Executive summary
The fashion in Australia echoes a pulsating, ingenious nation which is affluent in colors and shows a novel, energetic style; it mirrors the multicultural, urbane and cosmopolitan character of the society. The fashion labels from Australia are now being wanted around the globe and the precision of the basics with which Australians live are often the reason for determining the kinds of fabric and designs used by designers.
This report is based on Cotton On, one of Australia’s fastest growing retail brands. It is well known for its funky fashion and street wear. The brand entails the mind-set and style that reflects cutting edge clothing. The company has been in operation for over 15 years, with more than 150 stores across Australia and New Zealand. This report has a SWOT which shows internal analysis and environmental analysis. There are also reasons given for various strategies, accompanied by recommendations.
Introduction
There is a great difference in how economies regulate their businesses. The economy of Australia is sophisticated and modern and the country is incorporated into the global economy as it is center for commerce and finance in the region. It has a great appeal in the business world due to few barriers to entry, its legal and corporate framework, urbane demand of consumers and industries and a simple business culture (UCS, 1, 2009).
In modern Australia, there is a distinctive style of fashion which is different from that of European fashion lines. In Europe, fashion is more tailored whereas in Australia, it has a casual touch. There are various designers in Australia like Wayne Cooper, Lisa Ho, Martin Grant, Michelle Jank and Nicola Finetti who have a demand internationally and whose creations are stimulated by a peculiar variety of fashion textiles and influences of the culture (AG, 1, 2008). This report is based on an Australian retail Store ‘Cotton On’ and provides an internal analysis, an environmental analysis, an understanding of the strategic implications and recommendations about future strategies after an over view of the company and a profile of its customers.
Overview of Cotton On
It is a vibrant retail store which is operating locally as well as internationally. Cotton On was established in 1991 on the surf coast of Victoria, Australia with a single store and only a couple of employees. In a span of 14 years, the company grew to more than 70 stores in Australia. It is a family owned business; and at the moment it has expanded to more than 450 stores in Australia, New Zealand, Singapore and Hong Kong and there are plans for further expansion for future growth. The store is well known for providing fast-paced, cutting edge street wear for both genders at affordable rates. After the success and establishment of Cotton On brand, two more concept stores, namely, ‘Cotton On Kids’ & ‘Cotton On Body’ have been introduced in the market recently (CO, 1, 2008).
The company currently has more than 3,000 employees working for it and they have helped in developing a niche in the market by supplying the customers with such looks which mirror both the local and international designer market and styles (CO, 1, 2008).
The owners of the company oversee the production themselves to provide support and approve the designs; every product is a result of thorough thoughts where consistency, responding to the customers needs and innovativeness are the emphasized factors. Cotton On is one of the major players in the modern market of casual fashion (ACF, 1, n.d.).
Customers
The most important consideration to keep a business running is its customers. The customers of Cotton On are divided in three different segments of surfwear, streetwear and more fashion conscious lifestyle consumers. The products are carefully adapted to enable the use of clothing as a mode of expression and image enhancement through fashion. The brand is meant primarily for youth; the target customers lie between 18 — 30 yrs of age.
The consumers have fashion awareness but ingenious look to attain the in look without having to pay for designer price tags. This is the reason that the brand offers the latest trend at affordable prices at its stores. For men, there is directional yet masculine touch of modern urban wear whereas for ladies, there are fashion basics and daily use high trend garments. The customers value the original designs, graphics, fabric selection, colors and at the same time enjoy a value for their money in terms of prices (ACF, 1, n.d.).
SWOT analysis
A SWOT analysis is used for inspecting an organization and its environment. It is the initial phase of planning and assists the management in focusing on vital issues. SWOT is the acronym for strengths, weaknesses, opportunities, and threats, where the internal factors are analyzed by Strengths and weaknesses while the external factors are provided by analyzing Opportunities and threats (MT, 1, 2009).
A SWOT analysis results in identifying core competencies, as well as opportunities that a company is not able to benefit from at the moment as a result of lack of required resources (Olsen,1, 2005).
Internal Analysis
Internal Analysis concentrates on internal factors which provide an organization advantages and disadvantages while trying to meet the needs of its customers. Strengths are the core competencies which gives advantage and analysis of the strengths of a company should be market oriented/customer focused as they are of value as long as they help in meeting customer requirements. Weaknesses are the restrictions in developing or executing a strategy (Olsen,1, 2005).
Strengths
The company is complying with all the local laws and enjoying a good reputation legally. The labor market conditions did soften a little at the end of 2008, but it has held up better than expected despite the low domestic activities (RBA, 1, 2009). The labor force of Cotton On makes them able to manage and give desired business results. The culture of the company supplemented by quality training provides its employees a challenging career (SEEK, 1, 2008). Thus, it is commitment of the people that maintains and improves the standard of products and the services to customers (ACF, 1, n.d.).
Formerly, there was a tailored approach in fashion but now it reflects the latest and unique social trends and the Australian brands have a chance to earn a name in the global market more than ever (Gill, 1, 2009). This is strength for Cotton On, which has a mission “To be the dominant value fashion brand globally”. Focusing on innovative artwork and styling, a unique yet highly commercial garment is created (ACF, 1, n.d.). The company functions as a ‘design to retail’ business which provides great flexibility over the designs and timings of released product at its outlets. A vital strength is the Store management teams which are very customer focused, possesses a commercial mindset and excellent people management skills (SEEK, 1, 2008).
