Future Business Model Report by katharinagerken

Strategic advice for Miniconf/2020

AMFI 2018

Future Business Model Gerken/Leborg/Majda/ Onderwater/Pombar/M2D/

Table of content 1. Executive summary 2. Introduction (scope and limitations) 3. External analysis 4. Internal analysis 5. Introduction and in-depth explanation strategic advice 6. Realistic long-term goal with a translation to short-term KPIâ&#x20AC;&#x2122;s 7. Strategic implementation of long-term goals into operational level 8. Front and Back Office 9. Financial justification 10. Conclusion 11. Bibliography 11. Appendix A 12. Appendix B

2 3 4 5 6 7 8-10 11 12 13 14-16 17-33 34-37

Executive summary Expanding a company to a new country is under no circumstances simple. Miniconf, an Italian childrenswear company presents three brands within its portfolio: Dodipetto, Sarabanda and iDO. By the year 2020, Miniconf aims to expand its company by further establishing Sarabanda in the Netherlands. By deriving qualitative and quantitative research, it has been noted that expanding to the Netherlands requires ample alterations to enter the Dutch childrenswear market successfully. In order to expand, potential scenarios were thought out to ensure feasible and ealistic expectations. Exploring megatrends, Miniconfâ&#x20AC;&#x2122;s current business model canvas, its supply wheel and balanced scorecard contributed to the most practical scenario of a low demand for sustainability versus a high willingness for companies to implement new technologies. Personal surveys contained responses that mother living in the Netherlands prefer functional clothing in comparison to trends and price. Internal company analyses substantiated that Miniconf lacked modern tools to further attract potential customers. Thus, Miniconf will implement a new repositioning strategy retaining its core values and existing clientele whilst enticing new customers (mainly in the Netherlands). The strategy is compiled of three main objectives: branding, product management and distribution. Due to the fact that parents in the Netherlands prefer functional clothing for their children, Sarabanda will launch a new collection containing gender-neutral, functional and basic clothing made with organic cotton. There is an emphasis on creating the utmost coherent omni-channel, as well as a focus on a new marketing campaign. Based on Miniconfâ&#x20AC;&#x2122;s sales forecast, by 2020, Miniconf will not increase its profitability substantially. However, that does not imply that this strategy is infeasible. The implemented strategy is long-term, and the investments have proven to increase revenue, slowly but surely. All in all, Miniconf will increase its brand awareness successfully in the Netherlands with its new strategy. By the year 2022, Miniconf will have repositioned the brand to strengthen its presence in the European childrenswear industry.

Introduction The aim of this report is to thoroughly analyse the internal and external environment of Miniconf. The information will be acquired through surveys, interviews, statistics and reports to create the most feasible strategy for the future and growth of Miniconf. An analysis will be made on the prospective implementations made in the front and back office. Furthermore, sales forecasts and future financial statements will be justified in accordance with Miniconf’s new strategy. The Vision: Children inspire us, values guide us. The Mission: Dressing children with attractive, top-grade, comfortable, easy-fitting, safe clothes, pay, at the same time, utmost attention to customers, collaborators and environment. (Miniconf App, 2018)

Scope and Limitations However, it must be noted that there were several limitations when obtaining information for Miniconf’s future plan. First and foremost, Miniconf’s financial statements of 2015 and 2016 provided ample uncertainties. The uncertainties led to assumptions on Miniconf’s market and demand. Therefore, making it problematic to create assumptions and justifications for its future financial position, based on predictions. Additionally, since Miniconf is a private Italian company, the language barrier presented to be a considerable issue. Nevertheless, with determination and perseverance, the obstacles were overcome.

External Analysis There are several external factors that a company cannot have any control over which are to be taken into consideration before establishing a branch in the Netherlands. This includes megatrends, the childrenswear market, the consumers and various threats and opportunities. There are plentiful megatrends that impact the Dutch market positively and negatively. For instance, the trend ‘digitalisation’, regarding the implementation of digital devices into society and improves the standard of living, by offering a completely novel approach to the way things are fulfilled. Secondly, an additional trend considers adapting to climate change, signifying that societies and countries have to adapt to the changes of the planet by re-adjusting to new realities. Such as adapting to different weather conditions or to unusual catastrophes. (Pombar, 2018) The childrenswear market is exceedingly competitive. The targeted consumers vary from one country to another, as the children and parents shop for their children or the children who decide for themselves. In this case, it is primarily mothers who purchase childrenswear.

Although, their children do have significant input. According to a survey conducted by Statista, 85 percent of children have a saying when purchasing their clothing and shoes. From the age of four, Dutch children express the desire for more independence regarding what they wear. This is great news for the industry, as mothers spend approximately 30 percent more if their children are shopping with them. Parents consider quality, price, practicality and style when shopping for their children. Whereas children are mainly attracted by the style and colour. Dutch consumers are increasingly choosing to purchase childrenswear online rather than in-store. Ordering from home at any given time is extraordinarily appealing to the time-pressured parents of today’s society. In recent years (2013-2016), the number of specialised childrenswear store dropped by 23 percent. This portrays evidence of e-commerce rapidly gaining market share. 36 percent of the Netherlands’ population (5.1 million) is part of the second lowest income class . Consequently, affordable fast-fashion retailers have a significant and growing market . As a result, distinct opportunities and threats appear. Concerning the opportunities, there is a shift occurring in the consumer’s behaviour in terms of purchasing power and changing values. With new technologies emerging in the industry facilitating the entire process, such as 3D prototyping, an increasing amount of businesses expand on an international level. Additionally, the demand of online purchasing is growing. Concerning the external threats, there is an uprising competition regarding chain stores, a decreasing birth rate from 39.6 percent to 17.4 percent of the EU population of children and climate change causing weather uncertainty. This leads to seasonal clothing overstock, new entrants on the market that claim to be ethically aware and create sustainable/organic brands, thus increasing the price of raw materials. (Gerken, 2018)

According to Gerken’s company analysis on the Italian childrenswear company Miniconf, the organization was founded in 1973 by its current president Giovanni Basagni, based on today’s values of quality and Italian craftsmanship combined with a strong connection to the local heritage. After being present for over four decades on the international childrenswear market with its brands Sarabanda, Dodipetto and iDo, Miniconf established a strong market presence, especially as a market leader on the Italian market.

To ensure being futureproof, the company is expanding its business and brand awareness internationally. By entering the Dutch childrenswear market, the company is given several opportunities to ensure a successful future.

The company’s success can be measured by the clearly stated connection of the company’s territory in Casentino Valley, Italy. The geographical background of the company and its motivated workforce is definitely one of a kind, since the identification between staff and the company’s values is remarkably strong. Furthermore, the company is placing its focus on high quality and strict safety standards by implementing a strict selection procedure of its outsourced suppliers. Corporate Responsibility regarding the local environment, as well as the company’s staff is of importance by supporting the local society. Since 2003, Miniconf has been UNO EN-ISO 14001 certified, proving that the organization respects environmental norms to protect the environment. Lastly, the company’s segmented strategy of two retail and one wholesale business allows the Italian market leader to be present on several markets, supporting the company’s success. Miniconf is a well-known company, however, every successful organization has pitfalls that need to be improved in order to remain future proof. Firstly, the Italian front-runner of childrenswear immensely lacks a sustainable approach within the production process, as well as within the collections. Besides the motivation of the company’s workforce, there is a absence of diversity within age and nationality noticeable. The internal environment is not internationally advanced, which can lead to “tunnel vision”. This so-called vision is supported by the company’s conservative management style that lacks comprehensive communication skills. Additionally, the company states itself as tech-savvy, however, has insufficient innovation regarding technology. The technological skills are not at the forefront of the fashion industry. Ultimately, the visual language of the company does not capture what Miniconf wants to portray. The company shows inconsistency in marketing.

Internal Analysis

Introduction and in-depth explanation strategic advice Based on the utmost realistic scenario of Miniconf’s future, the scenario: low demand for sustainable products versus high willingness of businesses to implement new technologies, deemed the most feasible (see appendix, page 21). Therefore, Miniconf has envisioned a new repositioning strategy: Cognitive Adaptation by Sarabanda. It is important to note that this strategy is strictly for Sarabanda and not for Miniconf’s other brands. This is because Sarabanda has a stronger brand with a more established market position. This makes its faster to form a market position in the Netherlands since they are not competing with chain stores. Additionally, Sarabanda has higher-priced products, implementing that parents would be willing to spend more money on their child in relation to the values of the product. Miniconf’s repositioning strategy is set on the foundations of remaining faithful to the significant elements of the brand, while modernising them. This strategy is to retain its existing customers, while enticing new clientele, strictly focusing in the Netherlands. By the year 2022, Miniconf will have repositioned the brand to strengthen its presence in the European childrenswear industry. Three objectives are incorporated in the strategy to achieve success: Branding, Product Management and Distribution. Since Miniconf’s current branding lacks coherence, the newly implemented branding approach focuses on strengthening Miniconf’s visual language, as well as communicating a coherent message throughout all areas. With the main focus of reaching prime brand recognition in the Netherlands, an alternative marketing campaign is implemented to attract the new market. Research on parents living in the Netherlands has led to notable information stating that they prefer purchasing functional and durable clothing for their children. Therefore, Miniconf will alter its current product management to fit the needs of its new target group by developing a collection for Sarabanda: Unita. Unita will contain gender-neutral and functional clothing for children made with organic cotton. In order to fit the needs of the Dutch consumers, Miniconf must be flexible and coherent. As a result, Miniconf aims to implement an omni-channel approach replacing its current multi-channel strategy. If Miniconf is not available everywhere, the limited presence will derail the customers’ experience. By implementing this new strategy, Miniconf will be recognised at a higher standard when penetrating a new market. Hereafter are Miniconf’s long-term objectives that have been interpreted from its new strategy.

Realistic long-term goals with a translation to short-term KPI’s: 1. Create a successful omni channel, as well as online presence

Miniconf aims to pursue a successful omni-channel, specializing in marketing and sales. Providing Miniconf’s customers with an accustomed shopping experience by uniting customer experiences from brick-and-mortar stores to online-browsing and the entirety in between. Additionally, the power of omni-channel experiences can increase sales dramatically.

