when it comes to the content of Ralph Laurens product portfolio. Today Ralph Lauren has a wide arrange sub-brands (only the clothes brands totalling seventeen different ones), constituting different product lines directed towards both men and women, such as: Polo Ralph Lauren, RRL, RLX and the premium Purple Brand. In this way the company has managed to expand their customer target group to include more people, even children. The pricing is different for each brand, ranging from 50â‚ ¬-450â‚ ¬ for a shirt to give but one example. (ralphlauren. com) In this way they manage to capture a wider range of customers. Looking at the target consumer from a demographic point of view we can see that even though it is an American brand its consumers can be found all around the world. The Target customers are often wealthy, professionals, people from affluent communities, or people that sail, ride horses or participate in other sports associated with the upper class. However, not every customer is part of this group. What makes them still purchase the brands products is something pertaining more to the psychological level. They all value, quality, style and the exclusivity of the brand and they all aspire to be wealthy, sophisticated and admired (Isidro, I. , 2012). Positioning the story told by the brand What attracted me and what I still like about the brand, is the casual yet well-dressed apparel that they offer. To me it is a brand that communicates that message through their collections that manages to be both modern and at the same time remain in contact with their classical American style. According to Ralph Lauren himself he stated that he had a dream of fashion being able to be timeless, with natural quality and seamlessly matching life with lifestyle (Biographyshelf. com). I think that the brand has successfully managed to communicate this original intention through always offering products of good quality and by being a trendsetter without being too innovative. By this I refer to that the main attributes of their products could be considered being slightly more timeless but yet successfully managing to stay in tune with the latest trends. One example of this is their dress shirts previously having been considered as being rather oversized, but know appearing just as often in a slim-fit version. A basic apparel in both men’s and women’s wardrobe that needed a renewal to stay in time (Askmen. com). More than just clothes Ralph Lauren is of course more than only polo shirts and other clothing apparel. In the company’s repertoire can be found perfumes, home furniture and even towels and bed linens. What it all boils down to is peoples desire to be able to express themselves through the use of tangible items. Ralph Laurens success was not merely based upon his skills as a designer, but also by knowing this fact that it is the intangibles that matter just as much. Packaging and presentation of the articles are just as important when it comes to make the purchasing decision for the consumer as to the feel and look of the garment (infomat. com). The hardest part when it comes to design clothes and other fashion products I believe is to be able to convey the message that you as a designer are trying to infuse into the product. Ralph Lauren has been celebrated as a being successful in this manner by taking the inspiration from the world that surrounds him and transferring that into tangible fashion wear. It could be a pillow design inspired by a Navajo (Native indian tribe) blanket, or the patina of a Jeep that gets turned into a sweater (oprah. com). I believe this is a good example of how creativity is developed within the brand. I do not consider Ralph Lauren to be a brand that stands for novelty and originality, but I believe that they manage to imbed their products with a feeling of usefulness. Through offering products with high quality that appeals to the customer and managing to take familiar themes from the surrounding world, transforming them into fashion products, the brand expresses its fashion consciousness in a more subtle way. Another aspect when it comes to communicate the feeling of your brand is the use of symbols. This could take form in either portraying your products in a certain environment, using celebrities to promote your products, or by the use of logotypes. What most people associate the name Ralph Lauren with is perhaps a certain logotype. The creation of the Ralph Lauren Polo logo is a great example of how the essence of the gentleman sport of Polo can be imbedded in a piece of fabric. By selecting this symbol Ralph Lauren has been able to give a special meaning to the garment. As a consumer you do not buy certain products only because of the quality of the garment or the fit of the cut, you buy the concept of the story that is being conveyed. The reason why I believe that Ralph Lauren has managed to become and stay successful is their ability to keep telling the same story, transmitting feelings to the consumers. Just think of all the advertisements that the company use, portraying handsome models in idealized environments, by the side of the pool or outdoor having a picnic with majestic mountains rising in the backgrounds (Girvin. com). These images I believe are not only portraying the American dream of living a rich and successful life but also a Global one, able to attract customers from all over the world. By aligning itself to different relevant sporting events, the Ralph Lauren brand has been successful in reaching out to a broad international audience. In sponsoring the Wimbledon tournament they managed to create a connection to their Polo Ralph Lauren brand that felt natural and appealing. This is just one example of how the brand makes subtle yet recognizable appearances in other ways than through advertising and sends out a message of being a supporter of the same things that many of their target customers like. (Girvin. com) Last but not least it is important to not forget the creator himself. The Brand being his own name tells you a lot of what kind of person he really is; a true icon embodying the story created by him. While many brands seems more focused on copying the creations of others, Ralph Lauren has stayed true to his own ideals of continuously innovating his brand. (Girvin. com) Timelessness with all due respect, but no one can argue that the brand is not being innovative after having checked out the Ralph Lauren 4D commercial that was being projected on some of the company’s flagship stores in 