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TRANSCRIPT
HSY Studio
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Letter of Acknowledgement
Mr. Muzaffar Azad
Course – SME
Section – D
Faculty of Commerce
University of Central Punjab.
Subject – Conducting an interview of a SME business
Sir,
We are glad to submit our report on the specific topic as you have assigned us to prepare a
term Project as a partial requirement of the course. Now we are looking forward for your kind
appraisal regarding this report.
The report reviews on the Success of HSY studio.
We were pleased to prepare this report and we expect that it provides you an overall concept
on the management HSY Studio.
It would be appreciated, if you please evaluate our report. We would like to thank you for
your support and feedback.
Sincerely yours,
Name ID Signature
Ilyas Ahmad Farooqi L1F10MCOM0155
Muhammad Ahmad L1F10BCOM0053
Adnan Afzal L1F10BCOM0034
Umar Akram L1F10MCOM0142
Javaria Naveed L1F10MCOM0154
Sammra Liaqat L1F10MCOM0110
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Table of Contents
Introduction 5
Historical Perspective 6
Start-up 6
Vision Statement 7
Mission Statement 7
Changes in Mission and Vision of the Organization 7
Financing 7
Web Site Analyses 8
Capital Structure 9
Hierarchy 9
Branches 9
Marketing Tools 10
Marketing Issue Related to Stiff Competition 10
HRM Policies 11
HR Issues and How the Company Resolved Those Issues 11
SWOT Analysis 12
PEST Analysis 13
Porters’ Five Forces 18
Product Lines 21
Cultural Issues if ever faced 21
Brand Recognition 21
Diversification 22
Restructuring of the business 22
Forecasting 23
Distribution Channels 23
Advertisement 23
Quality Control System 23
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Growth Trends 24
Corporate Social Responsibility if fulfilled 25
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Introduction.
Hassan Sheheryar Yasin is one of Pakistan's leading fashion designers, if not the top
designer, in bridal and formal wear. Hassan's HSY
Studio has been a rage with young brides, and
everyone attending a wedding for the last several
years, but it has truly reached the frenzied "I am
not getting married without a dress from HSY"
heights in the last 2-3 years. These days, Hassan (known as Sheru to his friends) is
in the US, where he has choreographed a series of fantastic fashion shows for a
nonprofit, charity organization called Developments in Literacy (DIL).
"I am here for DIL. When we make sales or take orders, a large percentage
goes towards the charity we are supporting. DIL is a good organization! They
are doing great work and have made huge changes in the educational field,
especially for girls in the rural areas. I'm just glad I can help them."
Hassan brought his Virasat collection and has bowled over the US audience with
class, quality, and sheer creativity that would make you want to get married all over
again if only to wear one of Hassan's creations. We met with Hassan in Virginia, a
couple of days before he swept over the DC residents with his fashion show for DIL
at the Sheraton in Tysons Corner. This young man, barely out of his 20s, is not only
a fantastic designer, but a very inspirational person, with deep thoughts and high
ambitions. We are truly impressed with his creative genius and business acumen,
and hope that you will enjoy reading our conversation with him.
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Historical Perspective
A salutatorian graduate of the Pakistan School of Fashion Design (class of 2000),
Yasin is affiliated with the La Chambre Syndicale De La Couture Parisienne in
France. He holds an honours degree in couture and currently serves as a member of
the board of directors and the executive committee of the fashion institution he
graduated from.
Starting as a fashion choreographer in 1994, Yasin worked both as a choreographer
and designer in various shows within Pakistan and international shows including
Dubai, London, New York City, and Toronto.
The year 2000 marked the introduction of Yasin's own fashion label, HSY. Starting
as a bridal and formal wear couture house, it has since become one of the most
recognized South Asian fashion labels in the world and currently employs over 350
people and six stores internationally, with the flagship studio housed in Lahore.
In 2003, Karachi-based Diva Magazine placed Yasin on the cover of their "Most
Powerful People" issue and also as one of their 10 Faces of the Year.
In 2007, Yasin introduced a jewellery line under the HSY brand.
Start-up of HSY
About HSY start in the world of fashion design.
