Case Study Rita Dresses

7/29/2019 Case Study Rita Dresses

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ANALYSIS OF CASE STUDY

RITA DRESSES

BY:

PRAKHAR KUMAR SHARMA

MBA 4TH SEMESTER

MONIRBA (A.U.)


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CASE SUMMARY :

Ram Gupta and Rita Gupta had established atailoring shop named Rita Designer wear.

Two years old venture.

Ram worked as an accountant and Rita was agraduate in fashion designing before starting theirbusiness.

They used only the best materials and accessoriesincluding handmade cotton, silk, wool, or juteclothes instead of synthetic clothes.


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Their shop reflected an image as spic and span.

They became popular and known for their good

quality.

Their initial orders included wedding dresses,

dresses for kids and for some boutiques.

They got an order from a top airline to supply

uniforms for its air and ground crew.


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Ram and Rita Gupta are examining the issue indepth whether to expand their business or limit, as

the profit margin in the airline order is very less.

They called up their close friend Ramesh to helpthem solve the problem and to persuade him to

either give them a loan or to join them as a partner

in case of expansion.


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ANSWERS FOR CASE STUDY


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OPTIONS AVAILABLE FOR RITA DESIGNER

DRESSES

A. Go for expansion without accepting AirlineOrders.

B. Go for expansion and accept airline orders.

C. Continue to make custom-built dresses for

chosen customers.


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1.(A). GOFOREXPANSIONWITHOUTACCEPTING

AIRLINE ORDERS

Merits :

Growth and expansion.

Enhancement in brand value.

Bigger consumer exposure.

Better margins of profit.

Will help in withstanding international competition.

Demerits : Advertising would eat into profits.

Involved risks.

Product uniqueness could be jeopardized.

Danger of compromise in quality.


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1.(B). GOFOREXPANSIONANDACCEPTAIRLINE

ORDERS

Merits :

Airlines guaranteed sales.

Enhancement in Brand Value.

Bigger consumer exposure. Growth and expansion.

Assured margins of profit in the long run.

Demerits : Low or nil margins of profit in airline order.

Risks involved in purchase of raw materials.

Compromise in quality.

Uncertainty in the recurrence of assignment.


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1.(C). CONTINUETOMAKECUSTOM-BUILT

DRESSESFORCHOSENCUSTOMERS

Merits :

Retain their specialty.

Better quality and design in dressings.

They have started earning profit since last year so they

should stabilize their present business first.

No extra expense or economical burden.

Demerits :

No growth.

Threat of competition to small venture.

Limited exposure of customers and restricted product

range.


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CONCLUSION :

They should go for expansion and accept the airline

order as-

They will avail the benefit of

Growth and expansion.

Enhancement in Brand Value.

Bigger consumer exposure.

Assured margins of profit in the long run.

Will help in withstanding international competition.

Opportunity of long-term association with the airline.

Chances of getting publicity and advertisement for their

business.

Opportunity of getting orders from other airlines.


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STRATEGIC PLAN


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A STRATEGICPLANSHOULDINCLUDE

FOLLOWINGINFORMATION-

1. A clear statement of strategic intent covering thevision, mission, business definition and objectives.

2. Result of environmental appraisal , major opportunities

and threats and critical success factors.

3. Result of organizational appraisal, major strengths andweaknesses.


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A STRATEGICPLANSHOULDINCLUDE

FOLLOWINGINFORMATION-

4. Strategies chosen and the assumptions under

which those strategies would be relevant.

5. Contingent strategies to be used under different

conditions.

6. Proposed organizational structure and for

strategic implementation.


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A CLEAR STATEMENTOF

STRATEGIC INTENT

Strategic intent of any organization defines

what the organisation stands for.

VISION-To become the priority of customers

looking for quality designs and dresses.

MISSION-To design, develop and provide bestdressings and their matching clothes, with

continuous creativity and innovation in

apparels.


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BUSINESS DEFINITION

1. CUSTOMER FUNCTIONS :

Innovative and latest designed dresses.

Best designs at reasonable prices.

Best quality clothes in terms of materials andcolours used.

Comfortable in wearing, washing and handling.

Longlife.

As a symbol of prestige in society.


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2. CUSTOMER GROUPS :

Kids wear, teenage wears.

Wedding dresses for brides and grooms.

Mens suits and blazers.

Uniforms and staff dresses for different

organizations.

3. ALTERNATIVE TECHNOLOGY :

Modern sewing machines.

Machines for labelling and packaging.


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OBJECTIVES

To serve the customers by providing themquality product.

To continuously try to reduce cost of production

by mass purchasing of raw materials.

