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Managing a Business/My uni homework !

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Question
The Four Seasons Corporation

The Four Seasons Corporation is a new firm to the market that is established recently. Since the garment industry is growing in a pace rate worldwide, the company decided initially to focus on this industry. The total available capital of the company is $350,000. The company owes no assets at this stage. As a distinguished graduate from AOU the company decided to appoint you as a consultant. Your main task is preparing a feasibility study to aid the company to make the final decision of its intended business. The following inquiries are the underlying bases for the feasibility study:

1.   What market segment will the company be targeting? Why?
2.   Which is more appropriate type of business: garment production or retailer? Why?
3.   Does the company extends its operation regionally or keep it locally? Why?
4.   What type of assets is required?
5.   What promotion will be used to get maximum effect?
6.   Conduct a SWOT analysis for the company.
7.   Prepare the forecasted income statement for the first fiscal year showing profit/losses of the company.
8.   As a consultant, what is your final conclusion and recommendation? Why?

Note:
You need to cite at least 3 different external references.




I know its alot of questions but I need help :<

Answer
1.   What market segment will the company be targeting? Why?
A:      As you are focusing on garment industry its recommended to focus on youth especially young girls. Girls are always attracted towards shopping and they are not stuck to specific brands. So if you are new at it and have some different or designer stuff you can easily position yourself in the market. Even the garments for baby girls are much in demand then for baby boys.

2.   Which is more appropriate type of business: garment production or retailer? Why?
A:      If you are a start-up you can start with retailer options to understand the market but as I mentioned in my above answer if you focus on specific segment, even garment production can be smarter choice. In my opinion select the right options and jump into production and later you can try out for factory outlets with your own brand-name like many others e.g. Raymonds, Van Huesen and many more.

3.   Does the company extends its operation regionally or keep it locally? Why?
A:      Depends. I prefer start with local market and seeing the response from the local market the company can extend the operations to regional level as well. The reason is quite simple - "What if people don't accept your brand/products" and in that case you need to check for other options. Even the bigger brands in today's era have started from small segment and seeing the response they have grown up.

4.   What type of assets is required?
A:      The basic assets required for setting up garments industry would be machinery, knitting yarn, needles and other stuff. I need to think more in this aspect to answer the question in more detail.

5.   What promotion will be used to get maximum effect?
A:      Consumers are always allured with the quality promotions of the product. The best one considered is the endorsements done by celebrities. But as you are the start-up with limited start-up capital I prefer to go for some quality promotions like use of famous songs or animations and get it customized from local vendors, believe me they are quite good and affordable. e.g. MAKERS (suiting fabric)when started promotion in Indian market they have focused on music and picturisation and it was quite hit among the youth. You can check the commercial in youtube.. just type : "lallan top lollipop shahrukh dekha bachan dekha" and search.

6.   Conduct a SWOT analysis for the company.
A:      As you have not mentioned any location, I presume that you are located in UAE seeing your graduation university as AOU. I will take Abu Dhabi as a location for your start-up company as I think Abu Dhabi is one of fastest growing city in UAE. So the SWOT analysis details for your garment industry will have a reference of the location Abu Dhabi.
SWOT commonly known as STRENGTH, WEAKNESS, OPPORTUNITY and THREAT analysis.
STRENGTH (S):
1. People have interest in fashion trends
2. Attraction to tourists from around the globe, so they can be targeted as consumers
3. Wide range of varieties can be manufactured due to different climatic conditions
4. No problems related to transport as its well connected with other big cities like Dubai.
5. Dubai market can be considered
6. Costs to the garments can be customized easily due to wide range of market options
7. Good networking with suppliers is possible

WEAKNESS (W):
1. skilled labors and regular knowledge increase related to the new skills
2. change in fashion or inadequate information on changing trends
3. design copy-write
3. cost of raw material
4. high level of fluctuation in input prices
5. Inadequate skilled designers and trained professionals in IT

OPPORTUNITY (O):
1. Establish the value in the market with increasing trends
2. Networking with promotional agencies around the globe
3. Availability of raw material and machinery
4. Scope to work efficiently with limited natural resources due to developed cities in vicinity.

THREATS (T):
1. Competition with existing enterprises
2. Brand endorsement
3. Cost and quality competition in nearby markets

7.   Prepare the forecasted income statement for the first fiscal year showing profit/losses of the company.
A:      Give me couple of days to write a forecast income statement. I will get back on this question.    

8.   As a consultant, what is your final conclusion and recommendation? Why?
A:      Again I will consider Abu Dhabi as your base location for the final conclusion. Being in Abu Dhabi, the raw material for the garments will not be a problem and Dubai being in the vicinity can be traveled easily. The cost of fabric, yarn, needles and many other raw materials will be lesser than the other places. Above to this, the installation of the machinery will not be a problem due to easily available resources and hard working man-power. There can be a problem with skilled labors with the sense of changing fashion trends which can low down the productivity but this is not a big issue as the resources can be trained easily with the usage of advanced technologies and internet. e.g. In India, there is a small city Salem which is famous for aluminium and steel but during the recent past they have developed in the field of garments as well due to the use of advanced technologies and migrated labors. I believe Abu Dhabi can be a good option to start with garment industry as its adapting new trends gradually and with the involvement of the tourism industry in this city, the local people are growing tremendously so the history can ever be created being in Abu Dhabi.  

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