essay about clothing business

Fashioning a Bright Future: Your Clothing Brand Business Plan

Launching a clothing brand can be an exciting and fulfilling venture, but like any business, it requires careful planning and execution. One of the most crucial steps in establishing a clothing brand is creating a well-thought-out business plan.

To create a clothing brand, a well-crafted business plan is your foundation. It defines your brand identity, target market, marketing strategies, and financial projections, guiding your path to fashion industry triumph.

In this article, we will walk you through the essential elements of a business plan tailored specifically for your clothing brand.

Table of Contents

Executive Summary

The executive summary serves as the introduction to your clothing brand’s business plan. It offers a brief but clear snapshot of what your brand is all about. In this section, you’ll outline your brand’s mission and vision, essentially explaining the purpose and future direction of your clothing business.

It’s crucial to emphasize the unique aspects that set your brand apart from others in the market. What makes your clothing brand special? Whether it’s your design aesthetic, commitment to sustainability, or another distinguishing factor, make it clear here.

Furthermore, introduce the key members of your team. Highlight their roles and qualifications, showing that you have a capable group driving your brand forward.

Lastly, provide a rough estimate of the startup costs required to get your clothing brand off the ground. This helps investors and stakeholders understand the financial scope of your venture right from the beginning. A clear and concise executive summary sets the stage for the rest of your business plan, giving readers a solid foundation to understand your clothing brand’s potential.

Read more about:  Design Your Own Clothing Line: A Creative Journey

Market Analysis

Market analysis plays a crucial role in the viability of your clothing brand. It involves thoroughly studying and comprehending your intended customer base. By conducting extensive market research, you gain insights into who your ideal customers are, what they like, and how they make purchasing decisions.

Begin by identifying your target audience, focusing on demographics like age, gender, location, and income. Dig deeper to understand their preferences and behaviors regarding clothing. What styles do they prefer? Where do they usually shop?

It’s essential to assess your competitors within the clothing market. Analyze their strengths and weaknesses, the products they offer, and their pricing strategies. This examination helps you uncover opportunities to stand out in the market.

Lastly, clearly articulate your brand’s competitive edge. What makes your clothing brand unique or better than others? Whether it’s quality, pricing, sustainability, or another aspect, highlighting your strengths is vital to attract your target audience effectively.

Thorough market analysis equips you with valuable insights that guide your clothing brand’s direction. Understanding your customers and competitors is fundamental to making informed decisions and ensuring your brand resonates with its intended audience.

Brand Identity and Product Line

The brand identity and product line section of your business plan is where you paint a clear picture of what your clothing brand is all about. It’s about defining and explaining your brand’s personality, look, and what makes it unique.

Start by describing your brand’s aesthetic – the visual style and feel it embodies. Is it classic, modern, or something entirely different? Clarify your brand’s style by using simple words that anyone can understand.

Next, share the story behind your brand. What inspired you to start it? Your brand’s origin story can be a powerful way to connect with customers on a personal level.

Now, let’s focus on your product line. Outline the types of clothing you’ll offer, such as shirts, dresses, or accessories. Mention the materials you’ll use, whether it’s organic cotton, recycled fabrics, or something else. Be clear about your pricing strategy – will your brand be positioned as affordable, premium, or somewhere in between?

In essence, this section helps potential investors and partners understand your clothing brand’s essence, style, and the range of products it will offer. Clarity in describing your brand identity and product line is key to conveying your vision effectively.

Sales and Marketing Strategy

Creating a solid sales and marketing strategy is essential for the growth and visibility of your clothing brand. This section outlines your approach to making your brand known and reaching potential customers.

Begin by detailing your marketing plan, which includes methods for promoting your brand. Consider both online and offline strategies. Online avenues may involve digital marketing campaigns, which can include methods like search engine optimization (SEO), pay-per-click advertising (PPC), and email marketing. Social media platforms offer a powerful way to engage with your audience, so discuss how you intend to use them effectively.

Collaborations with influencers can amplify your brand’s reach, so mention any plans in this regard. Think about traditional advertising methods, such as print media or events, if they align with your brand’s image and target audience.

Your goal here is to provide a clear and comprehensive plan for attracting and retaining customers. A well-thought-out sales and marketing strategy will help your clothing brand gain traction in a competitive market. Clarity and simplicity in your explanations will make it easy for others to understand and support your vision.

Read more about:  Design, Create, Flourish: How Do You Start a Clothing Line?

Operations and Production

The operations and production section of your business plan is where you lay out the practical aspects of running your clothing brand. It’s about the “how” of bringing your clothing to life and getting it into the hands of your customers.

Start by explaining where and how you’ll source the materials needed for your clothing line. Be specific about suppliers and materials, whether it’s organic cotton, synthetic fabrics, or others.

Describe the production processes involved, from designing and creating prototypes to the final manufacturing stage. Detail how you’ll maintain quality control throughout these processes, ensuring that the finished products meet your brand’s standards.

Discuss your supply chain, outlining the steps from production to distribution. Clarify whether you plan to sell your clothing online, through physical stores, or both. Explain how you’ll manage inventory and fulfill orders efficiently.

This section provides a practical roadmap for how your clothing brand will operate on a day-to-day basis. Clarity and simplicity in your explanations help others understand the logistics of your brand’s operations, from sourcing materials to delivering products to customers.

Financial Projections

The financial projections section of your business plan is where you present the financial aspects of your clothing brand in a structured manner. This information is crucial for potential investors and lenders to assess the viability of your venture.

Begin by detailing your startup costs, which encompass all the expenses needed to launch your clothing brand. This includes costs for materials, equipment, marketing, and any other initial investments.

Next, provide revenue projections, which are estimates of how much money you anticipate your brand will generate over a certain period. This may be monthly, quarterly, or annually. Be realistic and base your projections on market research and sales forecasts.

Discuss your profit margins, which indicate how much profit you expect to make after deducting costs from revenue. Highlighting healthy profit margins can be attractive to investors.

If you require funding to get your clothing brand off the ground, specify your funding requirements. Explain how you plan to secure financing, whether it’s through loans, investors, or other means.

The financial projections section is a critical aspect of your business plan, providing a clear financial outlook for your clothing brand. Transparency and simplicity in presenting your financial information will instill confidence in potential investors and lenders.

Team and Management

In the team and management section of your business plan, you introduce the individuals who will play essential roles in your clothing brand. This section allows you to showcase the skills and experience of your team, emphasizing their importance in achieving your brand’s goals.

Start by providing a brief introduction to each team member, including their names and positions. Detail their roles within your clothing brand and explain how each person contributes to the overall operation.

Highlight the relevant experience and skills of your team members that make them well-suited for their roles. This could include prior work in the fashion industry, expertise in design, marketing, production, or any other skills that are crucial to your brand’s stability.

The purpose of this section is to demonstrate that you have a capable and committed team in place to execute your clothing brand’s vision. Potential investors and partners will be reassured by the skills and experience your team brings to the table, knowing that they are essential to achieving your brand’s objectives.

The team and management section provides valuable insight into the people behind your clothing brand, showcasing their qualifications and roles within your venture. Clarity and simplicity in your explanations help others understand the strengths of your team.

Read more about:  Clothing Startups: Pioneering Trends and Triumphing in Fashion

Risk Analysis and Mitigation

In the risk analysis and mitigation section of your business plan, you openly address potential challenges that your clothing brand might encounter. It’s a critical step in demonstrating your awareness of the uncertainties that come with any business venture and your preparedness to deal with them.

Begin by identifying and acknowledging these potential risks. These could be external factors like market fluctuations, economic downturns, or changing consumer trends. Also, consider internal risks such as production delays, supply chain issues, or financial constraints.

After acknowledging these risks, outline your strategies for mitigating them. Explain how you plan to minimize the impact of these challenges on your clothing brand. This may involve contingency plans, diversifying suppliers, or having financial reserves.

Investors and stakeholders appreciate a realistic assessment of potential obstacles because it shows that you’ve thought critically about your business. It instills confidence in your ability to navigate difficulties effectively.

In the appendix section of your business plan, you have the opportunity to include supplementary materials that provide additional context and support for your clothing brand’s vision. These materials serve as valuable references and evidence to bolster the credibility of your plan.

Consider including market research data, which can offer in-depth insights into your target market, customer preferences, and industry trends. This data helps to substantiate the claims and strategies outlined in your plan.

If you have specific product designs, illustrations, or prototypes, these can be included in the appendix to visually showcase your clothing line’s potential. Visual aids can be powerful tools for conveying your brand’s unique style and quality.

If you have secured letters of intent or agreements from potential suppliers or partners, these documents can be added to the appendix. They demonstrate a level of commitment and support from external parties, which can be reassuring to investors and stakeholders.

Crafting a business plan for your clothing brand is a crucial step toward achieving growth in the competitive fashion industry. A well-prepared plan will not only guide you in the initial stages but also serve as a valuable reference as your brand grows. Remember that flexibility and adaptability are key in the ever-evolving world of fashion. With determination, creativity, and a solid business plan, you’re well on your way to making your clothing brand a reality.

Frequently Asked Questions

Q: What is the importance of a business plan for a clothing brand?

A: A business plan for a clothing brand serves as a roadmap, guiding your brand’s direction and ensuring informed decision-making. It outlines your goals, strategies, and financial projections, crucial for attracting investors and staying on track.

Q: How do I conduct market research for my clothing brand’s business plan?

A: Market research involves analyzing consumer preferences, studying competitors, and identifying market trends. It provides valuable insights into your target audience, helping you tailor your brand to meet their needs effectively.

Q: What should be included in the financial projections section of the business plan?

A: In the financial projections section, include startup costs, revenue forecasts, and profit margins. Investors want to see a clear picture of your brand’s financial viability and growth potential.

