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By Kieve Kavanaugh, eHow Contributor updated: May 30, 2010
The apparel and textile trades face new perils, while yielding a wide range of opportunities.
SWOT, an in-vogue form of strategic planning, is ideal for the volatile fashion industry. SWOT studies evaluate "strengths, weaknesses, opportunities and threats" involved with stated business objectives. Both internal and external factors are considered. Analysis then defines favorable and unfavorable factors and their potential impact on the end-goal.
1. A SWOT analysis covers four areas of consideration. The first "strengths" takes into account internal attributes that will positively affect the business objective. The second area, "weaknesses," identifies potential weak -links within the company's control that could contribute to a detrimental outcome. The third category, "opportunities," analyzes external conditions that favor end -goal achievement. Finally, external "threats" that are beyond the company's control face evaluation.
Fashion is a multifaceted industry comprised of design, production, distribution and merchandising factions. The global fashion market is broken into geographical segments including the Asian, European and U.S. markets. Boundaries must be erected around t he segment of the market to be analyzed. Those boundaries could include geographic regions, particular brands, designer lines and particular cogs within the fashion wheel, such as garment manufacturing or junior-retail sales. The business objective itself narrows the area of fashion that will be considered on the SWOT study.
its loyal consumer base. A costly labor source would be added into the category. al. A new designer. industrial advantages and trade connections. This lack of name recognition would be listed as a specific weakness. Before plunging into unknown seas. Strengths A brand's strengths are resources that contribute to its competitive edge. proprietary knowledge. the tightening of consumer discret ionary income. Shifting trends. without a reputation. trade barriers and governmental regulations increasing minimum wage all appear on SWOT radar. without a following. mainly the US and European Union. is a negative point. competitive sources of raw materials. an industrious designer may be spurred to create a line featuring Thai silk. Competitive disadvantages within company control land in this portion of the study. Threats Threats to doing business as usual also instigate SWOT studies.1. order a SWOT. These external negative changes can impact the fashion industry by crippling profits. Antitrust laws are designed to encourage competition in the marketplace (Arthur Sullivan et. which prohibits anti-competitive behavior and disadvantage business practices. would be another weakness.Timing 2. A new line. talented labor pools.1Types of Anti-trust Laws .. Factoring into a line's strengths are its reputation. Easy access to this inexpensive quality fabric may be a windfall. have anti-trust laws. Weaknesses Lack of strength in an area equals weakness. It will reveal your market's climate and reduce financial risk. When opportunity knocks. Opportunity Emerging opportunity often proceeds the SWOT. 6. 2003) and prevent market failure. Tapping into the maquiladora labor pool is another such opport unity. Many countries. When international trade barriers come down. with the latter having provisions under the Treaty of Rome to maintain fair competition. It is wise to conduct a SWOT analysis prior to opening or expanding an industry business. 1 Economic Regulations Economic regulations in the fashion retail industry are mainly based on the policies of anti-trust laws. authorize a SWOT study.
6. Hart-Scott-Rodino Act 5. Sherman Antitrust Act 4.1.1 Issues in The Fashion Retail Industry 6. Orthodox economists like Richard Whish fully acknowledge that perfect competition is seldom observed in the real world.2 Types of Anti-Trust Violations Two types of anti-trust violations are of most concern in this industry. while their competitors can operate individual outlets at a loss indefinitely. organizations like the United Nations. Only in recent times.2.1. the fashion retail industry have also faced many social issues over the production of its goods. 6.2. Clayton Antitrust Act 3. Independent retailers are especially vulnerable. taking a temporary loss so as to drive competitors out of business and achieve a dominant market position. it controls market operations where it can. Federal Trade Commission Act 6.3 Importance of Anti-Trust Laws Anti-trust laws were implemented to prevent the concentrations of wealth in the hands of very few through trusts and monopolies.1.2 Buyer Power Buyer power is the ability of big retailers to use their clout to bully suppliers into providing special discounts and favorable terms that are not made available to local businesses.2. Antitrust laws were formed to prevent trusts and monopolies from creating restrictions on trade which reduced competition. 6.1. By using the law. 6.1.1 First-world or Third-world? . governments and campaign groups are stepping up their laws and regulations for producers in order to provide a better environment. 2004). mainly for the garment workers. Such trusts and monopolies erased normal market competition and produced undesirable controls on prices. and so aim for what is called "workable competition (Richard Whish. due to the lack of financial reserves to withstand a sustained predatory pricing assault.1. 6.2. mainly predatory pricing and buyer power. Robinson-Patman Act 2.1 Predatory Pricing Predatory pricing occurs when a company sells its products below its own cost price.2 Social Issues and Implemented Regulations Over the years.