2010. (vimeo. com) Position from a value chain point of view In order to be economically successful, being in control of the total value chain is one of the key drivers. Ralph Lauren makes a good example of a company that manages to achieve that control, even without owning all the parts of the different functions. (Bokus. com) Even though Ralph Lauren’s main focus of the value chain is at the top, where they create, design and market their products (Fundinguniverse. com), I believe that a large part of their success lies in the company’s ability to manage the retailing of their product at the very end of the chain. The fact that Ralph Lauren does not own all the channels through which their sales are made does not mean that they have left anything to chance. In order to control the retailers that are selling the Ralph Lauren brand in department stores, the company has dictated very strict guidelines. By maintain good relationships with big department stores like Macy’s and Dillard’s Ralph Lauren can rest assured that its demands are being understood. How the products are being presented and offered to the customers is very important to the customer experience and by carefully regulating this, Ralph Lauren manages to control even this last part of the value chain (http://whatsnextretail. om/owning-the-retail-value-chain-like-lululemon-and-ralph-lauren). The consequences on range development A common phrase when it comes to targeting and positioning for a company is that you can’t be everything to everyone and that such a strategy is usually very expensive and not as efficient at attracting a solid group of customers (Isidro, I. , 2012). It could however seem that this is something that Ralph Lauren tries to achieve co nsidering the wide arrange of customers that they are including into its marketing mix. In order to not confuse the consumer by using only the brand name Ralph Lauren for all their products they have created many different sub-brands over the years, as previously mentioned. In this way they can develop new product ranges that are targeting more directly a narrower range of consumers. One example of this was when Ralph Lauren launched their new brand Rugby in 2010 in order to attract the younger generation. In this way they can retain most of the values already associated with the Ralph Lauren brand, while at the same time being able to customize the products to better suit the specific needs of the consumer. My only concern when it comes to this approach is whether it is a durable approach in the long run. If to many different sub brands and product lines are created under the Ralph Lauren name it could lead to a dilution of the story told by the original brand and the values that it stands for. So far Ralph Lauren has however managed to be successful in this balance so I believe that they will be able to continue this delicate balance act in the future. Part 2: The Sourcing plan Sourcing Location To determine how to develop a sourcing plan for a specific product it is important to keep in mind the demand characteristics for each specific item. Depending if the type of product is a continuity, seasonal or short seasonal product different aspects are more or less important to prioritize to assure that the final consumer gets the maximum amount of value out of their purchase. For a continuity item the customer is not willing to pay as much as for a short seasonal one and the latter product needs to incorporate the latest trends on a whole other level than the first type of product. This leads to some fundamental very important traits to account for when it comes to choosing the origin of where to produce an item. The first point we have to address is whether we want to source it domestically or globally. Depending on the type of product there is a trade-off between managing the complexity of the fashion content and the complexity of managing the supply chain. By producing closer to the final point of sale the complexity of managing the supply chain is reduced which enables the company to focus more on managing the fashion content (Guercini G. , Et al, 2004). Continuity product When it comes to a continuity product one of the most important traits is cost saving. The product has a longer life cycle and the fashion content is not as high as for the other product types. Time is therefore not the most important factor (logisticsbureau. com). Since a large proportion of the cost of producing apparel comes from the assembly process, the labour cost becomes a significant concern. It is however important to not only consider the cost saving on labour, but also keep in mind other factors that are imperative for when it comes to create value for the consumer. I would suggest that a factory located in the costal regions of China, like Shandong, should be used. The location is situated close to a large harbour, which is important for the logistics to Europe, and the area contains many different factories that are specialized in the production of apparel. Even though the labour cost might be lower in other countries like the Philippines or Cambodia, these other aspects are just as important. Since Chines manufacturers are more used to this type of production they have the know-how and the machines to be able to do it efficiently. Another aspect when it comes to sourcing from China is the proximity to raw materials, like cotton, and the abundance of textile manufacturers. This reduces the time and cost associated with connecting these parts of the supply chain to the manufacturing of our product (Chinasourcingblog. org). Even though this might be true for the current situation I believe that this might soon come to change when it comes to China. The cost of labour is steadily rising and the governments attempt to even out the income disparity has already lead to problems of labour shortage in some of these coastal areas. As China is also trying to move away from these lower added value types of production we might need to consider other countries as better alternatives for when it comes to source even this type of continuity products in the future (Chinasourcingblog. org). Seasonal product When it comes to Seasonal products much stated above for when it comes to choose allocation and what is important when selecting a manufacturer is still true. The importance of time is however more significant than before. Since the Seasonal product is only going to be offered for sale during a thirteen-week period the fashion content is higher than that of a