Q: How can I mitigate risks in my clothing brand’s business plan?

A: To mitigate risks, acknowledge potential challenges your brand may face, and outline strategies to address them. Investors appreciate a proactive approach to risk management.

Q: Is a business plan essential for a small clothing brand startup?

A: Yes, a business plan is essential, regardless of the size of your clothing brand. It helps you set clear objectives, secure funding, and navigate the competitive fashion industry with a well-defined strategy.

To learn more about starting your own clothing business, check out my startup documents here.

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Meet Shawn Chun: Entrepreneur and Fashion Business Fan.

I’m a happy individual who happens to be an entrepreneur. I have owned several types of businesses in my life from a coffee shop to an import and export business to an online review business plus a few more and now I create online resources for those interested in starting new ventures. It’s demanding work but I love it. I do it for those passionate about their business and their goals. That’s why when I meet a designer or boutique owner at a craft fair, farmers market, retail location or anywhere else I see myself. I know how hard the struggle is to retain clients, find good employees and keep the business growing all while trying to stay competitive.

That’s why I created Fashion Business Boss: I want to help fashion business owners like you build a thriving business that brings you endless joy and supports your ideal lifestyle.

Essays About Fashion: Top 5 Examples and 9 Prompts

If you are writing essays about fashion, check out our guide of helpful examples and exciting writing prompts to get started.

Fashion is individuals’ way of expressing their personalities. They do this through clothes and accessories that display their tastes and preferences. There are different fashion styles and trends, and anyone can choose anything they want to follow. Additionally, fashion has various benefits, such as boosting self-confidence, lightening moods, and developing creativity. Our fashion choices also help us send messages and present our beliefs. Thus, fashion can also be political .

Below are five essay examples and nine writing prompts to help you create an eye-catching essay about fashion:

5 Top Essay Examples

1. why fashion is important by george k., 2. fashion: an important part of life by ankita yadav, 3. fashion as communication by eunice summers, 4. fashion 2022 by edudwar, 5. the effect of fashion on teenagers in school by anonymous on newyorkessays.com, 1. fashion trends and women, 2. fashion evolution, 3. fashion and starting a business, 4. effects of fashion on society, 5. the best fashion styles for men, 6. fashion trends in different countries , 7. careers in the fashion industry, 8. cultural fashion vs. modern fashion, 9. the best and worst of fashion trends.

“The clothes we wear has become more than merely a way to cover our nakedness; instead it has also become one of the primary ways in which people express themselves.”

George K explains that fashion separates individuals from the rest. A person can introduce himself to others for who and what he is through style choices. Further, the author expounds on how fashion is a very competitive industry that depends on one’s search for identity. The author also points out that every person is unique and thus needs a distinct style to fit them. However, because of constant peer pressure and criticism, an individual’s fashion picks can’t be entirely their own. Ultimately, George K reminds the reader that it’s not just the clothes but how individuals wear and feel in them.

“…if we can do something then it is choosing the right stuff like entertainment, adventure, fashion, etc. All these things can make us happy and are also an important part of life. Fashion always attracts and it is available for all,”

Yadav considers how fashion originated from people’s traditions and cultures and became what it is today through individuals adopting each style and making it their own. In the following sections of the essay, she defines fashion and lists its importance, including how it developed new employment options and how styles speak for the wearer. 

In her conclusion, she encourages everyone to choose their styles and not to mind their age. Fashion helps everyone live life to the fullest.

“Fashion is an industry based on creating a need where there is none and nowadays, due to the current recession, I can understand that fashion may not be people’s biggest concern. But we cannot qualify it as ‘trivial’ since we are surrounded by it; each new generation of customers is highly exposed to commercial influences.”

Summers gives her opinion about the book “Fashion as Communication” by Malcolm Barnard . She identifies points in the work and shares her thoughts on them. The first point being those working in the fashion industry aren’t smart. As a Fashion Marketing student, Summers vehemently disagrees with this statement and recounts her experiences to counter it. She continues to analyze Barnard’s other arguments and agrees with some of them. Summers ends her essay by highlighting that fashion is too essential in modern culture and economic organization for it to be considered “trivial.”

“…the youth cares more about what they wear and how they look which could affect their status in their peer group and meddle with their mental health. Following trends and doing what everyone is doing like a sheep is never a good idea. Fashion is there to reflect your personal style, not copying what other people think is trendy.”

User Edudwar reminds people that fashion is not simply following what’s currently trendy. Fashion is there to give people the chance to show off their individualism and personalities and not present a fake version of themselves to be accepted by society. Additionally, he mentions that youth nowadays are more sensitive to what people think of them, so some will always do everything to follow trends, even if they’re not presentable or appropriate.

“Youths of the present times have indulged themselves in so much fashion that they do not receive sufficient time for other work… The time spent on studies is being used in watching TV programmes, reading fashion articles, or even finding the recent trendy outfits on the Internet.”

The essay discusses the real effects of fashion on today’s youth. The author focuses on kids zeroing in on finding the latest style instead of caring for their studies that directly affect their future. The essay also delves into how youths of yesterday had ambitions and goals in life compared to today’s youths, who prefer to have fun rather than study hard.

See our best essay writing tips to help you write an attractive, attention-grabbing essay.

9 Writing Prompts For Essays About Fashion

To assist you with your essay, we’ve compiled nine exciting writing prompts you can use:

Some women follow fashion trends religiously. They are also more conscious of their physical appearance. Some even go to the extreme and do plastic surgeries to look better in clothes. In your essay, discuss what you think these trends do to women’s perception of their worth and beauty. Add which trends you believe are unhealthy and why there’s more societal pressure for women to be fashionable.

Each era had its styles that directly resulted from that time’s circumstances. Make a timeline of how fashion evolved and the factors that influenced them. At the end of your essay, pick what you think is the best fashion era and explain why.

For this prompt, include the relevant things a future fashion clothing boutique owner should bear in mind. For instance, they should always be on top of the fashion trends and know how to balance demand and costs. Then, find a boutique owner and interview them about their experience to make your essay more fun to read.

Tackle what makes people choose the clothes they wear daily. Some prefer their fashion to display their personalities while others merely follow what they think is popular. To make your essay more interesting, you can do a simple experiment: Go out in public on two occasions: while wearing your fashion picks and donning the latest fashionable clothes. Then, add your findings and how people reacted to you.

Fashion for men is different from women. Although most brands dedicate their line to women, men also deserve to know what makes them look fashionable; this essay lists styles that are excellent for men depending on the setting and event. 

What could be considered fashionable in one country can be seen as disrespectful in another. For this prompt, compile fashion trends many do but are unacceptable in other places. Reasons why may include religion or tradition. Use research data and cite reliable sourcing for a compelling piece.

In this essay, identify the career opportunities available in the fashion industry, including the steps to get there. Next, list the different job roles within fashion, and describe the responsibilities for each. Then, add tips on succeeding in that job and standing out from the rest. For an intriguing essay, conduct interviews with professionals within the industry and include this in your piece.

Our ancestors’ culture greatly influenced today’s fashion. Meanwhile, modern styles are those that the current generation uses. Write an essay about cultural and contemporary fashion’s differences, similarities, advantages, and disadvantages. 

Fashion trends come and go. However, not all popular fashion is pleasing to the eyes. For this essay, compile a list of what is, in your opinion, the best and worst fashion trends. Then, describe why you have formed these opinions and describe the details of each outfit.

Are you looking for your next essay subject? Check out our list of the best writing topics for students .

Maria Caballero is a freelance writer who has been writing since high school. She believes that to be a writer doesn't only refer to excellent syntax and semantics but also knowing how to weave words together to communicate to any reader effectively.

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SWOT Analysis of Fashion Business

Beauty and fashion is a multibillion dollars industry focusing on the product and sale of clothes and other accessories. Some of the high fashion brands in the beauty industry manufacture clothes from ordinary to luxury mass scale fashion. 

The simplest way to define fashion business is the style of wearing clothes and other accessories by various segments of the people. On the surface, you would see a vast difference between the ordinary street fashion that is available in the shops and mall, and the runways fashion of New York, London, and Paris. 

The fashion industry has different types of fashion for men, women, children, teenagers, middle-aged, and old people. It ranges from ordinary street clothes, casual sweatpants, and medium to luxury designer clothes. However, it comprises various functions and operations like designing, producing, manufacturing, distributing, marketing, retailing, selling, and promoting. 

Today, we’ll discuss the swot analysis of the fashion business (clothing store and boutique). It’s going to focus on various aspects like strengths, weaknesses, opportunities, and threats of the fashion business .

Here’s the swot analysis of fashion business as follows; 

Table of Contents

Strengths of a Fashion Business

Wide product range .

The fashion business offers a wide range of products and services to the fashion lover customers market. Like apparel of men, women, and children, footwear (boots, sandals, shoes), luggage, bags, purse, watches & jewelry, accessories, formal wear, traditional clothes, sportswear, textile, costumes, cosmetics, vintage, and secondhand products. 

If you look at it closely, then you’ll see that fashion covers almost every aspect of our daily life. It offers products/services/accessories for every occasion to use and sends the message whatever you want to convey. 

Global Presence 

The internet and media have already made the world a global village. We’re aware of it whatever is happening here and across the world. However, the same thing goes for the fashion industry. Various companies organize fashion shows in different parts of the world like Asia, the Middle East, Africa, Europe, America, and Australia, where they promote their products. 

Financial Growth 

As I said earlier the fashion business is a multibillion-dollar industry. Different multinational companies back fashion shows and finance the artwork of creative designers and artists. However, they’re visionary people and they value and worth of art. If one idea/design clicks, it would go to mass-scale production worldwide, and it would pay off the company in billions of dollars. 

