School project

CLIPPER A/S

Project holder: RenĂŠ Claus Larsen Guidance Teachers: Lise Kathrine Hoberg, Lene Pedersen, Anatolie Cantir, Hans Trautner VIA Design, Visual Business Model (BIZZ-project) Edited by: Sophie Ejick (Int. fas1a DI18S), Cindy Fels (Int. fas1a DI18S), Stipe Barac (Int. fas1a DI18S), Maj-Britt Nielsen (Int. fas1b DI18S) and Daniel Grabov Jensen (Int. fas1cDI18S)

Due date: 2nd of november

1st semester report Group no.: 12 35.779 units

contents P. 01

Introduction

P. 01

Problem statement

P. 01

Methodology

P. 02 Explanation of Clippers business model Company description Company information P. 03 Textile and clothing industry in Latvia Exports of textile and leathers in 2015

The sectore is currently following European industry trends source Textile industry sources Latwia working conditions P. 05 Analysis of business trends on the market Industry and trend description Social medias Sustainablity P. 08

Business Model Canvas

P. 10

SWOT-analysis

P. 12 Statistics Key numbers

ROI - Return of investments

Profit margin Asset turnover ratio P. 16

Assement on how they can optimize their business model

P. 17

Conclusion

P. 18 Sources Links Articles P. 20

Attachements

VISUAL BUSINESS MODEL

CLIPPER A/S

1.1 Introduction

How can Clipper become a more sustainable company

Clipper A/S is a Danish fashion company that is main- in the near future? ly focused on knitwear. Their production is based in Latvia, India and China. This company most commonly Explanation: Explanation of Clippers business model uses B2B model to sell their products. In addition, their Analysis: Analysis of business trends on the market

design DNA is based on classical and minimalistic gar- Assessment: Assessment on optimizing Clipper’s busiments for a male audience. A situated man in his 40s ness model could definitely be a classic example of their customers. However, Clipper is one of the four sub-brands in 1.3 Methodology

the company founded by Bernhardt Sørensen. The pur- The most significant tool we have used is the Business pose of this report is to improve Clipper’s business pol- Model Canvas. With this model we have described icy and incorporate changes that will attract a younger Clipper’s strategic performances and added sugaudience, enable more sustainable development and gestions how to expand their future activities. Addistrengthen the production in Europe instead of Asia. tionally, we have used a SWOT analysis to define the company’s strengths, weaknesses, threats and future 1.2 Problem statement

opportunities that helped us to solve the problem state-

Main question: How can Clipper optimize their busi-

ment above. Statements on Clipper’s financial perfor-

ness model in relation to relevant business trends?

mance were generated through Orbis and CVR. For

How can Clipper optimize their business model in

further analysis the articles The State of Fashion (Mck-

relation to relevant business trends?

insey & Company, 2018) and Creativity and sustainable

How can Clipper adjust their brand to the younger

apparel retail models (Lang et al., 2016) were used.

audience?

Figure 1 - History of Clipper Articles about production and work conditions in Lat-

Figure 1 illustrates an overview of the time-

via are presented.

line of forming the company Clipper. There is a

1.4 Explanation of Clippers business model In general Clipper is doing well when it comes to being aware of their activities on the market and implementing their business model. They know their main consumers and through what channels to reach them as well as which sales propositions to promote. Later on during the assignment Clipper’s business model is going to be analysed in detail.

1.4.1 Company description Clipper A/S is a company based on 4 different brands: Clipper, CC-Fifty-Five, Breidhof and BELIKA. The tie between all of these brands is knitwear. First of all, Clipper is known for classic elegance garments full of pure masculinity. Second, the brand CC55 is used for corporate uniforms for many different industries all over Europe.

wide section of men’s and women’s knitwear as well. The position of Breidhof is mainly in Germany but the company is planning on closing it down in the near future. BELIKA is present since 1933 and it is the oldest brand of these four.

