Apparel Industry on the First Term Paper

Excerpt from Term Paper :

"Social messages sent by clothing, accessories and decorations can invoke social status, occupation, ethnic and religious affiliation, marital status and sexual availability etc."

4.2 Product innovation and technological changes

The rapid rate of technological development set the course of development in numerous other domains, including apparel. In this order of ides, the technology adherent to the apparel production process is on its path from computer made designs to technologically improved materials' quality. For example, future directions in the apparel industry involve "more types of fiber developed using nanotechnology or smart clothes that incorporate electronics."

4.3 Marketing innovation

The main characteristic of current trade and production is that the items tend to focus more and more on the customers' needs and desires. Apparel producers are today faced with the difficult task of combining the publics' needs with a high quality of work and material as well as with the latest fashion trends. Aside from these, apparel manufacturers are constant contributors to the art of marketing in order to promote their items. Apparel producers have been able to take the advertising campaigns one step further and organize glamorous fashion shows. These fashion presentations are in fact the core of apparel marketing and still represent its main source of prestige and customers.

4.4 Extent of globalization

The effects of globalization upon the apparel industry need to be analyzed from two points-of-view. First, from the production point-of-view, globalization brings about outsourcing of workforce and raw materials from abroad as they imply lower costs that the national resources. On October the 5th, the Sri Lanka Ministry of Finance publicized a press release stating that "According to the Chairman of Sri Lanka Exporters Association, A Sukumaran, exports of Sri Lanka apparel to U.S. registered a growth by 9.5% to U.S. $1,217.5 million from January to September this year"

The other point-of-view is referred to as fashion globalization. The United States have been able to impose their clothing culture upon numerous countries. "At the start of the twenty first century, the preferred garments of young people of both sexes from around the world tend to be jeans, sweatshirts, T-shirts and sneakers. These clothes are also international icons of American culture. The global young wear the same clothing, a phenomenon made possible by new technologies, global commodity advertising of branded leisure clothing, and the cultural and political domination of the United States. The reasons for wearing such clothing vary, but these clothes signify youth, modernity and an eagerness to belong to the newly globalized capitalist world."

5. Companies in the StrongestWeakest Positions

The leading positions in the apparel industry assure the occupants privileges such as international recognition and power as well as immense revenues. Fashionable clothing and accessories belonging to apparel houses of Gucci, Ralph Loren, Chanel, American Apparel, Dolce&Gabbana or Vera Wang have become part of the American culture and nowadays struggle to compete for the title of world's leader on the apparel industry.

5.1 Gucci

Gucci fashion house is "one of the world's most influential fashion houses and a highly profitable business operation." Their position in the apparel industry is given by their great number of customers, turnovers and international recognition. They have opened stores in most parts of the worlds, having headquarters in The United Stares, United Kingdom, Germany, France and Japan.

Gucci Strategies

Prior to the year 2000, Gucci was faced with an economic crisis. In order to overcome it, they were willing to sell the majority of option stocks. The stock options were sold to Prada and to LVMH which aided to the revival of the company. In September 2001, the Gucci Group signed a partnership agreement with the French company PPR and purchased shares from Di Modolo, Balenciaga and Bottega Venetta. In addition, they focused towards collaborations with new and young talented designers, such as Stella McCartney or Alexander McQueen.

Regarding their human resource strategies, it is known that along the years Gucci has not hesitated in letting their employees go and replacing them with better qualified personnel. Aside from the high quality of their products, Gucci also attracted customers through numerous promotional strategies such as price reduction or purchase gifts in the form of accessories (belts and watches.)

5.2 Vera Wang Strategies

Vera Wang, named after its top designer, is an apparel business located in New York, mostly focused on wedding gowns, but also producing clothing for other numerous occasions. The latest strategies adopted by this fashion house involve launching on the market several new products and expanding the product line. The designer intends to launch "an exclusive line of clothing and handbags [...] and also manufacture and market the Vera Wang mattress set."

Nonetheless heroic, launching into a new market is a rather risky action. Given the international reputation of Vera Wang wedding gowns, the outcome of the new product line would also affect the entire Vera Wang image and collections. In this order of ideas, a failure to successfully launch the new items on the market could result in reputation denigration for the fashion house as a whole. Annual sales would decrease drastically, placing Vera Wang in a near bankruptcy situation.

To ensure the success for the company and increase its market segment, in August 2006, Vera Wang signed a business partnership with "mid-tier retailer Kohl's. The duo announced that they are partnering in a premium fashion and lifestyle brand to be called Very Vera by Vera Wang. The line, available in fall 2007, will be sold at 749 Kohl's stores and online at"

Vera Wang's leading position is assured by its 300 million dollars annual sales and it's a perfect depiction of the American dream. The means of attracting customers number the impeccable taste and fashion of the gowns and materials used as well as an international guarantee of the best quality.

5.3 Dolce&Gabbana Stategies

Dolce&Gabbana is a "high-end fashion house started by the Italian designers Domenico Dolce and Stefano Gabbana. The company became very popular for their designs in the Hollywood industry" and nowadays possesses stores all over the world.

The latest business strategy adopted by the company was made public in the summer of 2005, when the two founders decided to separate their paths. However, the Board of Directors believed that such separation could be fatal for the company as a whole. Therefore, even if the Dolce and Gabbana chose different paths, "the company will still stay the same, and they will continue to design together."

The position occupied by Dolce&Gabbana in the apparel industry is stated by the large number of customers, the high quality of their products and the impressive annual turnovers. Aside from these, Dolce&Gabbana has been able to become integrant part of the worldwide culture, being referred to in several pop songs by bands such as Black Eyed Peas, LL Cool J, 50 Cent, Kelis or Notorious B.I.G. Aside from pop songs, the Dolce&Gabbana immense success was also acknowledged by numerous specialized magazines, television talk shows documentaries and musicals.

In conclusion, all three companies are leaders in the apparel industry. Their positions on the market are given by the characteristics of their customers (number, preferences, and income) and their target market, the attributes that define the apparel items and the company's overall annual turnovers.

6. Key Success Factors for Competitive Success (1, 2 pages)

In order to become a strong competitor on the apparel market, companies need to prove international acknowledgment, high quality of their products and numerous resources. Possessing all the above key factors ensures producers with success and profits.

The apparel industry is a branch of the clothing and manufacturing industry, which divides itself onto six sub-categories: apparel for men, boys, women, girls, infants and accessories. This classification of the apparel industry does not imply a difference in the KSFs, as these are all similar on every segment.

The reputation a company has with their current customers and potential consumers is vital for success. In order to improve their public images, apparel manufacturers launch into humanitarian and charity actions. Whenever a scandal arises, companies rapidly organize press conferences to clear their names and explain the situation to the public.

The quality of the products is yet another significant KSF as it aids to increase customers' interest and continuous satisfaction with the manufacturers' products. The third highly important KSF is represented by resource availability. The resources required for a successful outcome are numerous, among which are financial resources, material resources and human resources.

A yet unexploited success factor is technology. The role of hi-tech devices and procedures is expected to increase in the course of the following years. Using high technology, apparel manufactures will come to change the internal structure of materials and make them more comfortable and more environment-friendly. The latest trend in using hi-tech in the apparel industry is developing free-sweat clothing. For instance, using nanotechnology, the apparel manufacturer No Sweat Australia has already launched their products on the market.

7. Industry's Attractiveness and Prospects for Long-Term Profitability


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