A Singapore brand named as Charles and Keith is famous for its footwear and its accessories. The company was established in 1996. The two brothers Charles Wong and Keith Wong started this company. It started as Women shoe store but now had grown into international chain. It has more than 300 outlets. The company has also achieved significant number of awards. Considering the background of company, the two brothers learned the way of managing the shoe business by supporting their parents at their store. Earlier it was wholesale way of selling the shoes. The two brothers wanted to make use of new model of business and so they opened their own label in Amara Shopping Centre, Singapore. They could see the unsustainability of selling shoes bought from wholesalers. It lacked the design and variety of options (Monczka & Patterson, 2015). The company make sure that their products are sold in the affordable range. The business is also made cost efficient by directly buying from manufacturers. The exclusivity is maintained by ensuring that manufacturers are not selling shoes to the other retailers. Promotions are done through photoshoots and using social media websites like Facebook. Charles and Keith also have introduced footwear for men section called Pedro. However, Pedro has become unisex.
Just in Time:
Just in Time or JIT methodology mainly focuses on reducing flow time during production and response time between stakeholders (Cottam & Ranson, 2017). Charles and Keith maintain strict timelines from manufacturing to logistics till the product reach the shelves. Every week 15-20 new designs hit the stores. The designers and manufacturers are near i.e. in China. Instead of buying material from wholesale in Singapore the company buys from China directly where the products are made. Vertical Integration is implemented in the business including supply from their own factories, delivering good quality of goods etc. They maintain speed to market which is key to their success (Christopher, 2016).
The company positioned themselves as high design affordable products by maintain decent quality. However, to penetrate the market, the company has also introduced Signature Level. The new collection represents high quality and more expensive shoes. Due to its growing reputation of high quality women and men collection, the international partners are joining hands with the company. Also, vertical integration where the owners focus on everything from suppliers to franchise partners. This assures reasonable quality level (Serban, 2015). They also maintain attractive shop ambience and display which provides a significance proof to quality. The brand is located mainly in urban and suburban mall where other high-quality brands are placed. Also, the investment of private equity arm of Louis Vuitton (L capital Asia) in Charles and Keith made its retailing business more successful. The franchise partners are selected who are passionate and who try to maintain the positioning of the brand.
Reengineering is way by which business process are re-thinked and re-designed to see improvement in measure such as cost, service, speed and quality. While helping their parents, the owners realized that selling shoes which are brought from the customers is not a good way to go to market. The customers feedback must be considered by suppliers (Chang, 2016). The customers must be provided with the design they wanted. Also, this new approach should not build high prices. The brothers devised strategy for designing shoes, stocking inventory, making entry to cash register. Also, the company has entered into e-commerce business so that it can reach to the markets where it still lacks brick and mortar shops.
In addition to shoes, the company also provides women bag and accessories. So, the company is widening its product range with new products. The entire supply chain is designed in a way that consumer market is researched fast and the products as per requirement are put on shelves faster. Also, the company is acting as its own biggest competitor. Pedro is one of the famous shoe store owned by Charles and Keith. It begins as an option for males but later own started creating female shoes as well. This may cannibalize their own chain of Charles and Keith’s. But the company is easy to adapt the growing market requirement. It invests a lot in understanding different markets and provide the required output. Also, LMVH took about 20% stake in the company. Initially owners were hesitating to bring investors onboard but later took this step for the betterment of company. During Asian Economic Crisis (1997), when most of the Singaporean firms were suffering, Charles and Keith see this an opportunity to work with factories and gain control over production process.
This concept stresses on the fact that time is considered as resource and the organization which values it can take a competitive edge (Suri, 2016). The company is pioneer in focusing on this concept. At the right time it could understand that wholesale purchased products would not give them edge, so they opened their outlet way back in 1966. The company knows that even in inflation a Singaporean female shop for shoe every month. So, the main prerequisite for their target market is design so the company maintains standard of designers. They make sure that designers are well informed of coming trends. The company spends around 3% of their revenue in training the designers. Moreover, the company considers its overseas expansion seriously. It entered into different markets after doing proper retail and cultural research over there (Roll, 2015). The company has also sold its 20% stake to LMVH to enter China and United States.
This company has maintained strong relationship with its suppliers, business partners and customers. This is the first step they follow. They listen to the needs and build their service accordingly. The business is following vertical integration which starts from its own factories. The company mostly does retailing in shopping centers and prominent places that are easy to access. For example, when it opened first store in Japan, it strategically decides the main fashion district. Wherever its retailing outlet was not present it decided to choose online channels i.e. e-commerce. The proximity between supplier, designer and manufacturer is kept which helps in decreasing the lead time. The manufacturing operations are mainly taken place in China which decreases the overall cost. From these two owners, one is dedicatedly focused on operation activities and other is on Sales.
