Markdown Optimization for an Indian Apparel Retailer

Markdown Optimization for an Indian Apparel Retailer Description

Siddharth Sinha is the CEO of an apparel retailer WE SELL STYLE (WSS). The retail chain was set up in 2008, housing more than 100 brands. In 2015, they operated over 200 stores in all four regions of the country. They primarily focused on providing good quality fashion at a remarkably low price. Markdown planning has been an important aspect of the apparel business. It is important to understand that the demand for fashion apparel is seasonal - affected by current fashion, variations in the seasons, festivals and hence difficult to estimate. An apparel retailer could go off target - either by overestimating or underestimating the demand, with overestimating being prevalent. The ordering-manufacturing-stocking cycle is easily a 6-month cycle before the selling actually starts; with an expectation to improve sales year on year, the procurement team buys more, making an increase in the variety of colors and styles to offer more to the consumer. However, not all styles sell as expected, leaving higher than expected stocked inventory, which requires an impetus to sell. The impetus in the industry comes in the form of ''end of season sale (EOSS)''. Decision on the percentage of markdown for EOSS is one of the most critical tasks for an apparel retailer. This activity starts months ahead of the EOSS. The product team and the planning team sit together and come up with an EOSS plan at the style level. In the decision process, procurement and planning team use their domain expertise and judge the performance of style using metrics such as rate of sales, full price sell-through, inventory left, and more. The key decision is to quantify the degree of non-performance of styles that did not sell as forecasted and by how much to markdown for the EOSS.

Case Description Markdown Optimization for an Indian Apparel Retailer

Strategic Managment Tools Used in Case Study Analysis of Markdown Optimization for an Indian Apparel Retailer

STEP 1. Problem Identification in Markdown Optimization for an Indian Apparel Retailer case study

STEP 2. External Environment Analysis - PESTEL / PEST / STEP Analysis of Markdown Optimization for an Indian Apparel Retailer case study

STEP 3. Industry Specific / Porter Five Forces Analysis of Markdown Optimization for an Indian Apparel Retailer case study

STEP 4. Evaluating Alternatives / SWOT Analysis of Markdown Optimization for an Indian Apparel Retailer case study

STEP 5. Porter Value Chain Analysis / VRIO / VRIN Analysis Markdown Optimization for an Indian Apparel Retailer case study

STEP 6. Recommendations Markdown Optimization for an Indian Apparel Retailer case study

STEP 7. Basis of Recommendations for Markdown Optimization for an Indian Apparel Retailer case study

Case Analysis of Markdown Optimization for an Indian Apparel Retailer

Markdown Optimization for an Indian Apparel Retailer is a Harvard Business (HBR) Case Study on Sales & Marketing , Texas Business School provides HBR case study assignment help for just $9. Texas Business School(TBS) case study solution is based on HBR Case Study Method framework, TBS expertise & global insights. Markdown Optimization for an Indian Apparel Retailer is designed and drafted in a manner to allow the HBR case study reader to analyze a real-world problem by putting reader into the position of the decision maker. Markdown Optimization for an Indian Apparel Retailer case study will help professionals, MBA, EMBA, and leaders to develop a broad and clear understanding of casecategory challenges. Markdown Optimization for an Indian Apparel Retailer will also provide insight into areas such as – wordlist , strategy, leadership, sales and marketing, and negotiations.

Case Study Solutions Background Work

Markdown Optimization for an Indian Apparel Retailer case study solution is focused on solving the strategic and operational challenges the protagonist of the case is facing. The challenges involve – evaluation of strategic options, key role of Sales & Marketing, leadership qualities of the protagonist, and dynamics of the external environment. The challenge in front of the protagonist, of Markdown Optimization for an Indian Apparel Retailer, is to not only build a competitive position of the organization but also to sustain it over a period of time.

Strategic Management Tools Used in Case Study Solution

The Markdown Optimization for an Indian Apparel Retailer case study solution requires the MBA, EMBA, executive, professional to have a deep understanding of various strategic management tools such as SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

Texas Business School Approach to Sales & Marketing Solutions

In the Texas Business School, Markdown Optimization for an Indian Apparel Retailer case study solution – following strategic tools are used - SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

We have additionally used the concept of supply chain management and leadership framework to build a comprehensive case study solution for the case – Markdown Optimization for an Indian Apparel Retailer

Step 1 – Problem Identification of Markdown Optimization for an Indian Apparel Retailer - Harvard Business School Case Study

The first step to solve HBR Markdown Optimization for an Indian Apparel Retailer case study solution is to identify the problem present in the case. The problem statement of the case is provided in the beginning of the case where the protagonist is contemplating various options in the face of numerous challenges that Eoss Markdown is facing right now. Even though the problem statement is essentially – “Sales & Marketing” challenge but it has impacted by others factors such as communication in the organization, uncertainty in the external environment, leadership in Eoss Markdown, style of leadership and organization structure, marketing and sales, organizational behavior, strategy, internal politics, stakeholders priorities and more.

Step 2 – External Environment Analysis

Texas Business School approach of case study analysis – Conclusion, Reasons, Evidences - provides a framework to analyze every HBR case study. It requires conducting robust external environmental analysis to decipher evidences for the reasons presented in the Markdown Optimization for an Indian Apparel Retailer.

The external environment analysis of Markdown Optimization for an Indian Apparel Retailer will ensure that we are keeping a tab on the macro-environment factors that are directly and indirectly impacting the business of the firm.

