TLDR The leading apparel manufacturer faced strategic challenges from poor market research, leading to reduced efficiency and market share amid supply chain disruptions. By applying Value Chain Analysis and launching a sustainable product line, the company improved supply chain efficiency, market positioning, and customer engagement. This underscores the need to align product development with consumer values and invest in digital transformation.
TABLE OF CONTENTS
1. Background 2. Competitive Landscape 3. Internal Assessment 4. Strategic Initiatives 5. Market Research Implementation KPIs 6. Stakeholder Management 7. Market Research Best Practices 8. Market Research Deliverables 9. Enhance Supply Chain Visibility 10. Market Research for Sustainable Product Lines 11. Direct-to-Consumer (DTC) Channel Expansion 12. Market Research Case Studies 13. Additional Resources 14. Key Findings and Results
Consider this scenario: The organization is a leading apparel manufacturer in North America, facing significant strategic challenges due to a lack of comprehensive market research.
It has experienced a 20% decrease in operational efficiency and a 15% loss in market share over the past two years, primarily due to supply chain disruptions and increased competition from low-cost overseas manufacturers. The primary strategic objective of the organization is to enhance supply chain resilience, ensuring sustainable growth and competitive advantage in the volatile apparel manufacturing industry.
This organization is currently navigating through a phase of operational and competitive challenges that have put its market position at risk. The apparent lack of agility in its supply chain and the slow response to market shifts suggest that deeper issues in strategic planning and execution might be at play. The organization's leadership is concerned that without a significant overhaul of its supply chain management strategies, it might continue to lose ground to more nimble and technologically advanced competitors.
The apparel manufacturing industry in North America is highly competitive, characterized by rapid changes in consumer preferences and a continuous shift towards e-commerce. The industry is also facing pressure from sustainable manufacturing practices and ethical labor standards.
Analyzing the competitive forces reveals:
Emerging trends include an increased focus on sustainability and ethical production, digital transformation in supply chain management, and the rise of direct-to-consumer sales channels. These trends present both opportunities and risks, reshaping industry dynamics by:
A PESTLE analysis highlights significant political, economic, social, technological, legal, and environmental factors influencing the industry, such as trade policies, economic fluctuations, changing social attitudes towards fashion consumption, rapid technological advancements, stringent environmental regulations, and evolving labor laws.
For a deeper analysis, take a look at these Competitive Landscape best practices:
The organization excels in traditional apparel manufacturing with a strong brand heritage but struggles with digital integration and agile supply chain practices. It faces challenges in adapting to rapid market changes and implementing sustainable manufacturing processes.
Strengths include a well-established brand and extensive industry experience. Opportunities lie in leveraging technology for supply chain innovation and tapping into the growing market for sustainable apparel. Weaknesses are evident in the current supply chain rigidity and slow digital adoption. Threats include increasing competition and changing consumer preferences towards sustainability and ethical production.
Digital Transformation Analysis
The analysis reveals significant gaps in digital capabilities, particularly in supply chain transparency and e-commerce. Embracing digital tools and platforms could streamline operations, enhance customer engagement, and foster resilience against disruptions.
Organizational Design Analysis
The current organizational structure is hierarchical, slowing decision-making and innovation. A more decentralized approach could improve agility, fostering a culture of innovation and rapid response to market shifts.
KPIS are crucial throughout the implementation process. They provide quantifiable checkpoints to validate the alignment of operational activities with our strategic goals, ensuring that execution is not just activity-driven, but results-oriented. Further, these KPIs act as early indicators of progress or deviation, enabling agile decision-making and course correction if needed.
These KPIs provide insights into operational efficiency, market position, and customer engagement, guiding strategic adjustments and highlighting areas for further improvement.
For more KPIs, take a look at the Flevy KPI Library, one of the most comprehensive databases of KPIs available. Having a centralized library of KPIs saves you significant time and effort in researching and developing metrics, allowing you to focus more on analysis, implementation of strategies, and other more value-added activities.
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Successful implementation of these strategic initiatives relies on the active engagement and support from a range of stakeholders, including internal teams, technology partners, suppliers, and customers.
Stakeholder Groups | R | A | C | I |
---|---|---|---|---|
Employees | ⬤ | |||
Technology Partners | ⬤ | |||
Suppliers | ⬤ | |||
Customers | ⬤ | |||
Leadership Team | ⬤ |
We've only identified the primary stakeholder groups above. There are also participants and groups involved for various activities in each of the strategic initiatives.
