Business plan Fashion Industry
Lucia van Dijk (Exchange student) Entrepreneurship & Innovation 19-12-2013 KEA Exam
Executive summary Think Twice is a new upcoming company in the fashion industry in Denmark. Because of the growth of the total fashion industry this company has to distinguish them self and be the best in what they develop. Think Twice can make this possible. The company wants to achieve the following: What ensures that Think Twice will be a creative and innovative company for young females and which has a good chance in the fashion industry in Denmark? The answer on this question is their new concept “Everything 4 You’. With our great concept ‘Everything 4 You’ shopping is easier and so much more fun. Through this concept, the store offers an experience and tell a whole new story. As a result, the company exceeds and adds more value to the society. Think Twice is a young and dynamic company with a sense of fashion and passion. Through hard work the company will distinguish by a number of other companies. The company offers new opportunities, is innovative, unique and provides customers with an experience. Costumers can be a part of the production process. On course for success, is an important motto for this company. Besides that, Think Twice is making life easier for you. Think Twice’s vision: With the core value unique and innovation arises a great style, made with respect for people and our environment, whereby we create a fashion forward. As a result, we hope to be an inspiration for a fashion industry that is happening and harmless. Think twice is a online and offline company who want to sell second hand clothes. The clothes will tell you the story about the previous owner. This gives more value to the product. Think Twice is a innovative company and does not already exist in Denmark. Think Twice competes primarily with vintage shops and second hand stores. Moreover, the business models in this report shows that Think Twice has a good chance in the fashion industry. The risk analyses indicated a few risks but Think Twice can counter this risk. The costs to start up the company are acceptable. The investment budget indicated that Think Twice need € 59100,- and after 2 years and 3 months the company plays break even. In other words, the concept ‘Everything 4 You is worth it. If Think Twice can launch this concept the whole fashion industry has benefits of it. Think Twice will booming like never before!
Tabel of Content Chapter 1: 1.1 Selection of topic 4 1.2 Introduction fashion industry 4 1.3 Problem Area 4 1.4 Problem formulation 4 1.5 Limitation 5 1.6 Method & Theory part 5 1.7 Research design 6 Chapter 2: 2.1 Company Think Twice 2.2 Porters 5 forces 2.3 The 9 building blocks 2.4 Target Audience
7 8 10 12
Chapter 3: 3.1 Concept Everything 4 You 3.2 Experience Economy 3.3 Risk Analysis 3.4 Budget 3.5 Visualization
14 15 16 18 20
Chapter 1: 1.1 Selection of topic: This business plan is made for young female consumers who are interested in the Danish fashion industry. In this report you will find more information about the fashion industry, but besides also about the start up of my own company Think Twice. I created a new concept and used different business models, which you can find further in my report. I also made a calculation and thought about how to play break even. If you have any questions afterwards you can contact me. 1.2 Introduction: There are many changes going on in this fast growing world where today is nothing like the day before or the way it will be tomorrow. (danish fashion industry) The fashion industry is one of the world’s largest industries, while also one of the world’s most polluting. Fundamental change in the dominant business model is happening, and further change is necessary. Furthermore, the fashion industry is an important change agent that reaches far beyond their own realms. Not only because of the size, but also to the ability which constantly affect consumer behavior. Today’s society is changing a lot, it is important to distinguish nowadays. From now on it’s mainly about creating innovative ideas. It is important for costumers that they can be a part of the upcoming product. (deloitte.dk) For example the fashion industry in Denmark. Within 4-5 years Denmark (Copenhagen) establish itself into an international fashion cluster. So the apparel business companies in Denmark are experiencing a strong growth. (a-www.copcap.com) This attracts more and more attention from the world. You can say that he fashion industry is booming like never before. The fashion week, great designers and the international fashion fairs made this possible. From now on Denmark/Copenhagen is implemented on the fashion map of Europe. (denmark.dk) Besides that, Copenhagen has Stroget, which is the longest pedestrian shopping center in Europe. This had helped in shaping an ideal market for international fashion companies. Nowadays, there are a number of major brand located in this street. 1.3 Problem Area: The fashion industry in Denmark is spreading increasingly and creates a lot of competition. This competition can influence the buying behavior, but it is also important to involve the customer with your product. Due to the advantages of online shopping the competition has increased. This makes it very easy to choose between different brands at the same time. Nowadays buying clothes have an impact on daily life, especially on the daily life of women. For some of them is it even a sense of status. For instance, women who are more communally oriented will enjoy shopping more because of their psychological identification with the communal nature of the task. (Arnold & Fischer, 1994) Especially for young female consumers is fashion a special topic, because they play an important role in the market. Moreover, young people have a enormous influence over the allocation of spending power across a growing number of product categories including clothing. (Margret Hogg, 1998). Another point is that young females are extremely engaged in the process of fashion consumption. They are the drivers of new mode of fashion. 1.4 Problem formulation: What ensures that Think Twice will be a creative and innovative company for young females and which has a good chance in the fashion industry in Denmark?
