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1、精品文檔，值得擁有1 / 15INDUSTRY ANALYSIS FRAMEWORK - A Global PerspectiveApparel Production Industry - March 1995(Source: Joseph E. Decilveo, Jr., Apparel Producti on In dustry Segme nt Director)PURPOSEThe purpose of the In dustry An alysis Framework is to describe the fun dame ntal forces driv ing an in du

2、stry. It presents our auditors witha good framework with which to evaluate global industry risks and issues and, in turn, determine the applicability of these risks to specificclients. The Industry Analysis Framework accomplishes these objectives by: Prese nting a brief descripti on of the in dustry

3、 from a global perspectiveDiscuss ing the critical eleme nts of the Busin ess An alysis Framework affect ing the in dustryPrese nti ng available global resourcesDESCRIPTION OF THE INDUSTRYThe apparel producti on in dustry con sists of firms that produce weari ng apparel, both cut and sew n and knit

4、to shape for all populati ongroups. The most com mon in dustry segme nts are :Women s and MissesApparel*Blouses*Dresses*Suits and CoatsMensand Boys Apparel*Suits and Coats*Shirts*Separate trousers*Work Clothi ngIn general, the apparel production industry consists of brand-name marketers who are tryi

5、ng to maintainconsumersattention, and private labels who are trying to attract consumersattention. Both sides of thin dustry face their own uni que challe nges and risks. The dyn amics of the in dustry can cha nge almost in sta ntan eously as con sumerprefere nces cha nge. Since con sumer tastes are

6、 in flue need by econo mic cycles, demographics and social tren ds, apparel producersmust con ti nually mon itor the en vir onment to gain in sight into what con sumers want and whe n they want it.Many apparel companies are targeting international markets as a vehicle for growth. These markets are l

7、argely un tapped and offer tremendous growth pote ntial. Intern ati onal expa nsion can take several forms: in creas ing exports; in creas ing the n umber of overseasdistributors with which the compa ny does bus in ess; acquiring foreign companies; starting up a manufacturing plant overseas; andincr

8、easing the number of stores overseas.INTRODUCTION TO THE FRAMEWORK精品文檔，值得擁有2 / 15The In dustry An alysis Framework for Apparel producti on is inten ded to assist us in thinking more strategically and operati on ally abouta clie nt. It has bee n developed to con tribute to: (1) gaining an indepth un

9、dersta nding of the clie nts bus in ess as a whole and (2)ide ntify ing and evaluat ing critical bus in essissues and cha nges affect ing the compa ny and in dustry. The framework is inten ded to focus on the exter nal and internal in flue ncesthat affect a clie nts opportu nity for success, and thu

10、s, to deal with the matters ofconcern to the Chief Executive Officer, the own ers, the commu nity and the employees.The In dustry An alysis Framework for Apparel producti on is illustrated below:MACRO ENVIRONMENT? Economic Trends? Eco冒切Co豐rns? Demographics?Technological Advances? Social/Cultural?Reg

11、ulationThe eleme nts of the framework are inten ded to be applicable to any apparel producer, any where in the world, as they deal with the fundame ntals of the in dustry. While these bus in ess eleme nts are com mon, the specific en viro nment for each of these eleme nts willobviously vary sig nifi

12、ca ntly from cou ntry to cou ntry.Depending on the manufacturers product line, its geographic location and other factors, the specificenvironment will vary due to differences in factors such as the regulatory environment, the status of the overall economy, the power ofsuppliers and customers, and th

13、e availability of qualified personnel.精品文檔，值得擁有3 / 15OVERVIEW OF BUSINESS ELEMENTSThe purpose of this secti on is to ide ntify and describe the basic bus in ess eleme nts that are fun dame ntal to the in dustry, using thegraphic in troduced on the previous page.A. Environment1. Economic trends - Whi

14、le fashion trends may periodically drive the apparel growth in certain areas, overall dema nd for apparelis largely drive n by econo mic growth. For example, duri ng periods of slow econo mic growth, con sumers become more value-con scious and begi n to buy less expe nsive clothes. Basic apparel (T-

15、shirts, deni ms, and fleece) and moderately priced brand-name apparel usually in crease in popularity. Alter natively, duri ng periods of str ong econo mic growth, con sumers tend to takegreat in terest in their appeara nee and become slightly extravaga nt at the sales cou nter.2. Demographics - In

16、additi on to cha nging econo mic cycles, con sumer dema nd is also sig nifica ntly affected by demographictren ds. For example, the tre nd toward basic and moderately-priced apparel is rein forced by the aging populati on in mostdeveloped cou ntries. Aspeople grow older, they tend to spend less on c

17、loth ing as mortgages and children s educationdema nd more of their disposable in come.Demographic trends have also impacted on the children s wear segment. In some developedcountries, more children have been born in recent years to older, better educated, and more affluent parents who tend to spend

18、more money on their children s clothing. This has resulted inpopular adult brand names creating and designing more children s clothes. This is a highlyprofitable segme nt that tries to create bra nd loyalty early on in life.3. Social/Cultural - The industry is affected by fashion and style changes f

19、rom year to year and from seas on to seas on. Ficklecon sumers can ren der inven tory obsolete in mon ths rather tha n years.4. Tech no logical Adva nces - The n umber of retailer- man ufacturer“quick resp onse” relati on shipshas grow n sharply in the past few years. The goal of quick resp onse is

20、to maintain lea ninventories and avoid overstocking, while ensuring that retailers have on hand the merchandise customers want to buy, whe nthey want to buy it. Un der this program, retailers and man ufacturers are linked together through electronic data interchange(EDI). In the EDI system, interlin

