Rommel O. Best
Bus 101 Pro. Murfree
The three challenges Urban Outfitters had are getting their product/idea to “mass produce”, controlling debt, and handle situations where things in the market began to age out. A “niche” product is a product that is manufactured and marketed for specialized uses and different from other products. Three examples of “niche” products are used cloths, bohemian knickknack, and found objects. The advantages of a niche company are you have the opportunity to make your work more enjoyable and price. By targeting a specific group you don’t have to have a big generalized ad that can cost a fortune. Three reasons customers may pay more for exclusivity are quality, comfort, reputation. Niche players “chip away” at larger competitors’ base by creating a product that becomes successful in the market causing larger competitors to have to buy and sell their product through retail. Examples of niche players that have done this are Urban Outfitters, Apple, and Martha Stuart.
Urban Outfitters started out as a small shop with unique products and escalated to a very successful company. The original name was The Free People’s Store and was owned by Richard Haynes, his wife (whom he later divorced), and Scott Belair (whom later ventured off to Wall Street).
Urban Outfitters faced some unique challenges that Richard Hayes had overcomed. One of the challenges Richard Hayes faced with the idea of Urban Outfitters is getting it to “mass produce”. He wanted to create a series of unique stores that sold products for a particular crowd of people, different; a niche product. The niche products he sold were used cloths, bohemian knickknacks, found objects, imported incense burners, and Madras bedspreads. Some people may find these products exclusive and would purchase them because of the quality, comfort, and reputation. Controlling debt was another challenge. Urban
References: http://www.fundinguniverse.com/company-histories/Urban-Outfitters-Inc-Company-History.html Q2 FY 2009 Urban Outfitters Earnings Conference Call, Thursday, August 14, 2008 11:00 a.m. ET, http://phx.corporate-ir.net/phoenix.zhtml?c=115825&p=irol-EventDetails&EventId=1908465 http://media.corporate-ir.net/media_files/irol/11/115825/Q2%20 '09%20Conference%20Call%20Prepared%20Comments.pdf Urban Cowboy by Heidi Brown, 2004, Forbes 174, no. 9: 154-162, Academic Search Premier, EBSCOhost, accessed October 31, 2008.