Ec And Apparel Industry Essay

2892 words - 12 pages

Summary of Situation Presented in the Case A 1997 Kurt Salmon and Associates (KSA) study showed that 36% of consumers were willing to pay more for custom apparel (Lves and Piccoli, 2003, p. 80). Catering to this, various e-commerce initiates have been launched utilizing information technologies and automation that create the linkage between a customer's preferences and the ability of a manufacturer to produce apparel based on these preferences, or mass customization. It is "a process that uses the same production resources to manufacture a variety of similar, yet individually unique products" (TC, 2002). Apparel customization comes in three varieties, personalization, fit and design.Among various players, Lands' End custom tailored apparel initiative is a hugely successful store of IT-driven strategy. The company sells traditional threads stressing quality and value and the primarily means of marketing is catalog and specialty catalogs. It is one of the first major apparel firms to recognize the desirable Internet economics (Lves and Piccoli, 2003, p. 81). The CEO stated in his 1999 annual report that every sale through Internet potentially could be more profitable than through the catalog due to savings in selling costs that accounted for 40% of Land's End operating costs.In collaboration with its partner, Archetype Solutions Inc., Lands' End launched several Internet-based custom tailored programs with a long global reach of its supply chain and all custom products were made in Mexico. Since then, the company has managed to sustain its competitive advantage derived from IT-driven initiatives and doubled its net income in just four years while total sales only increased a relatively moderate 14% in the same period.2. Success Factors a) Barrier of Entry and the Exclusivity According to Porter's Competitive Forces Model (CFM), additional companies may be reluctant to enter the custom apparel market due to several factors, in particular, i) The confusion of many choices for customers, ii) Fear for "the integrity of the resulting customer-driven designs" (Lves and Piccoli, 2003, p.81), iii) Possible lack of the critical mass (Lves and Piccoli, 2003, p.81), iv) The exclusivity of the merchandise offered by Lands' End that reduces the threats from other players (Lves and Piccoli, 2003, p.83), v) The cost of production that is comparable with mass production while others find it hard to achieve (Business Wire, 2004).b) Sustainable Competitive Advantage To establish a profitable and sustainable position, Lands' End adopted a strategy to derive sustainable competitive advantage from IT-driven initiatives that were usually launched in September or October to prevent others from copying. In October 2001, it introduced custom chinos. In April 2002, it launched custom jeans and in November of the same year, it rolled out custom men's twill trousers and shirts.Its partnership with Archetype...

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