2. Coherent visual identity Visual identity aids businesses in evoking desired feelings and experiences within the brand’s representation. Creating a coherent visual identity with colour, form, shape and image will assist Miniconf in establishing their brand image. Additionally it will successfully communicate message of the brand to a greater extent.

3. Unique customer experience Providing a unique customer experience in store and online contributes to connecting on a deeper level with both the parents and children. By presenting and incorporating a range of contrasting tools and tactics. Miniconf will set an example in terms of attraction and playful interior, as well as introduce important life values to children and their surroundings, thanks to an inspiring character; Mr Fagus.

4. Remain financially stable As a long-term goal, Miniconf aims to increase its profitability by the year 2022. Miniconf prides itself for having been financially stable for over 40 years, however, Miniconf is not at its optimal profitability level, which raises uncertainty when expanding internationally. Thus, Miniconf will have to increase its profitability in order to remain financially stable, reaching its maximum potential and to gain new prospective customers from international expansion. This will increase revenue significantly.

5. Direct marketing at customer The heart of every successful business lies in marketing. Therefore, Miniconf strives to implement a new marketing campaign, focussing on the brand’s clientele. Miniconf’s products will be introduced and promoted in favour of the customers. This will attract a new audience, whilst pleasing the the current customers, establishing a forefront position of the childrenswear industry.

Strategic implementation of long-term goals into operational level 1. Omnichannel and online presence

2. Coherent visual identity

“Customers interacting with an omni-channel experience spent 4% more in-store and 10% more online, too.” (Oorendorff, 2018) Omni-channel retail will help focus on customer interaction and their comprehensive experience of Miniconf’s products and brand itself. The first stage in constructing a flawless omni-channel strategy is detecting which devices and media-platforms the customers use regularly (Manzo, 2018). This compromises favoured leisure destinations and what they are motivated by in day-to-day life. With the obtained information, Miniconf will have to implement an efficient mobile-app that is coherent with all of the channels available. Hiring specialists will be needed in order to fulfil a successful omni-channel. This being said, every touch point needs to be shoppable, whether that be activating the store ability on Miniconf’s Facebook page, or Instagram, etc. Implementing Blockchain would be beneficial to ensure accurate customer data (Honigman, 2018). By focusing on building customer relationships that generate an emotional brand connection, Miniconf is able to further differentiate itself from its competitors. Implementing the omni-channel distribution wisely involves a complete overview of the supply chain and a leaner order management system. The supply chain is altered with distribution in terms of sales and delivery. Having an omni-channel divides the distribution into 6 types: 1. 2. 3. 4. 5. 6.

Visual identity is the first impression customers acquire of the brand. “It’s a visual and verbal communication system that conveys a company’s personality and purpose to their audience. The ingredients vary, but typically an identity consists of core communication strategies, messages, and tone; nomenclature; static and/or moving image standards; colors, fonts, and patterns; print and/or interactive design principles; and of course the logo(s). In short, it’s a set of communication tools, often served up with a how-to guide for maximum mileage. It reflects what you do, not just what you say.” (M. Steel, 2016) The challenge is not only transforming the cluttered and obscure visual appearance of Sarabanda into a fresh and cohesive look and feel, but also lead it up towards entering the Dutch market. Starting with a design audit and a subtle logo evolution, the aim is to develop a visual identity direction that reflects the brand’s Italian heritage in its simplicity and refinement. The visual representation of Sarabanda has to be simple and modern, yet strongly communicate the brand’s values. By creating a flexible design system, the intention of ensuring a cohesive and dynamic translation to all brand’s touch points. Firstly, by applying the new visual direction onto the product branding and the in-store communication tools. The next step is to brief, align and direct internal and external partners like multibrand retail, online, the design and the branding agency to implement this new visual direction to the retail architecture, online environment, advertising campaigns and all internal communication tools.

Buy online, pick-up in store Buy online, drop-shipping In-store purchase, home delivery Ship from store Drop-shipping Buy online, return in store

Therefore, sales and delivery are a lot more convenient, efficient and flexible for the customer’s preferences (Magestore Blog, 2018).

3. Unique customer experience

4. Financial stability

Capturing a wider audience requires having a strong and compelling story that consumers can easily connect with. This can be done through the intermediary of triggering the audience’s curiosity in real life as well as online. In this case, sparking both the children and parent’s interest.

To reach the long-term financial goal of increasing profitability, Miniconf will have to be more efficient with the money put into the company to break even when investing in the new repositioning strategy.

In all flagship stores, simply improving the interior design while staying coherent with its newly improved visual language and online webstore, Miniconf will be able to adapt the store layout and retail design. If the shops are arranged in a certain manner that predicts the customer’s path to make them feel comfortable yet interested, Miniconf’s potential customer base will increase vastly. This will be achieved through the medium of playful passageways in furniture for children and strategic product placement at both the children’s and parent’s eye level while immersing them into the Miniconf Universe. This universe will comprise the compelling story of Mr. Fagus, a tree from the valley where Miniconf is established. Instead of only raising awareness about safety like this character has been doing until now, he will also aim at gently educating the little buyers of Miniconf about basic values in life such as respect, caring, listening. This will correlate perfectly with the new values of the new line, which are safety, convenience, functional and carefree. The result is a convenient and immersive shopping experience that consistently shows potential customers who Miniconf truly is. Furthermore, this unique customer experience does not stop there, after they choose to purchase from this brand, Miniconf will make sure the customers want to come back. This can be for various reasons. Some of the brand’s values might appeal more or less to different customers but they will keep in mind what they liked most, such as functional clothing or attractive prices. If they choose to sign up to the newsletter, they will receive exclusive discounts and good deals all year round for special occasions.

Miniconf can become more profitable in two ways: reduce costs or increase revenues. The first option is for the company to eliminate any cost or activity that does not add value to the business or the customer directly. Miniconf invests a lot of time and money into its community and the people in the territory. However, even though the money spent does not reach the company or the customer directly; the support of the community is one of Miniconfs most significant core values and should not be changed. The second and more viable solution is for Miniconf to increase its prices marginally. According to The State of Fashion 2018 report, a marginal rise of prices by 3% will increase gross profit due to the fact that the number of sales remains the same and the higher prices of products will increase total sales (McKinsey & Company). With the new strategy, Miniconf is able to create even more value into its products, making the customers willing to pay more. By doing this, their total sales will increase while the total costs remain the same. Hence the increase of Miniconfs profitability. With a sales growth of 10%, including the price rise of 3%, the Net income will be 1,894,348 euro in 2022(See Appendix B, i). By looking at the profitability ratio: return on assets, one can conclude that the increase of prices will in fact increase the profitability of 0,02 %. (See appendix B iii)

5. Marketing

Miniconf introduces its novel gender-neutral clothing line, Unita (ital.: unity), which is added to the company’s established high-quality brand Sarabanda. Unita, a collection produced with organic cotton, comprises of ten basic garments. This includes tops, bottoms, and one-pieces. This collection unites simplicity, safety and have special focus on functionality.

Miniconf’s products are introduced, as well as promoted by revolving around the customer, discovering a new audience and pleasing the old one to establish a brand at the forefront of childrenswear. The emphasis is put on the authentic reality of children by valuing safety, convenience, functionality, most importantly, the freedom of children.

Miniconf’s implementation of Unita to create brand awareness is a ground-breaking step for the Italian company. Next to practicality, Unita achieves convenient benefits of incorporating gender-neutral clothing. Thus leading the company to be at the forefront of considering the wider effects on children.

Trendy

The given shared experience can help children empathize with each other and form a unit. Furthermore, Unita strives for freedom of expression and creativity without the early pressures of social understanding and labels (Why the future of kid’s fashion is gender-neutral, 2017).

Other

In accordance with environmental friendly aspects of organic cotton, the material has a higher quality than conventional cotton. It is a great and gentle choice for childrenswear, as it prevents hypersensitivity and allergies (Childrenswear in Europe, 2016). Based on a self-conducted survey, 63% of Dutch parents prioritize functionality and safety over style and trendiness (How do you dress your Kids?, 2018). Therefore, the implementation of closures, such as zippers with strings, larger buttons, and loop fasteners are easy for children to utilize. This promotes self-dressing and prevents bathroom accidents. The garments are designed in coherence with safety features. Therefore, flowing skirts or long-sleeves that cause children to fall or tumble over are avoided.

Based on the zeitgeist of digitalization, Dutch consumers are increasingly willing to purchase childrenswear online rather than in-store (Euromonitor, 2018). To sum up the involvement of Miniconf’s customers, the collection and supportive campaign is not only promoted through billboards around the city, but also through online marketing. Customers are targeted directly with the help of engine optimizations. Therefore, Miniconf is not pushing its clientele to purchase. The customer is given the opportunity to be involved in the brand’s community.

Functional

Miniconf’s new marketing strategy revolves around its most important source of revenue - today’s parents and their children. To increase the organization’s brand awareness, the company tailors its marketing to the customer’s needs: functionality, convenience and safety, by showcasing the authentic truth of children (Childrenswear in Europe, 2016).

Secondly, the new marketing strategy is supported by the campaign “Let kids be kids”. Miniconf strives to create a content-driven business model by involving their customers in their marketing strategy supported by targeted advertisements showing the authentic truth of children. The campaign leads to identification and involvement between customer and brand, since it reflects children in their natural habitat. So, let’s be real: children do get dirty, as children do love to play – let kids be kids!

10%

20%

30%

40%

50%

60%

70%

80%

(Surveymonkey, “How do you dress you kids?”. Amsterdam, Netherlands, 2018.)

10.

90%

100%

Front AND BACK OFFICE The focus of the strategy lies mainly within the marketing department. Although the marketing department belongs to the front office, the strategy will also have an impact on the back office.