continuity product and the relationship with the supplier needs to be more flexible to be able to adapt the products characteristics and the quantity with shorter notice. Shipping from China takes about four weeks, which leaves less time for the company to able to change anything. The choice to produce this product type at this location is therefore a riskier decision than for the continuity one. I believe however that the fact that China has a broad network of experienced manufacturers can weigh up the negative implications of distance. Working with an experienced manufacturer decreases the friction of problems with explaining the product qualities that could be the issue if working with a supplier that has a lesser understanding of fashion. Short-Seasonal product For sourcing the Short-Seasonal product the supply chain becomes even more important, due to the product life cycle being only six weeks. Cost and fficiency is still important but since the product will be produced for the European market it is wise to consider nearby regions for the manufacturing. The main reason to keep the producer close to the sales point is due to the uncertainty of demand of the product (Bergvall-Forsberg, J. et al, 2002). In order to be flexible in the design, until the very last stages of committing the order and to adapt the quantities according to demand, placing such production in a far off country like China is not a good option. A good solution could therefore be to situate the production in a nearby region. Morocco is a cheap country in comparison with many other European alternatives when it comes to labour cost, but with the right knowledge and technology to be able to offer good quality and service. There are many reasons for why I consider Morocco to be a good alternative to choose as the sourcing destination for the short seasonal product. The extra costs with manufacturing in Morocco in comparison with China, is widely outweighed by the benefits of meeting the demand more precisely and being able to match the fashion content better due to the time frame for decision making being wider when sourcing from a nearby region. Besides all the advantages with the sourcing location being located closer, Morocco presents many other incentives to why it is a good choice. The local government has since years been investing in the infrastructure and created special zones for the sole reason of facilitating production for export. The country also posses good human resources to function as a qualified work force in the manufacturing of our short seasonal product (Executive-magazine. com). To summarize and make the whole supply chain more visible the different supply routes are visualised in the table below. Supply Chain Process| Yarn| Fabric| Garment Manufacturer| RDC| Retail Store| Continuity| China| China| China| Europe| Europe| Seasonal| China| China| China| Europe| Europe| Short-Seasonal| China| China| Morocco| Europe| Europe| Supplier Relationships Depending on which type of product that we are going to sample, different kind of relationships can be developed with the suppliers. Depending on how complicated the product is to produce, the complexity of the fashion content and the supply chain management needed, different levels of commitment can be applied. One aspect that should be taken into accounting, no matter the type of product or the relation with the supplier, is the use of multiple manufacturers to avoid getting over dependent upon the performance of one supplier (Cabusinessadvisor. com). By not sourcing more than fifty percentages from any single source, the company will be able to avoid getting the whole delivery delayed or other negative impacts from affecting the whole production. This can also put some positive pressure upon the suppliers, since they are aware of their performance being compared with a competitor. Continuity product For the Continuity product the fashion content is lower than for the other types of products, the planning and production is therefore also easier to achieve in comparison, since the demand is easier to predict. I would suggest that a short-term relationship should be used since the greatest need to satisfy considers lean aspects to cut costs. The product design is easier to explain and should not require any changes, which enables us to disclose less sensitive information. It is important that the factory we chose to work with are able to easily understand the design and produce a good quality product, but the vital point is that they can commit the capacity needed as efficient as possible. Since less contact with the supplier is needed when engaged in this type of relationship, the costs in time and money to explain and monitor the production are reduced. The product lifecycle is calculated to one year and the main consideration for the stock intake should be how to achieve a steady flow of products in accordance with the calculated steady demand. Looking at the WSSI-sheet I think the initial commitment could be kept at its current level of almost 50% due to the lower risk of the forecast. If possible I would however like to include the possibility to change the total quantity in the contract, to be able to increase or decrease the order amount when making future calls. It would be unnecessary to gamble the chance, although small, of having made a wrong initial forecast, if it would be possible to ad this extra security of flexibility into the contract. Seasonal product If lean production reducing cost was the key driver for the relationship with the manufacturer of the continuity product, service level and agile production is the recipe to use for our seasonal counterpart. Since we only have thirteen weeks to sell the product, demand is harder to calculate due to the higher fashion content, and the fact that our manufacturer is located in China; a high level of responsiveness is needed. These points all indicate that we should choose to engage in a closer working relationship. My suggestion is therefore that a totally committed relationship should be applied. Time is the driving factor and makes every part of the supply chain more important. Through engaging in a closer relationship we can get a better overview of the suppliers of fabric and even all the way down to the source of the raw material. By ascertain that the chances of disruptions in these parts are minimal we can focus on the communication with the manufacturer. The content of the details that we need to share with the manufacturer is containing