What differentiates the company against competition is their product team which makes regular visits to various countries like Europe, USA, China and India for continuously sourcing items which reflect the customers. This results in the final product which is unique and thus stands out in the retail sector. The organizational environment at Cotton On is such that the corporate image is communicated through a high criterion of visual merchandising under central control, ensuring that all stores are conveying a coherent outlook to consumers. The presentation of the Store is continuously monitored and a continuous strategy of store refurbishment makes sure that high standards are maintained (ACF, 1, n.d.).
Weakness
Though the store management teams are good, they still need to strengthen on their skills of leadership, communication, planning and organization. This is important for working in a demanding retail atmosphere (SEEK, 1, 2008). Most of the employees at the company are young and diligent with a prime focus to ensure that customers enjoy an affirmative and delighted experience but since the operations are being done in a volume market, it is important that the products are able to speak for themselves as the pace pf shopping is faster than before and impulsive decisions are made. There is a need for the products to focus more on elements like touch and color.
A major weakness for the company lies in its marketing strategy where there is very little commercial marketing and most of the marketing is left on the product and presentation of the stores to do for itself (ACF, 1, n.d.).
External Analysis/ Environmental analysis
This scrutinizes existing opportunities and threats in the environment; these are independent of the firm. Opportunities are the favorable circumstances in the environment which have the ability for producing rewards for the company upon action whereas threats are those obstructions which averts an organization from accomplishing its goals (Olsen,1, 2005).
Opportunities
It has been announced by the Australian Government recently that various planned stimulus will be provided to the investors, these include ‘direct transfers to households, support for businesses and increased public investment’ (RBA, 1, 2009).
Threats
The company faces a threat from the economy as the conditions have kept on weakening significantly with the recession in the global economy. GDP data for the last quarter of 2008 showed the growth in economy by merely 0.1 per cent. There has been deterioration in the business sector in recent months due to the on going global financial market crisis and this may hit the company sometime (RBA, 1, 2009).
Strategic implications
The mission for Cotton On is to be ‘the most innovative and responsive’ brand in the target market without having to compromise on those values which have turned the company into what it stands for today. The strategic plans include enormous growth so as to carry the name of the brand in all the corners of the world
Besides, the owners make investments with a strategic long term view to ensure that future success is intact. The basic objective of the strategies behind real estate is that the location and development of the stores offer a comfy shopping atmosphere to the customers and an environment which is positive, allowing them to enjoy the satisfaction of buying fashion.
The design team focuses greatly on graphics and styles and takes advantage of their devoted fashion sense and highly respected aptitude for styling and placing garments together, rather than merely making designs that are present in the market already. The company’s distinct style in designing successfully discovered a large gap, catering to which made enough difference to attract attention. The logic behind the wide but unique range is creating a niche market for the brand which will reflect modern and stylish garments at reasonable prices.
The store also has a strategic ‘design, graphic and merchandising team’ which travels to overseas for monitoring the market trends and tracing the fashion direction and performance of products. This helps in creating a stimulation which creates a unique look and feel for merchandise of every season resulting in products which makes the brand unique and trendy.
The company considers marketing a vital part as a plan of its future growth, for this reason; there has been an implementation of a program of public relations, website update and promotions, among others. Though the company was previously lagging behind in marketing, this domain is now being developed on every day basis in form of a vigorous campaign for advertising, which is still in the initial stages. This is essential for ensuring that the genuineness of the brand is developed in the best possible way and at a constant pace.
Recommendations
Cotton On has made great strides over the years and continues to make improvements in its stores, products and processes in order to further strengthen the brand. However, it is recommended that the company strengthens its marketing strategy. Marketing is about getting a product or service into the market, endorsing it, manipulating customer behavior, and promoting sales (Geld, 1, 2006). Though, some initiatives have been taken in the recent past but there is still a need to promote the brand both locally and in the overseas market in order to stand in line with the competitors or even better, move ahead of them in terms of brand awareness with consumers.
The company is suggested to develop a strong marketing theme and produce advertisements around the theme; this will help in establishing a stand for the brand name. The advertisements should be done a large scale both through print media and through visual media. A tag line or punch line should also be developed as it is an essential element of branding. It may be the best tool for brand communication, but only on the condition that it is done in the right way (Ehret, 1, 2009).
It is also recommended that extensive training be given to all the employees of the company to orient them with the business and bring them to work along the same wavelength. Different training programs should be designed for the production team, the designing team, the in-store employees and others according to the nature of their jobs. Besides, the most should be made from the opportunities offered by the external environment.
Conclusion
Cotton On is one of the best retail outlets of garments and a well known brand of Australia. The company has achieved great milestones in the last couple of years and continues to expand and make even more profits. The business has its various strengths coupled by some weaknesses, and faced opportunities and threats from the internal environment, as analyzed in this report. By making the most out of the analysis and the recommendation based on the analysis, the company can further improve its performance.
References
ACF “Cotton On company Profile”, p. 1. Web.
AG 2008, “Modern Australian fashion”, p. 1. Web
CO 2008, “About us”, p. 1. Web.
Ehret, J. 2009, “Classic Spot: The Importance of Taglines in Branding”, p. 1. Web.
Geld, S. F. 2006, “Importance of marketing”, p. 1. Web.
Gill, P. K. 2009, “Latest Fashion Style & Trends in Australia”, p. 1. Web.
MT 2009, “SWOT Analysis”, p. 1. Web.
Olsen, E. 2005, “internal and external analysis”, p. 1. Web.
OSAC 2009, “Australia 2009 Crime and Safety Report”, p. 1. Web.
RBA 2009, “Domestic Economic Conditions’, p. 1. Web.
SEEK 2008, “Jobs by Cotton On”, p. 1. Web.
UCS 2009, “Australian market overview”, p.1. Web.