1.5 Limitations: The generalization of the results of this study should be interpreted with caution in the physical store and web shop of Think Twice. Think Twice wants to focus on the fashion industry in Denmark. The fashion industry is a very huge industry so the company mainly want to focus on young female consumers between the age of 18 and 35(generation Y). The women of generation Y are the women who have a high interest in fashion and spend a lot of money to buy new clothes. (Molly McCracken) Another import limitation is that Think Twice will focus on the vintage and luxury second hand market. In this dissertation females of generation Y are viewed as a homogeneous segment of the market. During research is focused on the nationality of the females. This company is focusing on females who are living in Denmark. Research also showed that young female consumers play an important role in the market place as they exert enormous influence over the allocation of spending power across a growing number of product categories including clothing. (Margret Hogg, 1998). However, the dissertation have definite view on female consumers and data collected from well known fashion industries. The last limitation is that Think Twice also collected data online. By using this method, respondents were allowed to complete the survey at home or any other place. Some surveys/answers may not be accurate enough because some of the respondents complete the survey with distraction. 1.6 Method & theory part: This section will give broad view on theories of the Danish fashion industry and the start up of my own company Think Twice. Therefore this section will first touch upon the meta-theoretical considerations that are very important for writing the thesis, outline of the primary and secondary data collecting method. The figure below demonstrated the methods and models in details. Besides that, there is also a description about Think Twice, the concept Â´ Everything 4 YouÂ´, a risk analysis and a budget. Moreover, I choose to use APA guidelines for all the sources. It is easier to read and it is also more clear. Each chapter contains entries that refer to the resource list. Introduction
Porters 5 forces
The 9 building blocks
Chapter 1: 1.7 Research design: During the research for my business plan, I’ve chosen to use desk- and field research. Therefore, I used various external methods. It was not necessary to do internal research, because I choose to start up my own company. For the best results, I used online desk research and some literature. Through the literature I obtained relevant information, and from fronter I used different articles. I´ve used field research. Therefore, I created an survey, which I used for the people who fit with my target audience. I asked some friends to fill out the survey and I also went to the city center because I needed random people. This makes the research more reliable. The survey included open and closed questions. The closed questions are based on Likert scale. Moreover, I also did a few interviews with random female consumers. During writing the report I choose to use APA guidelines for all the sources. It is easier to read and it is also more clear. Each chapter contains entries that refer to the resource list. Results of the gathered information: For desk research I used articles about the fashion industry in Denmark but also articles about e-commerce. The fashion industry in Denmark undergoes a violent change. It is growing and growing. For example Copenhagen, it is fast evolving into a global fashion metropolis. The fashion industry is not only about physical stores anymore. Since a few years e-commerce is very popular. A lot of people use the internet to buy new products. (lijie zhou) The goods are more purchased than services. Nearly 6 of 10 internet purchases are of goods. Young consumers and families with children purchases more goods, which is consistent with their larger consumption of e.g. clothing than the elder consumers. (fdih.dk) Beyond that there is a good combination between the normal fashion industry and e-commerce. The reality is that almost all retailers intuitively know that people shop online before they go to the store, and shopping trends support that intuition. As many as 88% of consumers are researching items online and then buying them in a physical store. This increasingly digital consumer behavior is having a growing impact on retail. Therefore it is perfect to combine the normal fashion industry with e-commerce. The results of the survey made clear that the concept ‘Everything 4 You’ is innovative. Besides female consumers think positive about luxury second hand shops and it makes them curious who was the previous owner. One of the consumers said: Knowing more about the story behind, makes a real treasure of the product. Moreover, a large part of the participants said that the combination of a physical shop and web shop is a good choice. ‘A web shop is an advantage’ said one of the female consumers.. The best conclusion of the survey is that Consumers like it when they can decide by their own what they want.
