MS7SL83O – Business Intelligence

TABLE OF CONTENTS

25

1
LIST OF FIGURES

2
LIST OF TABLES

3
1.0 Business details

1.1 Gap analysis

Clothing rental is a novel concept that is reshaping the fashion industry and is the most recent
advancement in the sustainable economy. As part of a sustainable fashion initiative, people are
renting individual pieces of clothing rather than hoarding them. A growing number of public
figures are renting clothing to become more self-sufficient (refer Appendix A). Fashion is the
second most polluting industry on the planet (UN 2019). It generates nearly 20% of global
wastewater and 8-10% of global carbon emissions. It consumes more energy than the aviation
and shipping sectors combined (Ro 2020). As the environmental crisis worsens, so does the
demand for environmentally friendly clothing. Global consumer searches for sustainable fashion
have increased by 66% since 2018.

While being environmentally friendly, renting clothing provides customers with numerous
benefits. Everyone can try on their favorite clothes at a substantial discount from the retail price.
It enables you to experiment with new looks, follow trends, and expand your wardrobe without
breaking the bank.

Figure 01; Value Proposition Canvas

Source; Developed by author
Application (Pokorná et al 2015)

4
Figure 02 : Canvas business model
Source : Developed by author

1.2 Solution
'Threads on Threads' is Sri Lanka's first sustainable clothing rental platform. Users will be able to
rent out clothing items easily thanks to our website and application. Threads on Threads believes
in a more sustainable future. As a result, we rent out high-quality, sustainably manufactured
clothing. With the growing working class in Sri Lanka, an increasing number of people are
considering sustainable living. Sustainability is viewed as "the standard, not a luxury" at Threads
on Threads.

Threads on Threads wants ethical and environmentally friendly clothing to be widely available
and affordable. Our company is socially responsible and goes to great lengths to ensure that
every step of the supply chain is as ethical and sanitary as possible, from organic cotton

5
cultivation and harvesting to final stitching and all steps in between. Appendix B contains our
survey and the responses we received.

1.3 Our Buisness model

Our company produces and rents high-quality sustainable clothing directly to customers as well
as through distributors. In addition, our business model prioritizes the creation of economic and
social value through its operations. The identity of our brand emphasizes impact and
environmental responsibility.

Figure 03:Company mission,vision and values.

Source:Developed by author

6
Figure 04: Company value chain.
Source: Developed by author
Application : (Ensign 2001)

7
2.0 Macro Environmental Overview

2.1 PEST analysis

Table 01: PEST analysis

Source: (Welagedara & Ranaweera 2015; APIDM 2020;; Ameresekere 2021; Karunaratne &
Karunadasa 2021; Farzan 2021; Nadeera 2021; Rozais 2021;The World Bank 2020)
Application: (Sammut-Bonnici & Galea 2015)

8
2.2 Porters Five Forces

Table 02 :Porter’s five forces

Source : Developed by author
Application source : (Bruijl 2018)

9
3.0 Market,Industry And Competitor Analysis

3.1 Industry analysis

Despite the Covid19 pandemic, the global fashion rental industry, which is still in its infancy, is
rapidly expanding (Conlon 2020). The industry is expected to grow at a rate of more than 10%
per year by 2027 (Gonzalez-Rodriguez, 2021), with a global value of $4.4 billion (Biron 2019).

However, the industry in Sri Lanka is still in its early stages. Despite the pandemic, the country's
fashion retail industry is well-established and growing (Nanayakkare 2021), but fashion rental is
still in its infancy, with services primarily limited to wedding and party dress rental. All of these
services are currently only available offline.
Because of sector is still in its infancy in Sri Lanka, there is an opportunity to gain first-mover
advantage in terms of a 100% rental business. As competition and consumer awareness grow,
there is a chance that the site will expand into other sectors, such as garment exchanging and
collaborating with retailing companies to rent their clothing collections on the site.

3.2. Market Analysis

Table 03: Market segmentation

Source : Developed by author

10
4.0 Competitor Analysis

There is currently no other marketplace in Sri Lanka dedicated to renting out sustainable
clothing. The main direct competitors will be wedding and party dress rental companies.