Front Office Most departments will remain unchanged or will only need reinforcement. The design team and design agencies Miniconf has a partnership with will have more work as the Unita collection will come to light, meaning Miniconf will need to hire new designers. The relationships with the current suppliers and manufacturers will remain the same, however, the organic cotton will need to be sourced elsewhere. The marketing and sales department will need further training in order to develop a more commercial, yet innovative approach. A team of graphic designers will need to be hired in order to develop a more structured and consistent visual language that will be sent out in every department and implemented in advertisement and collections. Furthermore, the sales department could have a new partnership with an interior design business as they will need to re-think the interior design of all flagship stores.

Back Office Most departments will remain the same but HRM will need to recruit new employees in the departments cited above and the finance team will need to pay careful attention to the budgets the marketing and sales team will need in order to implement the new strategy.

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Financial Justification With Miniconfâ&#x20AC;&#x2122;s new corporate strategy put in action, a sales growth of 10% CAGR is expected within 2022. In addition, both a pessimistic and an optimistic scenario is taken in consideration and forecasted to foresee any potential outcome. The financial costs and benefits for the realization of Miniconfs new strategy will be further explained in detail based on the long-term goals and related KPIs. (see page 7)

The realistic growth rate of 10% is based on Miniconfs current growth rate of 3,3%, per year and the Euromonitor 2018 Dutch country report on childrenswear, stating that the sales of childrenswear will have a growth of 4,7% CAGR from 2017-2022. An investment of 6 million euros is needed, based on 30% of Miniconfs current(2017) SG&A costs to realize the new corporate strategy, to reach the financial goal Miniconf has to increase its profitability, increase its prices and increase overall asset sales.(Doing Business in the Netherlands, 2017)

4% 3%

As a consequence of the new strategy, there will be increase in ROCE, liquidity in terms of the current ratio and an overall increase of Net Income. The working capital ratio measures operational efficiency, whether or not Miniconf has enough short-term assets to cover its long-term debt. The ratio is in 2022 is 4,26% (See appendix B iii) and even though it is not a negative working capital indicating potential liquidity problems, the ratio is above 2,0 meaning that Miniconf is not using its excess assets effectively to generate maximum possible revenue. Return on Capital Employed measures profitability, and in 2022 it will be be 2,4% (See appendix B iii) comparing to OVSÂ´s 2,3% measures. This shows good profitability and efficiency with which its capital is employed. Increase of Net Income is an important measure of how profitable the company is over a period of time. There will be an increase of net income of 1,716,217 euro in 2017 to 1,894,348 euro in 2022 after implementing this new strategy. (See appendix B i) This strategy is financially viable because regardless of the final scenario, Miniconf will see positive results. However, part of Miniconfs core values is safety, and this is illustrated through their choice of avoiding financial risks. Expanding to an unknown market has a lot of uncertainties, however it has a lot more potential in future years because the goal of 10% growth is only an indication, but it could be that it increases further if the re-positioning strategy works very well. This strategy gives Miniconf the opportunity to see its profitability increase in the future years because of many possible developments.

3,3%

1% 0% -1%

10%

2% -0,5%

15%

0,5%

2016 2017 2018 2019 2020 2021 2022

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In overall, the Dutch childrenswear market is an attractive market to enter at present. The final scenario elucidates a future, where sustainability is placed at the forefront and mindfulness is induced – a future Miniconf has to prepare for. In order to be future proof, the new repositioning strategy “Cognitive Adaption by Sarabanda” for Miniconf keeps the brand’s main values safety and functionality, while carefully updating them to keep the old clientele, as well as attracting new possible customers. First of all, the brand’s goal of creating a successful online presence with an omnichannel approach will attract new customers, since sales and delivery are a lot more convenient, efficient, as well as flexible. Secondly, the new strategy of direct marketing with the new gender-neutral clothing line “Unita”, made out of organic cotton, as well as the implemented campaign “Let kids be kids” involves the customer by updating the heritage values of safety and functionality. Furthermore, the creation of a unique customer experience instore and online is sparking the parent’s, as well as children’s interest for the brand Sarabanda. The new implemented coherent visual identity of Sarabanda forms a direct connection between the brand’s image and the customers desired feelings to successfully communicate with each other. The customer has therefore the opportunity to connect with the brand visually. Last but not least, with the new implemented strategy of increasing prices, Miniconf will remain financially stable and fulfils its goal of increasing the company’s profitability. By looking at the company’s Return on Assets, an increase of 0,02% of profitability is noticeable by the year 2022. All in all, Miniconf will increase its brand awareness successfully in the Netherlands with the above-mentioned strategy “Cognitive Adaption by Sarabanda.” By the year 2022, Miniconf will have repositioned the brand to strengthen its presence in the European childrenswear industry.

Conclusion

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Bibliography Jensen, E. (2017). Why the Future of Kids’ Fashion is Gender-Neutral. [online] hypekids. Available at: https://hypekids.com/2017/11/gender-neutral-unisex-kids-fashion-river-island-john-lewis [Accessed 5 Jun. 2018]. K, F. (2018). Front Runners - About - Filippa K. [online] Filippa-k.com. Available at: https://www.filippa-k.com/nl/filippak-world/front-runners/ [Accessed 25 May 2018]. Kewley, C. (2017). 14 best brands for gender-neutral baby clothes. [online] The Independent. Available at: https://www.independent.co.uk/extras/indybest/kids/clothing-footwear/best-gender-neutral-clothing-babies-baby-clothes-place-for-to-buy-kids-a7952641.html [Accessed 6 Jun. 2018]. Magestore Blog. (2018). What is Omnichannel Distribution? - Omni channel Supply Chain. [online] Available at: https://blog.magestore.com/omnichannel-distribution/ [Accessed 5 Jun. 2018]. Magnusson, N. (2018). H&M Is Closing the Most Stores in Two Decades. [online] Bloomberg.com. Available at: https://www.bloomberg.com/news/articles/2018-01-31/h-ms-store-closures-to-surge-as-fashion-giant-shifts-strategy [Accessed 26 May 2018]. McDougall, D. (2016). The hidden face of Primark fashion. [online] the Guardian. Available at: https://www.theguardian.com/world/2008/jun/22/india.humanrights [Accessed 25 May. 2018]. McKinsey & Company (2018). The State of Fashion. [online] Business of Fashion. Available at: https://cdn.businessoffashion.com/reports/The_State_of_Fashion_2018_v2.pdf [Accessed 8 Jun. 2018]. Manzo, N. (2018). Three Ways to Improve Your Omnichannel Commerce Strategy. [online] Total Retail. Available at: https://www.mytotalretail.com/article/three-ways-to-improve-your-omnichannel-commerce-strategy/ [Accessed 5 Jun. 2018]. Oordendorff, A. (2018). Omni-Channel Retail Strategy: The What, Why, and How of “In-Store” Shopping. [online] Enterprise Ecommerce Blog - Enterprise Business Marketing, News, Tips & More. Available at: https://www.shopify.com/enterprise/omni-channel-retail-strategy [Accessed 5 Jun. 2018]. Parisleaf, A Florida Branding & Digital Agency. (2018). Why a Coherent Brand Identity is Stronger Than a Consistent Logo. [online] Available at: https://parisleaf.com/blog/ why-coherent-brand-identity-is-stronger-than-consistent-logo [Accessed 7 Jun. 2018]. Patagonia. (2018). Corporate Resposibility. [online] Available at: http://www.patagonia.com/corporate-responsibility.html [Accessed 25 May 2018]. Phil & Lui. (2018). Responsibility - Phil & Lui. [online] Available at: https://phil-and-lui.de/responsiblity/ [Accessed 25 May 2018]. Provenance. (2017). Increasing transparency in fashion with blockchain | Provenance. [online] Available at: https://www.provenance.org/case-studies/martine-jarlgaard [Accessed 25 May 2018].

15.

Bibliography Pombar, C., Trend to Forecast. AMFI for Miniconf. Amsterdam, Netherlands, 2018. SDIGROUPUSA, S. (2018). Multi-Channel Distribution in the Apparel Industry. [online] Logistics Management. Available at: https://www.mmh.com/wp_content/sdi_wp_content_073013.pdf [Accessed 5 Jun. 2018]. Steel, M. (2016). Why a Coherent Brand Identity is Stronger Than a Consistent Logo [online] Available at: https://parisleaf.com/blog/why-coherent-brand-identity-is-stronger-than-consistent-logo [Accessed 4 Jun. 2018] Simpson, P. (2018). 5 Ways Marketers Can Improve Omnichannel Retail Experiences. [online] DMN. Available at: http://www.dmnews.com/multichannel-marketing/5-ways-marketers-can-improve-omnichannel-retail-experiences/article/367619/ [Accessed 5 Jun. 2018]. Singh, B. (2018). The real cost of omnichannel | FierceRetail. [online] Fierceretail.com. Available at: https://www.fierceretail.com/operations/real-cost-ominchannel [Accessed 5 Jun. 2018]. Surveymonkey, “How do you dress you kids?”. Amsterdam, Netherlands, 2018. Tech, L. (2018). 6 ways to improve online customer experience in eCommerce - Liana Technologies. [online] Liana Technologies. Available at: https://www.lianatech.com/ blog/6-ways-to-improve-online-customer-experience-in-ecommerce.html [Accessed 5 Jun. 2018]. The Guardian. (2018). Jacquard: Google and Levi’s ‘smart jacket’ that you can only wash 10 times. [online] Available at: https://www.theguardian.com/technology/2017/ sep/26/jacquard-google-levis-smart-jacket-denim [Accessed 25 May 2018]. University of Kentucky. (2006). Children’s Clothing [online] Available at: http://www2.ca.uky.edu/hes/fcs/FACTSHTS/CT-MMB-085.pdf [Accessed 5 Jun. 2018]

16.

APPENDIX A - Strategy Implementation i. Current BMC Miniconf + SWOT analysis

Current Business Model Canvas K E Y PARTNER S

KEY ACTIVITIES

Minoconf- A fully outsourcing company.

