CeeCee Business Challenges and Strategic Solutions 15 May 2010
TABLE OF CONTENTS INTRODUCTION DISTRIBUTION STRIKE CHALLENGE RECOMMENDATIONS IT FAILURE CHALLENGE RECOMMENDATIONS CELEBRITY MARKETING EXPANSION INTO JEWELLERY RANGE CHILD LABOUR ACCUSATION CHALLENGE RECOMMENDATIONS CONCLUSION APPENDICES APPENDIX A-1: DISTRIBUTOR STRIKE APPENDIX A-2: DISTRIBUTOR STRIKE APPENDIX A-3: DISTRIBUTOR STRIKE APPENDIX A-4: DISTRIBUTOR STRIKE APPENDIX B: IT SYSTEM FAILURE APPENDIX C: CELEBRITY MARKETING 3 5 5 6 7 7 8 9 9 10 10 11 11 Error! Bookmark not defined. Error! Bookmark not defined. Error! Bookmark not defined. Error! Bookmark not defined. Error! Bookmark not defined. Error! Bookmark not defined. Error! Bookmark not defined. Error! Bookmark not Error! Bookmark not
APPENDIX D: JEWELLERY RANGE EXPANSION defined. APPENDIX E: COMPETITIVE ENVIRONMENT defined.
INTRODUCTION CeeCee is a retail fashion company that was established in 1989, operating 630 shops across 18 European countries. The success of the company is grounded upon employing the ‘fast fashion’ business model that utilizes the manufacturing ‘Just In Time (JIT)’ principle combined with efficient design and delivery systems. This business model relies on sophisticated IT systems, close contact with manufacturers, fast creation and supply to shops, and the swift sale of new inventory items. CeeCee has employed this business model to great effect, capturing significant market share in their target market of young professional women looking for fashionable but affordable clothing. It has since expanded into menswear, children’s wear and home furnishings. The following SWOT analysis highlights key attributes and opportunities CeeCee should leverage, threats to be mitigated and weaknesses to overcome. Despite intense rivalry between numerous competitors such as Zara and H&M, CeeCee offers a unique value proposition that differentiates it and positions it competitively in the market (see Appendix E). SWOT Analysis Leverage Internal Strengths • Fast creation and supply to shops • Integrated inventory and logistics system • Competitive prices • Excellent customer care • Global manufacturing sources Opportunities • Expansion of jewellery range • Celebrity endorsement • Trend towards ethical products Mitigate Weaknesses • Very reliant on one distributor (EIT) • IT system failure
Threats • Distribution strike • Child labor accusations • Seasonal nature of clothing industry • Economic recession • Intense competition
However, CeeCee has recently encountered significant business challenges. Distribution strikes, IT failure, child labor accusation threaten to disrupt the
successful functioning of the business. They pose significant long term ramifications to CeeCee’s image and in the short term affect financials. In addition, there are opportunities to select payment methods for a new celebrity marketing campaign and expand by offering a jewellery range. In this report, EVA Consulting will analyze the challenges and opportunities faced by CeeCee, and provide strategic recommendations to ensure sustainable and profitable growth as a leader in the fashion industry. EVA Consulting has prioritized the above challenges based on a criterion that includes: − Direct effect on immediate business operations − Indirect effect on the long-term growth of the company and brand image − Impact on long-term customer relationships, particularly repeat customers The most critical challenge is the distribution strike which strikes at the heart of the company as it disrupts the delivery of the product sold and damages relationships with repeat customers expecting on-trend items. It has more severe financial consequences than the IT failure, which is the second most critical challenge as managing receivables is crucial for cash flow. Celebrity marketing payment options should be decided to ensure the most efficient methods are agreed...