Table 04: Competitor analysis

Source: Developed by author

11
5.0 Marketing and Pricing Strategies

5.1 Positioning Strategy

"Threads on Threads" will use a strategy that emphasizes the consumer and environmental
benefits of renting clothing to position the platform in the target market.

5.1.1 Marketing mix

Table 05: Marketing mix

Source: developed by author

5.2 Operations
● Platforms: "Threads on threads" will be a digitally-based company. This necessitates the
creation and upkeep of a digital platform, which will include a website and mobile apps
for Android and iOS. The author, who works in the information technology sector, will
collaborate with other software engineers to build the platform's initial phase and launch

12
 it to the market. As the platform grows, a dedicated technical team will be assembled to
further develop and maintain it.

● Information systems and information technology to be utlised.

Information
Purpose Type system used Information
Accounting Enterprise resource Onexla - Gold ERP systems will be used to automate
Procurement planning [ERP] supply chain operations. ERP systems
Project will also be used to generate reports
management that can aid in decision-making and to
Risk generate financial reports.
management
Supply chain
operations.
Provide Recommendations Recommender According to a PwC survey,
recommendations systems Systems - approximately 30% of consumers are
for consumers Freelancers willing to pay more for things that are
suggested to them. Furthermore,
because users are constantly
bombarded with suggestions,
personalized recommendations are
likely to be appreciated. Higher rates
of engagement and increased sales are
the overall benefits.

*Expert Recommender Systems

freelancers for hire in Sri-lanka are
experienced in using the most
up-to-date Recommender Systems
tools and techniques to deliver
effective results for their clients for
any type of Recommender Systems
jobs in Sri-lanka.

13
Receiving Payment gateway Commercial A payment gateway is a piece of
Credit/Debit card bank payment technology that merchants use to
payments gateway. accept debit or credit card payments
from customers.

Benifits:
* MasterCard Payment Gateway
Solutions (MPGS) is a service
provided by MasterCard.
* VISA CyberSource
* Even during peak transaction
volumes, it provides maximum
reliability and availability.
* New features will meet all of your
business needs.
* PCI-DSS and other security
standards were fully met.
* Dashboards that display sales and
purchases in real time.
* 24 hour technical support.
Table 06: Information technology/systems to be used for ‘Threads on threads’
Source: (Fernando 2022, Payment gateway (merchant registration) 2023)
PricewaterhouseCoopers, 2023)

● Cleaning services:

14
 1. Sunshine launderettes
2. Wash Hub
3. Laundrocare
After each use, it will be standard practice to have each piece of clothing washed and cleaned.

15
6.0 SWOT Analysis

Table 07: SWOT analysis

Source: Developed by author
Application :(GÜREL 2017)

Pricing
● Each of our clothing items will be rented for Rs. 500.00 per day, with the customer able
to rent up to 05 individual pieces at a time for a maximum of 07 days. Clothing will be
charged an additional Rs: 250 per day after the first seven days.

● Subscription-based rentals are also available, in which customers register with us and pay
a monthly fee of Rs; 10,000.00 to rent out more than ten pieces of clothing for a period of
30 days.

● The company will handle laundry and minor tears and wears, and these charges will not
be added to the customer's final bill. If a garment suffers a major tear or damage, the cost
of repair will be split between the customer and the company.

● If a customer misplaces, loses, or fails to return an item of clothing. Customers who

misplace or fail to return more than three pieces of clothing will be barred from the store.

16
● Before renting out items, each customer must sign a rental agreement. Appendix C
contains a link to the agreement form as well as the terms and conditions.

17
7.0 Financial Requirements

7.1.Startup costs

● To cover startup costs, the author and partner will invest Rs.2,668.019.50 from their
personal savings, and a loan will be obtained if necessary to cover future costs. The
partnership will be formed with the intention of splitting profits 60-40.

Table 08: Startup Cost

Source: developed by author

18
7.2 Projected reveunue

Table 09: Projected revenue

Source: developed by author

● The table shows the expected revenue over the first five years of operation, taking into
account the three main categories of occasion, casual, and office wear rentals.

