style and trends amna

8/12/2019 Style and Trends Amna

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Style and Trends: Strategic Choices

WAC

Submitted to Sir Fareedy

By Amna Kaleem Baig

MBA 2

SEC B/ Marketing 2


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Problems

The success of any garment firm was highly dependent on the quality of the garments, asthe garment had to match the exact specifications of the customers; weight, shrinkage,

color, fastness and measurement and a minor difference in anything just deteriorated the

credibility of the firm. So precision at every level of manufacturing was required to

ensure high quality and on time delivery.

Since Pakistani cotton is considered to be poor by international standard a labor intensiveprocess is required to eliminate the impurities that mean value addition was required.

Bargaining power of suppliers was high due to the changes of prices of cotton yarn,cotton crop, fluctuations in the prices of fertilizers and other raw materials etc. The

upstream sectors like spinning mills acted as suppliers to the downstream sectors exertingmore power on the knitwear firms.

The quality of the yarn was difficult to detect until it was turned into the final product.Then expensive machinery was required for quality checks.

The rising growth in the knit wear industry was not complemented by growth in theancillary industry like buttons, zips, labels etc creating a shortage of those items. Tags

and labels were imported as the printing in Pakistan was not good that increased the lead

time to about 4 weeks.

Bargaining power of the buyers was very high as the buyers consumed goods in a largequantity the markets especially in the US had big buyers that did not compromise even a

bit on the quality creating very rigid design specifications for the Pakistani knitwear

companies.

The competition between competitors was very high including big firms like AmmarTextiles, Angora Textiles, Leisure Garments and Omega Knitwear etc.

The profit margin, return of assets and equity increased but quick ratio declined but thecurrent ratio increased by about 40 times that indicates towards the piling up of inventory

in the firm leading to inventory costs and risk of inventory becoming obsolete.

The deteriorating financial position of the firm could make the sanctioning of the loan animpossible thing.


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Core Problem

The supply chain of the company was not eff icient

As we know in order for a firm to be responsive or cost saving the supply chain needs to beproperly aligned, agile and adaptive but in case it was impossible as the bargaining power of the

suppliers and the buyers was pretty high. On one hand the prices kept on fluctuating and on the

other hand the buyers had very stringent requirements making the supply chain less efficient.

Recommendations

The company is right now faced with major challenge of meeting specifications of thecustomers and getting an uninterrupted supply of raw material. For that the company

should consider backward integration it can have more control over producing its own

cotton yarn that can be sent for stitching, it can produce things like zippers, labels,

buttons etc so that the interruption of the raw material is not experienced and quality can

also be taken care of. And the inventory can be reduced or the firm can implement the

lean production etc.

As quality is major issue and the greatest concern in the textile industry especially if thegarments are being exported so different quality checks can be implemented such as the 6

sigma, certifications, TQM that would make sure that the whole firm instead of one

department is taking care of the quality like it is done in Japan.

The company should try to expand its horizons by exporting into countries other than theUS as well. US is undoubtedly a gigantic market but other markets like Europe, Middle

East etc are also expanding day by day. So garments can be exported over there as well.

Certain things can be outsourced or agreements can be done with the suppliers that wouldensure the building up of a long term relationship.

style and trends amna

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