Fashion is fast paced. One of the important criteria for this is adaptability (Page, 2015). Problem solving ability is needed to reinvent and for continuous improvement. The excellence is strived at every step. The fashion products should have design, variety and have reasonable pricing. The prices must be competitive. Many of the big brands enter designing their own product based on the customers’ feedback. The customers expect new products at every season. Companies need to take proactive measures such as competing with themselves by bringing new brands or new products on shelve. Companies create different brands and segregate them to cater different target market (Pedersen & Hvass, 2018). The market research and fashion shows give significant ideas in business development (Walker & Klassen, 2014). In order to have success on National and International Front, firm grip is needed in operations across its network. Fashion brands are committed to provide sophisticated and high-quality products that are in synch with the trend. The strong social media presence is must. The leads are created using e-commerce sites. Also, the brick and mortar stores are located at accessible locations.
The fashion industry has been subjected to many environmental issue in the recent time. The notion of discarding the old and keeping the new is given prime importance (Turker & Altuntas, 2014). Various environmental issues include poor working conditions, low quality products and their planned obsolescence. Another issue is disposal of textile waste. Fashion Industry has large amount of backlash for their carelessness towards environment. The low-quality products are offered at low prices is the important aspect to be considered. Mostly companies are interested to increase their product line without considering any of the criteria like Sweat Shop etc. Many mass market retailers have started considered eco-friendly fabric like Organic Fabric in order to be social responsible. Many measures have been implemented to put a check on the social issues. The stakeholder analysis and life cycle assessments are done to become non-compliant for the environmental issues.
Zara, H&M and Forever 21 are performing well but they are not able to cater mass market for shoes like the way Charles and Keith’s have catered. Some brands are dedicated but they could not maintain the affordable price for the customers (Oakland, 2014). So, this makes the brand competitive with its high design and variety of products at affordable price with good quality (Goetsch & Davis, 2014). The company is following both cost leadership and differentiation strategy to cater mass market. It understands the customer needs and fulfil it through its own designed and manufactured products. All its processes and operations are properly designed and well managed. The company considers all the opportunities like selling of stakes to LVHM.
Charles and Keith have exceptionally done well since their inception. From creating their own design to expand themselves globally they have outpaced many brands. For the betterment of the organization they have accepted offer from LVMH. However, the company needs to maintain its vision in the long run. Despite joining hands with private equity, they also aim for IPO in the longer run. But this may impact the exclusivity of the company. Many people on the board may have different agenda so keeping the same pace as it has today must be taken care of. In addition to this, the company states that it maintains decent quality for the products other than Signature Level. So, this quality should be enhanced. Also, it may also bring option for co-customization where customers can design their products themselves using a platform. There are some franchise partners like “Owners” of Japan who lack retail skills. So, these partnerships must be evaluated properly before entering into the market. Charles and Keith have recently entered e-commerce. So various options like Artificial Intelligence, Machine Learning could be incorporated to attract and retain customers. Robotic Process Automation can be used to reduce unnecessary work (Lehmann, 2016).
Conclusion
Charles and Keith is Singaporean Multi National Company. The company is famous for its high design affordable products. The company has done vertical integration to create a niche in the market. The company is worldwide recognized. The credit goes to its owners’ capability of managing the operations and adapt the competitive market. The owners have learnt from their own setbacks. For the longer run, the owners’ have taken decision of selling stake to LVMH. This will increase their visibility to the market and strengthen their brand. The company is creating a big space in the ecommerce as well. The company is very selective in choosing business partners.
References
Chang, J. F. (2016). Business process management systems: strategy and implementation. Auerbach Publications.
Christopher, M. (2016). Logistics & supply chain management. Pearson UK.
Cottam, R., & Ranson, W. (2017). Just in Time. In Bridging the Gap between Life and Physics (pp. 57-74). Springer, Cham.
Goetsch, D. L., & Davis, S. B. (2014). Quality management for organizational excellence. Upper Saddle River, NJ: pearson.
Lehmann, C. F. (2016). Strategy and business process management: techniques for improving execution, adaptability, and consistency. Auerbach Publications.
Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2015). Purchasing and supply chain management. Cengage Learning.
Oakland, J. S. (2014). Total quality management and operational excellence: text with cases. Routledge.
Page, S. (2015). The power of business process improvement: 10 simple steps to increase effectiveness, efficiency, and adaptability. AMACOM.
Pedersen, E. R. G., Gwozdz, W., & Hvass, K. K. (2018). Exploring the relationship between business model innovation, corporate sustainability, and organisational values within the fashion industry. Journal of Business Ethics, 149(2), 267-284.
Roll, M. (2015). Asian brand strategy. In Asian Brand Strategy (Revised and Updated) (pp. 107-140). Palgrave Macmillan, London.
Serban, A. I. (2015). Managing Transformation: Business Process Reengineering or Total Quality Management. International Journal of Academic Research in Business and Social Sciences, 5(5), 81-86.
Suri, R. (2016). It’s about time: the competitive advantage of quick response manufacturing. Productivity Press.
Turker, D., & Altuntas, C. (2014). Sustainable supply chain management in the fast fashion industry: An analysis of corporate reports. European Management Journal, 32(5), 837-849.
Walker, P. H., Seuring, P. S., Sarkis, P. J., & Klassen, P. R. (2014). Sustainable operations management: recent trends and future directions. International Journal of Operations & Production Management, 34(5).
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