7.3 Projected Profit and Loss

Table 10: Income statement [2023 -2027]

19
Source: developed by author

7.4 Projected Cash Flow

Table 11:Projected cash flow

Source: developed by author

7.5 Fixed Costs and Variable Costs

Table 12: Fixed cost

Source: developed by author

20
Table 13: Variable cost
Source: developed by author

7.6 Break-Even Analysis

Table 14: Break even analysis

Source: developed by author

● As shown in the table, the company will begin to profit in its first year of operation.

21
References

Ameresekere, P. (2021) Digital Literacy Rises to 50% Ceylon Today, Ceylon Today. [Online]. Available
at: https://ceylontoday.lk/news/digital-literacy-rises-to-50 [Accessed: 26 December 2022].

Asia Pacific Institute of Digital Marketing (APIDM) (2020) EXPECTED CHANGES IN SRI LANKAN
CONSUMER HABITS AFTER COVID-19, rep., Asia Pacific Institute of Digital Marketing .
Biron, B. (2019) I rented clothes from 5 different services and saw how the model could be the future of
fashion for anyone willing to deal with some minor slip-ups Business Insider, Business Insider. [Online].
Available at: https://www.businessinsider.com/rental-services-rent-the-runway-nuuly-fashion-
future-2019-9 [Accessed: 24 December 2022].

Bruijl, G.H. (2018) “The relevance of Porter's five forces in today's innovative and changing
business environment,” SSRN Electronic Journal [Preprint]. Available at:
https://doi.org/10.2139/ssrn.3192207.

Conlon, S. (2020) The rise of Fashion Rental The Guardian, Guardian News and Media. [Online].
Available at: https://www.theguardian.com/fashion/2020/sep/20/the- rise-of-fashion-rental-scarlett-conlon
[Accessed: 24 December 2022].

Ensign, P.C. (2001) “Value chain analysis and competitive advantage,” Journal of General
Management, 27(1), pp. 18–42. Available at: https://doi.org/10.1177/030630700102700102.

Farzan, Z. (2021) Sri Lanka imposes drastic import restrictions Newsfirst, Newsfirst. [Online]. Available
at: https://www.newsfirst.lk/2021/09/09/sri-lanka-imposes-drastic- import-restrictions/ [Accessed: 24
December 2022].

Fernando, J. (2022) What is a payment gateway? definition, how it works, and example,
Investopedia. Investopedia. Available at:
https://www.investopedia.com/terms/p/payment-gateway.asp (Accessed: January 2, 2023).

Gonzalez-Rodriguez, A. (2021) Online fashion rental market to grow over 10 percent annually
FashionUnited, FashionUnited. [Online]. Available at:
https://fashionunited.com/news/business/online-fashion-rental-market-to-grow-over-
10-percent-annually/2021111843830 [Accessed: 28 December 2022].

22
GÜREL, E. (2017) “SWOT analysis: A theoretical review,” Journal of International Social
Research, 10(51), pp. 994–1006. Available at: https://doi.org/10.17719/jisr.2017.1832.

Karunaratne, P. V. M. and Karunadasa, M. P. V. D. (2021) Identifying consumer behavior influence on

fashion retailing in the COVID-19 pandemic situation Journal of Advanced Research in Social Sciences
and Humanities, 6 (2), p.54–68. [Online]. Available at: doi:10.26500/jarssh-06-2021-0203.

Nadeera, D. (2021) Lanka records negative economic growth of 1.5% in 3rd Quarter The Island, The
Island. [Online]. Available at: https://island.lk/lanka-records-negative-
economic-growth-of-1-5-in-3rd-quarter/ [Accessed: 24 December 2022].
Nanayakkare, S. (2021) Increased footfall signals quick uptick in consumer spending: Fashion retailer
The Island, The Island. [Online]. Available at:
https://island.lk/increased-footfall-signals-quick-uptick-in-consumer-spending- fashion-retailer/
[Accessed: 28 December 2022].

Payment gateway (merchant registration) (2023) Commercial Bank | Payment Gateway

(Merchant Registration). Available at:
https://www.combank.lk/services/internet-payment-gateway (Accessed: January 2, 2023).

Pokorná, J. et al. (2015) “Value proposition canvas: Identification of pains, gains and customer
jobs at Farmers' Markets,” Agris on-line Papers in Economics and Informatics, 7(4), pp.
123–130. Available at: https://doi.org/10.7160/aol.2015.070412.