I started in 1994 as a fashion choreographer and I have been directing
fashion shows since then. Then I joined the Pakistan School of Fashion Design,
which is a government sponsored school, and graduated in 2000 after completing a
four year degree program. The school is affiliated with Les Ecole de la Chambre
Syndicale de la Couture Parisienne, France, which is a leading chamber of couture
in Europe. I launched my label in 2000, after I graduated. So, in total, I have been
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working in fashion for eleven years now. I just had a show in London last week
where we opened the Fashion Week; this was my 206th show! I have just been
appointed by the Government of Pakistan to serve on the school's Board of
Directors, which is great!
Vision Statement.
“I am here for DIL (Developments in Literacy). When we make sales or take orders,
a large percentage goes towards the charity we are supporting. DIL is a good
organization! They are doing great work and have made huge changes in the
educational field, especially for girls in the rural areas. I'm just glad I can help them.”
Mission Statement.
“To become a world renowned luxury fashion designer in fashion industry. And a
Fashion Icon.”
Changes in Mission and Vision of the Organization.
There are few changes in HSY Studio like.
1. jewelry and accessories line.
I like to do what I enjoy and I feel that fashion is not just about clothes, it's a
lifestyle. And I want HSY to be a lifestyle product I want people to be able to buy into
the lifestyle that HSY represents, something for everyone.
Financing.
HSY is an emerging South Asian fashion label started by Pakistani designer Hassan
Sheheryar Yasin in 2000. As of winter 2005, HSY employs 350 employees. It is
based out of Lahore, Pakistan.
Traditionally a bridal and formal wear couture house, HSY has begun to shift towards
other genres of design. Currently the collection includes the traditional formal line, a
'made-to-order' line, a studio line, and a ready-to-wear (R2W) line. A men's line is
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planned for spring 2006. The launch of HSY Living in late 2005 introduced a
collection of home furniture, interior accessories, and soft furnishings.
As of winter 2005, HSY garments typically start from approximately Rs. 4000 ($70
US) for the R2W line, and Rs. 20,000 ($330 US) for the formal line.
Website Analysis.
Title : Hsy Studio
Min. Site Value : $1,800
Max. Site Value : $3,365
Domain Value : $10
Daily Unique Visitors : 227
Daily Ad Revenue : $5
Capital Structure.
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HSY garments typically start from approximately Rs. 4000 ($70 US) for the R2W
line, and Rs. 20,000 ($330 US) for the formal line.
Hierarchy.
HSY is an emerging South Asian fashion label started by Pakistani designer Hassan
Sheheryar Yasin in 2000. As of winter 2005, HSY employs 350 employees. It is
based out of Lahore, Pakistan.
Branches
Hassan Sheheryar Yasin has approximately 14 clothing display centers worldwide
one in United Kingdom, one in Saudi Arabia, two in USA, four in UAE.
There are total 6 branches working in Pakistan.
Karachi (2 branches)
Islamabad (2 branches)
Lahore (2 branches)
In Karachi.
1. The Designers.
F35/2 Block 4 califfton Karachi.
T +92 21 58 33 446 – 58 61 915
F +92 21 58 37 304
2. The Designers.
Shop # 4 Skye garden Apartment
Muhammad ali housing society Karachi.
T +92 42 45 23 833
In Islamabad.
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1. The Designers
Shop # 51, ground floor bevirly center
56 G, blue area Islamabad
T: +92 51 25 17 793
2. Melange
Outlet # 6, Street # 41, F-6/1, Islamabad
T: +92 51 282 3819
In Lahore
1. HSY Studio
23/block G Gulberg ||| Lahore
Pakistan
T: +92 42 111 279 479
2. PFDC boulevard
10 Q Gulberg ||, Lahore
T: +92 42 57 51 637 – 57 51 737
Marketing Tools.
Preferred to arrange fashion shows Nationally or Internationally as a Marketing tool.
“Eleven Years and 206 Fashion Shows”.
Marketing Issue Related to Stiff Competition.
No. Where there is a lot of mixed talent available especially due to the
internet, there is also a benefit to the consumer. The consumer becomes intelligent.
The consumer starts to realize the different options available under various roofs.
The consumer no longer wants to look like a million bucks she wants to feel like a
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million bucks. What's happening is that there are a lot of designers right now and I
think the consumer will do the shifting and the good ones will survive and the bad
ones will get down. In the process the good ones will become better for they will
realize that there is competition in the market and competition will motivate them to
become more creative.
