Blue Turtle Clothing Company case study and analysis

Blue Turtle Clothing Company (BTC) is a newly established business in London, Ontario. The company showed poor financial performance in the previous season. Therefore, the owner has decided to redesign the marketing strategies of the company to boost up its sales performance in the next season. This paper presents analysis of the case using different tools and techniques; including situational analysis, market analysis, segmentation analysis, competition analysis, and financial analysis; case keys (key success factors, key contingencies, and analysis of alternative solutions); recommendations, and action plan for the short run.

The paper starts with the problem statement and discusses the situational analysis for the company in detail. The analysis includes individual goals and objectives of the owners and the company, background and forecast for the company, SWOT analysis (internal and external environment), market analysis (including business environment, current and past strategies, marketing mix, segmentation analysis, competitive environment, and financial analysis. The 'Case Keys' section explains the key success factors that are essential for the company to succeed in a challenging business environment as well as the key contingencies which can impact its business operations and performance in a negative way. The paper also presents analysis of alternatives, set of recommendations, and action plan which the company should follow in the short run.

1. Problem Statement

Carlie Melcher is worried about the poor financial performance of her seasonal clothing store, 'Blue Turtle Clothing Company'. In order to improve its performance and beat the competition in an effective and competitive way, she has to redesign her marketing strategies for the next season.

2. Situational Analysis

a. Objectives and Goals

Carlie Melcher is a women entrepreneur from London, Ontario who wished to establish a successful business in the seasonal clothing line. She founded Blue Turtle Clothing Company with the support of her mother and started selling and promoting women's casual and athletic wear along with a number of complimentary products. Blue Turtle Clothing Company is a purely business-motive entity situated at the Main Street, but off the main strip (Richard Ivey School of Business, 2009). Therefore, the individual goals of the owner (Carlie Melcher) and her business entity (Blue Turtle Clothing Company) are as follows:

i. Objectives and Goals of Carlie Melcher:

Having felt entrepreneurship skills in her, Carlie Melcher has decided to establish her career as a business woman in the clothing business. Therefore, with the help of Blue Turtle Clothing Company, she wants to reach at the top and become the owner of the most profitable and the largest clothing company.

ii. Objectives and Goals of Blue Turtle Clothing Company:

Blue Turtle Clothing Company is a newly established business that wants to grow in the clothing industry and become the most profitable and competitive company in the country. It aims to build the largest customer base, strengthen the market share, and develop its brand image in the industry through modern, affordable, comfortable, and unique casual and athletic wear for women (Richard Ivey School of Business, 2009).

b. Background and Forecast

Currently, Blue Turtle Clothing Company operates as a small scale clothing business that mainly targets women aging between 14 to 40 years. The potential customers of the company include all those women who want trendy, comfortable, and unique athlete and casual wears at the most affordable prices. Therefore, the target market consists of women from all social and income classes of the society. The current positioning strategy of the company is focused on attracting more and more customers by taking into account both parameters of customer behavior, i.e. The brand consciousness of younger women as well as the price consciousness of older women (Richard Ivey School of Business, 2009).

In the near future, the company will expand its product lines by adding more variety of casual and athlete wear; expand its geographical reach by opening new outlets; and take the services of greater number of distributors and private outlets in the country. In this way, it will target larger number of customers from adjacent areas. In the long run, the company's strategic moves may include international expansion and direct competition with the world's strongest clothing brands.

c. SWOT Analysis

i. Internal Environment

(a) Strengths

(b) Weaknesses

One of the major strengths of Blue Turtle Clothing Company is its trendy, unique, and affordable clothing lines that can target all kinds of customers -- from younger to the older customers as well as high income groups to the middle to low income groups.

The owner of the company, Carlie Melcher is a business management graduate that understands the complexities of the business world and knows how to proceed in a challenging situation. Her skills, competencies, and public relations are largely helpful for the company in achieving its strategic objectives.

One major weakness lies in the product line of the Blue Turtle Clothing Company. Carlie Melcher has currently limited the company's product line to seasonal clothing (for summer season only). Therefore, the company observes a significant decline in its sales in off-season periods.

The company expends a very limited budget on its marketing and promotional activities. Carlie Melcher has only put a sign board on the main strip, rarely offers discounted coupons, and operates a marketing website. Therefore, the exposure of her business to its potential target customers is quite low.

ii. External Environment

(a) Opportunities

(b) Threats

First of all, Blue Turtle Clothing Company can expand its product lines by adding more variety of branded and non-branded casual, athlete, and formal wear. In addition, the complementary product lines can also be expanded by adding jewelry, hand bags, shoes, hair accessories, and other products appealing to women and teenager girls.

The company can promote its business using modern and interactive mediums like local print media, bill boards, banners, in-store displays in private outlets, and promotion through marketing and business development firms.

The company can also add winter variety in its product lines so that it can see a steady sales performance throughout the year.