Chapter 2: 2.1 The company Think Twice: Think Twice is the name of a new fashion company with primarily focus on young female consumers. The company consist of a physical shop and a online shop. Whose physical store is located in the center of Copenhagen. We have chosen both, because in our opinion you can make the best of your business if you use both options. Your offer costumers the choices and gives them the idea that they are part of your company. Besides, a shopping trip is in fact still an important trip for many women. People can make the best of it if they can visit the store in real life. (nboundlogistics) Moreover, Think Twice is a young and dynamic company with a sense of fashion and passion. Through hard work the company will distinguish by a number of other companies. On course for success, is an important motto for this company. Besides that, Think Twice is making life easier for you. With our great concept ‘Everything 4 You’ is shopping easier and so much more fun. Through this concept, the store offers an experience and tell a whole new story. As a result, the company exceeds and adds more value to the society. Think Twice’s vision: With the core value unique and innovation arises a great style, made with respect for people and our environment, whereby we create a fashion forward. As a result, we hope to be an inspiration for a fashion industry that is happening and harmless.
Chapter 2: 2.2 Porters 5 forces: Porters 5 forces is a very useful business model if you choose to start up your own company. It is a simple tool but at the same time a powerful tool for understanding where power lies in a business situation. This model helps you to understand the strength of your current competitive position, and the strength of a position you are considering moving into. When you use this tool it makes it possible to identify new products, services or business which have the potential to be profitable. (Amy Carlson) 1. Bargaining power of buyers: Every company has to deal with buyers/costumers. In this case it is important to know how much power a buyer has against his own holding.(porter) Buyer power is one of the forces that shape the competitive structure of an industry. If there are a few buyers and many sellers the buyer price is higher. When there are a few firms, there is less competition than if there are a large number of firms in an area, such as a shopping mall. (Kenneth and Laudon 83). In Denmark are a lot of different shopping stores. The Danish fashion industry offers new unique and innovative designs, high quality clothes and fashion accessories. These are some of the parameters the Danish Fashion Institute focus on when seeking to gain international recognition for the Danish fashion industry. (prodenmark). What does it mean for Think Twice: First of all, it is possible to go to another supplier, because there are a few vintage and second hand stores. (vititcopenhagen.dk) Besides my concept does not exist in Denmark but there are similar concepts.(copenhagentreasures.com) A unique store with a lot of treasures, which you canâ€™t find in other clothing stores. When we sell a quite new product it is possible that you can find it in another store, but this product does not have the same thought and story. Secondly, not every costumers paid the same bill, all products are different. Moreover, if we do not have enough customers, the company will not survive. 2. Threat of new entrants: It is important to look at the ease with which new entrants can start selling or manufacturing of the same products. (porter) It is not only rivals that pose a threat to firms in the industry. When a new firms may enter the industry it is possible that it can effect competition. For instance, any firm should be able to enter and exit a market. (fashioncapital).