> Planning/designing -All planning is centred in Italian HQ - Internal design team + design agencies

>A) Design Agencies: help with planning collections and spotting latest trends

> Outsourcing (Manufacturing) - 30 supplier (China 80%, Tunisia 7%, Bangladesh 5, Italy 4%, Pakistan 4) - Code of conduct, highly selected suppliers

>B) Suppliers (China, Tunisia, Bangladesh, Italy, Pakistan), specific companies are not provided + Auditing

> Marketing and Sales - Creation of community - Making the importance of territory clear to customer - Use of social media and influencers

>C) Quality/Safety controls (Intertek) >D) Wholesalers: Brands selling Miniconf’s products >E) Marketing: Influencers Motivation of having partners: Reduction of risk and uncertainty

KEY R ESOU R CES

> Physical - inventory - buildings - distribution networks that enable the business to function. > Intellectual - Brand name - Partnerships (Intertek, FabricaLab) > Human - Strong motivated workforce who comply with all the values - Highly specialized in every department > Financial - Cash (family owned) - Long-term loan (7 Mil. euro)

VALUE P RO P O SIT I O N S

> Safety - risk reduction (Europea) > Price (for their wholesale brand) > Convenience (clothing for every occasion) > Customers problems that they want to solve: good quality and attractive, comfortable, safe clothing for an affordable price, safe for children to use > Customer’s experience is enhanced thanks to a product that’s long lasting. > Why should customers choose Miniconf’s products over other brand’s products? For their strong values that go beyond the production of a simple product. They care about social responsibility and respect, protection and customer safety, respect for the environment.

C OST STR U CTU R E > MAINLY COST DRIVEN but VALUE DRIVEN ASPECTS: offering high quality goods with a message to the cheapest price possible (Operational Excellence) > Most important costs within the Business Model: raw materials, production costs and personnel costs > Most expensive Key Resources: Physical & Human (see above) > Most expensive Key Activities: Sales and marketing: in comparison with results, it is the most expensive cost eventhough outsourcing costs are higher

17.

CU STO M ER REL AT I O N -

> Personal to dedicated personal assistance: want to have dedicated personnel, but are not able to > GET: Social media marketing and use of influencers Local awareness through supporting the local community > KEEP: Stand for something = more loyal customers The right platform: focusing on in-store sales, because the customers prefer that. > GROW: Word of mouth marketing > they do more in keeping the relationship than growing it.

> > > > >

CHANNELS

E-commerce Multibrand Monobrand (franchise) Wholesale Outlets

> Awareness: word of mouth, through facebook and instagram, influencers, lookbooks, fashion fairs > Evaluation: social media comments, (multi)brand stores > Purchase: online, own shops, multi-brand stores, franchise > Delivery: click & collect or home delivery >After sales: newsletter

CU STO M ER > SEGMENTED: Three different brands provide products and services with a very small variation of needs and requirements. Even though the variation is minimal, it is still significant. > Children’s wear >Targeting children and parents especially mothers, main market in Italy (Child is the wearer, parents have purchasing power) > Low to middle level of disposable income

REV ENUE ST RE AM S

> Sales (retail + wholesale) - Leftover stock sell to outlets - Revenue

> Asset sale: the sales of goods - Lending/renting/leasing: interest income seen on the income statement - Values the customer pays for: Italian style, high quality, safety - Payment methods: credit + debit card, paypal and bank transfer

BUSINESS MODEL CANVAS K E Y PA RT N E R S > Increasing price for raw materials

K E Y ACT I V IT I ES

STRENGTHS VA LU E P R O P O S IT I O N S

Weaknesses

Opportunities

C U STO M E R R E L AT I O N S H I P S

Threats

C U STO M E R S EG M E NTS

> Strict selection procedure of >Shift in consumer behaviour >Strong connection to the suppliers: (purchasing power and changing high quality and strict safety companyâ&#x20AC;&#x2122;s territory and values values) standards

> Segmented strategy: retail and whole sale allows presence on several markets

>New technologies in the industry (like 3D Prototyping etc.) >Lack of sustainable clothing within > Uprising competition regarding chain stores the companyâ&#x20AC;&#x2122;s collections

>International market expansion

>Climate change: Weather uncertainty leads to seasonal clothing overstock

> New entrenants on the market: Organic brands

K E Y R ES O U R C ES

> Economic shift: increase of purchasing power

C HA N N E LS

>Motivated workforce

>Growing demand purchasing

> UNI EN ISO 14001 certified > Lack of diversity within age and nationality within the internal environment > staff

online > Decreasing birth rate (From 39.6% to17.4% of EU population children)

>Marketing does not capture what the company wants to portray > inconsistency

>Lack of implementing new innovations regarding technology >Old-fashioned management style - leads to lack of communication > tunnel vision

C O ST ST R U CT U R E

R E V E N U E ST R E A M S

> Increasing price for raw materials

18.

Internal

SWOT ANALYSIS

Strengths

Weaknesses

1) Strong connection to the companyâ&#x20AC;&#x2122;s territory and values

1) Lack of sustainable clothing within the companyâ&#x20AC;&#x2122;s collections

2) Motivated workforce

2) Lack of diversity within age and nationality within the internal environment > staff 3) Marketing does not capture what the company wants to portray > inconsistency

3) Strict selection procedure of suppliers: high quality and strict safety standards 4) Segmented strategy: retail and whole sale allows presence on several markets

new innovations

5) Old-fashioned management style - leads to lack of communication > tunnel vision

5) UNI EN ISO 14001 certified

Opportunities

External

4) Lack of implementing regarding technology

MINICONF

Threats

1) Shift in consumer behaviour (purchasing power and changing values)

1) Uprising competition regarding chain stores

2) New technologies in the industry (like 3D Prototyping etc.) 3) International market expansion 4) Growing demand of online purchasing 5) Economic shift: increase of purchasing power

19.

2) Decreasing birth rate (From 39.6 % to17.4 % of EU population children). 3) Climate change: Weather uncertainty leads to seasonal clothing overstock 4) New entrenants on the market: Sustainable/ organic brands 5) Increasing price for raw materials

ii. Future Scenarios- 4 graphs

FUTURE SCENARIO 2020

I N D U C E D MINDFULNESS

MONOPOLY OF SUSTAINABILITY

UNCERTAINTY 2A

UNCERTAINTY 1A

Businesses extremely willing to invest in technological innovations

Low demand for sustainable products & services

SOCIETY OF STAGNATION UNCERTAINTY 1B

Businesses extremely hesitant to invest in technological innovations

20.

TIME-POOR-SOCIETY TECHNOLOGICAL INNOVATION

RESOURCE SCARCITY CONSCIOUS LIVING

BACK TO BASIC

UNCERTAINTY 2B High demand for sustainable products & services

STRATEGIC IMPLEMENTATION // Levi’s > Closed-loop jeans // C&A > Closed-loop cotton shirt

// Other Stories > smaller products that are cheaper in the “isle of doom” // Apple > notebook computers screens are slightly angled is to encourage customers to adjust the screen to their ideal viewing angle—in other words, to touch the computer!

// Martine Jarlgaard >Implementing Blockchain: allows consumers to see and understand the complexity in bringing a product to market.

// Filippa K > many consumers are not aware of the importance of sustainability in Filippa K. They are mainly attracted by the aesthetics and quality of the brand’s products.

IMPLEMENTATION: BUSINESS CONCEPT EPI CENTRES > Offer-driven

// She is Hyperconnected, Social Media influences her, under social pressure // Friendships are all about status - superficial discussions, “fake” friends // Celebrity mother or perfect moms influence her // Social Media like Instagram has big influence on her: she is trying to imitate the perfect picture on the media // Children are her priority, however she remains quite materialistic > aims to be the perfect mother/ wife to fit in with societal norms // Self-centered >cares about herself and her familiar surroundings. // Much time spend on social media platforms. What keeps her up as well is perhaps her children not getting the best grades in the class and is worried they will be the laughing stock.

BU SINES S DRIVERS

BENEFIT

By implementing more up-to-date technologies Miniconf can become more efficient regarding production, strategy, distribution, ect. // // // // // //

Production/ Transaction > Blockchain Management Style > Workplace communication Products: closed loop pr0oducts Packaging (Re-pack), Transportation Cad-cam > Lectra (3D Prototyping) Smartphone commerce > omni-channel

// Recognition in the social environment and status. // Success: Self-confidence, amount of likes, social-status // Strategies to achieve goals: posting regularly on instagram, using many hashtags. Doing things that she sees other people doing to “fit in”.

COST

Age: 23-35

>Opportunity: new technologies in the industry >Weakness: lack of implementing new innovations regarding technology

// Nice in social situations, but quite snobbish . “Fake smile” > talking behind people’s back // Telling others how amazing her children are, where she previously just went on holiday and how amazing her life is. (But she really thinking in her mind how annoying this person is)

COST- BENEFIT ANALYSIS // // // //

Suburban trend-focused young mother with small children.

SAY & D O ?

// Other people following trends and doing things that she would also like to do. // Having a big house, elite gym membership, spa // Sourrounded by her children, husband, maid and Stay-athome mothers that are in their childrens’ class, with the same lifestyle. // Newsletters from big brands and spa’s. // Children who are spoilt.

PA IN?

// Patagonia > developing technologies that will help make its supply chain and products more sustainable // Tommy Hilfiger > digital showrooms: Eliminating the need for samples, order forms and eventually physical showrooms

S EE?

1) Miniconf invests in innovative technologies. 2) Consumers expect low priced goods over quality, however miniconf produces closed loop products. Thus a gap between consumer demand and company supply. 3) The stores are visually merchandised for boosting impulse purchases. Quantity over quality. 4) Technological advancement create faster communications and interactions due to more efficient systems 5) Miniconf prioritises sustainable products and services, even though it doesn’t meet the consumers expectation. 6) The dutch government implements restrictions for unsustainable production. (research) The government has greater power than businesses.

HE A R ?

> Low demand for sustainable products & services | Extreme willingness of businesses to invest in technological innovations.

EX AMP L E

FEEL?

D ESC R IB E

CUSTOMER

GAIN?