The biggest threat for Blue Turtle Clothing Company is its competitors that already have a strong presence in the market. These competitors include Sauble Beach Stores that offers similar products, Winners, Fitness Club, and departmental stores. These competitors have some kind of competitive advantages over Blue Turtle Clothing Company which further strengthened them against this newly established business. These advantages include location on the main strip, one-stop shopping, larger product lines and variety, stronger brand image and customer base, etc.

Another threat for the company is the increasing costs of business promotion on modern marketing channels as well as the supply chain and distribution members' demand for higher commission.

Implications:

Blue Turtle Clothing Company is currently operating at its growing stage. It essentially needs to overcome the weaknesses which are present in its internal operations as well as encounter the environmental threats which can impact its operations in a negative way. For this purpose, it must capitalize on its core strengths and competencies and avail the attractive opportunities available in the market (Saxena, 2009).

d. Market Analysis

The clothing industry represents 4.4% of the total Canadian retail industry. Ontario clothing stores have taken 38% share from this clothing industry. Women spend more than half of the total spending customers make on clothing and accessories. Normally, clothing stores enjoy 44% gross margins which make this industry quite attractive for the new businesses. Clothing stores observe almost 7% annual growth in their sales volume which is also a positive sign for the new investors (Richard Ivey School of Business, 2009).

i. Business Environment:

Like other industries, the Canadian clothing industry is also exposed to severe environmental factors; like economic forces, social, cultural, and demographic forces, political and legal forces, technological forces, and competitive forces. The companies have to carefully understand the consumer behavior which is purely based on their income level, brand preferences, cultural and demographic factors, and seasonal conditions of the locality. Moreover, they have to keep in view the legal infrastructure and technological environment in order to operate in the industry in a legal way and use the most advanced interactive mediums for the promotion of their business respectively (Gilbert, 2003).

ii. The Marketing Mix:

a. Product Strategies:

The clothing industry in London, Ontario offers a wide range of products; that include formal, casual, and athletic wear for all age groups and income classes of the society. The clothes consist of both branded and non-branded ranges and cater the preferences of women customers very effectively. The clothing outlets also offer a large variety of accessories and complimentary products; that include shoes, hair accessories, beauty and skin care products, etc.

b. Pricing Strategies:

Keeping in view the brand and price consciousness factors, clothing stores offer products with varying price ranges. Therefore, they are able to target all income groups and social classes of the community. Blue Turtle Clothing Company also offers its casual and athlete wear that are trendy, but still affordable for all income groups.

c. Promotional Strategies:

Large and successful clothing companies expend a huge amount on the marketing and promotional campaigns for their products.On the other hand, small and newly established businesses use limited marketing channels in order to put low financial burden on their performance (Gilbert, 2003). Blue Turtle Clothing Company only uses discounted coupons, a sign board, and promotion through home parties and private outlets to promote its business in London.

d. Place Strategies:

Large scale clothing brands have opened numerous outlets in Ontario, whereas small companies like BTC are operating with fewer outlets only. Most of the top outlets are situated at the main strip whereas BTC is located off the main strip. In order to attract the potential customers, all the competitors are promoting their products through discounts, in-store displays, and through business promotion firms.

iii. Segmentation Analysis:

The customers in clothing business are segmented on the basis of their brand and price consciousness. Generally, the teenagers and young girls prefer brand products due to their quality and trendy style. On the other hand, older women prefer non-branded products that are low in price. Customer segmentation is also done on the basis of clothing choices. The clothing stores in Ontario offer all types of casual, formal, and sports wear and accessories. Therefore, they can target all types of customers, i.e. students, sportsperson, professionals, and housewives.

iv. Competition Analysis:

The major competitors of Blue Turtle Clothing Company include Sauble Beach Stores that offers similar products, Winners, Fitness Club, and departmental stores. These competitors are comparatively stronger than BTC and offer a larger variety of clothes, accessories, and complimentary products. They also offer one-stop shopping as well as expend greater amount on public relations, business promotion, and expansion strategies (Richard Ivey School of Business, 2009).

Sr. No.

Particulars

Estimated Expenditures

1

Addition of Winter Clothing Line

$4,000

2

Addition of New Summer Variety

$2,000

3

Advertisement through Bill Boards and Banners

$500

4

Promotion through sales force

$200

5

Promotion through Business development firms

$300

6

Promotion through In-store displays

$100

7

Miscellaneous

$100

Total

$7,200

v. Financial Analysis:

3. Case Keys

a. Key Success Factors:

The three most important key success factors for Blue Turtle Clothing Company include; quality of the products, customer services, and business promotion. First of all, Carlie Melcher must understand that consumer behavior is the key to succeed in the business. The company can build its brand image in the market if it will focus on the quality of its products as well as the customer services which it will provide them before and after purchase. The promotion of business in the potential markets is also a key success factor for BTC. It must create awareness of its brand among the potential customers so that more and more women and kids visit its stores and make purchases.