Business Proposal For A Clothing Company – Strategy And Action Plan

Strategy for a Clothing Business

This business proposal will provide a road map for effective business functioning in clothing industry. It is client oriented business proposal which is prepared with a view to consider values, belief and perception of clients for clothing products. This business will provide good value creation opportunity to its investors. This clothing business will be opened up at Mississauga Road, Erin Miils Parkway in Peel region which attract not only domestic tourist but also international tourist as well. Therefore, it will increase the total turnover of business in effective manner due to increased number of potential buyers in particular Mississauga Road, Erin Miils Parkway in Peel region market.

Strategy to be followed by clothing business private limited for its business is given as below.

• Company by following cost leadership strategy will provide high quality and trendy cloths at very cheapest price to its clients.
• This business has been opened up by targeting youth customers and all the cloths have been customized as per the trends followed by youths.
• Company will enter into strategic alliance with well known manufactures who will stitch cloths for organization.  

Clothing industry has high amount of business growth potential. Clothing business private limited has proposed its plan to sell its cloths off line and online. Company will sell its cloths in Mississauga Road, Erin Miils Parkway in Peel region which will attract foreign and domestic tourist who visit that place. In addition to this, online business strategies will help organization to tap the international demand and needs of clients. Nonetheless, company needs to assure that its products are certainly produced with fashionable designed as per the requirement of clients.

After analyzing clothing business market at Mississauga Road, Erin Miils Parkway in Peel region, company has followed cost leadership strategy to win over with its competitors. In this strategy Clothing business private limited will provide best quality trendy cloths to its customers at very low cost. This will helps organization to attract high number of clients and will increase the total turnover and brand image of company. Nonetheless, this strategy will reduce the profit earning capacity of organization but at the same time it will increase total turnover of business. Company need to consider that company cannot afford to sell its products below its variable cost for long run. This strategy is ideally adopted with a view to attract customers and eliminating competition from the market.  Clothing business private limited need to consider that cost leadership strategy will be effective only till the time when, company do not compromise with its quality of products. Clothing business is ideally based on the offering of trendy cloths by company to its customers. Therefore, company instead of keeping its cloths price low should invest its money on its research and development department. It will assist organization to provide trendy cloths to its customers.

Cost Leadership Strategy

This strategy will be implemented by organization for providing different and unique cloths to its customers. It is observed that if clothing business private limited will provide same products and services to its clients then company would fail to attract customers for its cloths offering.  Therefore, company needs to offers unique clothing products to deliver better satisfaction to its customers.  This strategy is useful for gaining edge against rivals in the industry where multiple competitors produce similar products. Clothing business private limited could focus on providing international level quality to its buyers at cheapest price to win over market competition. However, it is hard for the clothing business private limited to provide unique cloths to its customers in starting. It would be prudent to evaluate customer’s perception, their choice of action and other values before selling cloths in Mississauga Road, Erin Miils Parkway in Peel region.  Cluster sample survey and stratified sample survey could be used by management department to customize their company’s products as per the different market segment. Cluster sample survey will provide the taste of different people based on their age, sex and purchasing power. On the other hand stratified sample survey helps in bifurcation of people choice of action, values and belief based on their origin (Battistella, et al. 2013).

This strategy is ideally followed by organizations which has set up its business in particular industry. It is used when company want to expand in narrow market or industry segment.  Clothing business private limited could use this strategy to focus on particular market segment. Youths are more inclined towards buying cloths as compare to other people. Therefore, Company should focus on expanding into youth garments. It will increase the total turnover of company if all the cloths of company are customized as per youth’s taste, values and perception.

This strategy is prepared to aim at grabbing larger market share, even at the expenses of short term earning. There are several strategies which could be followed by Clothing business private limited to expand into the clothing industry. Nonetheless, company should focus on these strategies when company has established its brand image in the particular market segment.

This strategy is used when company has high amount of capital available and wants to deploy in other business. Clothing Company limited should focus on its existing business in the starting and then it could endeavor towards entering into new business.