The global apparel retail industry has grown only modestly in value in recent years, which limits are attractiveness to new entrants. (datamonitor) The apparel industry consists largely clothing, luxury goods and accessories which accounts for over 55% of the overall market. The yearly growth will be 4%.(Matt Bodimeade). So it is possible for new entrants to enter this market. Also for people who live in another country. Because of the large number of shops you have to distinguish yourself. When you start up the company you donâ€™t need so much money. Only money for marketing, communication and the rent of the building. You should have knowledge about that, otherwise you canâ€™t use the best strategies to promote your company. Promoting is very important. Besides, the survey showed that there is enough demand for this kind of stores.(Matt Bodimeade). 3. Bargaining power of suppliers: The power of the supplier determines often the price of the product. This is very important for the sellers of the product. (porter)
It is more difficult for manufacturers of hardly differentiated goods to successfully position themselves in a industry on a long term basis. In the apparel industry, suppliers of standard components and specialized system suppliers have to be differentiated. Suppliers of very complex and very specialized products have a higher bargain power.(mattias varga) . Companies with a specialized concept cannot easily be replicated by competitors. What does it mean for Think Twice: There are two different types of suppliers. Suppliers who make and design the clothes and consumers(suppliers) who want to sell their luxury second hand clothes and make treasure of it. Most of our products depends on the consumers who want to sell. If there are not enough consumers we can’t sell products. Besides that, there are a lot of different suppliers available in this industry, the price of the products depends on the different brands and it is possible to find a new supplier when there price to produce is too high. (Ilaria Pasquinelli) 4. Threat of substitute products or services: The demand for a product may change by substitutes or complimentary goods. It is important to clarify if the product is a substitute or a complimentary good.(porter) The threat of substitute products can be evaluated in terms of the availability and performance of substitutes, switching costs and propensity of the consumer to substitute. Substitute products refer to products in other industries. A threat of substitutes exists when a product’s demand is affected by the change of price to a substitute product. A close substitute product constrains the ability of firms in an industry to raise prices. What does it mean for Think Twice: Instead of second hand clothes it is also possible to buy brand new clothes, this is a substitute good. If you want you can spend more money for brand new clothes. It is not a product that complements another product. 5. Rivalry among existing competitors: In this case it is important to look at the current competitors of the company. What impact has this competitive market? (porter) There are a lot of vintage and second hand stores in Denmark. (visit copenhagen.dk)There are not so much competitors in this current society. There are plenty of clothing stores in Denmark, but there are only a few stores who provide in the same needs. During my research I did not find stores who sell second hand clothes and new designs at the same time. Below you see three stores who almost provide in the same needs. - Butik second Ivelina; This store sells also luxury second hand clothes. It is also possible to do a great bargain, but that is actually the difference. Think Twice sells clothes with a story and it is not possible to negotiate.(ivelina.dk) - Resecond; Resecond is one store that is a real competitor. There is a real difference between our products. Resecond concept is to sell old dresses which you have worn ones, while the concept of Think Twice is bigger. Besides, Think Twice has to focus on merchant, otherwise they don’t have enough products to sell. (resecond.com)
- O.V.S.; This is a second hand store for men and woman. In this fashion boutique you can find designer clothes but that’s all. They have nothing special so that is the difference. Think Twice create an experience. For Think Twice is this a great opportunity to come up with the new concept ‘Everything 4 You’. They distinguish themselves and they also add value to today’s society.