Quality Products 

Some of the well-established fashion brands don’t compromise on the quality of their products and services. They offer both quality and fashion at the same time. They have established a large database of loyal customers because of the quality products. That’s why customers always choose the products of renowned brands and designers. 

In-house Production 

Speaking of renowned brands and their quality work, the reason they manage to maintain a high standard of quality and creativity is that they get the products manufactured in-house under their close supervision. Some of the fashion companies outsource their production work in developing countries, which helps them to lower the cost, but it bad impacts the quality of the products. 

Independent Operations 

Various operations of the fashion have complete autonomy on their work and interconnect at the same time. For instance, the designers and creative artists have complete independence in their creative work. So as the marketers, manufacturers, retailers, and sellers; they all work independently and close collaboration at the same time. When you look at the final product, then the final result is amazing. 

Weaknesses of a Fashion Business

Changing fashion trends .

As many of you are aware it the beauty and fashion industry is highly competitive, and various fashion brands are competing with one another to be the first in setting up new trends in the market. In fact, the fashion industry doesn’t have control over it. All they have to do is to keep up their pace with the latest fashion trends. If they don’t, then they would lose the market share, sales, and profitability ultimately. 

3rd Party Suppliers 

In order to be cost-efficient, many fashion brands outsource their production and manufacturing work to third-party suppliers. It’s good in some cases. But it creates a number of problems like having no control over the production work, quality standards, delayed work, and custom and border issues. When you add up all of these costs, then it leaves you without any cost advantage. 

Low Quality to Keep Price Low 

Many fashion brands are at war with one another over price. If you want to gain a price advantage over competitors, then you have to use alternative materials. However, when they alternative material, or outsource the production processes, then it results in the form so of low quality. In other words, the goal to achieve low prices compromises the quality of the fashion products. 

Entering New Markets 

Fashion business always has to enter new markets and target new customers. It’s because fashion trends are always changing, and their target market is different age groups. It means that you always have to be ready to face the uncertain conditions and unexpected responses of the market. 

Opportunities for a Fashion Business

Improved lifestyle .

The lifestyle and living standards of ordinary people have been increasing for the past few years. It’s a great sign for the fashion business. It’s because when people have extra money, then they would go out shopping and buy luxury fashionable products. It presents a great opportunity for fashion business to promote their products and services. 

Online Shopping 

The pandemic of covid-19 and worldwide lockdown have increased the growth of online businesses. It’s because of the growing online shopping trends. The fashion brands that have their e-commerce platforms remained profitable during the pandemic year. If you’re in the fashion business, then you should consider investing in the e-commerce platform. 

US Fashion Trends 

It’s true that fashion trends are uncertain and unexpected for the business, but they also offer new opportunities for fashion brands to take advantage. Therefore, fashion companies launch US fashionable products in the market whatever customers want and looking for. 

Spending on Fashion Products 

The overall spending on quality and fashion products has increased significantly. People have become conscious of how they look, and they want to present a better image of themselves. In other words, it means the growth of the fashion businesses and their products . 

Threats to a Fashion Business

High competition .

The beauty and fashion industry is the world’s most competitive business along with its high demand. Some of the renowned brands have hired excellent designers and artists in the creative team. They always come up with unique and innovative fashion products and take advantage of being the industry leader. On the other hand, the new fashion brands with limited resources have to follow them and accept the 2nd position in the market. 

Changing Trends 

The changing fashion trends could jeopardize the growth and performance of your business. It doesn’t matter however stable you’re in the market, if you’re not ready for the new trends, then you would lose the market share. It shows that how fragile the fashion business is against the trends. 

Established Brands 

For some of the competitive fashion brands that are already established in the market, it would be nearly impossible for you to compete against them and win the market share. They have got such a loyal database of customers that you have to follow them in order to stay in the market. 

About The Author

Ahsan Ali Shaw

How to Start a Successful Online Clothing Business

Richard Meadow

11 min. read

Updated November 13, 2023

Free Download:  Sample Online Clothing Business Plan Templates

You’re stylish, passionate, and talented—and you’ve decided you don’t want to work for the man for the rest of your life. You’re going to become an entrepreneur and start your very own clothing line!

This journey is undoubtedly going to be challenging and exciting, so you need to get yourself prepared properly.  Here’s the “checklist” for starting your own clothing line, starting right at the very beginning.

• Do you have the right skills?

What is your background? Having creative ideas for stunning clothing is a great start. But in most instances, it will be somewhere between ideal and mandatory to have some training or education in design, textiles, and garment creation—sewing or altering.

Although you can have clothes manufactured in a factory on a mass scale, you’ll need to be able to sew and draw initially so you can produce concepts for the factories to adhere to. Plus, it’s always a good idea to test your ideas with an MVP (minimum viable product), meaning that you test your designs by creating a small run before you invest in large-scale production. If no one buys a run of thirty skirts, for example, you’ve lost significantly less than if you finance a run of 20,000 without verifying that people will buy or that retailers will be interested.

Taking classes in marketing, design, textiles, or business is always a benefit in the clothing industry. But studying on your own time is also a good option to consider if you’re not interested in or don’t need formal education. University training will almost always help you expand your knowledge base and give you access to feedback from professionals and peers, but ultimately, developing creative designs is personal—it’s about your own style and ability.

• Are you suited to having a clothing line?

Do you have the artistic expertise, a strong design ethic, and a real passion for creating a brand?

Yes? Great, you’re probably pretty suited to running your own clothing line. The term “clothing line” refers to designing and producing your own clothing, controlling and directing the process from start to finish. There’s really only one thing that you will 100 percent need if you want to be successful in the industry.

It really doesn’t matter which way you decide to go with your line, this is an industry were passionless people stand out. While everyone says that no matter what your company, you need passion regardless, that simply isn’t the case these days. To be frank, there are actually a number of sectors that allow you start a perfectly successful business without ever having any real passion for the sector or business model itself.

When it comes to clothing, however, you really do need to have a genuine passion for what you are producing. Without it, you simply won’t stand out and enjoy any real success.  

It also goes without saying that you need to be an imaginative person. Having a creative eye is essential.

There is simply no point trying to copy what others are doing in the fashion industry— it simply will not cut it. Your brand’s rep is everything—never forget this.

So, if you’re creative, passionate and original—then you are suited to having a clothing line.

How’s it that we’re sure on that, where do you start?

The first thing you need is a plan, and the first question you need to answer is:

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• What is your brand?

In any business, branding is important. But for a clothing line, it’s absolutely imperative. Without a strong brand identity, affable story, and admirable ethos, your business will be overlooked for your competition.

Most brands have a great origin story, even the bottom line is that they were started simply to earn more money. Rather than just aimlessly choosing a style without reason, think about what you want to add to what’s already available in the marketplace: luxury, quality, cheap alternatives, additional sizes, or even a completely new style, it’s worth thinking through to create a foundation for your brand which will also serve as a guide in future.

When working out what you want your brand to be, draw on your own experiences and personality as a base. Your entire brand should, ideally, be a reflection of yourself. Consumers are cleverer than you think, and will immediately see through any generic, insincere branding attempts.

• What is your goal?

Your goal can be as big or small as you want, but while having a big goal is good for the distant future, you should also create some shorter-term, realistic goal for your business plan. Think about how much profit you want to make, or the level of public awareness of your brand you want to generate. The end goal doesn’t have to be for the label to become a global giant. Your line can exist as a side passion project to help you earn extra cash. The key is to figure out what you want.

A lot of new brands attracted the larger companies to buy the name from the owner and encourage a quick turn around in revenue rather than playing the long game, it varies on your passion and investment in your brand.

• How will you sell?

Next up, you need to work out how you plan to sell your clothing. These days, ecommerce is the best place to start. It keeps startup costs right down, and core retailers and distributors are more likely to talk to you with at least some sales and brand recognition under your belt.

Building a functioning ecommerce website can be ridiculously easy these days—and cheap. You can build a basic Shopify site for as little as $29 per month, and it’s you’re good at the design side of things, you can make it look pretty epic with very little effort.  Remember that your website will need to reflect your brand, which means conforming strictly to your brand guidelines strictly. Nothing puts consumers off faster than a poorly-designed website.

Another platform to consider is an independent listing on a fashion marketplace like ASOS marketplace or Amazon, alongside your own ecommerce offering. This can really help to boost much-needed exposure in the early days, and setting up a “boutique” style hub on ASOS in particular—which costs just £20 a month in addition to a 20 percent commission on sales—has added benefits. People trust platforms like this, and so these sales ultimately build your brand organically.

Selling directly to consumers isn’t the only option either. Depending on your goals and personal investment in the company you could consider selling to retailers as a wholesaler. The demand will be much higher and profits per individual garment lower.  But it also makes the sales side easier, not needing to deliver to consumers or market to individual consumers.

• How to market it right

I cannot stress how important market research is to any company. When you have settled on the brand, the next step should be market research.

Use (your best friend) Google to research the clothing brands out that are creating similar work or targeting a similar customer demographic. Pay attention to details about competitors, like their size, branding, geographic reach, price, and unique selling points. Use what you learn to work out how you can offer consumers something new, different, and ultimately better .

Marketing starts with testing the product on your target market , it’s a poor move to manufacture 300 garments without having first sought feedback on your prototype from customers in your target market. Creating a minimum viable product will help identify any improvements your garments need. Whether it’s the fit, size, or color, you’ll be able to make changes without investing a lot into an imperfect product.

Asking family and friends to try out your line might work if they are part of your target demographic, but making sure you’re getting unbiased feedback is key. So try to find some people you don’t know to give you feedback. Doing all of this reduces your risk—if your product isn’t viable, you will be out a minimal investment of time and money, but if it’s received well, you might yield repeat purchases from happy customers.

Identifying the right target market is also important—it can make or break your clothing line. Research on how much people are willing to pay for your product, and how much they pay for similar products, will help define your quality standards and pricing.