The brands’ vision can be described with their motto: “Trends will perish, but style will endure.” They offer immortal classics especially for male population. Moreover, the company has more than 63 years of experience and covers 28 countries. Clippers’ history starts in Herning in 1955 with Bernhardt Sørensen. If you possess one of Clipper’s products you will definitely have a timeless piece of clothing. Clipper’s DNA can be described as a classic gentleman style that is well-fitting and long-lasting.

Passionate specialists make sure that Clipper’s knitwear always maintains the high standard of quality and sophisticated craftsmanship.

VISUAL BUSINESS MODEL

CLIPPER A/S

Their classics are made of pure merino wool. Furthermore, their knitwear production is based in Latvia and in Biella, Italy as well as in India and China.

Clipper is a limited company with 24 employees in their office located in Herning and 110 employees in Latvia.

During the accounting period of 2017/2018 they had a gross profit of 19.000.000 DKK where a surplus of 2.000.000 DKK is manifested (Årsrapport 2017/18). At the end of the accounting period the company’s equity was 20.000.000 DKK. Clipper does not have any physical stores themselves, but they are selling through other channels and it is called B2B model. It refers to a situation where one business, for example Clipper, makes a commercial transaction with another one. The company is focused mainly on the Scandinavian region. The most important markets are Denmark, Sweden and Norway.

Breidhof is the brand that covers the German region.

1.4.2 Company information CVR number: 17049798 Address: Nakskovvej 1, 7400 Herning Founders: Bernhardt Sørensen Legal owners: Wagner Holding Registered capital: 2.000.000,00 DKK

Figure 2 shows a model who is wearing a Clip-

per’s sweatshirt. It can be noticed that this model presents Clipper’s design DNA. It means that the DNA is incorporated through masculinity, simplicity and seriousness. Moreover, this is Scandinavian style full of strict lines, monochromatic colors and garments without decoration.

Finally, materials are certified in accordance with the Oeko-Tex 100 standard. The company also supports high-level animal breeding because the company is convinced that well treated animals will give beautiful wool. They prefer ‘mulesing free’ yarn.

1.5 Textile and clothing industry in Latvia

The textile and clothing sector is a cornerstone of

Latvian industry, with deep roots in their culture. In

the past, Latvia was one of the world’s biggest man-

ufacturers of flax. The textile traditions have de-

veloped over time, and today we see an indus-

try that is well-equipped with the latest technology.

Latvia became a place where many well-known European,

Russian and international brands place their production for

smaller orders that need fast turnaround, or that give pref-

erence to sustainability. High quality and excellent service

stand out as key reasons for setting production in Latvia.

For centuries, the textile and clothing sector has

been one of the most important in Latvia. It has very

important roots, associated with natural materials,

high quality, and a true nature lifestyle and values.

Figure 2 - Model for clipper

t s .

h e .

Today, the textile sector is an important part of the

Figure 9 illustrates the textile export to other countries and

Latvian industry, combining the best of tradition-

Denmark is on the 3rd place with 10 % of exportation in total.

al, industrial and technological knowledge. This expertise has led to the creation of high value-add-

The textile products exported to the west are most-

ed products such as silver and amber threads.

ly under private labels. The outsourcing of textile production in Latvia is an integral part of the business.

Around 11 000 people are employed in more than 1800

At the same time, exports to Russia and the CIS

Latvian textile companies. In 2015 the sector’s contri-

(Commonwealth

bution to total manufacturing output was 3.4 %. The

ly

capital city Riga takes the lead as far as the workforce

rie collections, which have an esteemed reputa-

is concerned, followed by the city of Liepaja. However,

tion and appeal to highly demanding clientele.

feature

of

locally

Independent designed

States)

fashion

and

mostlinge-

textile companies are distributed all around Latvia, unleashing the creativeness and inspiration of the people.

The industry is dominated by sewing companies that have outsourced production facilities for EU brands. This

The main textile industry sub-sectors are lingerie manufac-

is very convenient, as production and delivery times are

turing, sewing, weaving, knitting, technical textile manufac-

short and technical capability are advanced – from em-

turing and hand-crafted textile production. The industry is

broidery and laser cutting to waterproof garment pro-

n highly export-oriented, particularly the lingerie segment.