Chapter 2: 2.3 Business model: The 9 building blocks The 9 building blocks is a model that you can use to describe the rationale of how an organization creates, deliver and captures value. (Jamal Aztout). It is a visual chart with elements describing a firm’s value proposition, infrastructure, customers, and finances. It assists firms in aligning their activities by illustrating potential trade-offs. I used this model to get a better view of my organization Think Twice. Below you will find the 9 segments filled out and described. Consumer Segments: Without customers no company can survive, so it is important to define your customers in different groups of people. Now you know exactly which customers you want to reach. For this concept there is chosen to segment on young female consumers. This allows you to focus on: Segment 1: Generation Y, this are women between 18 and 35 years old. They have a huge passion for fashion. They grow up in a generation of technology, this means that they are into social media and the internet. (TONG HOI YI, KAYE) Value proposition: It is possible to solve someone’s problem or satisfy a customer need with this concept. The companies value proposition is what distinguish itself from the competitors. This part provides value through various elements such as newness or customization.(osterwalder) For the young female consumers who loves fashion it’s hard sometimes to make a decision where they want to buy new clothes. Copenhagen has a lot of different stores, with different brands.(the guardian) With the concept ‘Everything 4 You’ you have a lot of different brands, new clothes and luxury second hand clothes with a great story. The whole concept is innovative and a great experience you will never forget. The price of the products are normal and we have more than only clothes. This is the perfect place to be for young females. Channels: This subject is about how you want to reach your customers. This point describes how you interact and communicate with your customers. Effective channels will distribute a company’s value proposition in ways that are fast, efficient and cost effective. (wiki) Many clothing lines sell their clothing by retail. Here you are selling your product directly to the end user of the product which is the people that will actually wear the clothing. (startaline) Think Twice, ‘Everything 4 You’ is a physical shop where you can buy luxury second hand treasures. When you buy one of our products we put them in our special designed bag. If you order a product online we will send it to you in a special designed box in a few days. Moreover, we want to promote Think Twice by worth of mouth advertisement, facebook, twitter, instagram, our website and flyers. We also want to send our members a newsletter by email. Customer relationship: which relationships does the company establish with one of the segments. Customer relationship is a strategy to manage customer relationships in order to create shareholder value. More companies are going beyond the traditional customer-vendor relationship to co-create value with customers. For example, consumers can write their personal story about the apparel that they deliver. (osterwalder)
Each time when you visit the store, it is possible to become a member. When you are a member you get your personal member card. Every time when you deliver your trash or when you buy something new you earn points.
When you have 20 points you receive a discount. It is also possible to use our website. When you want to buy clothes online or when you want your own account you have to sign up. The organization knows who visit the website and know what they buy and how many money they spend. They can build a CRM system with all the information they get by means of the sign ups on the webpage and the members in the store. Moreover, they also can send newsletters or discounts to the members. Last but not least I want to develop a ambassador strategy. Revenue streams: It is about how many a customer will pay for our product. Revenue streams refer specifically to the individual methods by which money comes into a company. This Revenue Stream is generated by the use of a particular service. The more a service is used, the more the customer will pay. (Osterwalder). Our concept sells physical products. Our products, are products with a story behind it. This creates more value for the product. Because of the second hand products, we are not asking more than 70% of the purchase price. After your purchase, you are the new owner, and free to do what you want with it. We also sell our own designs with an average price. This is about what kind of goods and services we use. This part connect some of the segments with each other. It creates and offer a value proposition, it reach markets, maintain relationships with customer segments and earn revenues. Key resources:
What does it mean for Think Twice: - We need to rent a building - Material; desks, clothes racks etc. - 2 employees, 3 interns - Software - Laptops, mobile - Luxury second hand products - Online market(web shop, social media) Key activities: What are the special things in your concept and what make Think Twice special. Sign up corner, area where you can find our own productions, area where you find the treasures with their great stories and the accessories, furniture etc which Think Twice can use to dress up the shop. All elements are linked together and take you into an experience. Key partners: The organization has a partnership with the following companies: - An agreement with universities, because it is possible to follow an internship at our company. - An agreement with the owner of the property, because we are hiring the building. - An agreement with a copy shop, who is responsible for our member cards and flyers. - A company who wants to produces/develop our unique creations. - A agreement with the sellers, because we pay them 20% of the retail price. - A agreement with someone who is going to build the web shop. Cost structure: This describes the most important costs incurred while operating under a particular business model. - Cost of Sales - Software - Salaries, rent, and physical manufacturing facilities.