PricewaterhouseCoopers (2023) Experience is everything: Here's how to get it right, PwC.

Available at:
https://www.pwc.com/us/en/services/consulting/library/consumer-intelligence-series/future-of-cu
stomer-experience.html (Accessed: January 3, 2023).

Ro, C. (2020) Can fashion ever be sustainable? BBC Future, BBC. [Online]. Available at:
https://www.bbc.com/future/article/20200310-sustainable-fashion-how-
to-buy-clothes-good-for-the-climate [Accessed: 24 December 2022].

Rozais, N. (2021) 'it comes down to a mix of inspiration and customer demand' The Morning - Sri Lanka
News, The Morning. [Online]. Available at:
https://www.themorning.lk/it-comes-down-to-a-mix-of-inspiration-and-customer- demand/ [Accessed: 26
December 2022].

23
Sammut-Bonnici, T. and Galea, D. (2015) “Pest analysis,” Wiley Encyclopedia of Management,
pp. 1–1. Available at: https://doi.org/10.1002/9781118785317.weom120113.

The World Bank (2020) Individuals using the internet (% of population) - Sri Lanka The World Bank, The
World Bank. [Online]. Available at: https://data.worldbank.org/indicator/IT.NET.USER.ZS?locations=LK
[Accessed: 24 December 2022].

United Nations (UN) (2019) UN launches drive to highlight environmental cost of staying fashionable | |
UN news United Nations News, United Nations. [Online]. Available at:
https://news.un.org/en/story/2019/03/1035161 [Accessed: 24 December 2022].

Welagedara, D. and Ranaweera, A. (2015) Conference: 4th International Conference on Management and
EconomicsIn: An Investigation study of up-cycled fashion consumption in Sri Lanka, 2015.

What is ERP: Enterprise resource planning definition: SAP insights (2022) SAP. Available at:
https://www.sap.com/insights/what-is-erp.html (Accessed: January 3, 2023).

24
Appendices

Appendix A: Celebrities are opting for clothing rentals.

Source: People. com

25
Source: https://www.whowhatwear.com/celebrity-rental-fashion

26
Appendix B
The survey's questions and responses

Number of questions : 11
Number of responses : 21

27
28
29
30
31
32
Appendix C
Rental agreement / terms and conditions.
Rental agreement : https://www.formpl.us/form/4924505917095936

33
34
 Threads on Threads
A sustainable you

Module: MS7SL83O–Business Intelligence

Student ID : 21598794
Business Name : Threads on Threads
Lecturer : Kanishka Weeramunda
 1. The Problem
2. The Solution
3. Porter’s Five Forces
4. SWOT analysis | Customer Segmentation
Content 5.
6.
Operation & Features
Rental Pricing
7. Information Systems/Technology
8. Start-up Cost
9. Projected Revenue | Break-even analysis [2023-2027]
10. Thank you
11. References
 The Problem
Fashion is the world's second most polluting industry (UN 2019). It accounts for about
20% of global wastewater and 8-10% of global carbon emissions. It consumes more
energy than the aviation and shipping industries combined (Ro 2020). As the
environmental crisis worsens, so does the demand for environmentally friendly clothing.
Global consumer searches for sustainable fashion have increased by 66% since 2018.

● The fashion industry is a major contributor to environmental pollution, with the

creation of vast amounts of waste being a particularly pressing issue.
● Fast fashion, the practice of quickly producing cheap clothing to meet the latest
trends, has driven the increase in textile waste.
● This waste has a number of negative impacts, including pollution of land and
water, and greenhouse gas emissions from the manufacturing process.
 The Solution
'Threads on Threads' is Sri Lanka's first sustainable clothing rental
platform. Users will be able to rent out clothing items easily thanks to
our website and application. threads on threads believes in a more
sustainable future. As a result, we rent out high-quality, sustainably
manufactured clothing. With the growing working class in Sri Lanka, an
increasing number of people are considering sustainable living.
Sustainability is viewed as "the standard, not a luxury" at threads on
thread.

● Our mission
Our goal is to establish Earth's Favorite Clothing Company.
● Our vision
The industry leader in sustainable fashion items that combine classic
design quality with eco-friendly techniques and sustainable textiles to
positively influence the environment, employees, and animal world.
Operation & features
"Threads on threads" will be a digitally-based company. Our consumers can access our ecommerce
site through any search engine, they can also access our platform through our mobile application, that
will be available through both ‘Apple store and Play store’.