-

- 1.5.1 Exports and textiles and leathers in 2015 -

.

duction. Latvian sewing companies provide customized services, including pattern and other design services.

Many companies have benefited from Latvia’s production in glass fibre. In this field, Latvia has several highly innovative companies with great potential for further expansion.

,

r

1.5.2 The sector is currently following European

-

industry trends source

e

Central Statistical Bureau of Latvia and development

.

is mostly being seen in technical applications of natural fibres, as well as in innovative solutions for non-wo-

s

ven fabrics in the automotive, medical and other sec-

y

tors. Intelligent textile and garment development is

,

being closely studied by research institutes and de-

.

signers, leading to creative products addressing new customer needs. Being well-established, the sector

Figure 9 - Pie chart about Latvia’s exports of textiles Without a doubt, the major market for Latvian textile goods is the EU, where the most important partners are the Baltic and Scandinavian countries. However, with every passing year, their eastern partners – Russia, Ukraine – have been expanding their contribution to the sector’s turnover.

continuously attracts new investment to upgrade existing production facilities and establish new ones.

VISUAL BUSINESS MODEL

CLIPPER A/S

1.5.3 Textile industry statistics

2.1 Analysis of business trends on the market In reference to The State of Fashion 2018 by Mckinsey & Company, there has been a slight change in the fashion industry and trends. In the fashion industry there is a huge number of influential companies that are competing on a daily basis. In The State of Fashion changing in buying behavior is described.

Producers in Latvia tend to acquire raw materials meeting high standards, that are mainly imported from Italy, Poland, Germany and Lithuania. These are later transformed into ready-made garments and other textile articles. The latest trends also show the willingness and ability of Latvian companies to acquire manufacturing plants in the EU. Export markets have grown steadily, expanding to 140 countries. Also, in the fashion industry social medias and online platforms are playing a more important role than ever. Today’s modern consumers use social platforms more than eight hours per day. This can be an opportunity for Clipper because they could reach younger generations on Instagram, Facebook & Twitter. At the same time customer’s expectations are increasing every day. Fast delivery, high-quality and functional materials are needful.

Amazon is an excellent example how companies can use online platforms as a tool to generate profit.

Figure 10 - Chart illustrates export and import in Latvian’s industry sector From 2008 to 2013 the export and import are increasing but after that period there is gradual decline.

1.5.4 Latvia working conditions During the Soviet rule, Latvia became a very industrialized republic of the Soviet Union. While the importance of the industry has decreased since the breakdown, urbanization in Latvia remains high. Today, 78 % of the population is living in urban centers. However, Latvia has a particular interest in healthy and safety condition.

Figure 3 - Increase in online sales Even though consumers seem to be uncertain today, consumers have never done as much online shopping as they’re doing right now. Therefore it is predicted that the habits would look like shown in figure 3 from 2017 - 2020 in the online sales as you see above.

Figure 4 - Demonstrate customers habits online

In addition, the main trend that is present today is sustainability. McKinsey & Company (2018) state that sustainability will be more significant in the near future and something that should be a part of every business model in every company. According to Cambridge dictionary sustainability is defined as an idea that goods and services should be produced in ways that do not use resources that cannot be replaced and that do not damage the environment. ‘’ Sustainability will evolve to be an integral part of the planning system where circular economy principles are embedded throughout the value chain. ‘’ - The State of Fashion 2018 2.1.1 Social media trends The social media trend is extremely widespread at this moment. Almost every company has their own account where they present their products and establish the relationships with customers. Platforms such as Instagram give the opportunity to be really close with their target group and to fulfill customer’s needs. Therefore, a huge evolution in online chatbots is also a very popular trend (see figure 5). For example, Facebook for instance has over 100.000 chatbots who are chatting with people around the world about guidances and even taking actual orders.