SCENARIO // INDUCED MINDFULNESS

// // // // //

New staff members specialized in IT or education on IT Outsourcing: maintenance and development of technologies Financing all of the technology > quite costly Timeconsumig regarding training and re-organizing

More efficient processes( production, deliver, communication) Flexible purchasing options for customers Faster communication and smoother decision-making process Increasing implementation of sustainability > company is more sustainable Higher dynamics in the working environment

PROCES S/ PROCEDURE/ P OLI CY policy: Production and distribution of Miniconf is as efficient as possible process: New technology is implemented to make processes more efficient procedure: Staff needs to be familiar with technology, which needs to be up-to-date to generate the highest efficiency possible.

21.

STRATEGIC IMPLEMENTATION // Arket > Besides being a consequence of a focus on the long-lasting in design and production, sustainability has been a primary consideration in developing the ARKET.

// Levis > “Levi’s Commuter x Jacquard by Google Trucker Jacket” using technology to improve the function of the garment

// Reformation > sustainable brand that care about their CSR and use their transparent supply chain as marketing tool

// Phil&Lui > “ We feel a personal need to not only ensure good qualiy but to enforce fair labor conditions, respect for human rights and the protection of our environment” (Phil&Lui, 2017).

IMPLEMENTATION: BUSINESS CONCEPT EPI CENTRES > Value-driven Conscious living mother thinking of the future, very adaptive to new trends and technology Age: 35-45

BU SINES S DRIVERS > Threat: Uprising Competition regarding chain stores > Weakness: Lack of sustainable clothing in collections Solutions: create more sustainable products and market their new collection to the consumer with shifting values (CSR) // // // //

Use more sustainable raw materials Make Supply Chain more sustainablie (product life cycle) More sustainable transportation - no offshoring? Convey new values

// Minimalism. Surroundings are clear, toned down and calm. Busy, hectic life of the city made her move out on the countryside > focus on herself and what’s important. // Hard-working person which invests too much time in her career and puts too much time on her work. // Intellectualists, artists other creatives. Art, architecture, and gaining new knowledge by travelling, visiting museums ect. //Mainly Instagram but also YouTube or Pinterest.

// Equality and peace for everyone on earth. Keeping the planet as clean and green as possible without destroying. // A green and sustainable living moves her. Fine art, good intellectual movies, architecture. //Her freelance job or receiving jobs that do not inspire her keep her up // Dream: Being a fully independent freelancer, having her own studio or atelier. Then retire in a beautiful, minimalistic house in fjords.

SAY & D O ?

PA IN?

// Veja > “The world understands that social issues and environmental crisis are now matters of urgency. Let’s try to offer a different vision which combines fair trade and ecology and links together economy, social initiatives and the environment. “ (Veja, 2018)

S EE?

1) Population increases- people understand that it is more important than ever to live sustainably, Miniconf has decided to create sustainable collections 2) Miniconf thrives from the sustainability trend- large investments in high quality products, regardless the price. 3)Sustainability becomes mainstream for the customers. They buy less, but higher quality. 4) Miniconf is constantly competing to be the leader when it comes to using innovative technologies in the industry. 5) Miniconf’s CSR is a major USP and marketing tool of the company. It brings not only positive impact on the environment, but also a good brand image. 6) Sustainability is a significant topic among politicians, new major changes in law that protect the environment.

HE A R ?

> High demand for sustainable products & services | High willingness of businesses to invest in technological innovations.

EX AMP L E

FEEL?

D ESC R IB E

CUSTOMER

GAIN?

SCENARIO // Monopoly of Sustainability

// Attitude: Calm, dignified, peaceful, but direct if she doesn’t like something. // She tells things as they are for her, however keeping in mind other people’s opinions. She is objective and calm, and quite diplomatic with her responses. // She’s too nice sometimes. She avoids conflicts and confrontations.

// Frustration: Finding orders for her freelance jobs. // Creative industry is an insecure industry, where you never know if you have a job. //Starting her own company. She fears letting people down. Or working towards something that doesn’t align with her values. Negativity in her life.

// She gains self-satisfaction and motivation with creative fulfilment through her work and hobbies. And a fully sustainable, waste-free lifestyle. // Success: By completing her tasks and her jobs with fulfilment and being proud of the work she has achieved. // Strategy: Challenging herself creatively in various disciplines, pushing your own limits.

COST- BENEFIT ANALYSIS COST // // // // // //

Increasing price of raw materials Increasing price of production > new technology/machinery is more rare and more expensive New staff with the right expertise or education for staff members Eliminating physical prototypes Immense cost for programmes like Lectra Loss of customers due to higher prices

BENEFIT

// Good Corporate Social Responsibility and Recognition // Less waste and landfill > greener planet: making a change for protecting the environment // New customers which value sustainability

PROCES S/ PROCEDURE/ P OLI CY policy : Miniconf is implementing a sustainable clothing line process :the design team or a design agency designs functional clothing with sustainable materials and cuts, while managers deal with manufacturers regarding sustainable issues procedure : the designs are made with close attention environmental issues. The planning, as well as the making is based on sustainability.

22.

STRATEGIC IMPLEMENTATION SCENARIO // Society of Stagnation

// Zara > meets continuous customer expectations by having very short lead-times and follow current trends driving fast-fashion consumption.

IMPLEMENTATION: BUSINESS CONCEPT EPI CENTRES > Customer-driven

BU SINES S DRIVERS

BENEFIT

Opportunity to improve their omni channel strategy for all three brands. customers will have more opportunities for places to shop, more flexible shopping. // // // // //

New and strategically placed warehouses Improve marketing matrix/plan > reaching more customers Transportation system > more efficient In store/online connection purchase and delivery Electronic point of sale system: tracks sales and inventory

// Pretend to live the perfect life but she is frustrated that she has not achieved her dreams that she had when she was young, like travelling. // Can not see the difference between the “social world” and the “real world” > too addicted to social media // Fear: Showing her true face, who she really is or where she comes from. That in real life she is actually not that posh and picky. // Recognition in the social environment and status. // Success: Self-confidence, amount of likes, social-status // Strategies to achieve goals: posting regularly on instagram, using many hashtags. Doing things that she sees other people doing to “fit in”.

COST

Age: 25+

> Opportunity: growing demand of online purchasing > Strengths: segmented strategy (retail and wholesale allows to be present on several markets)

COST- BENEFIT ANALYSIS // // // //

Suburban trend-focused young mother with small children.

SAY & D O ?

// Primark > is price driven and fuels mass consumption.

PA IN?

GAIN?

// H&M > Sustainability is rather used as a marketing tool, for example the Conscious collection, yet the company does not really implement sustainability in their CSR or Business Model.

S EE?

1) Hesitant to adapt sustainable technology and supply the continuous demand of their consumers 2) Driven by mass consumption, they find the cheapest suppliers that comply more or less with their values in order to sell at cheap prices. 3) Lack of awareness of sustainability issues due to the fact that businesses and governments are not promoting it. 4) High customer expectations within a short time frame. 5) Miniconf isn’t prioritizing innovation and technological advances 6)Miniconf is blinded by its own environment and doesn’t want to see the climate change and so is contributing to the degradation of the planet. 7) There is not enough political influence in terms of innovations and sustainability for Miniconf to take actions and feel concerned.

HE A R ?

> Low demand for sustainable products & services | Low willingness of businesses to invest in technological innovations.

EX AMP L E

FEEL?

D ESC R IB E

CUSTOMER

New staff Softwares/IT specialists/maintenance of the multi-channel network New warehouses Delivery services (new and more efficient)

// New customers > due to convenient shopping experience // Increasing sales // Increasing customer loyalty because of high convenience

PROCES S/ PROCEDURE/ P OLI CY policy: Miniconf is going to implement competing against chainstores by selling its products for cheaper prices. process : Miniconf will alter its production to meet the need of a low income level target group. procedure : The company will cut all the cut all the cost in production in aim to lower the product price, and have a complete operational excellence strategy.

23.

STRATEGIC IMPLEMENTATION SCENARIO // Back to Basic

// US resale vs. retail market > Secondhand shopping is booming, and it shows that customers are growing tired of fast-fashion retail.In the past five years, the $20 billion resale market in the US has outperformed the overall retail market.

IMPLEMENTATION: BUSINESS CONCEPT EPI CENTRES

// The environment around her does not align with her thoughts and feelings. She feels unheard. // The individual has to take matter in their own hands because the government and big companies are not doing anything for the state of the planet. // Influenced by people that manage to live sustainably and not give up the comfort of their everyday life. // Influenced by social media, news and is conscious about whether the information is reliable or not.

// Healthy lifestyle & consciousness about her surroundings (environmentally, socially, politically) // Feels connected to nature and wants to raise her children in a conscious way too. // Keeps her up: The future, especially for her children. // Dreams: Enjoy the simplicity of life and learn from the mistakes humans made in the past.

SAY & D O ?

// H&M > The company does not adapt to the changing consumer behaviour and values. Planning to close around 170 stores, H&M’s brand and product offer does not meet current consumers’ needs, as they experienced more than few flops in last decade, starting from Rana Plaza collapse, to the “the coolest monkey in the jungle” fail, the company proves that they do not do well with their CSR.

PA IN?

// Family, garden and forest around her house. Also sees the consumption lifestyle, yet she does not care about it. // She is a calm & positive, Career not priority anymore, as she already discovered her happiness// Family, pets & gardening is important to her. // Mothers and other women with a conscious lifestyle // Offers from the local market: organic vegetables // Not finding conscious products on a mass consumption market, unconscious companies are a problem for her

GAIN?

// The Timberland Company > increased energy efficiency at Timberland’s retail locations, renewable energy procurement at its distribution facilities and decreases in employee air travel = significant reduction of greenhouse gas emissions.

S EE?

1) Migration of people from big cities to the smaller ones 2) Individuals are aware of the harm they have caused the environment and are willing to change their lifestyles 3) Miniconf toughens the selection of their suppliers to be more sustainable and reduce (with the final goal to stop) their carbon footprint and waste. 4) Miniconf sells less because the demand for fast fashion decreased so this causes their turnover to decrease. 5) They lose customers due to the fact that the most common lifestyle cherishes vintage and more minimalistic products and services. 6) Miniconf doesn’t invest in innovations and sticks to their traditional structure.