Some of our features are listed below;

1. Shopping Cart: Allows customers to add items to their cart and then proceed to checkout to purchase the
items.
2. Product Catalog: A listing of all the products available for purchase on the site, along with product
images, descriptions, and pricing information.
3. Customer Accounts: Allows customers to create accounts on the site and save their shipping and billing
information for future purchases.
4. Payment Processing: Integrates with payment gateways to process customer payments and handle
financial transactions.
5. Customer Service and Support: Includes tools for handling customer service inquiries, such as a FAQ
page or a contact form.
 Rental Pricing
● Each of our clothing items will be rented for Rs. 500.00 per day, with the customer
able to select up to 05 individual pieces at a time and keep them for a maximum of
07 days. After the first seven days, clothing will be charged an additional Rs: 250
per day.

● Subscription-based rentals are also available, in which customers register with us

and pay a monthly fee of Rs; 10,000.00 to rent out more than ten pieces of clothing
for a period of 30 days.

The company will handle laundry and minor tears and wears, and these charges
will not be added to the customer's final bill. If a garment suffers a major tear or
damage, the cost of repair will be split between the customer and the company.
 Porter’s five forces
Threat of New Entry
Supplier Power ● Start-up costs for a new fashion rental
● The number of sustainable raw business are high.
material farmers is small. ● Threads on Threads, the market pioneer,
● There are few sustainable clothing has the opportunity to cultivate partner
manufacturers.
Competitive and customer loyalty through tactical
Rivalry initiatives.
● Fewer legal barriers to entry into the
markett
● Low rivalry
from other
renting
Substitutes services Buyer Power
● Customers' switching costs are low
● The alternative, which may be more
because there is no formal
appealing in some situations, is to
commitment to the brand
purchase clothing.
 Information Systems/Technology

Type : Enterprise resource planning Type : Recommendations systems Type : Payment gateway
[ERP] Purpose : Provide recommendations for Purpose : Receiving Credit/Debit card
Purpose : Accounting consumers payments.
Procurement
Project management
Risk management System used : Recommender Systems - System used : Commercial bank payment
Supply chain operations. Freelancers gateway

System used : Onexla - Gold

SWOT Analysis Customer Segmentation
Geographical
Nationality Local / Foreign
Region Colombo
Demographical
Age 16 - 50+
Gender Male / Female
Income level Upper and middle class
Psychological
Personality type Introverted / extraverted
Life style Sustainable / out going / thrifting
Start-up Cost
.

● Total capital required is estimated at

Rs: 2,668,019.50

● The author and partner will invest

Rs.2,668.019.50 from their personal
savings to cover startup costs, and if
necessary, a loan will be obtained to
cover future costs.

● The Owner wishes to utilise of of

his personal properties to reduce the
startup capital requirement; for an
example, an old house to be turned
into a warehouse to store inventory.
Projected Revenue for
[2023-2027]

Break-even analysis
[2023-2027]
Thank you
 United Nations (UN) (2019) UN launches drive to highlight environmental cost of staying
fashionable | | UN news United Nations News, United Nations. [Online]. Available at:
https://news.un.org/en/story/2019/03/1035161 [Accessed: 24 December 2022].

Ro, C. (2020) Can fashion ever be sustainable? BBC Future, BBC. [Online]. Available at:
https://www.bbc.com/future/article/20200310-sustainable-fashion-how-
to-buy-clothes-good-for-the-climate [Accessed: 24 December 2022].

References
Welagedara, D. and Ranaweera, A. (2015) Conference: 4th International Conference on
Management and EconomicsIn: An Investigation study of up-cycled fashion consumption
in Sri Lanka, 2015.

Bruijl, G.H. (2018) “The relevance of Porter's five forces in today's innovative and
changing business environment,” SSRN Electronic Journal [Preprint]. Available at:
https://doi.org/10.2139/ssrn.3192207.

GÜREL, E. (2017) “SWOT analysis: A theoretical review,” Journal of International Social

Research, 10(51), pp. 994–1006. Available at: https://doi.org/10.17719/jisr.2017.1832.