Figure 5 - Google trends for chatbots Another clear trend we can see on social medias is Instagram stories. It has increased so much since they launched it two years ago. Over two years they have expanded it so much, that now there are over 250 million daily users of Instagram Stories.

Figure 6 shows how much Instagram Direct has grown from end of the 2013 to 2017. It is possible to perceive that there is an exponential growth from 2013 with a distinct increase after Instagram Stories has been launched two years ago.

Figure 6 - Instagram Direct monthly active users in period 2015 - 2017 One of the biggest trends you may experience on social medias is costumsers expressing their dissatisfaction with products. Companies should be aware of this phenomena and take it more as a chance than as threat.

VISUAL BUSINESS MODEL

CLIPPER A/S

These different social media trends have a negative influ-

Clipper with its focus on high quality, long-lasting fashion

ence on Clipper’s Business Model because they tend to

items could make use of the trend. They are producing

not use them. Therefore, Clipper would have a stronger

partly in Latvia and supply most of their wool from Italy and

business model if they jumped into these social media

Germany. They could use these strategies as an advan-

trends and became a part of the competition. If they do

tage on the sustainable fashion market. Furthermore, they

that, it could give them the possibility to expand their

could concentrate on regional supplying and production

brand and reach the younger generation they want.

and limit or even stop their outsourcing to China and India. This way they reduce their emission due to transpor-

The future business model should focus on incorporating

tation as well as transportation costs. Another plus side

Instagram as a tool to reach the younger population. For

would be being able to guarantee good working condi-

example, Instagram stories can attract a large number of

tions as it is more realistic for Clipper to monitor their pro-

young people. To launch a webshop also is a wise idea for

cesses within Europe than on the other side of the world.

Clipper to achieve a closer relationship with millennials.

2.1.2 Sustainability trends Another major trend in the fashion industry is sustainability. There is a notable shift in consumer behavior from wanting the fast-fashion to being aware of the damage the fashion industry causes the environment. Instead of following the latest fashion trends, which drives consumers to constantly buying new clothes, preferable at the lowest prices, they choose to think more about their buying behavior.

Fast-fashion items sold for low prices often come in bad quality and their production causes a lot of wasted water, pollution and bad labor conditions, due to minimal production costs. Fashion consumers nowadays tend to choose items made out of materials that are more environment-friendly and instead of having a lot of low-priced garments, they buy fewer items in higher quality to benefit from their longer life span. Apart from that consumers like to buy “the good feeling of making a change” with their clothes. It gives them comfort knowing to support a company, that acts and produces with respect for the planet. This trend gives smaller companies following environment-friendly supplying and production the chance to have an impact on the fashion industry and to grow as their sustainable concept is what is wanted on the market now.

The sustainability trend is not only about having a more sustainable production, but also about changing the retail models. According to Lang et al. (2016) there are five new models within sustainable retail.

These models contain the sales of redesigned clothing, the service for altering and repairing clothes, a rental service for clothes, cloth swapping and a style consultancy service. All of them follow the goal of reducing waste and avoid an overproduction in the textile industry. Even though a decrease in production is linked to a decrease in sales for a fashion company, they could be able to keep up their profit by “selling their values” with their garments as well as offering new services to their customers. Being successful with these new models requires the customer’s awareness for the importance of sustainable fashion retail concepts. Apart from just assuming consumers to know about the

need for a change in the fashion industry, companies should communicate their responsibility as well. While publishing campaigns they could easily promote their own products and values so that both the company and the environment benefit.

The retail models that seem to be most useful for Clipper

Channels

are a style consultancy service and sales of redesigned

Clipper is different from other businesses because

clothes. The concept of a style consultancy service con-

they run their business as B2B. This means they use

sists of giving consumers inspiration on how to style their

their key partners as channels to reach end-consum-

garments. Different styling options can be shown on their

ers, because they do not have their own physical

website, a blog or social media. The purpose is to keep

stores. Primarily they’re selling through three differ-

the consumers from getting bored of their clothes and

ent main stores: Tøjeksperten, MR. and Din Tøjmand.

encouraging them to style their garments in different ways to get satisfying use of them for as long as possible.