Online marketing

It’s important to do the basics right. When you’re designing your online presence don’t be afraid to invest in it. If a potential customer likes your clothing but doesn’t trust (or can’t navigate) your websites they probably won’t order. Invest in quality product photography—your images need to look professional and be properly lit. Hiring a photographer for a day or two is worth the investment.

Secondly, it goes without saying that you will need a full and thorough marketing strategy that makes you stand out. The clothing market is unbelievably congested and extremely competitive. In general terms, it is always a good idea to build a strong social media presence through Facebook and Instagram. Via these channels, you can interact with brand advocates directly and develop a clear “voice” for your clothing line.

Putting initial budgets into paid advertising on these platforms is probably most worthwhile for ecommerce sites. You target audience, nine times out of ten, will spend their lives on these channels. Facebook’s model for ad targeting is so specific and niche these days that you can really reach the best audience for your brand.

Also, before you set up profiles on every single social media platform, make sure your target market actually uses them. Instagram, for example, isn’t as widely adopted by people over age 40, so if your range of garments targets that age group, it might be best to stick to Facebook rather than attempting Instagram too.

One way to increase sales and brand awareness is through  celebrity endorsement .  Most “instafamous” or “Z listers” social profiles will list an email address for PR inquiries. Getting celebrities to wear your brand increases follows massively and has the potential increasing your followers. But, be realistic. Don’t depend on celebrity endorsements as your primary marketing strategy, but it doesn’t hurt to try.

• Keep your startup costs low

One of the main advantages of starting a clothing line business is that it is relatively easy to keep costs low initially.

As you get started, put together a business plan . It will help you decide on and maintain your key areas of focus and should help you put together your initial budgets and financial forecasts, based on your startup costs . It’s a good idea to write down ways you can minimize your initial costs—look at your list of startup costs and define them as either essential from the very beginning, or something that can wait until you’ve started generating some revenue.

Your largest overhead at the very beginning will probably be the clothes themselves, and as you will likely be producing the clothes yourself, you’ll only need the most basic of equipment. Only invest in more professional equipment once demand has increased and you have more capital.

Until you’re dealing with a high level of stock, it’s a good idea to avoid renting space and just manufacture from home. This allows you to be more flexible with working times and keep your day job until you really take off.

One expenditure you should consider is insurance , including basic business insurance, freelance insurance, or professional indemnity insurance. When you’re small and the risk is low, you’ll be able to find policies that cost next to nothing—but should the worst ever happen, it could save you.

If another company claimed that your design, logo or branding was copying theirs, having professional indemnity (liability) insurance would give you the financial backing to battle the claim. It also offers some protection from dissatisfied clients.

From the outset, you should also consider setting up some key financial performances indicators to help you thrive—it’s critical to be able to keep track of how your business is actually performing , versus your financial projections. Think about number of sales, the total profit made per order,  and the revenue you hope to generate within a set time frame.

When you start your clothing line, you’ll need to find the balance between your quality standards, costs of production, and making money.

Almost no one is born with the full stack set of skills to start and run a successful business, so take the time to learn about the parts you don’t know as much much about, whether that’s how to network in the fashion industry, or how to develop a business plan that’s designed for growth.

Be passionate, know your brand, and keep your set up costs low! Good luck!

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Richard Meadow is a writer that works on topics related to freelancing, ecommerce, and small business advice. He uses Caunce O'Hara as a reference in his work. He is always interested in new subjects and articles to read and enjoys writing about them. He has previously worked closely with ecommerce companies and has found a lot of insight with his experience.

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Do I Need A Business Plan For My Clothing Brand?

Is it difficult to write a clothing line business plan, start creating the business plan for your clothing business, 1. company overview & executive summary, 2. products & services, 3. market overview, 4. sales strategies, 5. competitive assessment, 6. production schedule, 7. financial assessment & projection, things to keep in mind when writing your business plan.

If you are just launching your clothing business and you are wondering about the future of your company, constructing a business plan for your brand can help you better understand your current situation, and allow you to build detailed business development plans for the future.

In this article written by some of the most experienced fashion experts here at Appareify , you will discover all you need to know to create your clothing line business plan including the reasons to craft a business plan, how to craft a business plan, as well as things to consider when crafting your business plan.

You may wonder if a business plan is really necessary for your clothing business. Well, the answer is not exactly yes, since you can operate your business at the beginning with an “unwritten” plan. However, if you are looking for promising future developments and business expansions, you will probably need a business plan eventually.

There are a lot of reasons why business owners will craft a detailed business plan when they build their brands, especially for startups. Below are some of the common reasons.

Define Brand Image And Business Core Values

Creating a business plan for a clothing line helps you identify what your business stands for and how to correctly position itself on the market. Precisely defining your fashion brand is crucial in order to make it customer appealing and to generate revenue that will eventually fuel your business further.

Increase Investment Attractiveness

A steady and generous cash flow from generous investors can make your business thrive, and you will get exactly that by creating a well-written and thorough clothing business plan. Before investing their cash, every investor would first like to know what are your business goals, what strategies will be put into place, and how you intend to expand it in the future.

Establish And Achieve Business Goals

You can easily go off track if you don’t have your business goals in writing. Setting milestones for the next 1, 5, and 10 years will offer you direction and vision, while also promoting a proactive approach to expanding your business. A business plan for your clothing brand is the safe way to secure this.

Even if you might get caught in the web of uncertainty and think that it’s difficult to assess financial predictions or tackle market analysis, writing a clothing company business plan is not that hard. With a bit of attention to detail, constant research, and vision, along with our detailed guide, creating a fashion business plan can be easier than you think.

Writing a fashion business plan from scratch can feel intimidating. How about getting started with the basic structure of a clothing line business plan?

• Company Overview & Executive Summary;
• Products & Services;
• Market Overview;
• Sales Strategies;
• Competitive Assessment;
• Production Schedule;
• Financial Assessment & Projection.

Building a solid business plan should start with the company overview and executive summary that can provide any of the interested parties with a snapshot of your business status and the operation details.

1.1 Company Overview

Brand statements.

What does your clothing brand bring to the table? Is it unique and does it differentiate from so many others out there? If your fashion brand has anything distinctive and positive make sure to include it in the very first section of the company overview.

Company Missions

Is your clothing company planning to expand globally, while being environmentally friendly and eco-conscious? State your brand’s missions in order to create a truthful yet attractive image of your company.

Core Values

Are your business decisions impacted by ethical strategies? Make sure that your clothing line values are aligned, concise, and well-written so that everyone will understand what your core vision is.

1.2 Executive Summary

Leadership, management, and staff.

The executive summary is at the core of your business plan. For this section of the executive summary, you need to focus on the people that will be in charge of the daily tasks. Make sure to write clear and concise descriptions of their roles, attributes, and strong points, such as training, qualifications, and professional background.

Owner Supervision

Do you intend on closely following your personnel’s performances or do you plan on delegating these attributes to a highly skilled person? No matter what your plans might be, it’s advisable to include as much information as possible regarding the salaries, benefits, key roles, and major management strategies of your decision-makers.

For apparel business plans, the products and services explanation section is crucial, since it directly demonstrates the sources of revenue. This section should cover information about your fashion line production details, services offered, production plans, and the eventual benefits of using your products.

2.1 Production And Service Description

In this portion of your clothing store business plan, you should include information about what type of clothing products you sell, the fabrics, the production techniques involved, and the kind of services you tend to offer, for both “to B” and “to C” if necessary.

Also make sure to include descriptions of the services that your customers will benefit from, such as sampling, craftsmanship, and logistics.

2.2 Feature Benefits

In this part of the business plan, you need to write down every potential benefit you can think of. From basic clothing comfort levels to greater sustainability goals, you need to create compelling and attention-grabbing points for your fashion products.

2.3 Product Development Plans

This section offers an overview of how your production line will expand in the near, mid, and far future. You need to focus on underlining the proactive steps your clothing brand is planning to take in order to create better, sustainable, and appealing products, using the ever-evolving technological processes.

With the market overview section in your apparel business plan, you will emphasize your brand’s position in comparison to your competitors and how your business stands out from the rest.

3.1 Market Analysis

Looking at what your direct competitors and indirect competitors (such as department stores) are doing, generate reports that describe their modus operandi. From analyzing inspiring moves and worst decision-making patterns to detailing strengths and weaknesses through a SWOT analysis, this part of your business plan for a clothing brand is paramount.

3.2 Target Customer

Who will buy your products? You need to address the age limits of your customers, their gender, location, social status, budget potential, buying habits and tendencies, and as much information that would indicate whether or not your products are destined for the right consumer. If the target customer is not right, you might want to change your brand’s message or image.

3.3 Marketing Strategies

This section should focus on detailing your marketing strategies for acquiring a community around your products and brand. Will you focus on organic or paid marketing? If you’re planning on expanding internationally, you should tackle ways of developing your online presence through digital marketing, such as social media platforms, email marketing, and online PPC advertisements.

3.4 Marketing Investments

What metrics will you use in order to track whether or not your marketing strategies pay off? This part of your fashion line business plan focuses on detailing the provision of periodic marketing investments which convert your target audience into your actual customers.

In this part of the business plan, you can include graphics and statistics on how you will effectively allocate your budget to meet your financial goals.

In a perfect clothing line business plan, the sales strategies section will focus more on how the fashion line will generate revenue through efficient pricing strategies and optimized sales plans.

4.1 Pricing Strategies

The pricing strategies should include a detailed analysis of your production costs in correlation with the previous target customer analysis as well as market demand and offer. You should argue why your competitive price is set above or under the market’s average. Also, you might even include a chart with how you will adjust your prices in case of certain events.