000 euros in damages. garment workers are exploited mainly due to cheap labor.2.Whether the market is regulated and/or influenced by the state depends on the development of countries. Mass-produced clothing is often typified by lack of benefits. In June 2008. Fashion-retail powerhouse LVMH has created their own form of brand protection to deal with the growing number of counterfeiting products in the market. is a shopping website which provides online auctions for people and businesses to buy and sell a broad variety of goods and services worldwide. death. etc and Third-world countries such as India. They provided a registration scheme for manufacturers. Many countries have also created organizations and guilds to prevent such issues from arising. garment workers in developing countries have continued to suffer under harmful conditions which demand repetitiv e manual labor. long working hours and worker representation. tremors. Apart from the pests.2. of which pesticides worth about 819 million USD have been declared poisonous as per the guidelines of the WHO. The constant use of toxic pesticides leads to air. 6. 6. often employing illegal immigrants. 2007). UK.1. managed by American Internet Company eBay Inc. accessories and jeweleries in the market today. Based in France. pesticides also cause the death of other small animals and birds consuming them inadvertently. harmful to the environment and to people. who would then collectively boycott retailers if they were caught selling copied items. LVMH has been aided by police operations leading to the arrest of many illegal vendors selling counterfeited products which helped to raise the awareness of buying illegal products in consumers. China. The health of the workers spraying pesticides in cotton fields are adversely affected. In terms of production in the fashion retail market. many retailers face the issue of copyrighting someone else's product and this have led to many problematic issues over the years. . Ultimately whether it is a First-world or Third-world country. clothes made in more industrialized countries may also be manufactured similarly.3 Copyrights Issues Due to the wide range of clothing. in some extreme cases. Statistics have shown that nearly 2 billion USD worth of pesticides are used yearly.com ) eBay. Pesticide poisoning can lead to negative symptoms such as headaches. In the US. Bangladesh. Figure 45: eBay breaking copyright laws again (Photo courtesy of eBay. the Paris commercial court ordered eBay to pay nearly 40 million euros in damages to Louis Vuitton for selling fake luxury goods in a ruling due to copyright protection. water and soil pollution.1. the Fashion Originators' Guild of America was created to patent and prevent the copying of clothing designs. This is mainly due to the drive of these immigrants seeking new economic opportunities and better livelihood at the expense of exploitation (Mark Patrick Taylor.2 A Harmful environment The production of cotton which entails the use of a large amount of pesticides. First-world countries such as USA. etc. While most examples of such conditions are found in third-world countries. loss of consciousness and. Further selling of fake luxury perfume which bore the name of Louis Vuitton later that year led to the fining of eBay in which they have to pay LMVH 80.com. A Case Study on Copyright Violation: eBay Inc.
countries like USA and UK have stepped up on their laws and regulations to prevent the exploitation of garment workers. of forced labor and child labor.1 Immigration Laws and Acts In recent times. designer clothing.2.2 The Need for Intervention: Garment Workers 6. many designer and campaign groups have sought to improv e these conditions by sponsoring awareness-raising campaigns.. My sewing contractors are telling me they don't have the workers.2. Some of the major groups are discussed below: .000 per country.1. This means that garment workers with proper visas are given similar benefits to US Citizens.2. which most of the time lead to the deaths of these animals. 6.org ) The International Labor Organization (ILO) is a specialized agency of the United Nations that tackles labour issues and has received the Nobel Peace Prize in 1969 (Alcock. a popular sportshirt and sweatshirt maker in the US who mentioned: "This will cost me $10 million in sales this year. though many countries have recognized the regulations set by the ILO. successfully tackled the issues. Benjamin Mark.2. president-owner of ID#. However. For example. 6. among others.4 Ethical Issues Animal rights have also brought up ethical issues related to the fashion industry time and time again. The cruelty to animals behind the preparation of a fur coat has been the biggest issue in animal-rights activists as it is currently associated in developed countries with expensive. 6. and has to a great extent..000 visas established for immigrants from Eastern Hemisphere countries with no more than 20." (Cole.ilo. 1971).2. The ILO in all its efforts has proven to contribute to an improving human rights situation for the world's Indigenous peoples. 1987). However. mainly through world-wide events which draw the attention of the media and the public. Immigration Acts such as The Immigration and Nationality Act of 1965 in USA allows an annual limitation of 170.2. A.2. One example would be Roland Kosser.3 Non-Profit Organizations and Campaign Groups Coalitions of Non-Profit Organizations. immigration laws and acts are seen as a paradox to the retail industry as many household retail names would then lose substantial amount of sales due to the "disappearance of undocumented workers".2 The International Labor Organization (ILO) Figure 46: International Labor Organization (Photo courtesy of www.. many countries continue to exploit the workers by not fully enforcing the ILO's laws and treaties.2.6. The ILO organizes the International Labor Conference in Geneva every year.. pain is caused to animals in extracting wool and leather.
