Pumpkin Patch: a Strategic Management Plan

Topics: Retailing, Strategic management, Department store Pages: 10 (2731 words) Published: October 8, 2012
Nowadays, children’s clothing profession’s development is becoming much more powerful than before. In 1990, this kind of profession could not satisfy customers’ demands. Due to the lack of fashionable children’s clothing, Pumpkin Patch was found by Sally Synnott, who was the head children’s wear buyer in New Zealand. Although Pumpkin Patch was handled by other investors after two years, the brand expanded to a broader influence. Today Pumpkin Patch has its own market in several countries, such as New Zealand, Australia, the United Kingdom and United States. It is not easy for Pumpkin Patch to operate well in such areas, but the company still decides to look for new territories. So it should fully understand its position and create fitting strategic plans.

Analysing the external environment

The general environment
Demographic----high Speaking of the clothing products, population immediate influences customers’ real and potential demands to the brand. In fact, demands always far exceed supply and products are sold out very early in such countries, especially in New Zealand. It can be noticed that the population between newborn and 14-year old are the major customers of its market.

Economic----high In terms of each area’s economic, the consumption level should be mentioned. Taking the United States as an example, the whole cloth market earned US$172.8 billion in 2004 which occupied 22 percent of the total sale of global apparel. Because of the growth of each family’s income, the data would also increase year by year which presents a good vista to the cloth profession.

Technology----high In order to adapt the market change, the enterprise should sum up the existing management frequently and seek for the new ways to satisfy customers’ new demands.

Pumpkin Patch was early enough to cater to the world trend. The target market gives a good opportunity for the future development. In addition, if Pumpkin Patch always can bring forth new ideas into the operation and propagate the latest information to attract customers, it will do much better than other firms.

Industry Analysis
By a long time striving and struggling, children’s clothing has already become a mature industry. Countries where Pumpkin Patch chooses to do the business have no problems in supporting the firm. Till now, there must be many business models developed for the firm’s operation. The Porter five forces model can explain the state of this industry.

Threats of new entrants----high Although the new entrant can bring new productivity and new resources to the profession, it may appear the competition of raw material and the market share with the existing enterprises and finally cause the reduction of the existing enterprise profit. What is worse, the new entrants may even endanger the survival of other companies.

Threats of substitute products or services----low Children’s clothing profession does not need to worry about substitutes will replace their products. Clothes are essential in human’s daily life, not only for adults, but also for children need to keep their bodies warm and make themselves look polite.

Rivalry among existing firms----high Among the existing enterprises, companies who use the same resource or face the same market can become the competitors. There are numerous evenly matched competitors in the children's clothing profession, they may hold the bigger market share and obtain a higher profit.

Bargaining power of suppliers----moderate There are no substitutes can replace children’s clothing so suppliers can do not need to worry about buyers will have switching costs to go to substitutes.

Bargaining power of buyers-----high After buyers fully grasp the suppliers’ information, they can have switching costs to go to the cheaper one.

Industry Conclusion
Substitutes are not the primary factors which threaten the industry. Threats comes form rivalry are high because some firms like JK who...
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