2.2.1 Business model canvas Customer segments

The primary customers for Clipper A/S are Tøjeksperten, MR. and Din Tøjmand. The end-users for Clipper’s clothing after it has been sold through the stores would be mod-

Figure 7

ern men in the age of 40 years and above. They are mainly

Figure 7 represents the distribution model that

focused on this target group connected with their values

Clipper uses for their retail part. Clipper distrib-

of masculinity, minimalism and classic styles. They have

utes in two different ways, depending on wheth-

segmented their customer channels to be theses exact

er they sell within Denmark or outside the country.

stores, because they’re all having a common target group.

Within Denmark Clipper’s products are bought by a buyValue proposition

Clipper’s values lie within their focus on offering their cus-

ing group which distributes it to a shop (Tøjmand, MR. or

Din Tøjmand) and then they’re selling it to the end-users.

tomers high quality knitwear in a classical way. They focus on clear lines and simple and plain designs connected

When it comes to export, they’re selling to an agent,

with the Danish culture. Values are manifested through

then it goes to a chain buy group, which is resell-

their knowledge and focus on sustainability. This com-

ing it to a shop. At the end, consumers can buy it.

pany is special because they ensure high standards of producing knitwear for the male population. Therefore, they do also care about breeding the animals and consider garments which are ‘mulesing free’. Most of their raw materials are meeting the standards of Oeko-Tex 100, which ensures that the consumers are protected from any harmful effects related to their health. They do also strive for FN’s 10 principles, which means they are striving for better working and environmental conditions.

Figure 8

VISUAL BUSINESS MODEL

CLIPPER A/S

Figure 8 represents the distribution

for the corpo-

rate wear part. Clipper does the distribution in two dif-

Key activities

Clipper’s key activities are based on producing, design-

ferent ways when it comes to the retail, depending

ing and selling to the agents. The design team consist of

whether they sell within Denmark or internationally.

two employees who are co-creating new collections. Ev-

Corporate wear is distributed from Clipper to a dealer who makes sure that the designs are as previously negotiated. Then, they are delivered to the company which is reselling it to the end-users either in their physical stores or online. For exporting their corporate wear there are agents negotiating with dealers abroad for Clipper.

Customer relationships Clipper does not have a specific relationship regarding to their consumers because they do not interact with them directly. They just recently started to use social medias and online platforms, but rarely use those. Therefore, they have not established personal relationships with their target group. During fashion fairs they strengthen their relationship with their target group and business partners. In other words, they are able to show their collections and meet their customers personally. Fashion fairs are also a great opportunity to meet potential business partners.

Revenue streams Revenue is created as a profit from selling their products to other businesses or international agents. As stated in their financial reports, Clipper’s revenue streams were dynamic in the past five years. A linear growth is visible, which indicates that future income will still be increasing.

Key resources Clipper’s key resources are the office in Herning and the factory in Latvia. Their property consists of buildings, machine, vans and systems. Other examples of their key resources are individuals with knowledge about knitting and processes in the industry.

ery year they do also attend fashion fairs in Copenhagen.

The main activity of the sales team is to travel to get in

touch with potential business partners. Another creation

that they are producing is their own fashion magazine.

Key partners

Their main key partners are production companies based

in India and China. Also, they are collaborating with sup-

pliers from Italy and Germany. Ensuring high quality is

their main goal. By making sure their requirements for the

production are met, they want to satisfy customers’ needs.

Cost structure

Clipper has some variable and fixed costs that is

in

connection

with

production

and

interi-

or for their office in Hering. Other costs are splitted

into

financial

and

transportation

costs.

-

-

.

n

n

.

d

-

s

e

.

t

-

-

.

VISUAL BUSINESS MODEL

CLIPPER A/S

S

Figure 11 - Production in Latvia Figure 11 demonstrates production based in Latvia. There are a couple knitwear machines and it can be considered that the process is automatized.