buyer referrals.2.2.org ) The Garment Industry Development Corporation (GIDC) is a non-profit organization established in 1984 and has evolved into a multi-tiered service organization providing marketing.2.COO. and Bud Konheim . The principles set forth in this code include.2.3. Formed in the Netherlands in 1989.2.CEO. a minimum employment age and safe working requirements.1 People for the Ethical Treatment of Animals (PETA) .2. This shows the awareness of top fashion retail players who are concern about the rights and working environment of their workers. Successes The CCC has developed a "Code of Labour Practices for the Apparel Industry Including Sportswear" based upon the conventions of the United Nations' International Labour Organization. among others. Thomas Murry . and training and technical assistance to New York apparel manufacturers and workers. The CCC also pressures retailers and manufacturers to adopt the Code of Labour Practices and many successful campaigning by the CCC has led many businesses to adopt this Code of standards for suppliers.1 Clean Clothes Campaign (CCC) Figure 47: Logo of Clean Clothes Campaign (Photo courtesy of www. Elie Tahari.cleanclothes. 6.3.org ) The Clean Clothes Campaign (CCC) is dedicated to improving working conditions and supporting the empowerment of workers in the global garment and sportswear industries.3 The Need for Intervention: Animal Rights 6. Calvin Klein.2 The Garment Industry Development Corporation (GIDC) Figure 48: Images of GIDC (Photo courtesy of gidc. GIDC's main aim is to provide for a worker's education and GIDC's Board of Directors include some of the top leaders of New York's Fashion industry including. the CCC has campaigns in 14 European countries and works with a partner network of more than 250 organizations around the world.3.6. Nicole Miller. 6.
org ) People for the Ethical Treatment of Animals (PETA) in the US claims the largest animal rights group status in the world. along with other animal rights groups have called for attention to the extraction of fur and other practices they consider cruel.Figure 49: Logo of PETA (Photo courtesy of peta. TECHNOLOGICAL Visual 2000 International Inc announces that it has established a strategic partnership with fashion industry veteran Joe Facenda to bring its popular . PETA. animal testing and animals in entertainment and has continuously campaigned against the killing of animals. fur farming. PETA focuses on four core issues: factory farming. In the fashion retail industry.
´ SOCIAL ASPECT Can Fa MSSOocialean Fair Trade? .). supply chain management and other integrated software solutions to the apparel. ³We are pleased to have such a knowledgeable and reputable individual as Mr. ³I am excited with the opportunity to bring the Visual 2000 solutions to t his market. implement. After a flying career with the U..net product lifecycle management (PLM). Facenda is also a founding member and former chair of the AAFA Supply Chain Leadership Committee and former director of SEAMS. ³His industry consulting and technology expertise will enable us to meet fast growing demand for our comprehensive and cost -effective solutions in this important fashion market. The Visual 2000 software meets these previously unfulfilled needs with easy to co nfigure and use solutions that support business processes from concept -to-consumer. Mr.PLM. and other industry -specific solutions in California and surrounding states.´ Based in Los Angeles.´ added Mr. Facenda and his team to market. Facenda to lead our expansion into the Western U. Vice President of Research and Development at Visual 2000. The addition of this west coast office is part of our global business expansion initiative for 2010. We expect that this phenomenal value proposition will enable us to significantly expand the customer base here in 2010. footwear. Essentus (now Jesta I.net supply chain management. ³The dynamic nature of the industry here requires highly flexible software that can change with a company based on evolving market conditions. Facenda brings a wealth of fashion industry expertise to existing and prospective Visual 2000 clients in the region.´ noted Charles Benoualid. he served in a variety of management positions with Kurt Salmon Associates (KSA). Air Force. and accessories industry in the Western United States. The partnership makes it possible for Mr. Visual SCM.S. ERP.S. Inc. and support the company¶s Visual PLM. Facenda. Facenda most recently served as Vice President of Sales for global trade and supply chain management company TradeCard. and SAP reseller Metamor (now Ciber). Visual 2000 ERP enterprise resource planning .S.