HRM Policies.
The design philosophy at HSY is to combine contemporary silhouettes with
traditional techniques of old, making it appealing to an international clientele who
have an appreciation for the grandeur and extravagance of a regal past but expect
further innovation and creativity.
I believe every single designer has a different role when viewing fashion. At HSY we
always feel that if fashion portrays a slot of crazy hurricane competed with the
sensationalism of fashion trends then we want HSY to be the eye of the storm,
where we are, it's the center of timeless classic couture you can wear now and
maybe you can take out 20 years later and it will still be relevant. We don't believe in
trends-of-fashion; we want it to be something timeless, classic and elegant.
HR Issues and How the Company Resolved Those Issues.
Constantly faced with hurdles in this field, but I don't really see them as hurdles.
Challenges just motivate me to do more! I am a very competitive person, I always
have been. But I have been very lucky and we have had very rapid growth. We
started in 2000 with one employee and now we have over 300 people working for us
and we have stores in Lahore, Karachi, studios in Dubai and London. Basically, a
retail business will run anywhere in the world but just now it is difficult, economically,
because the whole world is going through so many changes. Personally I try not to
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ponder on the negative. Also, I don't just believe in doing everything without proper
management. All of our businesses and lines are set up as proper organizations,
with their own management. I do what I'm best at, which is the designing and
marketing, because I have a natural flair for both.
SWOT Analysis.
Strengths.
Ability of fulfilling customized order of customers.
Wide product line.
Availability of workforce.
Low labor cost.
Easy availability of raw materials.
High demand and supply Gap as buyers are much more.
Weaknesses.
Lack of brand awareness.
Fashion industry has not yet matured in Pakistan.
Highly Volatile i.e. rapidly changing the fashion and tastes of people
Opportunities.
Increasing trend of people to wards designer clothing.
Prospect sales through e-commerce channel.
Enter new product markets.
Expanding the number of retail outlets.
Export Opportunities
Threats.
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The market of the boutiques is highly competitive; therefore if the
entrepreneur is not
Well responsive to the tastes and response of the clientele as well as the
fashions in
Vogue he/she may not be able to capitalize the opportunity properly.
Selection of the wrong venue can be a major hurdle in achieving the desired
business Objectives.
Economic recession and political situation in the country
Established strong competitors
PEST Analysis.
In this industry evaluation,
P stands for Political,
E – Economic,
S – Socio-cultural,
T – Technological that impact the activities and opportunities and threats affecting an
industry.
Political forces
These include any change in government laws – tax laws, labor laws, patent
laws, government regulation and deregulation etc, political stability, safety and
environmental protection regulations, international trade regulations etc. (David,
2005)
Changes in tax and labor laws, can directly affect an industry’s revenue and growth
structures. A rise in the rates of these laws can increase business expenditures and
may decrease revenues. Sometimes, with industries with low profit margins, such
change can become a barrier to profitability.
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Political instability in the country in terms of political parties or weakness in
governmental policy can prove chaotic for the industry. Under such condition, this
business, like any other business can be severely affected and eventually shut
down. For e.g., national political parties like MQM and MMA reserve a very
unfavorable attitude towards the fashion industry. In case of power, any of these
parties can adversely affect or even lead to a ban on this industry which could prove
distressful.
Similarly strict trade regulations and excise policies can affect international exports
and hence, increase the overall trade deficit. Environmental degradation posses a
great threat to survival of any industry. Hence, being a socially and environmentally
responsible corporation is an essential for projecting a positive public image.
Economic Forces
Economic forces that impact an industry’s activities include interest rates,
income levels and earning patterns, price wars, oil, currency and labor markets,
inflation, unemployment, availability of credit, fiscal policies, consumption and
spending propensity – living standards, international trade and cooperation policies
etc. (David, 2005)
Nowadays, there is a growing trend toward two-income households. Individuals
place an increased premium on time; immediate availability and improved customer
service (David, 2005).Customers are willing to pay more if they can obtain it with
ease. There is an increase in the average standard of living in the country with a
decrease in poverty level of 10.6% during the past four years (Economic Survey of
Pakistan 2007-2008). This can serve as an opportunity for the fashion industry to
enhance profit margins through ‘add-ons’ provided that the income levels remain
stable.