HE A R ?

> High demand for sustainable products & services | Low willingness of businesses to invest in technological innovations.

EX AMP L E

FEEL

D ESC R IB E

CUSTOMER // Warm, easy to talk to, direct, she has an opinion // Stay out of conflict, peace and love all around. Try and be sustainable as possible. Not everything digital is good for you. // Pay particular attention to potential conflicts between a customer might say and what she may truly think or feel. Knows what she wants and, and will do everything to get it. // People who do not respect her space, her peace and surroundings, like nature. // Frustration: Her corporate job that she doesn’t like. // She dreams about quitting her job to fully focus on her children, herself and enjoying her life and her garden. // Risks: giving up on her old lifestyle which was meeting her constant needs.

// To do her part in changing the way we live. And contribute to a better society and future // Success: Happiness of her family // Strategy: Her children aren’t allowed technology or TVs so they don’t know what plastic toys are.

COST- BENEFIT ANALYSIS COST

> Resource-driven Independent mother with strong values and critical view on her surrounding world. Age: 45-55

BU SINES S DRIVERS >Threat: Uprising competition regarding chain stores >Weakness: Marketing does not capture what Miniconf wants to portray Improve marketing to keep up with competitors (strong marketing) > Change image by improving marketing towards more sustainable values // Implementing USPs in marketing strategy // Focus on new objectives about the company > increasing promotion to customer > send clear message // Improve visual language, make coherent style/language/ message

// New marketing experts // Graphic designers > staff with marketing background // Social media/trend specialists

BENEFIT // // // // //

Increase of new customers, which mostly value CSR Increase of sales/ revenue Increasing brand awareness Stronger brand image Better reputation

PROCES S/ PROCEDURE/ P OLI CY policy :Miniconf toughens the selection of suppliers to be more sustainable process : Miniconf will implement an increase of audits and quality checks and decrease distribution. The main goal is to stop and reduce carbon footprint and waste procedure : Technology that is not sustainable will be cut out of production. Production will be closer to its distribution networks.

24.

STRATEGIC IMPLEMENTATION // H&M > The company does not adapt to the changing consumer behaviour and values. Planning to close around 170 stores, H&M’s brand and product offer does not meet current consumers’ needs, as they experienced more than few flops in last decade, starting from Rana Plaza collapse, to the “the coolest monkey in the jungle” fail, the company proves that they do not do well with their CSR.

IMPLEMENTATION: BUSINESS CONCEPT EP I CENTRES

SAY & D O ?

PA IN?

S EE?

HE A R ?

> High demand for sustainable products & services | Low willingness of businesses to invest in technological innovations.

EX AMP L E

FEEL?

DESC R IB E

CUSTOMER

GAIN?

Chosen SCENARIO // INDUCED MINDFULNESS

// Warm, easy to talk to, direct, she has an opinion // Stay out of conflict, peace and love all around. Try and be sustainable as possible. Not everything digital is good for you. // Pay particular attention to potential conflicts between a customer might say and what she may truly think or feel. Knows what she wants and, and will do everything to get it. // People who do not respect her space, her peace and surroundings, like nature. // Frustration: Her corporate job that she doesn’t like. // She dreams about quitting her job to fully focus on her children, herself and enjoying her life and her garden. // Risks: giving up on her old lifestyle which was meeting her constant needs.

COST- BENEFIT ANALYSIS CO ST

> Resource-driven Independent mother with strong values and critical view on her surrounding world. Age: 45-55

B U S IN ES S D R IV E R S >Threat: Uprising competition regarding chain stores >Weakness: Marketing does not capture what Miniconf wants to portray Improve marketing to keep up with competitors (strong marketing) > Change image by improving marketing towards more sustainable values // Implementing USPs in marketing strategy // Focus on new objectives about the company > increasing promotion to customer > send clear message // Improve visual language, make coherent style/language/ message

// New marketing experts // Graphic designers > staff with marketing background // Social media/trend specialists

B EN E F IT // // // // //

Increase of new customers, which mostly value CSR Increase of sales/ revenue Increasing brand awareness Stronger brand image Better reputation

P R O CES S/ P R O CE D UR E / P O LI CY policy: Production and distribution of Miniconf is as efficient as possible process: New technology is implemented to make processes more efficient procedure: Staff needs to be familiar with technology, which needs to be up-to-date to generate the highest efficiency possible.

25.

iii. Argumentation on the four scenarios Induced Mindfulness

Monopoly of Sustainability

Society of Stagnation

Back to Basic

In a world, where the demand for sustainable products and services is comparatively low, but businesses are very willing to invest in technological innovations, the era of “Induced Mindfulness” begins. A world, in which companies are persuading the society to consume mindfully with the help of technological innovations to live a conscious lifestyle.

The demand for sustainable products is drastically increasing, while businesses are very willing to invest in technological innovations in order to follow a sustainable approach. The era of living conscious and valuing environmental sustainability is on the rise.

In the era of the Society of Stagnation, the sustainable approach of consumers, as well as the willingness of adaption of technological innovations is drastically low. There is a low demand for sustainable products and services by consumers, as well as a low degree of the implementation of technology by brands.

Consumers, as well as brands go “back to basic”. The customer’s demand for sustainable products & services is drastically increasing. Besides, the willingness of business to invest in technological innovations is as lowest as it ever was in the era of digitalization.

In 2022, the childrenswear market will introduce new innovative and more sustainable business models and the implementation of new products, made from sustainable materials, such as Patagonia or Tommy Hilfiger do today. The American outdoor brand develops technologies to make its supply chain and products more sustainable (Patagonia, 2018). The durability of clothing in 2022 will improve, which means that prices of products will rise. Nowadays, the Swedish label Filippa K. prioritises durability, quality, as well as sustainability within their design process (Filippa K., 2018). Within Induced Mindfulness, consumers will prefer lower prices children clothing, which might will create a gap between the consumers expectations and the businesses. Therefore, business will seek to educate their customers about the necessity of changing their unconscious behavior. Already today, brands like Martine Jarlgaard implement a blockchain strategy, which allows the customer to see and understand the complexity of bringing a product to the market (Provenence, 2018). In 2022, businesses use their power to educate their customers on a more conscious lifestyle.

In 2022, sustainability will be seen as a new lifestyle, which will be implemented in the childrenswear industry. Digitalization will be a major component of the business models of brands, meanwhile sustainability will be of major importance to the industry. Already today, the Swedish brand Arket, as well as the German brand Phil&Lui have, next to their focus on long-lasting products, their primary consideration on sustainability (Arket, 2018) (Phil & Lui, 2017). As mentioned before, nowadays, the denim brand Levi’s uses technology to improve the function of its “Levi’s Commuter x Jacquard by Google” trucker jacket (The Guardian, 2017). Furthermore, consumers will buy more consciously, less and will keep an eye on quality to increase their awareness of the environment in 2022. The era of the Monopoly of Sustainability, where brands and consumers will act as sustainable as possible.

For the childrenswear market in 2022, digitalization, as well as sustainability neither will be a major component of the brands’ business models, nor of higher importance to the industry. Consumers will purchase high quantities of childrenswear at cheap prices. A phenomenon, which can be seen already in today’s society. Big chain stores from the lower segment, such as the Irish discounter Primark, follow a cost driven business models, which fuel mass consumption and do not support a sustainable approach (The Guardian, 2016). Besides, in 2022, there will be little technological innovation, regarding sustainability, involved in production. Nowadays, the Swedish brand H&M states sustainability as a marketing tool, like the brand’s “Conscious collection”. Nevertheless, the company does not really implement sustainability in its corporate social responsibility or its business model (Forbes, 2018). Society of stagnation – a society where sustainability does not matter.

26.

In 2022, companies are involving sustainable take-back systems and vintage clothing. Besides, recycling will be frequently done within the childrenswear fashion industry. Already today, second hand shopping is booming. In the past five years, the $20 billion resale market in the US, has outperformed the overall retail market number of stores will decrease, since online-stores are more sustainable than brick-and-mortar shops (Business Insider, 2018). In 2022, the focus of brands will be on sustainability. Stores, which remain, will not only be in capital cities, but divided over different and smaller locations through suburbanisation. Consumers will live consciously and buy sustainable products, since they will be aware of the harm they have caused the environment and are therefore willing to change their lifestyles. Therefore, brands will make less profit, due to less sales. A phenomenon, which is already noticeable nowadays at H&M. The Swedish fashion brand “does not adapt to the changing consumer behaviour and values. Planning to close around 170 stores, H&M’s brand and product offer does not meet current consumer needs (…)” (Bloomberg, 2018).

iv. Confrontation matrix- Strengths, Weaknesses, Opportunities and Threats

27.

v. Scenario Template (four different scenarios for Miniconf)

INDUCED MINDFULNESS - Business Model 1

BUSINESS MODEL CANVAS

By implementing more up-to-date technologies, Miniconf can become more efficient regarding production, strategy and distribution. As a consequence, their brand image becomes more strong, they become more sustainable and the customer will choose the brand for their values. KEY PARTNE RS Minoconf- A fully outsourcing company. >A) Design Agencies: help with planning collections and spotting latest trends >B) Suppliers (China, Tunisia, Bangladesh, Italy, Pakistan), specific companies are not provided + Auditing >C) Quality/Safety controls (Intertek) >D) Wholesalers: Brands selling Miniconf’s products >E) Marketing: Influencers >F) Auditing

K EY ACT IV IT IES > Planning/designing > Outsourcing (Manufacturing) > Marketing and Sales - Creation of community - Making the importance of territory clear to customer - Use of social media and influencers > Customer Service > Distribution > Omni-channel approach: devlivery

K EY RES O U RC ES > Physical - inventory - buildings - distribution networks that enable the business to function. - machninery (3D prototyping) > Intellectual - Brand name - Partnerships (Intertek, FabricaLab) - softwares & programs > Human - Strong motivated workforce - Experts for new technologies > Financial - Cash (family owned) - Long-term loan (7Mil euro.)

