Analyzing the Business of Fashion

Introduction

The current report presents an analysis of the Business of Fashion (BOF). Main purpose of this report is to determine the advantages and disadvantages of establishing an e-commerce store for BOF. In this report, the researcher presents an analysis of the company through SWOT analysis and Porter Five Forces Analysis.

Research Methodology Table

BUSINESS OF FASHION (BOF)

The Business of Fashion was founded and established by the current CEO Imran Ahmed in 2007(About Us, 2019). Today it is among some of the leading sources of fashion news. It has also become a leading resource centre for fashion creatives, executives, entrepreneurs and other such individuals associated with the industry. One of the main goals of the company is to provide information to the people who are otherwise misinformed or do not have much idea about the industry. Today, the company operates in several countries and is considered among one of the best sources for all fashion news and information(About Us, 2019).

BOF TARGET CUSTOMER

BOF has placed itself as a fashion news company. This means that the main goal of the firm is to provide people with a variety of information relating to the fashion world and its latest updates(Macchion, 2017). Through its operations, the company targets customers who either do not have information about the fashion world or those who are looking to acquire more information about the latest trends and developments in the industry. Since its establishment, the company has catered to numerous people who were looking to enhance their overall understanding about the industry and also to make their way into the industry as a fashion designer, a creative individual, executive or in any other such form.

SWOT ANALYSIS

BOF has become the market leader in terms of fashion news and information. It is considered as the leading website that people looking to obtain more knowledge and information about the industry go to. It is essential for the company to identify and learn about its strengths and weaknesses, as it can be the differentiating factor for success and failure for the firm. Since the fashion industry is highly volatile, it is all the more critical for BOF to thoroughly evaluate not only its surroundings but also its internal environment(Perez, 2018). A SWOT analysis can be useful for this purpose. Through SWOT analysis, the management will be able to obtain a significant amount of information about both internal and external environments for the company. Such information can be invaluable for the company and could help the firm to successfully operate in the e-commerce sector and also develop a sharp image in the market. One of the significant weakness of BOF is the fact that the company has virtually no experience in the e-commerce market(Cerruti & Carlos, 2016). Further, it is faced with the threat of intense competition, which is ever increasing. This can make it very difficult for the company to establish its operations as an e-commerce firm successfully in the market. Following image shows strengths, weaknesses, opportunities and threats of BOF.

PORTER FIVE FORCES

For analysing the market position of the company, the approach porter’s five force model has found very effective. In this regards, different elements of Porter's five force model are listed below:

The first element is focused on determining the power of buyers that is relatively high in the context of the fashion industry. This is because BOF is facing tough competition with various other fashion brands such as Louis Vuitton, Marks & Spencer, Gucci and many more which are offering similar products and services so as customers have several options in the field of the fashion industry(Khurana, 2019).

The second section is the power of suppliers. It is relatively low for suppliers because there are several suppliers available in the market that are offering similar goods and products so as BOF can easily access new products with appropriate bargaining power.

The business rivalry is being termed the most critical factor of fashion because there is huge business rivalry addressed among leading brands and it has increased the level of competition in the market(Lawless & Katalin, 2016).

The threat of new entrant is being termed as an important element of this model. In the context of the fashion industry, various new companies are expanding their business operations, so asBOF is facing significant competition from new emerging brands. The entry and exist in the fashion industry are very easy, so as it motivates companies to become part of the fashion industry(Pedersen, 2018).

The last element is the threat of substitute that is significantly higher in fashion because various companies are offering similar types of goods and services.

COMPETITORS OF BOF

Some of the competitors of BOF includes Refinery29, which is a fashion style and beauty website. POPxo is also a major competitor for the BOF. Further, there are numerous other companies in the e-commerce fashion market that will compete with BOF in the future(Large, 2019). In light of this fact, it can be said that it will be imperative for the company to identify and learn as much as it can about its competitors. The Point of Parity (POP) with companies such as Refinery29, POPxo, and other such digital organisations is very high. These firms share similar operating styles with that of BOF. However, on the other hand, e-commerce stores such as the ones run by Louis Vuitton, Zara are very different from the current operations of BOF. Thus, the Point of Difference (POD) is very high in this case.