21、ked computer term in als are placed at every point of the man ufacturi ng and sales process.Through use of an electro nic sca nner and a bar code that has bee n tagged to the mercha ndise, retailers record at the point ofsale which mercha ndise has bee n sold. All sales data on in dividual products

22、- dow n to the details of color and size - aretransmitted instantaneously to the manufacturer. In this way, the man ufacturer keeps track of every stores retail sales tre nds bystock keep ing un it (SKU). This first-ha nd look at con sumer purchas ing tre nds allows the man ufacturer to produce appa

23、relbased directly on con sumer dema nd. The in formatio n contained in the bar code sets in moti on automatic reorder ing and enables the man ufacturer to quickly restock a retailers shelves.Quick resp onse now has evolved at the most adva need compa nies into resp on sive man ufacturi ng, whereby c

24、on sumerdema nd at retail is quickly tran slated into producti on at the man ufacturi ng facility. With resp on sive man ufacturi ng, companies are able to offer a wider choice of styles, reple nish retail stocks freque ntly at moderate cost, pare inven tory levels, andforecast dema nd more accurate

25、ly. These part nerships call for a high degree of cooperati on. In formati on is shared on production schedules and forecast ing. One study shows that, among large compa ni es, order cycle time-the time to process anorder-was cut from 17.6 days in 1985 to 12.5 days in 1990; this is expected to be re

26、duced to 9 days by the end of 1995. To do:update dataComputer aided desig n (CAD) applicati ons have greatly streamli ne fron t-e nd product developme nt by allow ing quickexcha nges of ideas and desig n specificati ons with retailers. Using CAD systems for patter n desig n, marking, grad ing,and cu

27、tti ng reduces waste and speeds up the producti on process.5. Ecological Concerns - The primary concern in this industry is the disposal of fabric scrap which is usually discarded inlandfills. The volume, however , is very large, and many landfills are reach ing capacity. As a result, many cities ar

28、e beg精品文檔，值得擁有4 / 15inning to use in ci nerators rather tha n lan dfills.6. Regulation - Tariffs and quotas on apparel will be phased out as a result of the recent round of Gen eral Agreeme nt onTariffs and Trade (GATT) talks. This will result in in creased competiti on for domestic producers and in

29、 creased opportunities for compa nies compet ing abroad.B. OwnersCon solidati on with in the apparel in dustry has in creased the market share of the largest apparel makers while the smaller companies have bee n squeezed out. Smaller man ufacturers are not capable of provid ing the volume and profit

30、 margi ns that the largeretailers now require. Typically, there are two differe nt types of own ership structures in apparel producti on:Large publicly traded compa nies - The large apparel producers supply primarily large departme nt stores. This adva ntageis expected to continue as only the larger

31、 compa nies can afford the in vestme nts n eeded in tech no logy. Some of themajor public firms are:*Pacific Dun lop Limited (Australia)*V.F. Corporati on (Un ited States)*Arn ault et Associes sa (Fran ce)Small privately held companies - A significant number of smaller companies have established nic

32、hes in specific lines andhave become leading suppliers of these items. These smaller firms vary in size from the smaller fashion houses designingtheir own lines to larger companies who desig n, man ufacture and distribute their product lin es.C. CustomersIn the apparel production industry, quality,

33、timeliness and flexibility are probably the most important qualities that customers expectfrom a supplier. As fashi ons and tastes cha nge more quickly, customer expectati ons and market dema nds will become in creas ingly volatile. The ultimate customer for most apparel is the gen eral public, howe

34、ver, the method of distributi on varies dramatically.The most com mon methods of distribution are:Retailers and mass mercha ndisers - Departme nt stores still rema in the primary distributi on channel for many apparelcompanies and have come to dominate the retail industry. In fact, apparel accou nts

35、 for over 60 perce nt of departme ntstore mercha ndise, and mass mercha ndisers are con ti nuing to in crease their emphasis on apparel.Specialty Stores - These stores usually carry a complete line of star performi ng bran ds. They gen erally specialize incustom styles rather tha n mass produced sty

36、les and therefore charge a premium for their merchandise. The customerbase for these stores is relatively small but extremely loyal.Discount Stores - Another method of distribution available to apparel manufacturers is the discount store. These stores sellapparel and accessories for as little as hal

37、f the price charged by departme nt and specialty stores. These stores are used todispose of extra or sec on d-quality精品文檔，值得擁有5 / 15mercha ndise, in clud ing the irregulars, overru ns, and odd lots. Man ufacturers prefer outlets stores to off-price retailers inorder to avoid tarnishing their brand n

38、ames, a risk that occurs when too much mercha ndise is sold at off-price.D. CompetitionThe apparel industry is a highly competitive global industry. As the protective barriers and tariffs are eliminated over the next tenyears by GATT, there should be an increasing amount of global consolidation as c

39、ompa nies strive to improve profitability. With littleopportu nity to in crease prices, efforts must emphasize cost man ageme nt.Typically, competiti on is fought on three fron ts:1. PriceBecause labor is such a significant cost component in apparel manufacturing, producers in low- wage develop ing

40、countries enjoy a sig nifica nt cost adva ntage over producers which are burde ned by higher union wages. In developedcountries (i.e. Western Europe, United States, etc.) the labor costs are sig nifica ntly higher and compa nies based in themcannot compete on a price basis with these low-wage cou nt

41、ries. Apparel producers in these cou ntries ofte n seek tosource their production in lower wage countries (eg, some U.S. producers source production in Caribbean cou ntries).2. Brand n ame vs. Private labelFor many of the compa nies who produce bra nd goods, advertis ing directly to the con sumer is very important. Maintaininga distinet image is paramount if they expect to charge a higher price for their clothi ng. These bran ded-lab