2.3.1 SWOT-analysis Strengths In all terms we can see that Clipper has a lot of strengths. One of their main strengths is their knowledge about sustainability. They’re thinking about the environment, because of the trends and tendencies in the industry.

They’re having a well-established company, that has been expanded through time. Now Clipper is their main company, and has three different brands as their subsidiaries. This is giving them lots of different options, knowledge and aspects towards target groups and the market, because the different companies reach different people.

For example Clipper only reaches men and C.C Fifty-five is also reaching men, but also women.

STRENGTHS • Focus on sustainability • They have 3 sub-brands • Positive development in their Return of Investments • Profit margin has been very positive • They have their own production factory • They know their target group • Knowledge to the knit industry in general • Scandinavian brand - minimalistic & classy • High quality of materials • Medium price affordable to wide range of population When you’re looking into their annual reports you see a development in all their key numbers.

Especially there has been an increase in their Return of Investments, which shows they’re generating more profit compared to their costs.

This gives them the opportunity to expand their company by buying new machinery for example.

W

WEAKNESSES • The lack of advertisements • New on SoMe and online platforms • Classical style is boring from young generation’s perspective • Production in India & China (not sustainable)

Weaknesses Clipper said themselves that they want to expand their target group and reach a younger generation.

If they would do that, it’s a weakness for them that they’re not doing advertisement. Social medias and online platforms in general are very new to them.

VISUAL BUSINESS MODEL

CLIPPER A/S

O

T

OPPORTUNITIES

THREATS

• The younger generation • Social medias • Positioning European continent as a Leader within the fashion industry • Collaboration with trendsetters and influencers

• Competitors - Scandinavian market • Crisis • Strengthening of Asian economies

Opportunities The younger generation would be a clear opportunity towards their brand and expanding their target group. This generation has huge potential for them, because there’s a lot of potential clients and they have the possibility to gain more knowledge about this specific group.

Again, at the moment social medias are very new towards Clipper’s marketingplan. Online platforms and social medias have a huge potential and a really big customer base, which is why they should gain knowledge about it.

Threats The main threat they’re facing at the moment is branding. Branding is an essential element to be successful in the fashion industry. Therefore, they are probably losing a lot of consumers, possible target groups and also a lot of profit. They’re not making their company visible enough towards these different groups.

2.4.1 Statistics

2.4.3 Profit margin

Please note: Look at their annual reports under INCOME STATEMENT and BALANCE SHEETS.

According to the Cambridge dictionary profit margin is the difference between the total cost of making and selling something and the price it is sold for. The profit margin has been increasing and decreasing through the whole accounting period. From 2014/15 to 2015/16 it has been increasing, and then from 2015/16 - 2016/17 it fell down. After that, in 2017/18 it inflates again.

In total, there has been a percentage change of 18178,5 % in the whole accounting period. The costs have been changing unpredictably and that reflects on the value of profit margin. Lower costs in the period from 2016/17 to 2017/18 have resulted with higher revenue. Finally, the profit has been higher.

2.4.2 ROI - Return of investments There has been a development in the return of investments in the the years of 2014/15 - 2017/18, which has been positive. From 2016/17 it started to be positive because it was higher than the market rate, which is 3 - 4 %. Therefore, in the years 2015/16 and 2014/15 it has been a dissatisfaction, because it was lower than the market rate.

All the costs during the accounting period 2016/17 - 2017/18 have been falling, which has developed the operation profit in a positive way. They’ve had less financial income, but they’ve used less financial costs, which is why the result before taxes is higher compared to 2016/17. In total they’ve had a development in their net income in total from 2016/17 2017/18. Therefore, the profit margin is very positive.

To sum up, in the period of the previous five years there is a linear trend of increasing. There has been a percentage change of 645,8 % in total through which shows that there has been an extremely large progress.

During the accounting period they have saved more money on administration and distribution costs. The reason why it is possible is because they found out a more efficient way to produce. If you have a look in the balance sheet for the same accounting period, you see that they have been spending more money on fixed assets, so maybe they invested some money on machines which could be more productive during the production. This is also the reason why they’ve saved more money on the employees.