Earlier this month at London Fashion Week. Both designer and highstreet labels with ethical production as a central guiding principle have emerged in the last 10 years. Highstreet labels such as Monsoon and Warehouse also have fair-trade lines. is an example of the trend in ethical fashion. Some of the top names in fashion advocate ethical fashion or are involved in such projects personally. and some of her lines use organic and ecofriendly materials. . Well established brands are also taking note. whose designers adhere to the three ethical standards of upholding internationally recognised high standards in working conditions. and preserving local skills. there were several ethically produced collections on show. 25-28 September 2010. for example. This weekend. with several offering ethically produced lines for sale alongside their main collections. Paris will host the seventh annual Ethical Fashion Show. Stella McCartney. Top model Laura Bailey is an ambassador for The Fairtrade Foundation. 27 September 2010 Designers try to saturate a growing demand for fair business by Leah Leiva The noughties will be remembered as the decade that ethical fashion went mainstream. including Pachacuti and Minna. minimising environmental impact. which surveys show has remained consistent despite the economic downturn. who showed her first collection in Paris in 2001. This event is exclusive to ethical fashion.Monday. She doesn¶t use any leather or fur. The designer considers animal rights and environmental impacts when designing her collections. This is in response to overwhelming consumer support for fair trade principles. but ethical fashion can also be found side-by-side with standard fashion at other events.
2005 and 30% in 2006. 2004.While still a niche market in the grand scheme of things. It provides fair pay to the producers and takes into account the principle of equal pay for equal work by women and men. but the company has since begun to include environmentally sustainable production by using recycled. ³the market for ethical clothing has more than quadrupled over the last four to five years to reach around £175 million´. for the Ethical Fashion Forum found that in the UK. Its website claims: ³We personally visit each cooperative or factory and get to know the workers who truly are the backbone of the apparel industry´. People Tree is a mid-range priced ethical clothing brand that has seen strong growth in the decade since it launched in the UK in 2001. is a US company that sells fairtrade clothing online. Its values were at first focused on fair treatment of workers. As in Europe. which opened in 2006. trade in ethical clothing has exploded in this decade. help producers with access to pre-harvest or preproduction financing. USA clothing brand giant American Apparel. US highstreet retailers are also responding to the growing interest of consumers in the manufacturing of the clothes they buy. and ³covers not only the costs of production but enables production which is socially just and environmentally sound. A report by Minitel. Fair Indigo." The noughties have also seen a boom in ethical fashion in the USA. which opened its first retail store in 2003 and reported sales of US$545 . The company explains that the price paid to manufacturers of their garments corresponds to International Fair Trade Association standards. whenever possible. Its sales grew by 40% in 2003. Fair Traders ensure prompt payment to their partners and. and ecologically friendly fabrics in response to its customers¶ requests. organic. published in 2009.
recycling fabric scraps and utilizing organic cotton´.million in 2008. and they reduce their impact on the environment by ³using solar power. there are some who feel that the words ethical and fashion do not belong in the same sentence. It proclaims that this service means that ³For the first time in history. Can fair trade fashion be cool? The endorsements from models and engagement of successful designers such as Stella McCartney indicate that it can and is. Trans Fair USA. The company claims that its ³average sewing operator earns more than $12 per hour´. Consumers questioned about their buying habits and attitudes about the fashion industry in a 2009 study conducted by the French Institute for Fashion agreed. A majority (57%) agreed or somewhat agreed. With trust in aid organisations diminishing somewhat and considerable cynicism regarding the . a fair-trade labelling organisation in the USA. reports that about three-quarters of consumers consider environmental and social aspects when they make purchasing decisions. ethical clothes are fashionable. Respondants were asked to what extent they agree that these days. has a strong ethical focus. Of course. The company is the first to offer fair trade labelling for the garment industry. This is especially important for socially and environmentally conscious consumers who want to support developing country economies but are weary of buying clothes from countries with lax labour or environmental laws. The success of ethically conscious clothing brands is testament to the strong desire among consumers to see trade with less advantaged people conducted justly. consumers will know that no one was exploited in the process of making the clothing items they purchase´.
there would be little need for such aid . it could easily be argued that if ethical trade became the norm rather than the exception. buying ethically made clothes and other products is increasingly seen as a positive way to µhelp people help themselves¶. Indeed. given the disastrous human and environmental effects of exploitative trade and investment.percentage of budgets some organisations use on marketing compared with direct aid provision.
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