Product Differentiation Strategy

Clothing business needs to make changes in its existing offering in market to attract more clients. Company could implement this strategy by installing newly developed garment machines in its value chain activities. This strategy will allow organization to make changes in its product life cycle in the given market segment. However, company has planned to sell its products in both market either on line or offline. Therefore, company could use cluster and stratified sample survey to identify the needs and demand of clients in the market. It will help clothing business private limited to come up with trendy cloths in the market.

This strategy is followed when company want to flood the market with its products.  Clothing business private limited use this strategy to increase its total sales. It is analyzed that if company increases its total sales then it would eventually result into decrease in total cost of production of cloths. Company could use this strategy to increase its total sales.

This strategy is followed by organizations to increase their market share in several market segments. Clothing business private limited instead of focusing on clothing market in Mississauga Road, Erin Miils Parkway in Peel region could also tap online market to grab high number of customers around the globe.

In this strategy company would enter into strategic alliance with other organization based on its own value chain activities need. It could be either vertical or horizontal integration strategy. Company need to enter into strategic alliance with Advertisement Company who could promote its products and services (Bernardo, 2014).

Value proposition of organization is to provide different and unique cloths to its customers. It is observed that if company will provide same products and services to its clients then company would fail to cover more market share. Clothing business private limited have customized its clothing products and promised to offer trendy and classy cloths to its customers. Therefore, company needs to offers unique clothing products to deliver better pleasure to its customers.  This strategy is helpful for gaining edge against rivals in the industry.

This will be comprised of identifying the true potential of market. It is evaluated that company needs to proposed cluster sample survey for collecting data from customers. This would be helpful in providing values, belief, wants and needs of different customers from the product offering of organization.  However, Company need to assure that its products is certainly produced with high quality and fashionable designed customers.  The marketing plan of company is required to be concentrated on different clients based on their purchasing powers. It is required to develop variety of cloths as per the different- different requirement of clients which are unique and affordable to customers in market.  Nonetheless, sales team will showcase company’s core competency to its clients while selling company’s products. Company would sell its unique products at very low cost which is hard to follow by its competitors in clothing business.  It is observed that company need to hire employees for promoting its products in the given domestic market segment. Nonetheless, online business of company could be promoted by increasing the visibility of company and using social media. These strategies will help Clothing business private limited to attract high number of clients (De Weerdt, et al. 2013)

Market Development Strategy

Product development strategies	Company by following this strategy will provide unique and trendy cloths to its clients either off line or online.
Promotion plan	Company need to enter into strategic alliance with other partners to promote its products.
Advertisement strategy	Company could use social media or conducting exhibition nearby its outlet.
SWOT analysis	Strength- All the products have been purchased from Paris which would be edge to organizations against its rivals in the market. Weakness- Company is new in clothing industry. It would be hard to grasp new clients in the market. There is tough competition from its rivals due to the high growth in clothing industry. Company has to make high amount of investment in developing sites and optimizing its search engine in order to increase the visibility of its products online. Opportunity- There are several opportunity available to clothing business private limited Offering of high discount by organization would attract high number of customers. Market is flooded with domestic and foreign customers that would increase total turnover and brand image of company. Availability of talented employees will strengthen the inbound and outbound activities of organization. Threats- The main threat which company would face would be related with rules, regulation and market practice followed by rivals in the market.
Action plan	Formulated strategies would take at least 2 months.
Leading strategies	Company will develop its two strategies to give tough competition to its competitor in clothing market. Product differentiation strategy will help organization to develop unique and trendy cloths in market. It would organization to win over its competitors.

It is evaluated that company would get its sales increased throughout the time due to its product differentiation and cost leadership skills in clothing market. Company could use following strategies to collect the data to estimate the future potential of business (Finch, 2016).

Super demographic tool- This tool assist in identifying people choice of actions, values and taste by evaluating demographics choice of people, their lifestyle and their purchasing power. By using this tool it would be easy to gauge consumer’s behaviors in buying clothing for the particular time period (Ciuriak, 2015).

Survey monkey- It is another tool which is used to conduct online survey. It would be easy to collect the data with the help of this tool. It would provide the data regarding how clothing business is effective as compare to other rivals in clothing industry.

This below budgeted plan of sales has been prepared after analyzing collected data and external factors of clothing industry.