- Marketing and communication - Materials
source: (fronter.com/kea, business model generation, 2013)
Chapter 2: 2.4 Target audience: Most of the women love to shop for clothes . They want to look good and want to be â€˜in style.â€™ Brand name clothes, serve as status symbols and communicate to other people what kind of image we want to present. Due to the large amount of women in Denmark, we have chosen to segment on the females of Generation Y . (unpac) Females of Generation Y: Females in this target are born between 1978 and 1994. The youngest female in this category nowadays is 18 years old. One of the characteristics of this women is that it is important for them to have quality in their life and that they get the best of everything. From their young age, they have been taught that they can have what they want. They desires for quality life and products can offers the best to them. This allows for ambitious women with high expectations. Besides they those women are brand conscious, perfectionism, materialism and hedonism towards fashion.(NAS) Facts about Generation Y: - This generation lives in a unique shopping environment, that consist of more opportunity and reasons to shop than ever before. - This group is often typified as being highly consumption oriented and sophisticated in relation to their tastes and shopping preferences (Belleau, Summers) - Shopping to them is a combination of social activities and leisure activities. They are born to shop. - Advanced technologies plays a crucial role in shaping generation Y attitude and judgment. They can get information from different source. (Wolburg & Pokywczynski, 2001). - They are addicted to Internet. Targeting: I have chosen to deepen on Generation Y women who loves fashion. For this purpose, the company will use a marketing strategy. For example, the company will promote Think Twice in various fashion magazines. From the online marketing, we will create social media campaigns to promote us at the beginning, build up a network and try to create interest with some creative advertising solutions in cooperation with advertising company. Positioning: The target should become interested in Think Twice. We also need to make sure we do not lose the sight of the segment on which we focus. We have to find a way to achieve the target 18 - 35 which are interested in fashion and socially adjusted.
P Persona Kristel: • Is 29 years old and has living her whole life in Denmark. • Lives in a luxury hous near to Copenhagen. • Is married with Tom for 3 years and they have a son (1 years) and a daughter(3 years). • Works hard for her career (business woman) and she works at the European Environment Agency. • Loves Fashion so she always reads the magazine ”Vogue”, besides that she has a collection of scarves and skirts. • Like to make photo’s and use photographs of street fashion, clothes. Dreams of being a good photographer and want to start here own company. • Twice a week she goes out with here best friend to walk for two hours. • In the weekend and vacations she’s want to go out to shop. She visted a lot of markets an vintage stores. • Is into super food, this is very healty food and good for here body. • Spends quite a lot of time on the internet, esp. Facebook, LinkedIn and Pinterst. She also visit site’s on here ipad to be up to date of the latest trends.
Chapter 3: 3.1 Concept ‘Everything 4 You’: An excellent opportunity is if someone develops a new shop which is totally different from normal shops. In fact here in Copenhagen are enough stores, all of the stores have a bunch of different brands for women. It is sometimes difficult to choose. Women love shopping and have their wardrobe always full with clothes. Therefore, it also happens that women have a bad purchase, or a product that they have worn only 1 time and still don’t like anymore. With this concept the young females are a part of a new experience and give new values to the products.(acrwebsite) What is Everything 4 You: This is a total new concept especially for young females who loves fashion. Think Twice is not just an ordinary store, with their new concept ‘Everything 4 You’ they give the opportunity to buy and sell luxury second hand items with a unique story. This is possible via the web shop or the physical store. The slogan of the company will be: ‘make a treasure of your trash’. When you bring your clothes to the pop up store your product get a second chance. Think Twice ‘Everything 4 You’ believes and thinks that every used product has a wonderful story which can be a beautiful treasure for another. Therefore offers the concept ‘Everything 4 You’, you the opportunity to deliver your ever loved but now unnecessary products. The company want and loves special things, that is why we provide a selection of the finest apparel, furniture, accessories, art, you name it! In our opinion as described earlier, had each product a story and a unique history that you would like to tell to the new owner. Think Twice decide which clothes that they assume. When the employees of the store decide which clothes they want they will receive you a tag where you can express your story. Moreover, Think Twice and their new concept ‘Everything 4 You’ is more than a fashion shop. It is possible to read crazy anecdotes, stories and experiences of the previous owners and besides it is possible to discover treasures of acquaintances and expand your home with new treasure! The store: Online shopping is naturally great, but sometimes it is better to see clothes in real life, to feel clothes and to check if it fits. That is de reason why Think Twice want to develop a physical store. In the physical store you will find unique developed creations as well. It is possible to shop and to deliver your clothes. When you enter the store you will find yourself in an treasure experience. You will see our whole assortment of clothes. First you will find the treasures and behind that you will find our unique creations. The incoming furniture, accessories and art treasures are used as decoration. The luxury second hand clothes are back to life. On the racks you will find the tags with someone’s personal story. On that tag you can find a barcode, which you can use at our screens. When you scan the tag you will get more information about the product. For example you will see the picture of the previous owner. Back in the shop you will find the selling point where you can deliver your clothes. The employees give you a tag and make a picture if you want. It is also possible to sign up as a member. This offers many benefits over time. If you are living to far a way to deliver your clothes in person, than it is possible to send good and sharp pictures of all your products by mail. The store decide and when they choose one of your products you can send them as a package.