CU STOME R RE L ATI ON SHIP S

VALUE PROP OSITI ON S > Safety - risk reduction (Europea)

GET: >Search engine optimization >Social media marketing & influencers >Create global/local awareness for social and environmental issues KEEP: >Free shipping on orders above 100 euro, and free returns (within 21 days) >The right platform: focusing on in-store sales, as well as focusing e-commerce while branching out internationally. >Quality minded: quality is the most important thing for Miniconf GROW: >Newsletter updates >Word of mouth marketing (Italy) >New sustainable collections > will attract some customers, and will make customers aware of the importance of sustainability

> Technology > Convenience (clothing for every occasion) > Customers problems that they want to solve: good quality and attractive, comfortable, safe clothing for an affordable price, safe for children to use > Customer’s experience is enhanced thanks to a product that’s long lasting. > Why should customers choose Miniconf’s products over other brand’s products? For their strong values that go beyond the production of a simple product. They care about social responsibility and respect, protection and customer safety, respect for the environment.

COST STR UCT U RE

> > > > >

CHANNE LS

E-commerce Multibrand Monobrand (franchise) Wholesale Outlets

CU STOME R SEGME NTS > SEGMENTED: Three different brands provide products and services with a very small variation of needs and requirements. Even though the variation is minimal, it is still significant. > Children’s wear >Targeting children and parents especially mothers, main market in Italy (Child is the wearer, parents have purchasing power) > Low to middle level (++) of disposable income

RE VE NUE STRE AM S

> MAINLY COST DRIVEN but VALUE DRIVEN ASPECTS: offering high quality goods with a message to the cheapest price possible (Operational Excellence) > Most important costs within the Business Model: raw materials, production costs and personnel costs > Most expensive Key Resources: Physical & Human > Interlectuell > Most expensive Key Activities: Sales and marketing + technological implementations

> Sales (retail + wholesale) - Leftover stock sell to outlets - Revenue > Asset sale: the sales of goods - Lending/renting/leasing: interest income seen on the income statement - Values the customer pays for: Italian style, high quality, safety, sustainability, ethical values - Payment methods: credit + debit card, paypal and bank transfer

28.

INDUCED MINDFULNESS - Business Model 2

BUSINESS MODEL CANVAS By As

implementing more up-to-date technologies, Miniconf can a consequence, their brand image becomes stronger,

KEY PARTNERS Minoconf- A fully outsourcing company. >A) Design Agencies: help with planning collections and spotting latest trends >B) Suppliers (China, Tunisia, Bangladesh, Italy, Pakistan), specific companies are not provided + Auditing >C) Quality/Safety controls (Intertek) >D) Wholesalers: Brands selling Miniconfâ&#x20AC;&#x2122;s products >E) Branding Agency: working with the in-house marketing team, it helps create visually appealing content and coherent, innovative campaigns.

K EY ACT IV IT IES

reposition attracting

as a brand new customers

> Outsourcing (Manufacturing) > Main focus: Marketing !!! - Creation of community > Customer Service > Distribution > Omni-channel approach: devlivery

K EY RES O U RC ES

> Physical - inventory - buildings: new warehouses - distribution networks that enable the business to function. > Intellectual - Brand name - Partnerships (Intertek, FabricaLab) - softwares & programs for omni-channel > Human - Strong motivated workforce - Experts for new technologies > Financial - Cash (family owned) - Long-term loan (7Mil. euro)

CU STO ME R R E L AT I O N S HIP S

VALUE PROP OSITI ON S

> Planning/designing

> Safety - risk reduction (Europea) > Convenience (clothing for every occasion) > Customers problems that they want to solve: good quality and attractive, comfortable, safe clothing for an affordable price, safe for children to use > Functionality > Customer Experience: you do not buy a product, you buy a feeling/ community > Flexible Shopping based on omni-channel approach

by improving their marketing strategy while still retaining older customers.

GET: >Search engine optimization, shoppable touchpoints >Social media marketing & influencers >Create global/local awareness for social and environmental issues KEEP: >Free shipping (5 days) & free returns (within 21 days) >The right platform: focusing on in-store sales, omni-channel approach and e-commerce while branching out internationally. >Quality minded GROW: >Newsletter updates >Customer surveys and feedback >Word of mouth marketing >New functional collection

> > > > > >

CHANNE LS

Omni-channel: online & offline E-commerce: convenience & flexibility Multibrand Monobrand (franchise) Wholesale Outlets

CU STO M ER SEG M ENTS > SEGMENTED: Three different brands provide products and services with a very small variation of needs and requirements. Even though the variation is minimal, it is still significant. > Childrenâ&#x20AC;&#x2122;s wear >Targeting children and parents especially mothers, main market in Italy (Child is the wearer, parents have purchasing power) > Low to middle level (++) of disposable income

> Awareness: word of mouth, through facebook and instagram, influencers, lookbooks, fashion fairs > convincing > Evaluation: social media comments, (multi) brand stores > Purchase: online, own shops, multi-brand stores, franchise > Delivery: home delivery service, strategically placed warehouses, click&collect >After sales: newsletter, distribution network

COST STR UCTUR E

RE VE NUE STRE AM S

> MAINLY COST DRIVEN but VALUE DRIVEN ASPECTS: offering high quality goods with a message to the cheapest price possible (Operational Excellence) > Most important costs within the Business Model: marketing/campaigns/PR, channels (establishing and maintaining a successful omnichannel), costs of new omni-channel retailing > Most expensive Key Resources: Physical & Human > Interlectuell > Most expensive Key Activities: marketing/PR/campaigns, channels (establishing and maintaining a successful omnichannel), sales and technological implementations

29.

INDUCED MINDFULNESS - Business Model 3

BUSINESS MODEL CANVAS

By implementing up-to-date technologies, Miniconf can make their production process more efficient and reduce costs. By doing this the prices can be lowered and Miniconf can then compete with cheaper chain stores. Obtaining new customers.

K E Y PA RT N E RS Minoconf- A fully outsourcing company. - Design Agency- help with planning collections and being updated on the latest trends --> more frequent collection to keep up with demand and current trends. - Branding Agency- working with the in-house marketing team, it helps create visually appealing content and coherent, innovative campaigns. - Suppliers (China, Tunisia, Bangladesh, Italy, Pakistan), specific companies are not provided. - Quality/Safety controls- Intertek - Wholesalers- Brands selling Miniconf’s products

KEY ACTIVITIES Planning/Designing Outsourcing Production Marketing Sales and customer services Distribution

VALUE P RO P O SIT I O N S - Safety - risk reduction (they follow the european standards) - Convenience: - Clothing for every occasion, not necessarily high quality. Fashionable clothing for children for lowest price possible (operational excellence) - Functionality

KEY R ESOU R CES

> Physical - inventory - buildings: new warehouses - distribution networks that enable the business to function.

- Customer Experience: you do not buy a product, you buy a feeling/ community - Flexible Shopping based on omni-channel approach

CU STO M ER REL AT I O N SHIP S

GET: - Search engine optimization - Social media marketing: use of influencers - Rebranding: new marketing campaign with focus on low prices and convenience KEEP: - Free shipping (2-5 days) and free returns (within 21 days) - The right platform: focusing on online sales (and omnichannel), because the customers are prefer that. - price driven: the customer care more about the lower prices, that the quality of the product. GROW: - Newsletter updates: seasonal, discounts, new products - Loyalty offers and discounts - They come back because of the low prices

CHANNELS Multibrand Monobrand (franchise) Wholesale Outlets - Awareness of brand: word of mouth, through facebook and instagram, influencers, lookbooks - Evaluation: through social media comments, (multi) brand stores - Purchase: online, own shops, multi-brand stores, franchise - Delivery: delivery service, in-store, click and collect - After sales: newsletter - Large distribution network - Lack in (supplier) transparency - Unstructured communication: scattered, unclear brand identity

> Intellectual - Brand name - Partnerships (Intertek, FabricaLab) - softwares & programs for omni-channel > Human - Strong motivated workforce - Experts for new technologies > Financial - Cash (family owned) - Long-term loan (7 Mil. euro)

COST STR UCTU R E

CU STO M E R SEG M ENTS - Children’s wear - Targeting children and parents (in the Netherlands) - Interesting because the children wears the clothes, but the parents have the purchasing power. Especially in Italy, the children does not have as much of a say as north/west european countries. - Low and Middle level of disposable income - Lower prices are prioritized over quality

REV ENUE ST RE AM S

COST DRIVEN (cost leadership) but VALUE DRIVEN ASPECTS: Most important costs within the Business Model: marketing/campaigns/PR, controlling the supply chain (short lead-times, maximise efficiency, lowest prices legotiation), channels (establishing and maintaining a successful omnichannel), costs of new omni-channel retailing Most expensive Key Resources: Physical & Human, intellectual Most expensive Key Activities: marketing/PR/campaigns, channels (establishing and maintaining a successful omnichannel), controlling the supply chain (short lead-times, maximise efficiency, lowest prices legotiation), sales and technological implementations

Sales (retail + wholesale) (What’s their average retail price?) Leftover stock sell to outlets Revenue Asset sale: the sales of goods Values the customer pays for: cheap prices, convenient shopping and basic clothes Payment methods: credit + debit card, paypal and bank transfer

30.

INDUCED MINDFULNESS - Business Model 4

BUSINESS MODEL CANVAS

Solution: By implementing more up-to-date technologies, Miniconf aims to fill in a gap in the market by creating functional and high performance clothing, using technologically advanced fabrics, fit and cut.