What is PESTEL Analysis? Briefly Explained

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in Markdown Optimization for an Indian Apparel Retailer case study. PESTEL analysis of " Markdown Optimization for an Indian Apparel Retailer" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

How to do PESTEL / PEST / STEP Analysis? What are the components of PESTEL Analysis?

As mentioned above PESTEL Analysis has six elements – political, economic, social, technological, environmental, and legal. All the six elements are explained in context with Markdown Optimization for an Indian Apparel Retailer macro-environment and how it impacts the businesses of the firm.

How to do PESTEL Analysis for Markdown Optimization for an Indian Apparel Retailer

To do comprehensive PESTEL analysis of case study – Markdown Optimization for an Indian Apparel Retailer , we have researched numerous components under the six factors of PESTEL analysis.

Political Factors that Impact Markdown Optimization for an Indian Apparel Retailer

Political factors impact seven key decision making areas – economic environment, socio-cultural environment, rate of innovation & investment in research & development, environmental laws, legal requirements, and acceptance of new technologies.

Policy Making Impact on Markdown Optimization for an Indian Apparel Retailer

Government policies have significant impact on the business environment of any country. The firm in “ Markdown Optimization for an Indian Apparel Retailer ” needs to navigate these policy decisions to create either an edge for itself or reduce the negative impact of the policy as far as possible.

Data safety laws – The countries in which Eoss Markdown is operating, firms are required to store customer data within the premises of the country. Eoss Markdown needs to restructure its IT policies to accommodate these changes. In the EU countries, firms are required to make special provision for privacy issues and other laws.

Competition Regulations – Numerous countries have strong competition laws both regarding the monopoly conditions and day to day fair business practices. Markdown Optimization for an Indian Apparel Retailer has numerous instances where the competition regulations aspects can be scrutinized.

Import restrictions on products – Before entering the new market, Eoss Markdown in case study Markdown Optimization for an Indian Apparel Retailer" should look into the import restrictions that may be present in the prospective market.

Export restrictions on products – Apart from direct product export restrictions in field of technology and agriculture, a number of countries also have capital controls. Eoss Markdown in case study “ Markdown Optimization for an Indian Apparel Retailer ” should look into these export restrictions policies.

Foreign Direct Investment Policies – Government policies favors local companies over international policies, Eoss Markdown in case study “ Markdown Optimization for an Indian Apparel Retailer ” should understand in minute details regarding the Foreign Direct Investment policies of the prospective market.

Taxation & Regulation Impact on Markdown Optimization for an Indian Apparel Retailer

Corporate Taxes – The rate of taxes is often used by governments to lure foreign direct investments or increase domestic investment in a certain sector. Corporate taxation can be divided into two categories – taxes on profits and taxes on operations. Taxes on profits number is important for companies that already have a sustainable business model, while taxes on operations is far more significant for companies that are looking to set up new plants or operations.

Tariffs – Chekout how much tariffs the firm needs to pay in the “ Markdown Optimization for an Indian Apparel Retailer ” case study. The level of tariffs will determine the viability of the business model that the firm is contemplating. If the tariffs are high then it will be extremely difficult to compete with the local competitors. But if the tariffs are between 5-10% then Eoss Markdown can compete against other competitors.

Government Scheme & Subsidies Impact on Markdown Optimization for an Indian Apparel Retailer

Research and Development Subsidies and Policies – Governments often provide tax breaks and other incentives for companies to innovate in various sectors of priority. Managers at Markdown Optimization for an Indian Apparel Retailer case study have to assess whether their business can benefit from such government assistance and subsidies.

Consumer protection – Different countries have different consumer protection laws. Managers need to clarify not only the consumer protection laws in advance but also legal implications if the firm fails to meet any of them.

Political System & Stability, and its Impact on Markdown Optimization for an Indian Apparel Retailer

Political System and Its Implications – Different political systems have different approach to free market and entrepreneurship. Managers need to assess these factors even before entering the market.

Freedom of Press is critical for fair trade and transparency. Countries where freedom of press is not prevalent there are high chances of both political and commercial corruption.

Corruption level – Eoss Markdown needs to assess the level of corruptions both at the official level and at the market level, even before entering a new market. To tackle the menace of corruption – a firm should have a clear SOP that provides managers at each level what to do when they encounter instances of either systematic corruption or bureaucrats looking to take bribes from the firm.

Independence of judiciary – It is critical for fair business practices. If a country doesn’t have independent judiciary then there is no point entry into such a country for business.

Government attitude towards trade unions – Different political systems and government have different attitude towards trade unions and collective bargaining. The firm needs to assess – its comfort dealing with the unions and regulations regarding unions in a given market or industry. If both are on the same page then it makes sense to enter, otherwise it doesn’t.

Economic Factors that Impact Markdown Optimization for an Indian Apparel Retailer

Social Factors that Impact Markdown Optimization for an Indian Apparel Retailer

Technological Factors that Impact Markdown Optimization for an Indian Apparel Retailer

Environmental Factors that Impact Markdown Optimization for an Indian Apparel Retailer

Legal Factors that Impact Markdown Optimization for an Indian Apparel Retailer

Step 3 – Industry Specific Analysis

What is Porter Five Forces Analysis

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in Markdown Optimization for an Indian Apparel Retailer case study. PESTEL analysis of " Markdown Optimization for an Indian Apparel Retailer" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

Step 4 – SWOT Analysis / Internal Environment Analysis

Step 5 – Porter Value Chain / VRIO / VRIN Analysis

Step 6 – Evaluating Alternatives & Recommendations

Step 7 – Basis for Recommendations

References :: Markdown Optimization for an Indian Apparel Retailer case study solution