4.2 Sales Plan

In your clothing brand business plan, you should include the sales plan information on what types of payment you’re going to accept, if you’re going to open a showroom or operate as an e-commerce business, how many sales staff you plan to hire, or if you will implement any promotional discounts to attract and build your customer base.

4.3 Sales Goals

Charts are best for this section of your business plan since they’re straightforward and concise. Are you planning on doubling your sales in the next year? What is your profit margin for this quarter compared to your competitors and how are you planning to evolve? This section should be all about numbers, analysis, and evaluations.

This part of any clothing line business plan focuses on the SWOT analysis, detailing your brand’s position in comparison to your potential competitors.

5.1 Main Competitors

Analyzing your main competitors should underline their strengths and weaknesses, and their strategy when it comes to production and branding, as well as pinpointing their sales numbers, and how they manage to stay on top of the niche through so many years.

5.2 The SWOT Analysis

The SWOT analysis is the most common approach to assess, evaluate and conclude a company’s competitiveness. By conducting a detailed analysis of the 4 critical areas of your business, you can thoroughly understand your own business and make thoughtful decisions along the way.

A SWOT analysis first dives deep into the strengths of your business. Do you offer free delivery? Are your fabrics ethically sourced? Have you lowered your carbon footprint? Is your target customer inclined to spend their large budget on the products that you sell? Are you highly experienced and do you possess the know-how?

In short, you need to explain “why customers would like to choose my products over the others.”

Focusing on your brand’s weakness might feel like a burden, but it will save you time and money in the future. Is your business not so prone to building connections because of its remote location? Should you be choosing an e-commerce business model rather than paying so much on warehouses?

That is, you want to know for sure “what is stopping my customer from buying my products” at first and to arrange solutions accordingly.

Opportunities

This section taps into external factors that will positively impact your business, the “thing” you can take advantage of. Do you have a potential unexplored market? Do you have any access to next-generation production technology? Or perhaps your team is young, proactive, innovative, and passionate about the future. And maybe your products are the new wave in an emerging market.

In any clothing business plan template, the threats analyze potential harmful factors for your brand. Is your competitor in the business for more than 10 years? Or perhaps the majority of your budget will be redirected to marketing strategies, and not to new investments in the production line? This analysis allows for creating mitigating plans in the future.

The production schedule of any clothing brand business plan outlines the timelines for production, inventory, verifying, and delivering the products.

6.1 Production Development Arrangements

It’s all about preparing your products in time for the next season. This part focuses on the timeframes of sourcing fabrics, their delivery times, how long it takes for the design and pattern to be made, and the actual production and quality control times, all depending on the number of products you’re planning on selling.

6.2 Production Arrangements

You should have all of your craftsmen and production line on the go since you don’t want to miss any of the six fashion seasons (if we also include the resort and holiday collections). Here is a useful fashion calendar for you to reference.

Development Dates: May - August

Sell Dates: August - October

Production Dates: October - January

Delivery Dates: January - March

Summer Collection

Development Dates: July - September

Sell Dates: October - January

Production Dates: December - February

Delivery Dates: March-May

Fall Collection

Development Dates: October - December

Sell Dates: January - March

Production Dates: April - June

Delivery Dates: July - August

Winter Collection

Development Dates: December - January

Sell Dates: March - April

Production Dates: June

Delivery Dates: September

Holiday & Resort Collection

Development Dates: February - March, March - May

Sell Dates: May - June, June - August

Production Dates: July - September

Delivery Dates: October - January

6.3 Sales Arrangements

The sell dates are crucial for financial prediction and goal aspiration. You can’t hope for stellar selling numbers if your products aren’t ready to hit the shelves when buyers are looking to spend their money. This part of the business plan should include strategies for distribution channels, on-sale timetable, sales team structure, and also selling strategies.

6.4 Delivery Arrangements

It’s mandatory to take into account if you’re shipping your orders internationally or even to a different continent. Do you offer free shipping? It’s also essential to consider cost-effective delivery methods for your business. You also need to factor in the logistics, such as standard delivery times that can be delayed by unforeseen natural events, strikes, and so on.

The projection on your brand’s financial evaluation is crucial when developing a coherent apparel company business plan, including assessments on investments, costs, and profit margins.

7.1 Upfront Investments

Considering the upfront investments when writing a business plan for your clothing brand shouldn’t miss on expenses for production equipment, warehouse costs, showroom rent, manufacturing and marketing costs, as well as sourcing fabrics and labor force. The more realistic the investment evaluation, the more your investors will trust your business plan.

7.2 Funds Usage / Expenses

For this part of your business plan, you should indicate how exactly your funds will be allocated and spent. Its purpose is to underline that your business is viable and can withstand the rate at which the funds are spent. You can consider using bullet lists or charts for better visual representation.

7.3 Expected Cash Flow

For a clothing line business plan, the expected cash flow describes the inflow and outflow of cash for your business, during a specific timeframe. You should factor in aspects such as rent, salary expenses, returns, and reinvestments, as well as sales revenue, and capital realization channels, all of which determine the scalability of your business.

7.4 Income Projections

The income projections part of a business plan template for a clothing line offers an estimate of the future revenue over an exact timeframe. You should go into detail as much as possible when it comes to projecting the price points, sale volumes, as well as gross and net profit margins.

7.5 Balance Sheets

The balance sheet is a useful tool that underlines the estimated financial situation, factoring in all of the costs as well as any source of income. At times, especially once the business develops, it might feel daunting to be personally in charge of this. A professional accountant can be the easiest solution in this situation.

Look Out For Overestimation

It’s easy to get hyped about your business idea and to oversell without even realizing it. However, this might be perceived as unrealistic and investors might feel lied to, and eventually refrain from giving you their cash. It’s important to maintain as objective as possible and present everything fact-based, without compromising on the benefits of your business.

Contain Both The Pros, and The Cons

An effective clothing brand business plan will never stay away from pinpointing the actual cons of your business. No success ever comes without hardships, so investors are familiar with having to overcome a few cons along the way. Focusing only on the pros of your business will make it look like a scam and potentially scare the investors away.

Keep Your Business Plan Up-To-Date

Once you’ve come to a certain milestone in your business, it is important to keep your business plan up-to-date. This will help you track your progress, maintain your focus on achieving your target, and adapt to the ever-changing market while keeping your investors informed.

If you are able to make it here throughout the article, you're already halfway through the long path of starting your own clothing brand, and we assume that you should know a bit better about your fashion business after the long “self-assessments.” Follow the steps, parts, and structure mentioned in our guide, and start drafting your business plan right now!

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Fashion Design and Business Management, Essay Example

Pages: 2

Words: 537

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My aspirations are to pursue a course in fashion design and business management that will facilitate achievements of my goals in being a successful fashion designer and business manager. My intellectual curiosity, qualifications, dedication as well as interests in furthering my skills in fashion design and business management offers me a good opportunity to pursue this career (Steele, 2000).

I have always been a fun of singing dancing taking pictures and cooking since I was two years old. I remember that freezing cold winter of 2005, when my parents decided to set up their own business on selling fashionable cloths and that was also the moment when my 100% of happiness end.

My parents were very busy due to their abroad business which expanded from Madrid to everywhere of Spain, China and Brazil, so they had little time for me and my little brother. Fortunately, I have been grown being a daughter, sister and mom at the same time because I know that taking care of my brother is my biggest responsibility. Moreover, the little time that my parents have spent on us, we have been flying to many countries to learn about how their business works and to get in touch with the clients has become the reason why I would like to be a real business woman as my mom, selling fashionable cloths.

Since the age of 12, for as long as I can remember, I started to be really interested on everyday’s fashion while others see the engineering, lawyer or doctor. Furthermore, my aspirations came from my mother and my intellectual curiosity and dedication have became one of my biggest goal that I want to achieve. That was the year when my mother named me as her little secretary. I wish to find my skills in fashion design and business management through familiarizing with visual merchandizing and store management. Actually, I would like to call my brand as AE15 and make all the people around the world be familiar with this name as they currently do with Prada or Louis Vuitton (Steele, 2005).

Consequently, having explored the success factors at Zara fashions stores, I got a better understanding of the world market in relation to fashion merchandize which is also a crucial success factor in this field. I also appreciate embracing diversification together with vertical integrations as the predominant strategy in the achievement of growth as has been implemented at Zara business. This specifically focuses on dressmaking designs, manufacturing, distributions as well as retailing of clothes as fast as possible since the appearance of the original design in the catwalks. Just like in Zara fashion stores, I want to enhance my skills in developing the formula for the contemporary chains and getting the on-trend fashions in the stores with speed while at the same time considering the quality standards as well as pricing so as to be ahead of the competitors. I am certainly sure that my dream is becoming as good entrepreneur as Zara owner do (Stephania, 2010).

Works cited

Stephania Lara,   “Mass market broached by high-end fashion”. The Prospector. College Media Network, 2010.

Steele, Valerie, Fifty years of fashion: new look to now, New Haven: Yale University Press, 2000.

Steele, Valerie, Encyclopedia of clothing and fashion, Detroit: Thomson Gale, 2005.

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ESSAY SAUCE

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Essay: Clothing retail industry

Essay details and download:.

• Subject area(s): Business essays
• Reading time: 42 minutes
• Price: Free download
• Published: 26 June 2012*
• File format: Text
• Words: 12,380 (approx)
• Number of pages: 50 (approx)

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Clothing retail industry

Chapter One

1.0 executive summary.

