Harrington Collection Strategic Management

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Executive summary

Harrington collection is a manufacturer and marketer of designed women’s clothing. Known for its top in-house design staff, extensive advertising campaign, exceptional and stylish products, its brand equity label fuelled the premium prices that it captures. In the fiscal financial year 2007 and some past three years the company had posted lackluster sale, with the margins being at all time low.

This called for laying down strategies, reviewing the disappointing 2007 results as well as brainstorming to reverse the negative trend once and for all.

The strategic planning team gathered vital information on the market trend upon which decisions of whether to venture into a new line of product with more casual, low-priced fashions, though seen as a departure from Harrington collection’s sophisticated, high class roots yet had a big turnout was to be elucidated. The need for a fresh idea was crucial if it were to maintain its dominance in the industry.

Decision Analysis

Harrington needs to be sensitive on the consumer’s need, their price demand as well as putting more attention on the economic downturn, since this has an effect on product choice; most consumers have now diverted their trends towards less expensive, casual clothing due to the rising cost of living as well as diverting their discretionary dollars once earmarked for fashion into leisure activities, home design and technology products.

The company is therefore, missing out on its product for its continual production of highly priced quality products.

The manufacturing group should consider manufacturing private label brands; it can do this by directly liaising with the retailers. These products have since doubled their turnout for the past one decade. They could also directly sell products to retailers.

Position Statement

The company needs to invest in active wear-clothing with superior fabric, stylish and fit. A shift from professional looks by her loyal consumers, into something fresh and comfortable, fittings their active lifestyles has pressurized the market.

Harrington collection needs to consider outsourcing labor to low cost areas, this would eliminate the need for overhead and capital spending associated with manufacturing plants, there are also low barriers to enter into such business. It will also ensure improvement on its competitiveness and financial turnout.

Being sensitive to consumer demands as well as their preference and changing taste is paramount to hold onto your loyal clients. The company should ensure their products are vibrant and easily acquired across all the targeted groups, being mind full of their pocket and their preferences.

The company’s departmental stores should consider pursuing consolidated strategies to boost its financial performance. This is because the merger of large department stores chain provides a more significant power of bargaining in the value chain.

The company needs to integrate forward into retailing as well as involve the retail outlets in integrating backwards in the value chain. In contracting retailers directly, they could produce private label brands, these have been growing twice the rate of regular brands for a decade now. With company owned stores it would benefit from controlling their customers in terms of service, their product display, as well as the sales staff.

Decision options

The company needs to venture into a new line of products that are low priced stylish to maintain its financial performance and appeal to more consumers as well as reclaiming its market share in the business.

Selling products to mass merchandisers and discount retail outlets would cut costs incurred along the value chain. Outsourcing for cheap labor cost production within proximal places where it can control both the quality and reliable delivery would give more return.

The company needs to be vertically integrated across the entire value chain as done by its competitors thereby boosting financial scales.

Its departmental stores also needs to consider pursuing consolidation stores, the merger would not only give it high bargaining power but also make profitable returns.

Definition of Decision Criteria

Market share- the product preference and its overall turnout would reflect its market share, Competitiveness- the acceptability of a new product by consumers would be reflected by how well it would be perceived and appreciated in preference to other similar products. Therefore consumer’s reaction towards is key in measuring its market share.

Profitability- this would depend on how much sales is needed to break even, and whether it would be attainable to capture an attractable profit margin.

Proof of Recommendation

Consumer’s fashion preferences- Survey revealed that the target customers showed considerable interest in a more active-wear clothing with superior fabric and fit.

Stylish active were sold extremely quickly, the inventory had an inventory turnout rate twice the rate of current Harrington collection apparel, again the markdowns for the stylish active wear were not as extreme as for other product lines. This calls for the company to consider the demand, preferences and cost friendly apparels for their consumers.

Outsourcing- the Company needs to consider this while making the decision to venture in this line of fresh new products. A proximal place where it can monitor product standards and delivery would suffice.

The key issue is financial growth and holding onto the traditional norms of producing sophisticated elegance attire is long overdue; the management board needs to instill a new blood by embracing the unfolding of events in the market trends.

Critique of Options

Harrington collection should not consider venturing into a diverse range of brand portfolio that are of new designs. This is because such products would be easy to simulate, their consumer demands are usually short lived and therefore requires a constant stimulation by introduction of new products. Instead investing in a product that is of style and superior fabric would be a novel idea.

They should not reduce their product design, production nor retail placement cycle time. Instead they should ensure their consumer taste is catered for by shifting into a category and classification of most sought after.

Major Disadvantage of Recommendation

Venturing into less expensive attire would tarnish the status quo of the company well know for its sophisticated elegance women apparels for the past years.

Outsourcing for third parties, being the only company that is known for in-house production of women apparels, going into this would most likely derail its image, if by chance a low quality product with Harrington label makes it to the public domain.

Action Plan

A needs to embrace change and adopt new products that are appealing to their consumers in terms of cost and style bearing in mind of their economic trends. In doing so their financial turnout would scale up and expand their market share.

Goals

The company needs to be market sensitive, since even some of its loyal consumer is diverting from a more sophisticated lifestyle to a less costly but stylish. Therefore, changing into a new brand that is affordable to their clients but still makes the name brand shine is long overdue. This would make it retain its market share, retain its brand and consumers as well as realize the major goal in financial turnout.

Action Steps

Short terms

Market conscious- the company needs to know what their consumers want to buy and how much are they willing to spend. In so doing they would be able to plan and adapt to their needs by producing a product that would ‘fly off the shelves’. Their financial status would peak and still retain their market control.

Merger of departmental stores-The departmental stores should pursue consolidated strategies; this would boost financial performance and provide them with significant bargaining power.

They should integrate forward into retailing to expand their market portfolio as well as involving the retail outlets to integrate backwards in the value chain, in a bid to produce private label brands whose turnout is high.

The manufacturing group should consider selling products to mass merchandisers and discount retail outlets. They could also manufacturer private label brands by liaising with these retail outlets.

Long-term

Outsourcing in areas where there is cheap labor with controllable quality needs consideration.

Diversifying the brand portfolio, Scaling up specialty stores and investing in an array of products should be an important aspect as well.

Retaining the brand quality, as much as adapting to market flexibility and making profit is important, retaining the label of the company becomes a long term priority.

Major Risks and Responses

Outsourcing- Harrington divisions avoided this idea because of lack of adequate control of quality and turnaround time. If a shoddy product enters the market with Harrington label then definitely it would irreparably harm all the other divisions. Choosing a more proximal location to the retail outlets like Mexico would suffice, this would make it easy to monitor the required standards of the product.

Branding to Vigor division- Ostensibly, incorporating the less expensive active wear into the vigor division could cheapen the brand and eventually have an overall effect on all the Harrington apparels. Initiating a new independent brand of the intended project would be a novel idea, as this would ensure quality is maintained across all the facets.

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