Some guidelines before you deliver your product: - All products need to be in a good condition. The clothes should not be washed, be broken or full of stains. They have to be clean and ironed. - We don’t assume clothes from the brands, h&m, primark etc because of quality reasons. - If you have homemade accessories with a good story behind you can drop them. - If you want a special price for one of your products it is possible otherwise the store determines. the price. Normally it is 70% purchase. When your product is sold then you get 20% of the price. Status: Think Twice wants to distinguish themselves in the fashion industry of Denmark. Insight: You have to enjoy shopping, ‘Everything 4You’ allows you to relax and offers the best treasures. Message: ‘Everything 4You’ gives more value through your trash. Tagline: Buy and sell items with a unique store.
You are living your story
Chapter 3: 3.2 Experience Economy: Times have changed. People nowadays want more and more. Having a simple product is not good enough anymore. The economy has changed to an Experience Economy. The most important thing about the Experience Economy is to trigger emotions. Entrepreneurs are adding something special to their products, an experience, so they can distinguish themselves from other similar products. The consumer will pay a higher price than similar products without any experience. â€œan experience is an event whereby a person actively and emotionally is involved, and who has a value and meaning for the individualâ€? (Herman Lier)
The Progression of Value Think Twice
Clothing shops Bazaar
In the progress of value you see a few different steps. If you can see, Think Twice is in the premium and differentiated stage because they use an experience in their store.
Experience Economy in three stages: Expectation: Think Twice will offer there costumers a unique experience from their first interaction with our ‘treasures’. Our aim is to create expectations in accordance with what we offer, but we think that the focus point should be to offer customers and potential customers the best means to access our experience. When young females see our store they know they enter a special store, so customers will be excited. Event: When young females enter Think Twice they will find a lot of great treasures. The design and decoration of the store gives our customers a special feeling. They get the feeling that they are a part of the company and they know that they can find different brands and everything what they want. Memory: This is a crucial part for us since we know that a happy customer will always recommend to others. We want our visitors to keep in their memories a positive image. So they will recommend us to their friends and post good feedback for example on websites and social media. This makes it possible that we get a lot of new customers. 3.3 Risk analysis: When you are using our concept, there will be an expectation gap. There is a difference between the buyer customers or seller customers. How they experienced the situation and expectations and how that actually should be. Risks can be arise with this new concept, besides non of all the risks are the same. Some risks are more relevant than others. Therefore you can use the risk matrix. On the y line you put the probability of the concept and on the x-line the expected impact of the concept on business and/or reputation. It allows you to reduce the risk of a issue. 1. Not enough products or too much products: For this concepts we need a lot of products. It depends on how many people want to sell good stuff. More sellers means more products. It is also possible that we have more products than buyers. A lot of people become a member and bring clothes to our store, but now we don’t have enough space to promote our products. How can we solve this problem: Think Twice has to promote the concept and convince people. Tell your costumers that their product become a treasure, that it comes back to life. If you have to much products you can choose to have them for less than 3 months in your collection. When products are not sold you can give them back to the previous owners. This gives you the opportunity to display multiple items. 2. Not enough buyers: It is possible that you don’t have enough buyers to keep your business standing. When that is going to happen you do not earn enough money. So this risk is very critical. How can we solve this problem: It is necessary to promote your business on different events, second-hand markets etc. Make sure you have a stand at a second-hand market. Another solution is to share flyers on the events but also in the center and other popular shopping malls. 3. Online shopping: It is possible that there are a lot of customers who only use our webpage. Maybe they only want to buy new clothes and nowadays online shopping is a trend. In order to keep our business existing, we can not only use online shoppers.