Key numbers

VISUAL BUSINESS MODEL

CLIPPER A/S

2.4.4 Assets turnover ratio

Collaborations

turnover ratio has been falling. From 2016/17 - 2017/18

to reach more customers if they have a huge audience on

it went up again. The percent change is -27,1% in total.

social media platforms. For example Joel Kinnaman, he

The reason for it are the flows in the revenue and assets.

is Swedish actor and person with credibility and excep-

During the accounting period 2014/15 - 2016/17 the asset

Collaborations with influencers could help the company

tionally good reputation in Scandinavia. He could be an The revenue hasn’t been developing more than

important figure of attracting new generations. However,

the assets during the accounting period 2014/15 -

Clipper can benefit from Instagram in many ways and that

2016/17, which is why it has been declining. From

shows their awareness for current trends on the market.

2016/17 - 2017/18 the revenue had positive development, where the assets fell which means the as-

On the other hand, they could collaborate with other

set turnover ratio showed a more positive direction

brands. This is called co-branding. If they found a brand

during the 2016/17 - 2017/18 accounting period.

that has a similar vision as themselves, they could create a clothing line together. For example, the croatian

3.1 Assessment on optimizing Clipper’s business

brand Varteks also produces man’s fashion. Collabo-

model

ration with this brand can open new opportunities in

From the analysis and the information that has been gath-

eastern Europe. They would gain knowledge from an-

ered through this report, there will be different sugges-

other brand, on how they’re operating and then imple-

tions that could optimize Clipper’s business model. In gen-

ment it into their own strategies and business model.

eral we suggest Clipper to open up to a B2C business. For some of the following suggestions this is a requirement.

Sustainability and Production in Eastern Europe

Another solution for them is to move their production Social media and online platforms

from India and China to Eastern Europe. For example,

As mentioned before, Clipper is barely using social me-

Croatia and Bosnia & Herzegovina where they can place

dias or other online platforms. If they implement this in

their production and even more, they can cooperate

their business strategy, it could push them into a new di-

with other businesses in that area. On one hand it’s a

rection. At the company visit they mentioned that they

cheaper production compared to Denmark, but on the

would like to reach a younger generation, and this gen-

other hand it is more sustainable to produce in Europe,

eration relies into online platforms. Interacting on social

than in Asia due to reduced transportation. This is an ex-

media platform is a great chance for Clipper to promote

cellent idea to make the European production flourish.

their products as well as their values, while they are building a personal relationship with potential customers.

Production in Europe also stands for quality. According to the EU and standards, a more environmental production is required. Some general requirements are: • The product should be energy efficient or possible to recycle.

• the users should be informed on how to treat and maintain the materials the best.

• life-cycle analysis of the product to identify alternative design options and suggestions for improvement

Therefore, there are some general objects that com- Through this webshop they could have all their prodpanies in Europe should pay attention to, before pro- uct descriptions including the used materials. They ducing and selling their products. Even though China can add a section about their sustainable actions and has increased their environmental standards, they still campaigns that will attract customers to activate and tend to have a lot of greenhouse gasses emissions. develop positive emotions related with the brand.

There’s a many people in China and a lot of companies around the world are either having their own production Double face knitting

there or getting it produced by a third party in China. This kind of garment would definitely be in harmony with sustainable way of running their business. Double face In addition to the production Clipper should also keep knitted garments are wearable on two sides. It means that supplying sustainable. Wool from local suppliers and one color would be visible on the outside of the garment well treated animals make great sales propositions. and if you turn it inside-out it will change into another color. This is also an interesting way of creating new clothes Recycling

and expanding the product’s life span because consum-

Right now Clipper is producing so much, that they don’t ers won’t get bored of it as it usually is with regular clothes. risk the ‘out of stock’ situation. This means there could be a lot of waste during the process. Therefore, a recom- 4.1 Conclusion