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Changes in interest rates often occur due to changes in the exchange and trade
market. A deficit in trade can account for rise in interest rates. Similarly and rise in
the international price of oil (as witnessed in recent years) can drastically impact the
value of currency. This leads to changes in fiscal policy like an increase in the
interest rate translated by inflation. High inflation can slow down business activities
and at time generate no profit at all. The inflation rate the year 2007-08 was
calculated to be 10.3% as compared to the 7.9% last year which shows an increased
inflation that disadvantaged business performance country-wide (Economic Survey
of Pakistan 2007-2008).
However, in an economically active country with lower trade barriers, resultant price
wars can increase competition and even and industry’s profit margins provided the
industry is dominant as well as has international presence.
Similarly, increased unemployment can provide an industry opportunity to project a
positive image and provide training and employment to the depressed, hence
positively contributing to the economy.
Socio-Cultural Forces
Factors in the socio-cultural front that can influence an industry’s operations
include demographic trends, cultural changes, environmental patterns, population
growth, business attitude, change in tastes and lifestyles, education, ethical
concerns, buying habits, religion, family, values and attitudes etc.
Pakistan, with a population growth rate of 1.8% is the world’s 6th most populous
country with an estimated total population of 160.9 million. (Economic Survey of
Pakistan 2007-2008) Out of this 74% of the total population of Pakistan lies in age
group 15 – 34. However, 70% of the population resides in urban areas. (Federal
Bureau of Statitics, 2005). With this came in increase in the literacy rate of the
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country which increased to 55% in the last four years (Economic Survey of Pakistan
2007-2008). Business activities have also flourished quite in the recent years, partly
owing to foreign competitors entering the market. This has led to an increased
change in the lifestyles and mindsets of people. There is an increased trend towards
nuclear and dual-career families which serves as great opportunity for the industry
as the buying power of the consumer is enhanced. Moreover, with change in
lifestyles comes change in tastes. Nowadays people prefer using customized
products and this is an opportunity for the fashion industry to pursue its target
marketing strategy.
Fashion industry is an industry for the youngsters. With such a large and lucrative
target market, this industry can earn huge profits, provided it sufficiently focuses of
their needs and interests. In view of this, fashion industry collaborated with the PBA
(Pakistan Broadcasters Association) to launch a fashion channel worldwide last year
by the name of ETNL (Style Dunia & Youth) which is being launched soon in the
country (Pakistan Broadcasters Association (PBA), 2007).
Religion and ethical preferences too, play a major role in shaping strategies and
marketing products, especially if one moves from culture to culture. Fashion industry
in Pakistan, therefore has to take into consideration the limitations that ethics, culture
and religions imply on clothing nationally as well as internationally.
Technological Forces
Though fashion industry is not technologically driven, but is has now become
a necessity; especially if an industry or company wants to maintain competitive edge
or tap into international arena. The focus of today’s industries is on mass
customization as well as mass production which are not possible to achieve if it is
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inept in technology. Several factors impact an industry’s technological consideration.
These are, Government spending in research, changes in Information Technology,
Internet and Mobile Technology, energy use and costs, and international transaction
costs etc.
Technology is one of the powerful sources of marketing in today’s era. The
world is now a global village. Increase in technology, especially the internet helps
cover a large number of consumers thus, helping a business reach a large target
market in a short time span. According to estimates of 2006, the global internet
usage accounts for 21.9% of the total world population with Pakistan alone, having a
total usage of 7.2%. (UNDESA, 2006) This is a very attractive opportunity for the
fashion industry in case fashion designers start e-selling.
International marketing (e-commerce) is one of the major contributors to world
economy. It not only helps in the development of the business but also helps in the
development of the country’s economy. However, any business before tapping into
international arena has to go through various study and research to adopt proper
marketing mix, physical evidence and performance before launching itself worldwide.
It also needs to be aware of all the rules and regulations (cyber) of its host country.
Once capitalized upon, e-commerce can produce great profits.
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Porters’ Five Forces.