Years	Budgeted amount of sales
2015	30,00,000
2016	37,00,000
2017	45,00,000
2018	50,00,000

This will include inbound and outbound activities of organization in its clothing business. However, company would be need of following resources for the proper business functioning of its clothing business. It is surely considered that company would be in need to opening up its outlet at place where accessibility to clients is more. Clothing business would require 5000 square feet area to open up its outlet in Mississauga Road, Erin Miils Parkway in Peel region (Hair, 2015).

Office Desks- 17 Units

Office chairs- 12 Units

Computers- 7 Units

Office staffs- 120 employees

Advance Garment Machinery- 13 units  

 (Fernandes, Ferreira and Moura, 2016).

Premises

Company has been planned to be opened at Mississauga Road, Erin Miils Parkway in Peel region which will assist in grasping domestic and foreign customers who visit that place. Clothing business private limited would require 7000 square feet area to open up its outlet in Mississauga Road, Erin Miils Parkway in Peel region.

Machinery and equipment required

Office desk- 16 units

Office chair- 12 units

Office staff- 50 employees

Garment machinery – 15 units

Clothing business sets up in Mississauga Road, Erin Miils Parkway in Peel region will be accustomed to act as per the directions and instructions of CEO of company. All the operating management decision will be taken by the line managers of company. In addition to this, 40 employees will be engaged in production of cloths in factory and other 20 employees will be deployed in sales team for direct interaction with customers. HR team of company will be responsible for hiring quality of staffs for the proper business functioning of organization (Knockaert & Vanacker, 2013).

SWOT Analysis

Clothing business private limited will hire a company secretary who will be responsible in handing all legal issues in determined approach. In addition to this, he will be responsible in taking license and confronting with judiciary on the behalf of company.

All the amount of capital required to set up new clothing business in Mississauga Road, Erin Miils Parkway in Peel region would be funded by promoters from their own funding. However, company could take loan from banks and financial institutions by creating charge against its assets. In addition to this, company could also follow some of financial management strategy to reduce the cost of capital of organization such as buying cloths on credit, leads and lag in payment by making alteration in payment to its vendors. It is considered by financial manger that all the operating expenses will be funded by own funds by the owners and other capital expenses will be arranged by organization by taking loan and financial assistance from banks and financial institution. A proper financial management plan would be prepared by the organization to reduce the cost of capital engaged in its business functioning (Mutanda, et al. 2014).

There is proposed income statement of company has been computed as below after analyzing all internal and external factors of business

Forecasted income statement of company and  benchmarked with its rivals
	2017	2018	2019	Benchmark
Sales-cash	725000	739500	826500	839500
Sales- credit	203000	261000	304500	271000
Total sales	928000	1000500	1131000	1110500
COGS	464000	493000	522000	573000
Gross Profit	464000	507500	609000	537500
Selling and distribution expenses
advertising	43500	46400	58000	56400
Rent	29000	31900	34800	37900
salaries to shareholders	130500	130500	130500	290500
salaries to employees	87000	94250	94250	94250
Total selling expenses	290000	303050	317550	479050
General and administrative expense
Insurance	8700	8845	8845	8845
depreciation expenses	2900	3480	3480	4480
general office expenses	11600	13050	12325	23050
total general and administrative expenses	23200	25375	24650	36375
Financial Express
Bad Debts	4350	2900	3625	2900
Interest expenses	7250	10150	10875	10150
Total financial expenses	11600	13050	14500	13050
Total operating expenses	324800	341475	356700	528475
net profit before tax	139200	166025	252300	166025
Less: Taxation	37700	47125	69600	47125
Net profit after tax	101500	118900	182700	118900

(Note: All amounts is shown as Canadian Dollar) (Saadatmand, et al. 2015).