To strive for quality improvement.

To maximize the utilization of machines to

increase productivity.

To strive for market expansion.

To increase customer loyalty by establishingtheir brand and search for guaranteed buyers.

To stick to the time dimension.


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OPPORTUNITIES :

Large order from top airline.

Can enter into large retail trade sector.

Demand for Rita dresses from retailers and boutiques.

Products of Rita Dresses are not available in the nearby

towns, even though the need is there.

Orders for wedding ceremony dresses.


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THREATS :

Probability of not getting repeat orders from airline.

Competition from International players is increasing in the

local market and it may sweep the Rita Dresses away withtheir established and respected brands.

Demands from the customers is sporadic and not uniform.


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STRENGTHS :

Both husband and wife being professionals as accountant,

and graduate in fashion designing respectively are most

suitable for the business.

Quality design and best quality materials and accessoriesused in dresses made them supplier of unique products.

Profit margins of wedding dresses and kids girls are higher.


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WEAKNESSES :

Lack of experience.

The company has beard a loss of Rs 1,00,000 in firstfinancial year.

Availability of funds is a problem before the business, it canbe taken either from Ramesh or financial institutions.

Scarcity of labor / HR for full utilization of machinery forproduction in the idle time.

Lack of infrastructure including outlay in case of expansion.

Publicity only through word of mouth and lack of othermeans of advertizing.


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CRITICALSUCCESSFACTORS :

Continuous improvement in quality of their design bycreativity and innovation to cater latest and new fashion.

Reducing cost of production through bulk purchase of rawmaterials.

No compromise in the quality of raw materials andaccessories used in production to remain unique in market.

Targeting and tapping customer groups and markets onbasis of their prior profits i.e. high profit in wedding and kids

dresses. Flexible product mix including Customized products and

different sub-brands for mass production.


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Go for expansion and accept air line order. And at the sametime search for other ready buyers to ensure smooth cashinflow and smooth operations.

Machinery and manpower should taken on lease/outsourcingfor the airline project.

After completion of airline order on the basis of its result , theyshould go for permanent machinery and manpower.

After fulfilling the airline order they should go for increase intheir product range by capitalizing on profit.

They should make separate division for mass and custom

production. They should increase their product range by adding Mens

suits and blazers with the present range of wedding, teens andkids dresses.

They should heavily advertise the airline contract to attract big

customers and also look for franchising the brand .

STRATEGIESCHOSENANDTHEASSUMPTIONSUNDERWHICHTHOSESTRATEGIESWOULDBERELEVANT.


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STRATEGIESCHOSENANDTHEASSUMPTIONSUNDERWHICH

THOSESTRATEGIESWOULDBERELEVANT.

They should produce both type of products customized and

mass products with different sub-brands.

1. Rita dresses CUSTOMISED-

To avail the benefit of the better profit margins.

To retain the old and loyal customers.

To capitalize on the strength of Rita dresses, i.e. Betterquality, customized and designer products.

To intact the products uniqueness.


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STRATEGIESCHOSENANDTHEASSUMPTIONSUNDERWHICH

THOSESTRATEGIESWOULDBERELEVANT.

2. Rita dresses FASHION APPARELS (sub- brand for mass

production)-

To avail the benefit of the wider distribution.For better consumer exposure.

To establish the brand name.

To get the benefit of the different guaranteed sales like airline

order.

To compete with international brands.


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SOURCESOFMONEY:

Taking monetary help from Mr. Ramesh by adding

as share holder.

Taking advance from Airline Line Company.

Taking loans from Bank.

Generating money from relatives and other

personal sources.

Taking government grants/assistance for

development of SME in textile line.


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CONTINGENTSTRATEGIES :

1st If the Airline Company refuses to accept the

product of Rita Designer Dresses after installation

of machineries and other infrastructural facilities.

In this case the company will produce product to sell

to schools as school uniforms and other officialprofessionals.

The company will produce in mass to sell to other

towns.


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CONTINGENTSTRATEGIES :

2nd if the International competitors sweeps them

away from the market.

The Rita dresses will work as only production unit

and it will sale its products to the Bigger players in

the industry.


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PROPOSEDORGANIZATIONALSTRUCTUREFOR

STRATEGICIMPLEMENTATION :

Organizational structure should be changed from

entrepreneurial structure to functional structure.

Ram should be the MD or CEO and Rita should be

the Main Designer.

A number of employees should be hired and

assigned the posts and responsibilities for various

functional areas like finance (that should be in

direct invigilation of Ram), marketing, production

and HR.

Ramesh may join them in partnership as an

investor.


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THANKYOU.

Case Study Rita Dresses

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