“The clothes that we choose to wear each season often depend more on fashion than on ethics. However, if we want to make a positive impact on the world around us, we need to start considering more than whether the clothes suit our shape or are in fashion. Instead, we should be asking ourselves a number of different questions. Where has this been made? What sort of conditions are those producing the clothes working under? Are they getting paid enough? We should also ask ourselves what impacts the production of our clothes has on the environment” (Ruth Rosselson 2005)

The clothing retail industry is one of the fastest growing industries, and with the advent of globalization, it has become one of the most favoured industries, as designers are now able to sell his cloths all over the globe. The amazing issue is how cheap some retailers sell their cloths, and the number of times they carry out sales within a year. One begins to wonder if these retailers are making enough profit from this business. Another interesting thing is the similarity in the designs of this cloths, the same design of shirt been sold in a Next shop, is the same sold at Matalan; the only different is the label and the price of the cloths. Should this means the same designer own both companies? Talk of the prices in which this cloths are been sold, with the increase in the price of commodities especially during this recession period, one begins to think how much profit this retailers will be making, having carried out about five or six sales within a year. Considering the cost of material, labour cost, transport, and several other cost associated with distribution, the question remains that how are they making their profit?

In agreement with Ruth Rosselson (2005) a researcher, made a comment in one of his write up in the Resurgence magazine titled “Conscience Clothing”, that we the consumer only care about the fitness of the cloth and the fashion, we care less about where the cloth is been made, the conditions under which it is been made, if labourers are paid well for the production, or have the production been carried out under any violation on human right. The basic truth is that, most consumers careless about these facts. Most of the cloths sold in the developed countries including UK and US are produced in the developing countries, companies prefers to import cloths from these countries, because of the availability of the cheap material and labour, and more especially because workers have little or no right. More than fifty percent of cloths imported are from mainly five countries, including China, Turkey, Bangladesh, Taiwan and Romania, because of availability the cheap material and labour. (Crane and Matten 2007) The media has exposed the notorious act of the retail companies and the bad manner in which they treat their workers. Various acquisitions have been alleged against the retail companies, including child labour, workers exploitation, and poor working environment. Bodies, such as the ILO (International Labour Organisation), IFHR (International Federation of Human Right), NGO (Nongovernmental Organisation), and several other have raised campaigns, and have taking to responsibility to alleged clothing retails to draw up a business ethics, to guide their business operations and activities. (Drucker, P 1981)

Business ethics are also called codes of conduct; they are rules and regulations, or policies that stipulate the standards by which a company must adhere to. Business ethics guides the activities and operations of the business, and it is aimed at respecting and upholding the human right standard. The business ethics of a company should include the working hours of the employees, the minimum wages, good working conditions, and several basic workers right. Nevertheless some business gurus believe business need not to be ethical, as the major aim of any business to make money, and the welfare of the workers is a responsibility of the government. (John Hooker April 2003),

This project is designed evaluate and investigate the meaning of Business ethics, and argument for and against business ethics. Literature reviews from different journals and textbooks concerning subject matter will also be analysed and evaluated, Furthermore, this work will consider and discuss the contribution of globalisation to business and business ethics, and its impact on business ethics. A proper analysis of issues in business ethics will be done, and discussions with examples on different issue of business ethics in the clothing retail industry. A good analysis of the future of business ethics will be done, which is the corporate social responsibility and we shall analyse and discuss the importance of upholding human right standard. Recommendations and conclusion will also be made.

1.1 Aims and Objectives

The main objective of this work is to examine if business ethics as a corporate strategy of a clothing retail company could aid the upholding human right standard and yet increase the organisation performance.

In achieving the main objective if this study, emphasis would be laid on the following issues:

– The impact of Globalisation of on business ethics as well as human right.

– Identify and discuss the common ethical issues in the clothing retail company

– Discuss the concept of Corporate Social Responsibility as a new strategy in the corporate world and its impact of business performance.

– Finally, the work will analyse and discuss the importance and benefits of an organisation to uphold human right standard.

Chapter Two

2.0 literature review, discussion and analysis, 2.1 definition of business ethics.

The spread of unethical issues and corruption has expanded in a wide range, revolving from politics to business and to religious institutions; this spread has ironically prompted increase in the interest of business ethics, and how corporations can adjust to help in upholding human right standards.

Ferrell et al, (2008) described that business ethics is concerned with the evaluation of practises exercised by corporations, if it is generally and morally accepted. This defines that businesses are expected to operate within a particular laid down rules which are morally acceptable to the public and failure adapting to the norms provided may not be accepted. Robin and Reidenbach (1987), believes that business ethics involves the organisation behaving in accordance with some carefully laid down rules of moral philosophy. Taylor (1975) also described business ethics as “inquiry into the nature and ground of morality” in which the term morality is assumed to mean; standard, codes of conduct or moral judgement. Manuel (2001) supports Taylor and concluded that business ethics boils down on moral standards as they are applied in business policies and behaviour, he continue that business ethics is therefore a form of applied ethics. This defines that the concept of business ethics does not only entail the analysis of the morals and norms, but also preaches the application of these norms and moral standards in every business aspects.

Davidson (2005), described business ethics, is a path in which an organisation ought to follow, smiting less pains and suffering to human and the environment as it extends the most of its benefits to the society and the economy. Collins; Watson (1994), concluded that in everyday business activity of an organisation, it is important that the firm maintains basic ethical standard which include, trustworthiness, providing a conducive environment for workers and several others, Crane and Matten (2007) also concluded that business ethics is a study which defines rights and wrongs in business activities and situation, as it affects human right, they further explained that the rights and wrong meant, is in the scene of company operation, strategy, commercial or financially activities.

Business ethics, as it has been defined by several researches and writers can simply be summarised as the fundamental moral standard, or codes of conduct by which an individual, or an organisation as a whole is expected to abide by. Comparatively, business has been seen to be the major source of investment and job creator. Business can also be assumed to be the basic background of industrial activities, ranging from production, trading, financing, distribution and several other activities which are carried out in different industry. John Ruggie (2008) described that business constitute a powerful force, which can factorise decrease in poverty rate, and increase economic growth of any given environment. Nevertheless, there are sets of rules and guide lines which are laid down, in which every business is expected to operate having considered these rules and guidelines. Any business that operates not in accordance with these rules is termed to be unethical and can be liable to justice.

Apparently, business varies in terms of nature and operation, therefore ethics of each business may differ from each other. Ethics adopted by corporations includes variable number of norms, which defines the business ethics of that corporation, though most of these norms can be general principles such as the non discrimination principle and the conducive -work environment concept. In several situations the organisation laid down some principles, according to its social practice which worker and the organisation as a whole is bound to respect and abide by. Some corporations distinguish between the norms that regulate the internal activity of the organisation, and its involvement with its subordinates, thus most of these codes and norms are explicitly referenced to the ILO convention, especially those concerned with the upholding of human right standards at work places (Jean-Paul Sajhau 1996).

Manuel Velasquez (2001) in his book “Business Ethics Concepts and Cases” suggested that, business ethics inquires three major matters which includes;

– Systematic matters: these are ethical issues that is concerned about the social, legal, political and economic system within which the organisation operates

– Corporate matters: this are ethical issues that focus on the company itself and its operations

– Individual matters: this focus on individual within the organisation.

2.2 BUSINESS ETHICS AS NORMATIVE AND DESCRIPTIVE ETHICS

Manuel Velasquez (2001) described that “normative study aims to discover what should be. A descriptive study attempts to describe or explain the world without reaching any conclusions about whether the world is as it should be”. Normative ethics involves moral standards that determine the right and wrong of an individual or an organisation, it is the quest for an ideal moral behaviour; it is based on practical moral justice. The concept of normative ethics defines that there is an ultimate norm which serves as the fundamental bases of ethical behaviours. The concept examines the moral standard to determine if people are acting right or wrong.

Descriptive Ethics on the other hand definers the ethical guidelines by which people behave. Descriptive ethics examine what moral standard an individual or a group of people tends to follow as guidelines for their behaviour, it also investigates different people’s beliefs on what they term to be morally good or bad. Descriptive ethics an also be termed as comparative ethics because it involves comparison of different ethical system from the past to the present, from one society to the other and the beliefs of people that they act according to. It asks questions such as:

– What people believe to be their moral standard?

– How do people react and handle problems?

2.3 ARGUMENTS FOR AND AGAINST BUSINESS ETHICS

Various arguments has been raised concerning business ethics, what business ethics should be, how it should be practice and even if it should be considered or not. This section of this work will analyse view and beliefs of different economist and writers concerning business ethics.

Milton Friedman an economist and business man who believes business ethics is irrelevant, he continues that business should not be concern about ethics because the major aim of business is to make money and maximise profit (Friedman 1984). He discussed in an essay tittles ” The Social Responsibility Business is to Increase Its Profit”, that the major aim of corporation, and its major task is to maximise its profit, he believes organisations are not suppose to be concerned about how to reduce unemployment, or reducing pollution more than that the law of the state has stated. In a more literal term his assumption means business should be less concern about how they make their money, as long as they keep making the money. Friedman raised two arguments against business ethics. First, “corporate executives and are not qualifies to do anything other than maximizing profit, because business people are specialized in making money not social policy”. Second, “corporation executives are not obligated to spend company’s money on social welfare, they can only elect a representative of people, to perform such function and any project on which company’s money is to be invested on, must be one that will yield benefit to the company”. He continues that a sole proprietor can afford to spend his money on social welfare without the expectation of any returns, since it’s his money and he can do whatever he wishes, but a corporation should not invest people’s money on social welfare unless it expects a yield.

Ducker (1981), supports Friedman, he suggested that “there is neither a separate ethics for business, nor there is need for one” Ducker (1981) believes the obligation of a corporation not to vandalize human rights, lies on age, old wisdom and common sense, as there is no special need for terms such as business ethics. Carr (1968) wrote in an essay titled “Business Bluffing Ethical?” Suggested that “business is like a poker game”, he continues that “deception is a legitimate part of business”, he described business to include deception, bluffing, misleading others and concluded that, “ethical rules of everyday life are not applicable to business”. Collins (1994), described business ethics to be an oxymoron, meaning business ethic is a contradictory concept, Collins (1994) continued that, business is unethical, it is inherently bad, and will remain bad, therefore introducing the concept of business ethics is like introducing an almost impossibility.

