ASHLEY HIMPEL GILLIAN WARE EMILY ECKARD LAUREN WERTH PROFESSOR DONALD LEVY GLOBAL SOURCING FASM 420
CONTENTS WHO WE ARE.................................................................. MISSION & VISION......................................................... VALUES.............................................................................. CUSTOMER PROFILES.................................................. STORE LOCATION & LOGISTICS............................... INSPIRATION................................................................... PRODUCTS/STYLE/PRICING...................................... WHY PINATEXT?............................................................ COUNTRY ANALYSIS.................................................... COUNTRY RANKING.................................................... SUPPLIER ANALYSIS...................................................... SUPPLIER RANKING...................................................... LINE PLAN........................................................................ UNIT BREAKDOWN......................................................
WHO WE ARE Poppy & Iris is a modern chic accessories brand with a bohemian twist, that offers a variety of handbags in different fabrics and colors, reaching an audience of women 25-40 years old. Poppy & Iris only uses raw materials to aspire and create fashionable pieces that aren’t harming to animals and the environment. Our pineapple fibers is sustainably produced for use as an alternative to both mass produced leather and polluting synthetic materials, offering a better choice for our earth. Our brand aims to inspire other fashion conscious companies that value animal rights and sustainability. According to recent studies, there are certain drivers that push the handbag market. The usage of handbags is predominant with the rise in the woman workforce over the years has boosted growth. Recently, the handbag market has had a growing affluence in the emerging economies and awareness of better brands. Since we are targeting women ages from 25-40, our customers are able to afford our higher price point and appreciate our brand ethics. Our clients want strong, durable statement pieces that will last a lifetime, so our goal is to give them just that.
MISSION Our mission is to ensure every woman can feel unique and on trend without feeling guilty.
VISION The vision of Poppy & Iris is to inspire other fashion brands to become sustainable and be cruelty free in their design making process.
VALUES Poppy & Iris believes in bags that are strong personal pieces in a persons wardrobe and are cruelty free. Cruelty free is a very important aspect to our company because it is wrong to use innocent animals for human pleasure. Our brand also values the environment and does not participate in the use of harsh chemicals and toxins in our manufacturing process.
1
Cruelty free and sustainable products. No animals are used in the process of producing our handbags.
2
Reducing wasteful practices and being ethically and socially responsible.
3
On trend, statement pieces that will last a lifetime and always in season. At Poppy & Iris want our women to feel confident and chic when wearing our accessories.
PRODUCT CATEGORIES
VEGAN LEATHER HANDBAGS: Cross-Body Drawstring Bag Backpack Tote Clutch
GOALS// GROWTH PLANS Cruelty free was the most important aspect for our brand. As we continue to grow we would like to give our customer more choice and control. Therefore, the ultimate goal is to launch the “Bag Bar� which would allow our customers to customize their own bag. As of right now, we only have four color options with one type of vegetable leather. We want our clients to be able to choose everything from style, to material, to embellishments to color. This aspect will create an overall experience and give our women the chance to create a handbag based on her personal aesthetic.
WHY PINATEX? Pinatex is a manufacturing company based in the Philippines. Their products are made from sustainable sourced natural fibers, using no harmful chemicals or animal products. The fiber used is made from pineapple leaves and can be easily cut, stitched and embroidered. It is a non-woven textile, developed for use as a low-impact alternative to leather and PVC/PU materials. The company currently has 6 dierent colors including charcoal, natural, brown, paprika, gold and silver. Pinatex will be adding extra colors in limited editions as they grow as a company. They have also passed ISO international textile testing standards including tear and tensile strength, flexing endurance, seam rupture, finish adhesion and color fastness. Their company values align with Poppy & Iris and appreciate the innovation and responsibility Pinatex embodies. They use no extra land, water, fertilizers or pesticides are required to produce these fibers. The process involves a patented pending technology that protects both the process and the finished material. This opportunity provides new additional income for farmers while creating a new industry for pineapple growing countries.
STORE LOCATION & LOGISTICS Store Location: Nashville, Tennessee We chose Nashville to open our first store because it is a friendly, progressive and probusiness city. Nashville still has a small town feel with a lot of small business that are bringing their creativity and passion, creating a unique culture. Poppy & Iris believe Nashville is the perfect spot to launch our store which is in the hub of food, music, culture, and diversity. There is a lot of economic growth with businesses continuing to grow, and expand. Overall, cities in the South continue to grow at a faster rate than any other U.S region, according to a demographer in the Census Bureau’s population division. Poppy & Iris is a brick and mortar store located in Nashville. Our product will be made in the Philippines, and our hardware and lining will be imported from China and India. From there, we will utilize FedEx to transport the orders from the Philippines to our store location. Shipping rates will vary from state to state but our flat rate will be set at $8 USD.