mendation is to recycle all their waste and put it into their In conclusion, social medias and sustainability trends are production. For instance they could make a clothing line influencing Clipper’s business model. The use of suswhich is only produced by recycled materials. This would tainability has positive impact on the company’s credibe better for the environment and could create value bility and perception in public. On the other hand, the proposition towards their target group. Besides recycling lack of using social media platforms causes a negative used materials Clipper could recycle whole garments. Af- impact on their customer relationships. Additionally, the ter a redesigning process they could easily be sold again. use of double face knitting garments can attract younger and eco-friendly population. It is an excellent trick Another idea is to open an outlet store, where leftover to improve sales. Consumers are able to wear it twice. clothes from stock and redesigned garments can be sold. A webshop would also be a powerful tool to reach new This idea could be expanded by a second hand shop, customers because they can easily order clothes onwhere consumers can bring their old garments to close line that could be delivered to their doorstep in a short the recycle circle and give their clothes a second life. period. Production in Eastern Europe can re-establish powerful European production instead of Asian and reWebshop

duce transportation costs. However, it will allow easier

As mentioned before, Clipper should establish their own production control, satisfaction and alignment with EU webshop. They would create more value proposition if standards. Finally, Clipper’s profit was increasing in prethey achieved this goal because customers will be more vious five years and it is predicted to continue to raise. related to this brand. This model is called B2C (Business to Customer). That means that customers can easily choose clothes online and they will receive it in a short time.

bibliography 1.12 Links 1. .https://www.npd.com/wps/portal/npd/us/industry-expertise/fashion/ 2. https://politiken.dk/forbrugogliv/forbrug/art5890779/ModebranchenB%C3%A6redygtighed-og-mode-er-i-virkeligheden-to-modstridende-ord 3. https://orbis4.bvdinfo.com/version-20181018/orbis/1/Companies/Report 4. https://en.clipper.dk/about-us#10250 5. https://www.facebook.com/pg/clipper.knitwear/about/?ref=page_internal 6. https://wellmadeclothes.com/articles/BoFStateOfFashionReport2018/ www.clipper.dk 7. https://sproutsocial.com/insights/social-media-trends/ 8. https://europa.eu/youreurope/business/product/eco-design/index_da.htm 9. https://cdn.businessoffashion.com/reports/The_State_of_Fashion_2018_v2.pdf 10. https://dictionary.cambridge.org/dictionary/english/sustainability 11. https://branchebladettoj.dk/navne/clipper-far-ny-salgsdirektor/ 12. https://branchebladettoj.dk/messer/clipper-borster-stovet-af-sig/ 13. https://www.flaticon.com/ 1.13. Articles 1. Chunmin Lang, Cosette M. Armstrong and Chuanlan Liu: 2016, Creativity and sustainable apparel retail models: does consumers’ tendency for creative choice counter‑conformity matter in sustainability?, Springer Open 2. McKinsey & Company: 2017, The State of Fashion 2018, BoF 3. LIAA: 2015, Textile and Clothing Industry in Latvia, Riga, Magnetic 1.14 Reports 1. https://datacvr.virk.dk/data/visenhed?enhedstype=virksomhed&id=17049798&soeg=Clipper%20A/S&type=Alle&language=da (Annual reports for all years)

VISUAL BUSINESS MODEL

CLIPPER A/S

VISUAL BUSINESS MODEL

CLIPPER A/S

S

STRENGTHS • Focus on sustainability • They have 3 sub-brands • Positive development in their Return of Investments • Profit margin has been very positive • They have their own production factory • They know their target group • Knowledge to the knit industry in general • Scandinavian brand - minimalistic & classy • High quality of materials • Medium price affordable to wide range of population

W

WEAKNESSES • The lack of advertisements • New on SoMe and online platforms • Classical style is boring from young generation’s perspective • Production in India & China (not sustainable)

O

T

OPPORTUNITIES

THREATS

• The younger generation • Social medias • Positioning European continent as a Leader within the fashion industry • Collaboration with trendsetters and influencers

• Competitors - Scandinavian market • Crisis • Strengthening of Asian economies