Schedule of start up expenses and capital costs

Particular	Cost ($)
Office infrastructure	5 Million
Hiring team	1 Million
Operational plan	2 million
Marketing plan	20,000
Legal expenses	10,000
Tender filling cost	1,00,000
Licensing cost in clothing business	50,000
Garment machinery cost	2 Million
Land purchase cost	10 million
Project cost escalation	10,000

Clothing business needs to identify its available resources which could be deployed in its business functioning. Nonetheless, financial department of company would make arrangement of resources for the better functioning of organization (Saadatmand et al. 2015

This plan provides how much time company would take in setting up of its clothing business in Mississauga Road, Erin Miils Parkway in Peel region. It is observed that company should reduce its pre and post incorporation time to increase the efficiency of business. There is chart given which reflects the required time involved in setting up of new clothing business in Mississauga Road, Erin Miils Parkway in Peel region.

Activity	Description	Days	Predecessors
1	Arrangement of finance for company	2
2	Developing value chain activities of organization	3
3	Hiring employees	10	1
4	Investment appraisal	12	2
5	Sales activities	20	4
6	Sales plan implementation	15	3
7	Sales activities	10	5

Gantt chart- It is the chart in which a serious of horizontal lines reflects amount of works done or production completed in a given amount of time in relation to the business proposal prepared by organization.

In this business proposal of this clothing industry it is evaluated that market has high potential growth. It is further observed that company has analyzed all internal and external factor of clothing industry. It provides that company has to keep its cloths price very low and at the same time unique and stylish cloths should be offered by organization. There are mainly two strategies which should be followed by organization to beat up the existing rivals. In addition to this, product differentiation strategy will assist organization to offer stylish and trendy cloths in market. This strategy has been prepared by organization with a view to attract clients and provide them high level of satisfaction from its offering. It is observed that if clients are given goods and services which they expect from the market then it would highly influence their buying behavior. In the end it would be inferred that clothing industry is providing high amount of profit to all the corporations running their business in this industry. Therefore, there will be no doubt that whether company would earn profit from these activities or not. Clothing business should endeavor toward providing trendy and stylish cloths to customers.

It is evaluated that company should prepare effective strategic plan to reduce its total cost of production. In addition to this, promotional strategies of the company should also be comprised of social media, and sponsoring particular sports and running the exhibition of cloths in the particular segment. Nonetheless, company should also maintain required level of finance for smooth running of business otherwise it would be hazardous for the company if it has lack of money for its business functioning.  Company should evaluate all possible external and internal factors in effective manner. Liquidity is one of the important measures which should be maintained by company in proper manner. However, company has maintained project escalation amount to pay off its contingent liabilities.  An effective financial management plan should be prepared by the organization to reduce the cost of capital engaged in its business functioning Management department of company should also need to make consistent changes in their strategic plans after evaluating rivals offering and external factors of business.

References

Battistella, C., Colucci, K., De Toni, A. F., & Nonino, F. (2013). Methodology of business ecosystems network analysis: A case study in Telecom Italia Future Centre. Technological Forecasting and Social Change, 80(6), 1194-1210.

Bernardo, M. (2014). Integration of management systems as an innovation: a proposal for a new model. Journal of Cleaner Production, 82, 132-142.

Ciuriak, D. (2015). Making Free Trade Deals Work for Small Business: A Proposal for Reform of Rules of Origin.

De Weerdt, J., Schupp, A., Vanderloock, A., & Baesens, B. (2013). Process Mining for the multi-faceted analysis of business processes—A case study in a financial services organization. Computers in Industry, 64(1), 57-67.

Fernandes, C., Ferreira, M. and Moura, F., 2016. PPPs—True Financial Costs and Hidden Returns. Transport Reviews, 36(2), pp.207-227.

Finch, B. (2016). How to write a business plan. Kogan Page Publishers.

Hair, J. F. (2015). Essentials of business research methods. ME Sharpe.

Knockaert, M., & Vanacker, T. (2013). The association between venture capitalists’ selection and value adding behavior: Evidence from early stage high tech venture capitalists. Small Business Economics, 40(3), 493-509.

Mutanda, M., De Beer, M., & Myers, G. T. (2014). The perception of small and micro enterprises in the city of Durban Central Business District (CBD),(Kwazulu-Natal)(KZN) towards financial planning.

Saadatmand, N., Gaj, S., Proctor, G., & Varma, S. (2015). Managing Risks and Using Metrics in Transportation Asset Management Financial Plans (No. FHWA-HIF-15-020).