AFFILIATE MARKETING FOR BOF

In the modern world, the tools of marketing have changed significantly. It can be supported through the fact that aspects such as affiliate marketing have gained major popularity and widespread use in recent some years. Since BOF is looking to start its own e-commerce operations, the company can use affiliate marketing as one of the various tools through which the sales can be increased, and an increasing number of people can be informed about its products(Horsley, 2017). Herein the company will need to provide special offer codes to fashion influencers on social media like Instagram and YouTube, which they can give to their followers, thereby promoting the company and its sales. Affiliate marketing can help in increasing the overall reach of a company in the target market and among the target customers(Bharadwaj & Fairhurst, 2010).

DATA FROM PRIMARY RESEARCH

In the context of the current situation, primary research will be of great importance for the firm. It can enable the company to collect a significant amount of information about the market, as well as the demands of customers and trends in the market(Hickman, Ozuem, & Okoya, 2019). Such information can be of great use for the company and help in enhancing its reach as well as overall performance in the market. There are various types of information and knowledge that the company can expect to obtain from the primary research. Through the survey, the company can learn about general needs and trends in the target market while focus groups can enable the firm to identify the demands of a particular group of customers. Similarly, interviews can help in pinpointing needs, demands and expectations of a particular type of customers(Blazquez, Zhang, & Boardman, 2019). Such information can enable the company to develop better plans, therefore enable the company to fulfil the needs and demands of the customers in a better manner. Through such research, the company can expect to obtain a significant amount of information about the market in general and thereby make plans through which it can achieve its goals and objectives(Yang, Song, & Tong, 2017). In this regard, it may not be wrong to say that primary research is of great importance for the company. During the surveys, it was observed that majority of the participants believe the e-commerce market, especially for fashion-related products, is saturated. There are numerous companies that are providing such kinds of services. The focus group provided information about the fashion needs of the customers; for instance, the participants stated that they want to buy such products which are practical but of regular use as well. The participant during the interview stated that he expects high-quality products but at cheap or at least reasonable rates from a brand such as BOF.

ADVANTAGES

One of the biggest advantages of having e-commerce operations for BOF is the fact that the company has operations in many countries and markets around the world. Thus, BOF already has a large customer base. Through its e-commerce operations, the company can cater to the needs and demands of its customers who are spread across geographical boundaries(Ferreira, 2018). It is a new and much effective way for the company to fulfil the demands of a large base of customers and add value to its overall operations as well. Another advantage of e-commerce operation for BOF is that the company can gain new customers. This can be a great benefit for the firm, especially if it is looking to compete with the international market leaders. Lower costs are also a major benefit for the company. Because the firm will cater to a large customer base, e-commerce can be a way through which BOF can reduce its overall costs of operations(Khurana, 2019). Customer satisfaction and reach among the target customers is another major advantage of e-commerce-based operations for BOF. It can also be used as a means, by the company, to enhance its image and position in the market.

DISADVANTAGES

In addition to the numerous benefits, there are a number of issues as well that BOF will have to be aware of. These can have a significant negative impact on the overall operations of the company. One of the biggest disadvantages is that the company cannot guarantee the quality of the products(Meghani, 2018). Although there are several measures and tools that the firm can rely on, that would not guarantee the quality of the products. If the fashion items are of not the best quality, then it can have a significant negative impact on the company and satisfaction level of its customers in the long run. Security issues will be a major concern for the firm. In recent some years, there have been numerous problems with the aspect of the security of customer’s data(Wong, 2017). As data thefts and cybercrimes are increasing at a rapid rate, there are chances that BOF’s e-commerce operations could get affected adversely, leading to major dissatisfaction among the customers and the various stakeholders as well.

CONCLUSION

The main purpose of this report is to determine the advantages and disadvantages of establishing an e-commerce store for BOF. The company has placed itself as a fashion news organisation. This means that the main goal of the firm is to provide the people with a variety of information relating to the fashion world and its latest updates.

RECOMMENDATIONS

On the basis of the above study, it can be recommended that BOF should determine ways through which its e-commerce operations can be differentiated from the already existing companies. This can be extremely useful for the firm, more so because of the fact that participants during the focus group and interview sessions also had raised similar concerns. Apart from this, the company will also have to pay a lot of attention to improving its security standards so as to protect data of the customers from any cybercrimes and data theft incidents. BOF will also be required to provide high-quality products, but at cheap rates, as it is one of the responses obtained through the primary research.

REFERENCES

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