Chapter 3: How can we solve this problem: If this is going to happen we have to promote our company. We can use different marketing skills and promote our store on social media. We need to tell/ convince our target audience about our great experience. Therefore we can organize a small event at our store and give some discounts. 4. Competition from companies who provide in the same needs: In Copenhagen are a lot of vintage stores, and there are also events for second hand clothes. Those stores provide in the same needs, they want to survive as a company. So you have to be the best and distinguish yourself. How to solve this problem: Think twice used an experience for their concept ‘Everything 4 You’. Promote your experience and make a good strategy for your company. Use marketing and communication. Sell your product in commercials, advertisements and on the internet. Try to use free publicity as much as possible and indentify your company on social media platforms. 5. Not enough Interns: A great extents depends on the Interns. We want to have 3 or 4 interns who are responsible for a lot of thing. For example, they are responsible for updating the website, design, social media etc. For them it is a great opportunity to be part of the company as a real colleague. It is possible that students don’t know about a internship at Think Twice . How can we solve this problem: There should be good contact with the Copenhagen business school and the academy of fashion design. Besides that, our company needs a high search optimization on google and special webpage’s with jobs for interns.
The risk matrix is a very useful tool. The numbers inside the model shows how important and high a risk is for the company. For example number 3, this one is about online shopping. When Think Twice has a web shop they can reach more people and it will be easier to buy clothes. But the risk is not so high if they don’t utilize a web shop.
3.5 Budget: In de budget you will find two tables with costs. The first one is about the investment and the costs you have when you start up a new company. The second one is a exploitation budget, which shows you how many money you earn in a year. For year one Think Twice calculated to sell 60 items each week. We also made a calculation to purchase 25 items each week. We use this items for our handmade collection. In year 2 this will be 70 items to sell and 30 items to purchase. In year three it will be 80 and 35. Investment budget to start up a new company:
Investment at the beginning Profit After one year Profit After two years
€59.100 €16.400 €42.700 €33.300 € 9400
Breakeven: €9400 / €50.200 =0.19 0.19 x 12=2.25 After two years and 2.25 months the company plays break even.
Home Shop Treasures
Want to sell?
Conclusion: The problem formulation was: What ensures that Think Twice will be a creative and innovative company for young females and which has a good chance in the fashion industry in Denmark? During the research I found a few problems. For instance, the growth of the Danish Fashion Industry and women who are buying more and more clothes. To solve this problem I created a new physical store and web shop with a great experience, which is called Think Twice. The mission to develop a new store was to create an experience for especially young females. By using the concept â€˜Everything 4 Youâ€™ the consumers are connected to Think Twice. They are part of the product now. The study also revealed that consumers need to be part of something. Besides study also showed that consumers want both a physical store and a website. Hence, our store Think Twice offers you to choose. Summing up on the previously developed theories, we can conclude that Think Twice is an unique experience for young females. We believe that we have developed a basic business plan that shows the great business potential this company has to offer. Moreover, this store offers a lot of possibilities and adds value to the Danish fashion industry. The budget shows that the company will play break even after 2 years and 3 months, so they will have a good change in the future.
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