CUSTOMER PROFILE MILLENNIAL Name: Lauren Wilson Age: 28 Education: Bachelors Degree Income: Flexible income ($100k) Resides in: San Francisco Occupation: Style director at Harper’s Bazaar Values: Structure and durability over price and her vintage Chanel bag Hobbies: Hanging out with her close girl friends, shopping, hot yoga, blogging, writing Other brands she wears: Free People, Revolve and Anthropologie Wants: To travel the world, more brands to become sustainable/cruelty free
Lauren is constantly on the go, working on projects for Harper’s Bazaar and traveling to style clients. She values strong, durable pieces that will be staples in her wardrobe. Lauren also supports cruelty free brands that participate in sustainable practices. Her biggest investment pieces are bags and shoe because she knows she’ll always have them. With the hustle and bustle of living in California, and fashion constantly changing, Lauren appreciates more valuable and neutral pieces that will never go out of style.
CUSTOMER PROFILE GENERATION X Name: Jaclyn Pierce Age: 35 Education: Masters Degree at Boston University Income: Flexible income ($175) Resides in: Chicago Occupation: Marketing director for Urban Decay cosmetics Values: Family/friends, staple accessories and her work ethic Hobbies: Working out, getting dinner with friends and colleagues, reading, knitting and hiking Other brands she wears: Stella McCartney, Nordstrom and Anthropologie Wants: To make people happy, and travel to Egypt one day Loves: Sleeping in on her days o, her best friends, and chocolate Jaclyn loves statement pieces that still look classic and season-less. She has a few designer bags and is very fashion forward. She looks for innovative designs and style but also wants quality and function. Her personal style is dressy, girly, bohemian, and a bit modern. Jaclyn is goal oriented, self motivated and always up for a challenge whether it’s her professional or personal life.
LINE PLAN
UNIT BREAKDOWN
INSPIRATION//STRUCTURE & COLOR
PRODUCT STYLES & PRICING PRODUCT DESCRIPTION: Piper Cross-body OneSize Cost: $85.80 Retail: $275
FABRICS/COLOR:
PRODUCT DESCRIPTION: Delilah Drawstring OneSize Cost: $108.62 Retail: $350.00 FABRICS/COLOR:
PRODUCT DESCRIPTION: Ainsley Tote OneSize Cost: $147.80 Retail: $475.00 FABRICS/COLOR:
PRODUCT DESCRIPTION: Willow Backpack Cost: $178.89 Retail: $575.00 FABRICS/COLOR:
PRODUCT DESCRIPTION: Eloise Clutch Cost: $62.17 Retail: $200.00 FABRICS/COLOR:
China is a nation in East Asia with Beijing being its capital. The were founded as a district and original nation in 1368. Their population is 1.32 billion people as of 2016.
CHINA China is a key player in deciding where to source our products from. They are the world’s largest exporter and they have the second largest amount of goods imported. They have continuously been a world leader in technology and innovations with electronics and machinery being their largest export category. Chinese producers have invested in machinery and technology that improves quality and is environmentally conscious, and began shifting towards the use of all Eco-friendly materials.
China’s issues of sustainability are linked to the industrial processes that are supporting China’s economic development mode. The country does not see emissions as a problem that must be dealt with immediately. With millions of people remaining in poverty, economic growth is still the number one priority. China has a five year plan laid out and if they follow through on that, the country will see a 48% reduction in its ration of CO2 emissions to GDP by 2020, compared to 2005 levels. As part of its commitment to the Paris Agreementm by 2030, China has pledged to reduce this figure by 60-65%. Beijing has also begun to crack down on fossil fuel subsidies, especially with respect to gas taxes. The country does not have a set minimum wage as a whole, but it is divided by region. The minimum wage just increased last year to 19.5 Chinese Yuan ($2.94 USD) per hour for part time workers. The highest minimum wage for full-time workers is 2,300 yuan or $333USD which is the highest minimum wage in teh country.
Trade between the United States and China has grown substantially since China began reforming its economy and liberalizing its trade in the late 1970’s. U.S and China trade rose from $2 billion in 1979 to $579 billion in 2016, making them the United States second largest merchandising partner its third-largest export market, and its biggest source of imports. In May 2017, the United States and China announced the “U.S.-China Trade Agreement which includes China market commitments on the U.S beef, biotechnology, products, credit rating services, electronic payment services.
There are currently 907.5 million people in the labor force in China. The unemployment rate is 4% with an industrial growth rate at 6%. There as been an influence in increasing cost of raw materials, labor, energy and power. The labor force is migrating to better jobs and their customers are moving to buy from lower cost countries. Their labor laws have been recently under reform, growing in union support and protection year after year. Poppy & Iris take labor laws and human rights into a considerable amount before partnering with them.