KEY ACTIVITIES Planning/Designing Outsourcing --> Production Marketing Sales and customer services Distribution

VALUE P RO P O SIT I O N S - Safety - risk reduction (they follow the european standards) - Convenience: - Functional clothing for every occasion - Unique, high quality products - Brand emotional value - Flexible shopping experience - Customer experience (added value)

KEY R ESOU R CES

Omni-channel- online and offline sales and services are on the same level of quality and importance. ---> E-commerce: maximise convenience and flexibility (free shipping and returns), high quality images of the product, high performance customer service. Multibrand Monobrand (franchise) Wholesale Outlets ---------------------------Awareness of brand: word of mouth, through facebook and instagram, PR push, influencers, lookbooks, fashion fairs, values and sustainability (powerful and convincing) Evaluation: through social media comments, (multi)brand stores Purchase: online, own shops, multi-brand stores, franchise Delivery: delivery service, strategically placed warehouses. click & collect or home delivery After sales: newsletter Large distribution network Lack in (supplier) transparency Unstructured communication: scattered, unclear brand identity

PRODUCT LEADERSHIP but VALUE DRIVEN ASPECTS: Most important costs within the Business Model: marketing/campaigns/PR, raw materials and production, channels (establishing and maintaining a successful omnichannel), costs of new omnichannel retailing Most expensive Key Resources: Physical & Human, intellectual Most expensive Key Activities: marketing/PR/campaigns, channels (establishing and maintaining a successful omnichannel), raw materials and production, sales and technological implementations

GET: - Search engine optimization - Social media marketing: use of influencers - Rebranding: targeting a very specific target group KEEP: - Free shipping (2-5 days) and free returns (within 21 days) - The right platform: focusing on online sales, yet the offline stores play as crucial role, as it is important to touch and see the products in real life due to they technological advance - Product driven: the customer care more about the quality and uniqueness of the product rather than price. GROW: - Newsletter updates: personal, targeted messages - Limited products and events for loyal customers - They come back because of the quality and technological advance of the product

CHANNELS

> Physical - inventory - buildings: new warehouses - distribution networks that enable the business to function.

C OST STR UCT UR E

CU STO M ER REL AT I O N SHIP S

REV ENUE ST RE AM S

CU STO M ER SEG M ENTS - Segmented: the 3 different brands provide products and services with a very small variation of needs and requirements. Even though the variation is minimal, it is still significant. - Childrenâ&#x20AC;&#x2122;s wear - Targeting children and parents (in the Netherlands) - Differentiation through belonging/ creating a tribe - Interesting because the children wears the clothes, but the parents have the purchasing power. - Middle-high level of disposable income

Sales (retail + wholesale) Leftover stock sell to outlets Revenue ---------Asset sale: the sales of goods Values the customer pays for: cheap prices, convenient shopping and basic clothes Payment methods: credit + debit card, paypal and bank transfer

31.

Argumentation on the four business model options

BMC 1

BMC 2

BMC 3

BMC 4

Solution: By implementing more up-to-date technologies, Miniconf can become more efficient regarding production, strategy and distribution, etc. As a consequence, their brand image becomes more strong, they become more sustainable and the customer will choose the brand for their values.

Solution: By implementing more up-to-date technologies, Miniconf can reposition as a brand by improving their marketing strategy As a consequence, their brand image becomes more coherent and stronger, attracting new customers while still retaining older ones.

Solution: By implementing up-to-date technologies, Miniconf can make their production process more efficient and reduce costs. By doing this the prices can be lowered and Miniconf can then compete with cheaper chain stores. Obtaining new customers.

Solution: Solution: By implementing more up-to-date technologies, Miniconf aims to fill in a gap in the market by creating functional and high performance clothing, using technologically advanced fabrics, fit and cut.

Miniconf chooses to incorporate technology within their supply chain in order to be as efficient as possible and therefore increase their revenue (cost driven). This can be done at different stages of the supply chain whether they have outsourced that specific stage or not. For instance, it could be 3D Prototyping for the design stage, or blockchain for the data management of each product, etcâ&#x20AC;Ś This causes the cost structure to differ as there would be expenses and would involve huge and long-term capital investments.

As Miniconfâ&#x20AC;&#x2122;s marketing does not capture what it wishes to portray, it uses technology as a powerful tool to boost its marketing strategy, thus increasing its reach and sales. In this case, Miniconf keeps the same target group but aims at becoming more visually appealing through various marketing techniques and thus keeping the same old clientele while attracting a attracting a new one. To do so, it launches a new functional and genderless collection that will attract new customers, but will also make them aware of the importance of quality and sustainability for their children. In terms of channels, its goal is to give the customer the ability to go from one channel from another very easily. Therefore, the focus will lay in running a smooth omnichannel model which gives a flexible shopping experience to the consumers. All channels will be improved in terms of being more visually appealing by having a coherent visual language (appealing website and playful interior design).

32.

With the increasing demand for companies to impleResearch on the childrenswear industry in the ment up-to-date technologies, Miniconf aims to creNetherlands states that Primark has the leading number ate functional clothing that are also high-performance of brand shares of childrenswear, as well as a 150 per with innovative fabrics and styles that are unlike its cent higher company performance versus the market in current collections. comparison to other childrenswear brands. Therefore, Miniconf would like to implement a similar objective to Miniconf will still be targeting children and parents, Primark by lowering prices to compete with cheaper however, with the aim of differentiation through bechain stores. longing. This strategy creates tribes within the childrenswear industry. A difference in the customer segIn this scenario, Miniconf would alter the customer ment is that Miniconf will have to target customers of segment slightly by attracting customers with a lower middle to high levels of disposable income, as the level of disposable income that value lower prices over clothing will be notably more expensive. higher quality clothing. Due to this, Miniconf would have to rebrand its marketing campaign with a newfound focus on lower prices and convenience. Practical matters for the customer relationships such as free shipping, returns and focusing on online sales would remain the same.

Having a differentiation strategy includes the extra added value of customer experience while purchasing and wearing the clothes, as it will be like no other. The outsourcing aspect of Key Activities would change drastically, as the entire production chain will be different. Miniconf will have to find experts in textiles to find and purchase the most suitable innovative textiles and new technologies to implement throughout the supply chain. Distribution networks in production need to be adjusted to enable the business to function smoothly.

Miniconfâ&#x20AC;&#x2122;s value propositions will differ in the sense that, instead of creating safe and high quality clothing, it would be fashionable clothing for the lowest price possible, aiming to achieve operational excellence. This entails that the cost structure as well as the cost of production will decrease substantially. Production will need to hire experts and invest in new technologies for a fastMiniconf strives to have a product leadership title with er supply chain. value driven aspects, by constantly creating state of the art products. A lower cost structure that includes cost driven but value driven aspects would eventually lead to Miniconf having a cost leadership position. The most important costs in this strategy include a new marketing campaign, PR and experts controlling the supply chain for short leadtimes to maximise efficiency and the lowest prices.

Argumentation on the feasibility of the four business model options

BMC 1

BMC 2

BMC 3

BMC 4

This is the most realistic and feasible scenario because not only does Miniconf needs to show more consistency within their marketing strategy but they are also able to financially support a new collection.

This strategy would not be as feasible for Miniconf’s future proof plan, in comparison to the second strategy. With this strategy, Miniconf would have to alter its entire production, which does not align with its brand identity of safety and riskfree clothing.

This strategy of filling a gap in the market by creating functional and high performance clothing, using technologically advanced fabrics, fit and cut will not be beneficial for Miniconf’s future proof plan.

Miniconf’s current biggest challenge is competing with the cheap chain stores, and therefore it would be too risky to implement this strategy when entering the childrenswear market in the Netherlands. It is too difficult to compete with already-established brands. Primark and other chain stores are well known globally, and therefore have the necessary funds to pursue ‘risky’ strategies. This being said, it would be too costly to have to implement new technologies for a faster lead-time.

33.

Since this would be targeting a niche market, it would not be favourable for Miniconf as it is not in its field of knowledge or expertise. It would be a large investment to in this direction as there is no prior experience. As well as the fact that Miniconf’s mindset, management style and organization is slightly old fashioned that the investment, time and money will not be worth it.

APPENDIX B - Finance

i. Income statement ( forecast 2018- 2022) + explanation

Explanation Income statement: sales increase a total of 10% CAGR from 2018 to 2022, this is shown as a steady increase of sales. The percentage increase is divided and so is the COGS costs. In addition the cost of the total cost of the strategy of 6 million based on the 30% of its current SG&A costs. And the total cost of the strategy is further divided into the five year action plan of the strategy: first year being 2.5 million, second year being 1.5 million, third year being 1 million and in the fourth and the fifth year using 0.5 million euros on the strategy. All the other numbers on the income statement increase by the given growth percentage of that year.

34.

ii. Balance sheet ( forecast 2018- 2022)+ explanation

Explanation Balance Sheet:

Sales increase a total of 10% CAGR from 2018 to 2022, this is shown as a steady increase of sales divided into 0% the first year, 2% the second and third year, and 3% sales growth in the fourth and fifth year. The net income from the Income statement of each year is put in the retained earnings of the equity side of the balance sheet, of the given year. The cost of the strategy for the given year is seen as in increase of asset in terms of inventory asset side of the balance sheet. The gap between the total asset side and the total equity and liabilities side is then taken from the cash to equal out both sides.

35.

iii. Ratios ( forecast 2018- 2022)

Explanation Ratios: The importance of a ratio analysis is to undergo a quantitative analysis of information contained in Miniconfâ&#x20AC;&#x2122;s financial statements. Ratio analysis is used to assess different aspects of the companyâ&#x20AC;&#x2122;s operating and financial performance such as its efficiency, liquidity, profitability and solvency. The ratios are calculated using numbers from both the income statement and the balance sheet.

36.

iv. Cost of strategy and depreciation costs The amount of money Miniconf will be able to use to implement this strategy is 6 179 229 euros (6M if rounded up) as it is their annual profit of 2016. This table shows the multiple areas where the money will be used.

into SGA cost TOTAL

2 500 000

1 500 000

1 000 000

500 000

2018

2019

2020

2021

2022

1642195

642195

167000

social media

60000

amsterdam flagship store

19805

1905

19805

omnichannel

50000

25195

25000

warehouses

20000

700000

218095

700000

8000

collection

marketing campaign interior design

Explanation Cost of Strategy and Depreciation Table: The total cost of the strategy is 6 million and even though the majority of this sum is used the first year. Some of the costs are depreciated throughout the 5 year duration of the action plan for the strategy. and depreciation table. The table below shows the different costs of the strategy and how the money is used throughout the years, and what will be depreciated.

37.