Wk 1 Case Study
Intro to Business
1. When considering the retail apparel industry, what barriers might a new entry have to overcome?
If you’re planning a clothing shop, it will have to compete with chain and online stores that enjoy the competitive advantage of a built-in economy of scale. Simply put, large retailers can buy inventory at a lower cost because they buy so much of it at a time.
2. Does Urban Outfitters provide exclusivity or merely the perception of exclusivity? Why is this important to the retailer?
Some of their merchandise is private label, produced by them for sale in their stores only, and the company would not allow that stuff to be sold in other stores. Also, Urban Outfitters sells labels that are edgy and they are selective about where they sell their stuff. Exclusivity is valuable because it puts your business at a competitive advantage; if you have the exclusive product, which means it is well known and well trusted, no one can attempt to sell that product unless there is an agreement to do so.
3. When entering the retail apparel market, what would you have to know about your customer?
You would want to find out the ages in which you will be advertising to. The style that all the people are wearing in that demographic. You would also want to take a few risks when letting out new designs, in which case, you could start a new trend.
4. Give examples of popular retailers who have understood their market and been successful.
A few retailers I would mention that fall under this category are Ecko Unlimited, Guess Jeans, Calvin Klein, I understand that Wal-Mart likes to cooperate with a few different clothing lines, as well. Sean John is another big one. Versace has always been regarded as the best of the best.
5. What are some retailers that misjudged their market and failed?
I used to work for Linens-N-Things, and they went out of business. I remember the, “All About Sport's”