Manufacturing in China cost significantly less due to the high saturation of manufacturers and the huge-highly skilled labor force. Manufacturing growth is slowing more quickly than economic growth and research suggest that the country is already losing some new factory investments to lower cost locations such as Vietnman. The Chinese-owned and multinational manufacturers boost productivity, refine productdevelopment approaches and tame supply chain complexity. Thos who do so can create a competitive advantage.
PHILIPPINES Philippines has made significant development in the technology field. The country is using latest technology to grow their industry and agriculture. Various IT developments have been introduced so most people have their own cell phones and internet facilities. This technological support is now booming in terms of outsourcing. In addition, over five million mobile phone users also use their phones as virtual wallets, which leads among devloping The company we are partnering with for our handbags is located in the Philippines and has a positive and social impact with a low environmental impact. The USA is expected to remain the single-largest market for locally made apparel over the next few years. Apparel and accessories made from hemp, ramie and bamboo are also becoming popular among overseas buyers because they are perceived as sustainable. Increasing demand from traditional markets is driving the growth of the garment industry in the Philippines. Philippines’ minimum wage is the lowest amount a worker can be legally paid for his work. Their wage is set by tripartite regional wage boards. Philippines daily wage is between $9$10 USD with a yearly minimum wage is $2,053 USD. The new minimum wage reates for non-agriculture jobs is $10 and agriculture, retail, and manufacturing get $9. To ship a 20” container from the Philippines to the United States, it would cost around $1900 USD and take about a month to get delivered.
Located in the continent of Asia in the Western Pacific, the Philippines is the 73rd largest nation in the world with a total area of 300,000 square kilometers, compromising more than 7,000 islands.
The Philippines is a very relationship based country, so building relationships with other countries important to them. The Philippines is a member of the WTO and trades with the EU, China, Australia, New Zealand, India, Japan, and Korea. Although they do not participate trading with the United States, the Philippines does meet regularly with us under the support of a Trade and Investment Framework Agreement in aims to establish one. In a statement in 2017, the Office of the United States Trade Representative said officials from the Philippines and US agreed to work together “to foster free, fair, and balanced trade between them” during the TIFA meeting. With six medium to large size ports, there is room to continue successful imports and exports within the country. However, inadequate infrastructure, transportation and communication have inhibited faster industrial growth. More than 27 million Filipinos live in poverty (2015), therefore Poppy & Iris will work closely with the Philippines to help grow their economy through the increase of job growth.
The Philippines is a country that has one of the biggest available pools of qualified workers in the world. With more than 38 million people that belong to the workforce. This labor force is dominated by people that have an eduacational background. The minimum age for employment is 18 years old and below that age is not allowed. Most of these employed workers are in the field of services, followed by agriculture, and industry with the lowest percentile. The proportion of employed working people in the Philippines constitutes 60% of the population, which is a relatively large percentage that belongs to the upper-third in the world ranking.
Manufacturing comprises more than half of the Philippines’s industrial sector and accounts for almost a quarter of the country’s Gross Domestic Product (GDP). Manufacturing industries have higher employment, and promotes stronger inter-industry linkages, firm productivity, technological development and innovation. The growth of the this industry improves the upgrading and diversification in the agricultural sector, as well as drives demand for higher value-added services. Therefore, the Philippines is accelerating in the manufacturing competitiveness towards achieving sustainable goals.
India is a leader in the field of science and technology in the world. They house some of the youngest entrepreneurs in the technology industry throughout the world at an average age of 28 years old. India is considered the second most connected nation in comparison to China. Social media is a huge outlet used across India. The top three main platforms in the use are YouTube, Facebook and WhatsApp. India is working towards becoming a leader in the industrialization and technological development. India’s IT industry cost competitiveness is 3-4 times cheaper than the U.S. India is gaining prominence in the IT world by setting up global firms centers throughout the country. This has gained attention of major countries that want to invest in India’s IT industry.
While per-capita emissions are amongst the lowest in the world, it is also the third biggest generator of emissions. Despite being the third largest economy in the world, India also has a larger number of people living below the international poverty line. Because of this sheer size and rapid growth, sustainability is a challenge. However, it has shown leadership in combating climate change and meeting the Sustainable Developmental Goals, as reflected in many of its developmental schemes. Sustainability has always been a core component of India culture. Its philosophy and values have underscored a sustainable way of life. India and the world have a long and challenging way to go in dealing with environmental problems, but they are learning to live together in sustainable communities.