On the other hand some other business gurus and economist disagree with Friedman and Carr. Crane and Matten (2007), suggested that, various circumstances traceable to unsuitable business activities, such as child labour, poor working environment, exploiting sweatshop workers and several others, are unethical ways in which some business carry out their activities, he continued that despite the occurrence of this scandals within bushiness, yet it doesn’t means there are no principle and values that controls such this activities, it worries that, this kind of activities occurs among business, but attention should be given to this areas and better decisions should be developed to improve the situation. Hooker (2003), wrote an article “Why Business Ethics”? He commented on Friedman believe, that “if laws permits anti-social behaviour, should businesses not restrain themselves voluntarily, even if it imposes a cost on stakeholders?” He argues that corporations neglecting business ethics is as worse as giving an armed rubber a gun to murder, he cited an example of clothing retailer, packaging cloths with a fake labels to make consumers buy the products, and a food processor intentionally placing a wrong label on the food packs, or a family car built with an explosive gas thank like the factory mistake on Ford Pinto, such acts are precisely illegal and unethical, which may leads to death. He continued that, if a sole proprietor tuned to be a company, should he loose his moral ethics, or would those ethics just disappear? In contrary to Carr view. Hooker (2003) believes that, every business needs to gain loyalty from the consumer to improve in its operation and increase in profit making, and one of the ways in which this can be done is by adopting proper ethics that the consumer can benefit from. Collins (1994); Watson (1994) commented that “several writers have shown that everyday business activity involves and requires the maintenance of basic ethical standards which includes honesty, co-operation, trustworthiness and truthfulness”.

Crane and Matten (2007) concluded that, business will not be possible if buyers and sellers don’t trust each other, and employers don’t help each other at work, or directors lies to his colleagues, so also it is not possible to believe business ethics is insignificant or idealistic, because the essence of business ethics is to identify, distinguish and correct the rights and wrong in the business activities.

2.4 GLOBALIZATION AND BUSINESS ETHICS

Globalization has become an important issue publicised by the media in current days, Crane and Matten (2007) said, “Globalization is one of the most prominent buzzword in recent times”. Magazines, news, press report and conferences, talks about the issue of globalization as it affect economy and the business world. Business and government leaders have also come to realise the effects of globalization to their environment, the chairman of Goldman Sachs made a speech titled the “Gospel of Globalization” where he embraced the interconnectivity of the world economy, and its advantages to the global economic growth and welfare (Paulson2001). In contrary the chief executive officer of Deloitte Williams Parrett described globalization to have brought about different risk into business. At the world economic forum held at Davos in 2006, he described that, the effects of globalization is that, it has increased the risk of all kind to business including lack of confidentiality in business, due to the rate at which information travels far and fast, it also allows any occurrence or event either far or near to affect the business, since the market is independent. These assumptions have confirmed the great impact of globalization in business, despite the diversity in global culture.

Business ethics have been playing a big role in globalization. Multinational corporations are now at the centre of public criticism, as they have been alleged of engaging in exploitation of workers, child labour, and destruction of the environment in the developing countries, which is against the codes of conduct in which they are suppose to operate as laid down by the ILO – International Labour Office (Crane and Matten 2007). However either these accusations are true or false, with the reigning alert about globalization, it is of good for corporations to define if their behaviours are right or wrong.

Crane and Matten (2007) identifies two main instrument of globalization which were technology and indigenisation. The improvements in technology such as mobile phone, radio, television, internet and several other media, has opened the connectivity and interactivity within people irrespective of their distant residence, so also the improved technology in transportation, which now makes moving from one territory to the other very easy. This factors has to a great extent obstruct the presence of territoriality in the business world as people can easily advertise, market and transact business despite the distance between the territories.

Integration as a political nature is another instrument of globalization as described by Crane and Matten (2007). The development in the political nature has brought about the eradication of territorial borders in many countries, as many countries now engaged in bilateral trade and allow visa free entrance into their territory. A good example is the European Union (EU) and the Economic Community of West African States (ECOWAS). These new political nature which allows trade to be easily carried out since the process of obtaining visa is now made easy, while some countries can even be entered without the use of a visa .

These two instruments of globalization have obstructed the significance of territoriality. Crane and Matten (2007) concluded that the effect of these new developments is that there is no more substantial need for geographical territory to exist, and there is less restriction by the territorial borders. Scholte (2000) defines globalization as, “the progressive eroding of the relevance of territorial bases for social, economic and political activities, processes and relations” he characterized globalization to be “deterritorialization” giving an example national sport events, such as the champions league. Different people from different countries watch the football match in their separate homes or pubs at the same time, without visiting the venue where the match is been played. Another example is global products and global market; people buy the same brand of Toyota all over the globe just as people wear a Gio Gio Armani shirt all over the globe despite how far they are from where it’s been made. The idea of global product, global capital market, global communication, global labourers, have emerged the relevance and relationship between globalization and business ethics.

According to the UN conference on trade and development, it was reported that in the past thirty years, the GDP of most developing countries have increased by 52% and about 8% increase in the six largest developing countries every year, in the past 5 years. The UNCTAD also reported that there have been an increase in growth, in the developing countries “… seems to have engendered synergy among developing countries so that growth in these countries can be endogenous” (http://global-labour-issues.suite101.com/article.cfm/panacea_or_worker_exploitation). Frank Hardy a reporter with the Washington press wrote an article, where he evaluates the Effect of Globalisation on Business; despite the flow of labour from old industries to the new industries, which has caused a very large gap between the demand and supply in the labour market. The disparity between the demand and supply of labour will result in a short-fall in many industries. At the same time the loose of high pay jobs will have a negative impact on the workers and their entire family.

Multinational corporations engages in labour exploitation, observations were made that corporations often ignore the ethical practice, while in other countries especially the developing countries, cases of slavery and exploitation have been alleged in India’s clothing industry, exploitation of children in Indonesia, poor working environment in Bangladesh and inferior material usage in China. All these acts where all factorised by the globalisation as a function to maximize the company’s profit. However, GDP might have definitely increased in the developed country aided by globalisation, but it has also cause stagnancy in many developing countries economy. David Wessel a reporter with the Wall Street Journal, wrote an article in May 2005 that, Americans perceives their country to be a state of many opportunities due to the increase in the GDP of the nation and standardised labour market, yet economist in recent day analysed that a child living out of poverty in the developing country would have had a better chance of prosperity if accurate ethical conducts are put in place and respected by the multinational corporations. Hardy says “In order for globalization to work there must be a large consumer base requiring good paying jobs. Which nations have that base is another question.” (http://global-labour issues.suite101.com/article.cfm/panacea or worker exploitation)

As much as globalization has affected business and economy, so has it affects business ethics. Crane and Matten (2007) described two major factors of globalization that could affect business ethics.

2.4.1 Culture

As business becomes “deterritorized”, it opens an advantage for corporations to trade in overseas market which brings them to confront issues of divers and contradicting ethical standards … the cultural belief of different territory affects the way business is been done and defines the ethical standard in which the indigenous business operates. Donaldson (1996), said the morals and values by which people live in their home land may be questioned overseas and vice versa. For instance the Europeans find child labour to be unethical while some parts of Chinese need their children to work even at underage to feed him or herself and to provide for the family. Also Chinese people believe it’s unethical to sack workers during economic recession but Europeans find it to be a moderate act. Some culture takes gender equality seriously while some believes there is a great difference between both genders. Another instance is a case of religious believes, some culture allows their ladies to dress which almost nude at beach sides if they want to, while some think ladies should cover up at every point in time. These instances and other cultural differences affect the business ethics as a result of globalization been deterritorized.

These have been a problem for multinational companies to live with, but yet, it should be a great obligation for them to operate in different territory according to the way their culture allows. If multinational business gains a lot from these overseas trade, then it of moral that proper responsibility to the territory should be carried out in their operations in accordance to the cultural belief in which the people believes it is ethical

2.4.2 Legal issue

“The more economic transaction loses their connection to a certain regional territory the more they escape the control of the respective national government (Crane and Maten 2007). Governmental powers are functional only in their traditional regions for instance the Unites Kingdom government can only exercise her power within the territory of United Kingdom and same goes for other territories. Moreover the advent of globalisation has restricted the impact of government on business, the government can only impose its laws on the activities and operation of that business which is been carried out in that territory. When a business extended to the overseas, the framework of governance and the legal issues attached to that company becomes different, for instance, the government can only charge tax on the operations of that business within its own territory, excluding its operation outside her territory. This resulted to the fact that business can no longer rely on the legal framework of ethics as that is pronounced by just a government to determine if a business practice is right or wrong. Researchers have distinguished between business ethics and government law, some writer defined law to be the institutionalisation of ethics into rules and regulation, while some writers defines it to be the least acceptable measure of behaviour, nevertheless several immoral issues in business are not included in law. Crane and Matten (2007) said ethics begins at the level where law ends, just as discussed earlier, some government may find it against the law for business to engage in child labour while some government are silent about, just as there is a legal act binding all business to contribute to the development of the territory where they are while come government careless about it as well. Therefore as globalization increased in terms of deterritorization so does business ethics, because business activities are now beyond the control of a particular national government as it becomes difficult for a national government to impose authority on the enforcement of business ethics globally.