Below a diagrammatic summary of the five important competitive forces is given:
Rivalry among competing firms
Fashion industry in Pakistan is yet in its progressing stages. It has moved
ahead from being embryonic but hasn’t spurted. However, threat of competitors is
still an important factor that govern the operations of this industry; particularly the
rivalry between fashion designers of Karachi and Lahore in terms of ideals have
prompted every company in the industry to strive to develop a competitive edge and
nationally expand as large as possible. This is mainly because the few designers
that exist at present are equal in size and capability.
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The internet is still not used as a primary source of doing business but there is
a growing tendency among designers, particularly the established ones to use
internet for trade purposes nationally and internationally.
Inflation and changes in customers’ perceptions and attitudes is also a driving
force toward increased competitive rivalry. In the beginning, fashion designers
pursued all their efforts towards bridal dresses. But as customers are becoming
more and more aware and demand of branded apparel is increasing, these
designers are finding new areas of development by focusing more on casual outfits.
However, this industry is still not mature enough in its life cycle that price
cutting could be a common phenomenon. There is not much time before these few
designers are faced with increased competition particularly as standards of living
become high and international designers set up their business in the country.
Competitive rivalry in this case is comparatively high.
Threat of new entrants
Threat of new entrants in Pakistani fashion industry is high. This is because
the barrier to enter this market is quite low because no previous experience is
required to start doing business in apparel, customers have low brand preference
and loyalty, too is low. If a customer gets a better option else where and that too, for
a lower price, s/he can switch to that option.
Regulatory policies in the country are not very strong and hence achieving
patents for a product or service is relatively easy. Moreover, the government itself
promotes the setting up of new businesses.
In regards to technological requirement, fashion industry does not require any
cutting-edge technology to keep at pace. Therefore, if one needs to get into fashion
designing, it is quite easy.
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Potential development of substitute products
In an apparel industry, there is no substitute for clothes, but there may be a
substitute on the procedure of processing them. Fashion industry, too faces threat of
substitute methods of processing. People, especially in a growing economy can
easily get ideas from designer outfits and get them stitched through a neighborhood
tailor instead of buying it from that very designer due to its high price. On the other
hand, local tailors can give you the same design, though maybe not the same quality
at a comparatively low price.
Hence, the threat of substitute is high.
Bargaining power of suppliers
Bargaining power of suppliers is quite low in Pakistani fashion industry. The
major raw materials required in this case are textiles and embroidery materials.
These two industries – textiles and embroidery are one of the richest and profit
producing industries of the country. Therefore a designer has the power and the
choice to switch among suppliers and even negotiate prices as there are a large
number of suppliers available to provide the same or even better raw materials at
negotiable prices.
Bargaining power of customers
Bargaining power of customers is low in this industry. This is because there few
choices to select from. Designers have there set prices that are quite high and fixed
– they cannot be negotiated upon. If talked about competing brands, a buyer cannot
easily switch to other options. Products are homogenous and the prices may either
be uniform or else a buyer has to trade-off with quality of the product.
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Product line.
1. HSY Wedding
2. HSY Couture
3. HSY R2W (ready to wear)
4. HSY Homme
5. HSY Private collection
6. HSY Noir
7. HSY Active
Cultural Issues if ever faced.
There was a huge brain drain and now the people are coming back and giving back
to the country. The new generation wants to stay; they are not interested in going
anywhere outside the country. There are huge possibilities for making money and
doing something for their country and I think people are interested in that. This kind
of patriotic feeling has never been around since 1947. I think this change has a lot
to do with president Musharaf being in power. I think he has changed the way we
think about ourselves. There are more opportunities now, we have a far larger
middle class economy, consumer awareness is increasing, and I think people are
beginning to feel proud of the fact that they are Pakistanis. People are forgetting the
Nawaz Sharifs and Benazir Bhuttos of our history and they are beginning to realize
it's not just about politics; it's about our own lives, our neighborhoods, our society,
and giving back to our country.
Brand Recognition.
HSY label speaks about the modern day woman who understands the rich legacy of
the past. The lines are fluid and silhouette is full and luxurious. Using only the
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purest of fabrics and richness of embroideries, the emphasis is on unconditional
glamour.
Diversification.
I always wanted to do menswear but wanted to progress slowly and gradually with
complete concentration and produce something exciting and fabulous. Now that we
have the time and we feel that we have established HSY women's wear so now we
can start off the HSY men's wear. Can't start off anything I can't concentrate on,
seriously, it's about trying your hand in everything and that's what we are doing right
now.