Domestic workers, around 80% of whom are women, are employed by wealthier Indias to perform household chores, with low pay and little or no job security. Rights group Anti-Slavery International said more than four million workers are employed in India in the unregulated domestic sector with wages typically two thirds lower than other industries. Many workers are not paid a fair amount of money, physically and verbablly abused, and have no benefits or security. National labor unions are asking for a minimum monthly salary of 15,000 Rupees or $231 USD, but the government has raised the wage to 18,000 Rupees or $277 USD. The absolute lowest federal minimum wage in Sierra Leone, India is $0.03 an hour.
India is a South Asian country and 7th largest nation int he world. India shares land borders with 6 countries: China, Bangladesh, Burma, Nepal, Bhutan, and Pakistan. The total population is 1.3 millino people. It houses the second largest textile and apparel sector for employment in the country.
India does not have any trade agreements with the United States and has no future plans of implementing a trade agreement.
INDIA
India’s labor laws date back to almost a century. This made it diffuicult to fire anyone without agreement between authorities, management and workers. Tackling India’s labor practices is a main priority on the Prime Minister’s list in order to revive economic growth. Their labor laws hinder a lot of progress and push for innovation. However, the country needs to start changing and correcting their employment laws, but that could also potentially lead to political
Manufacturing in India is expected to become the fifth largest manufacturing country in the world by the end of year 2020. The government of India has taken several initiatives to promote healthy environment for the growth of manufacturing sector in the country. Therefore, India is an attractive hub for foreign investments in the manufacturing sector. Several mobile phone, luxury and automobile brands, among others have set up or are looking to establish their manufacturing bases in the country. The manufacturing sector of India has the potential to reach $1 trillion USD by 2025.
COUNTRY RANKING PHILIPPINES
CHINA
INDIA
GOVERNMENT
6
5
10
LOCATION
7
9
8
BUSINESS CLIMATE
6
7
8
TEXTILE INDUSTRY
5
10
10
COSTS
8
10
3
TRADE AGREEMENTS
4
0
0
ECONOMICS
6
7
10
RISKS
5
4
SOCIAL STABILITY
4
4
SOURCING GUIDELINES
5
6
7
TRAINED WORK FORCE
9
9
10
TOTAL
65
71
77
7 4
1. 2. 3.
INDIA
CHINA
PHILIPPINES
SUPPLIERS ANALYSIS PINATEX: PHLIPPINES
GUANGZHOU MEGA TRIMMING CO., LTD: CHINA
We chose this country because the producer of our natural vegetable leather is produced only in the Philippians due to them only using the leaves of pineapples. The supplier only uses recycled pineapples that can’t be sold or used. They limit the use of harmful chemicals to grow the pineapples so it reduces harm to the workers as well as the products. They give working wages to their employees which all match our CSR program at Poppy & Iris.
We chose this country and supplier because the supplier is strong in the production of zippers and they have a great lead time, while they maintain strong work ethics within the factory. They do have restrictions on how products are made and the company works with clients to make sure that there are safe labor regulations in place.
LEATHER FOR HANDBAGS AND DRAWSTRING
YAHUANGDA METAL PRODUCT FACTORY: CHINA
SNAP BUTTONS
We chose this supplier in China to produce our closures for our handbags because they have their own design department. They also have strict administration systems in place to make sure the working conditions for their workers are safe and healthy. They only have a small number of employees which allows for better treatment of the employees in general. This supplier corresponds with Poppy & Iris’s CSR policy.
ZIPPERS
RUCHI TRADERS: INDIA PURSE LINING
We choose this country and supplier due to the demand they have in making lining for clothing and handbags. We chose this specific supplier because they have built trust with other clients by having safe deliveries, several payment options, fair labor practices within the factory. The fabric and dye that they use are high quality and the dye is safe for all skin types. They have a great client base, which builds trust and reassurance for our up and coming company.
SUPPLIER RANKING PINATEX
YAHUANGDA
GUANGZHOU
RUCHI TRADERS
ABILITIES
5
8
8
7
CAPACITY
4
6
9
6
LEAD TIMES
3
6
7
6
QUALITY
4
5
8
5
CUSTOMERS
2
8
7
4
SOURCING GUIDELINES
7
6
5
4
SERVICES OFFERED
3
7
7
5
STRATEGIC OUTLOOK
8
5
5
4
TOTAL
36
51
56
41
CONCLUSION ANALYSIS The fashion and accessory industry has seen a global shift in consumer and social expectations, and our overall strategy of creating cruelty free and sustainable accessories aligns with that mindset. Providing a quality product made in a crueltyfree environment was of the utmost importance to our company. Therefore, when researching sourcing companies and manufacturers, we made sure they adhered to a transparent and ethical business standard. We believe this will maximize our margins as the consumers will want to support such a strong business model. Our lead times may be longer as we will not accept quick work, nor do we weigh quick production over quality of human life.