Learn more about Stakeholder Management Change Management Focus Interviewing Workshops Supplier Management
To improve the effectiveness of implementation, we can leverage best practice documents in Market Research. These resources below were developed by management consulting firms and Market Research subject matter experts.
Explore more Market Research deliverables
The organization adopted the Value Chain Analysis framework, developed by Michael Porter, to enhance its supply chain visibility. This framework was chosen for its effectiveness in dissecting the organization's activities into strategically relevant categories, allowing for a detailed examination of the sources of value and cost within the supply chain. It proved invaluable in identifying areas where digital interventions could streamline operations and improve efficiency. The team undertook the following steps to implement the Value Chain Analysis:
Additionally, the SCOR Model (Supply Chain Operations Reference model) was utilized to standardize the supply chain processes and measure performance. This model helped in benchmarking against industry best practices and provided a framework for continuous improvement. The organization:
The integration of Value Chain Analysis and the SCOR Model into the organization's strategic planning for supply chain visibility led to significant improvements. The organization experienced a 30% reduction in lead times and a 25% improvement in inventory turnover within the first year of implementation. These results underscored the efficacy of applying these frameworks to enhance supply chain visibility and operational efficiency.
For this strategic initiative, the organization employed the Kano Model to categorize customer preferences for sustainable products into must-be, one-dimensional, and delighter attributes. This framework was instrumental in understanding how different features of sustainable apparel contributed to customer satisfaction. The process involved:
Conjoint Analysis was also applied to quantify the value customers placed on different attributes of sustainable products, including materials, production processes, and brand initiatives towards sustainability. This allowed for:
The application of the Kano Model and Conjoint Analysis provided a deep understanding of customer expectations and value perceptions regarding sustainable apparel. This strategic initiative led to the successful launch of a new sustainable product line, which contributed to a 20% increase in market share among environmentally conscious consumers within two years.
To support the expansion of Direct-to-Consumer channels, the organization leveraged the Customer Journey Mapping framework. This tool was pivotal in visualizing the end-to-end experience of customers interacting with the DTC channels, from awareness through purchase to post-purchase support. The team executed the following steps:
The Business Model Canvas was also adopted to systematically understand and design the DTC business model. This approach allowed the organization to:
Through the implementation of Customer Journey Mapping and the Business Model Canvas, the organization significantly enhanced its DTC capabilities. This strategic initiative resulted in a 40% increase in DTC sales and a marked improvement in customer satisfaction scores, demonstrating the effectiveness of these frameworks in guiding the expansion and optimization of Direct-to-Consumer channels.
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Here is a summary of the key results of this case study:
The strategic initiatives undertaken by the organization have yielded significant improvements in operational efficiency, market positioning, and customer engagement. The 30% reduction in supply chain lead times and the 25% improvement in inventory turnover are particularly noteworthy, as they directly contribute to enhanced supply chain resilience and responsiveness. The successful launch of a sustainable product line, resulting in a 20% market share increase among environmentally conscious consumers, demonstrates the organization's ability to align product development with emerging market trends and consumer values. Additionally, the 40% increase in DTC sales underscores the effectiveness of leveraging digital channels to build direct relationships with consumers. However, the report suggests room for improvement in fully integrating digital capabilities across all supply chain and customer engagement processes. The initial resistance to digital transformation and the hierarchical organizational structure may have slowed down the adoption of innovative practices, potentially limiting the full realization of strategic objectives.
For next steps, it is recommended that the organization continues to invest in digital transformation, particularly in areas that enhance supply chain agility and customer experience. Emphasizing the development of a more decentralized organizational structure could further improve innovation and responsiveness. Additionally, expanding the sustainable product line and exploring new market segments based on consumer insights can drive further growth. Finally, leveraging data analytics for predictive modeling and decision-making can enhance operational efficiency and market responsiveness, ensuring sustainable competitive advantage.
The development of this case study was overseen by David Tang. David is the CEO and Founder of Flevy. Prior to Flevy, David worked as a management consultant for 8 years, where he served clients in North America, EMEA, and APAC. He graduated from Cornell with a BS in Electrical Engineering and MEng in Management.
To cite this article, please use:
Source: Market Research Enhancement for a Life Sciences Firm, Flevy Management Insights, David Tang, 2024
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