Do you have jewelry and accessories line?
Yes. I like to do what I enjoy and I feel that fashion is not just about clothes, it's a
lifestyle. And I want HSY to be a lifestyle product I want people to be able to buy
into the lifestyle that HSY represents, something for everyone.
Restructuring of the business.
Starting as a fashion choreographer in 1994, Yasin worked both as a choreographer
and designer in various shows within Pakistan and international shows including
Dubai, London, New York City, and Toronto.
The year 2000 marked the introduction of Yasin's own fashion label, HSY. Starting
as a bridal and formal wear couture house, it has since become one of the most
recognized South Asian fashion labels in the world and currently employs over 350
people and six stores internationally, with the flagship studio housed in Lahore.
In 2003, Karachi-based Diva Magazine placed Yasin on the cover of their
"Most Powerful People" issue and also as one of their 10 Faces of the Year. In
2007, Yasin introduced a jewellery line under the HSY brand.
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Forecasting.
My main aim besides fashion, which I obviously love, is to promote a positive image
of Pakistan. I am in many ways a very patriotic person. I think this Fashion Week
will really help us out. The world will not see Pakistan as fundamentalist and
extremist nation, but a more progressive and talented nation with so much potential.
Unfortunately the media over here only portrays the wrong side of Pakistan. We are
open hearted and fun people. I think it's really sad that people "fix" the same kind of
picture onto Pakistan and then they think that's what it really is. What they show on
CNN and Fox news is a complete misrepresentation of Pakistan. With the right kind
of media coverage, we can portray the softer image of Pakistan, because that is
who we really are! There is a new Pakistan and it's good for people to see that.
Distribution Channels & Advertisement.
Through Yasir Saeed.
Black Box Concepts
Own and Manage a successful a full service creative and communications
agency that handles the image-building of multi-national and local clients which
include Tag Heuer, Levi’s®, Patchi Pakistan, LVMH, Royal Palm Golf & Country
Club, Sui Northern Gas Pipelines Limited, Leisure Club, Maria B., HSY Studio,
Men’s Store, Stoneage Jeans Co. and Murree Brewery.
Quality Control System.
HSY Studio specializes in bridal wear. We started out with evening wear, but for the
last three years we have become known for our bridal collections. We also have a
line called R2W, which is a ready to wear line. Then we have a Studio line, with
Western clothes. We do a couture line, a men's line, and we are also launching a
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furniture line in January. My label, HSY, is about a lifestyle and not just about
clothes, and that's what we want to sell - a timeless, classic lifestyle that will fit well
with today's fast paced modern life. We can easily claim to be high end because we
are not off the rack designers.
Growth Trends.
We have a lot of varied clients; we sell a lot to the Middle East market, and we sell a
lot in Pakistan. We have a lot of clientele in India and I've have had many shows in
India and actually a lot of shows in Dubai, Muscat, Prague, Greece, Poland,
London, Germany, New York, LA, Atlanta, Toronto, and Ottawa. The show in
Prague was for the President and the First Lady, which was a great honor and lots
of fun. Max Mara (a leading Italian designer) was also in this show. We both
showed our collections together on the same ramp, which was a first for a Pakistani
designer. This was a big show because we were doing it for the President and it
was also a charity event. The proceeds went to UNICEF. It was a lot of fun
especially since we were doing it for a good cause.
Corporate Social Responsibility.
These days, Hassan (known as Sheru to his friends) is in the US, where he has
choreographed a series of fantastic fashion shows for a nonprofit, charity
organization called Developments in Literacy (DIL). "I am here for DIL. When we
make sales or take orders, a large percentage goes towards the charity we are
supporting. DIL is a good organization! They are doing great work and have
made huge changes in the educational field, especially for girls in the rural
areas. I'm just glad I can help them."
Hassan brought his Virasat collection and has bowled over the US audience with
class, quality, and sheer creativity that would make you want to get married all over
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again if only to wear one of Hassan's creations. We met with Hassan in Virginia, a
couple of days before he swept over the DC residents with his fashion show for DIL
at the Sheraton in Tysons Corner. This young man, barely out of his 20s, is not only
a fantastic designer, but a very inspirational person, with deep thoughts and high
ambitions.
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