more sensitive information we need to ascertain that no intellectual property is transferred to any competitor. It is thus important to make good design not only for the product but also for the contract. By having a buyer office located relatively nearby the region of the factory we can facilitate the frequent communication that is needed. Due to changes of different factors, as a drought affecting the cotton harvest or a change in the consumer demand, having a fast responsive manufacturer is a must. In the WSSI-sheet I would suggest that the initial commitment should be lowered slightly to 24’000 units instead of 26’000, since I consider 60% to be enough to start with, before we have had time to see how the demand will be. By postponing the delivery of the second shipment to w. 8, we gain another week to measure the performance of the sales in store and can make the call w. 4 instead and thus hopefully being able to make a better decision based upon more statistics. I am aware of the risk being slightly higher for the possibility of running out of stock if the product were to sell exceptionally well, but consider the risk of ending up with to much jackets to be greater. Short-Seasonal product All the critical issues discussed above for the seasonal product is applicable in an even higher degree for the short-seasonal item. Even though the location of the factory being located much closer to the point of sales, the need for an agile and responsive producer is greater still. Since the raw materials and the fabrics are still coming from China the importance of these suppliers are greater than before. The delivery time of the finished product, from Morocco to the RDC in Europe, should be feasible to perform in less than one week. The fabrics still need around four weeks to arrive, stressing the importance of the quality and reliability of the Chinese supplier. This risk of this could however be reduced by negotiating the terms of the Moroccan suppliers level of commitment, so that they acquire the sufficient amount of material well in advance before starting the production. The demand for the short–season product is very hard to determine. I believe it is possible to plan for the suggest dates in the WSSI-sheet without further changes, since the delivery time is shorter, enabling future changes if the need should occur. In order to accurately gather the information from the stores where the product is being sold, the need for an advanced information system is greater than for the calculation of the other product types. By implementing this we can make a better, more accurate decision for the important second call. Production Activity Control In order to ensure that the products arrive in store on time and that they fulfil all the qualities needed to bring value to the end consumer, it is important to manage the process of the production activities. As previously discussed; it is central to be aware of how the whole value chain functions but it can be hard and inefficient to try to be everywhere at once. There are thus some parts of the value chain that we need to focus more on, the main one being the manufacture of the finished good and the shop floor control. By using Production Activity Control we can manage to ensure that we receive the greatest possible worth out of the production process for each different product type (mcts. com). By designing a production plan together with the manufacturer we can ensure that we have a possible way to measure the standard of the production and what is expected in terms of, capacity, speed, quality, timing and so forth. Once a plan has been agreed upon and the production has started, we need to be able to carefully manage the process. By using an efficient system it is possible to monitor each stage of the manufacturing process and possible to make a rapid change, should anything be inadequately performed. Such systems that I would recommend includes, work in progress monitoring, where supervisors calculate the amount that each production line has produced, in combination with randomly performed quality controls to see that not only quantity is being achieved. Depending on which type of product that is produced, different focuses needs to be applied to the process to create the maximum possible value. For the continuity product the focus should lay on making the process as fast and efficient as possible in order to reduce as much waste as possible. Quality should be given and more easily achieved due to the lower fashion content of the item (and due to our choice of factory), enabling an enhanced focus on capacity and volume. Cost and dependability are the key drivers that we want to achieve through the monitoring of this process, since we need a steady stream of products coming into store at a low price. For the products with a higher fashion content, the seasonal and short seasonal products, another important aspect becomes important: Flexibility. Due to changes in demand and product modifications it is important to include a fast and efficient system to be able to communicate and implement these alterations as smooth and rapid as possible. Having a manufacturer that is agile in these terms and able to provide the best possible service is what creates the highest value in the manufacturing process. Quality is important for all the product types but essential for the short-seasonal item. In the production of all the product types a Golden sample should be used to measure the quality. This is however not a guarantee for a satisfying result. In order to make sure that the manufacturer fully understands what is intended we need to include many specific details describing the product and carefully monitor the production at each stage (Asiaqualityfocus. com). Of particular concern is the final check that needs to be made before the products are packed for shipment and put on a lorry bound for the harbour. After the products have left, little can be done to change the status of the products. This is not only of importance due to quality issues but also, to ensure that all the paperwork is in order to guarantee a safe passage through customs, in particular when it comes to China (Importsoriental. com). For the seasonal and short-seasonal products where we have established closer working relationships with the manufacturers it is important to not forget the value of feedback. Since we are going to work with these suppliers for a longer time, much can be gained from having an after action review of the process.