2.5 BUSINESS ETHICS IN A CLOTHING INDUSTRY

A list of ethical standard has been adopted by different industry in line with the nature of the business, this business ethics are also termed the company’s code of conduct and are defined under the company’s corporate social responsibility (CSR) function. The corporation engages in different social practice both internal and external of the organisation affairs, and each activity is expected to be respected as it follows the principles by which the business is operated. Some organisation segregate the principles that govern the internal affair from that of its external activities, most ethics adopted by the corporations are directives from the International Labour Organisation (ILO), especially the ethics that are concern with the upholding of human right standard of workers, public and environment. These codes of conducts are fundamental principles established in accordance with the ILO convention. (Jean-Paul Sajhau 1996),

A number of industries have joined the practice of business ethics as it has become a remarkable comeback into the business world in recent years, especially in the clothing and textile enterprises such as Sara Lee and Levis Strauss in the united state, Mark and Spencer and a number of other clothing retail companies in Europe. Even in the developing countries, though much engagement has not been done, but Multinational Corporation has been obliging their subcontractor to respect the established ethics that concerns their activities (http://www.ilo.org/public).

The ILO, established in 1977, had a tripartite declaration of principles on Multinational Corporation and social policy, after the alarming critics about multinational company exploiting the developing countries. The tripartite declaration by the ILO, alongside with other non governmental bodies campaigned against the unethical behaviours of the multinational corporations and till date, the industries including the clothing and textile industries still hold great respect and importance to these principles. To a great extent most of the principles established voluntarily by individual enterprise in the circle of social policy, are referenced to the principles and codes of ethics as prescribed by the ILO (http://www.cleanclothes.org/)

The international trade unions has also contributed to the publication of business ethics in the clothing and textile industry, for instance The International Textile, Garment and Leather Workers Federation supports the national federation in the campaigning for human right standard and call for corporate social responsibility by the corporation. Also in 1995 The Amalgamated Clothing Textile Workers’ Union and The Clothing Manufacturers Association of the United State, agreed on a national ground, a collective agreement which define some codes of conduct for the clothing industry. The agreement includes a bound on the clothing manufacturers and retail companies including their sub-contractor in the developing countries, the codes defines the proper standard for minimum wages, non-forced labour, non-discrimination, non-child labour and several ethics in accordance to the ILO convention of 1996 (http://www.itglwf.org/default.asp?Language=EN).

Consumer associations and non-governmental organisations have also engaged in the duties of educating and drawing the attention of consumers and enterprises to the need for proper business ethics to be put in place, as well as making awareness for human right, and reason why it should be uphold (Peter Prowse 1996). One of the top issue focused on by the NGO’s is the issue of child labour, campaigns where made as they tried to promote social label for the clothing industry and enlightened the public on the danger associated with child labour as well as the rights of the workers (http://www.ilo.org/public).

The national governments also played an important role in the uplifting business ethics especially in the ethics concern with upholding human rights; they helped in enforcing the standard in business operation. The French government for instance laid great emphasis on respect of human right especially in the case of international business and their subcontractors, ensuring workers right are met and adequate benefits are paid to the workers. The united state government also adopted a similar measure, during the President Bill Clinton administration a campaign was made against sweatshop, the Labour Department identified some issues with a list of clothing company and their subcontractors to be acting against the ethical standard of the industry especially concerning the exploitation of worker in the sweatshop companies. This prompts the clothing companies to clean up the industry by urge their subcontractors to respect the labour congress legislation on human right in their marketing and production activities. They also carry out researches draw guide lines for the companies from which the companies can build up their ethical standards and also use the media publicise articles to educate the public on the rights of the workers. (http://www.sweatshopwatch.org/).

2.6 ETHICAL ISSUES IN THE CLOTHING INDUSTRY

Business ethics issues are problems or conditions that arise in the daily business activity that allows the corporation or employers to evaluate if the activity in question is right or wrong (Ferrell, Fraedrich and Ferrell 2000). Various activities are carried out in the day to day operation of a business which may result in conflict of any manner. Conflicting issues may arise between the manager and the employees, within the employees, between the business and the consumer or between the business and the environment as the case may be. These conflicts arising from the activities of the business might be termed as ethical issues in the business. Ferrel et al described said “ethical issues arise due to conflicts within people’s personal moral philosophies and values, the behaviours of the organisation where they work and the environment in which they live within”. Crane and Matten described that employee and the employer relationship is an area from which ethical issues is expected, including fair wages, working conditions, sexual harassment, or taking advantage of company facilities. Due to different human needs and wants, the business environment erupt several ethical conflicts as a result of collision of interest, the buyer’s interest in buying a safe quality product might collide with the interest of the seller with the aim of making more money as a result reducing the quality of the product, also the interest of the corporation in its objective might collide with the interest of the employee, just as a director might prefer to employ the best candidate for a particular job but the organisation interest in another person might obstruct the director will. In different ways, due to the nature of business ethical issues may arise and when it does arise, the organisation is expected to decide on the best way of resolving the issue (Taylor 1975). Some business gurus argued that there is no need for the involvement of the corporation in his employees working and living condition, Fitzgerald (1999) concluded that an employee is motivated by the care shown to him or her by the corporation, he continued that only when workers live in decent and comfortable condition are they likely to be excellently productive and committed to achieving the organisations objective. Crane and Matten concluded that modern companies now see to their workers housing and healthcare.

Thousands of ethical issues may arise in a business environment, within the organisation involving the shareholders, directors to the employers and outside the organisation involving the suppliers, consumers and the environment. Ferrell et al defines four classes in which business ethical issues can be classified, they include, communication, conflict of interest, honesty and fairness and organisational relationship.

Communication – Redding (1996) suggested that several questions has been asked in relation to the phenomenal of organisational communication has it integrates the question values and ethics in business activities. Communication in this context is the transmission of information between two parties (Ferrell et al 2000). Communication covers a large section of ethical issues, ranging from communication within the organisation and between organisation and the public Cheney and Christensen (2001) defines that internal and external communication in an organisation is designed to create the organisational identity in respect to companies ethics and values . Ethical issues in communication includes advertisement, marketing, employment contract, employee privacy and several others (Redding 1996).

A misleading communication or false communication could be termed as unethical and can be destructive to the organisation. Lying in communication is a serious issue in the business ethics, deceptive adverts is also a serious issue in communication as well as abuse can also be taking seriously, exaggerated claim to the public and the workers are also unethical and can leads to distrust in the business. A number of clothing retail company do this to encourage exploit workers by promising them to certain about of wages before resumption but latter changed their word after the worker resumed to work and of course the worker has less option. For instance Appendix One illustrate a situation in Primark one of the leading retail company in UK. Navdip Dhariwalof the BBC news on the 12 January 2009 reported a case of an undercover reporter who was promised the minimum waged before resuming to work but was offered �3.00 per hour at the end of the month (http://news.bbc.co.uk/1/hi/7824291.stm). Another issue is the size labels on the cloths, the labels such as super size has been use to confuse the intentions of the buyers as the buyers seem not to know the significant difference in the sizes and they doubt which is the real perfect size for their body. In response to this some manufactures have now introduced the extra measure by labelling cloths extra large, petit, extra-extra large and so on, also is an instance of the women clothing of size 8 which differs for one designer to the other (Ferrell et al 2000).

Such acts in business are unethical and it creates issues, the communication those not include all the necessary information that the buyer need or the workers been deceived which can be termed to be exploitation. Such acts are illegitimate are and are against the ILO standard and are liable to court action.

Conflict of Interest – “We can define aconflict of interestas a situation in which a person has a private or personal interest sufficient to appear to influence the objective exercise of his or her official duties as, say, a public official, an employee, or a professional.” (Chris MacDonald, Michael McDonald, and Wayne Norman 2002, pg 88) Ferrell et al (2000) wrote that one of the issues in business ethics is the conflict of interest between the employee and employer or between the business and the public, this conflict can result into violation of human right by the organisation in most cases, in the United State, employees are not obliged to accept bribe or gifts or personal payment as a medium of influence to carry out a special favour. Thought bribing is a legitimate ethics in of business in some part of the world but it is morally questioned by most cultures.

Conflict of interest may also occurs indirectly, most clothing retailers based their manufacturing outlets in the developing countries most especially in the eastern Asia’s because of the cheap material and labour and in return to help in the development of their economy, most of this labourers with these organisations were exploited and maltreated but the government seems to be quite about it because of the money been given to them or because of the promises made by the companies to help in developing their country. In instances like this, though the interest of the company to gain cheap labour and material is not conflicting with that of the government to help them in building their economy but its conflicts with the workers human right violated the standard business ethics as pronounced in the ILO convention. Appendix Two illustrates an instance of Nike in Taiwan and South Korea, Nike normally produces his shoes and sport ware in Taiwan for several year due to the cheap labour and cheap material in the country, but when the work force got the advantage of forming a union that was able to organise the wages and salaries of the workers and sets a minimum wages, Nike decided to leave the country for another Asian country where there is an authoritarian leader who did not allow the independence of labour union and the labour union is less functional, there is less protective measures for the labour market and the labour market is cheap.

(http://www.thirdworldtraveler.com/Boycotts/NikeFacts_GX.html)

Honesty and Fairness – honesty can literally means been truthful and trustworthy, having integrity and been compassionate. Fairness on the other hand means impartiality and unbiased, or equitable, these are normal general moral ethics that every business is supposed to operate by. Ferrell (2000) suggested that every business should at least respect the rules and regulation governing human rights and employers should not deliberately harm any of his workers. Loucks (1987) concluded that though business men are more conscious of their own self interest, yet business should be base on fairness, trust and justice, each chain in the business circle should be honest and fair with each other, he continues that not abiding by the ethical rules and regulation can obstruct business performance.

Honesty and fairness are normal moral way of living, business are expected to behave in same manner, though some businesses are only concern about the money and careless of whatever they need to do go gain the money, this kind of action will be termed as unethical. To exploit a worker or to discriminate are certainly instances of been unfair. Paying a staff below the minimum wages or depriving workers of their benefits or no providing a good working environment for the workers and also instances of been dishonest and unfair. Hurlbert (2006) said employers should pay their workers fairly, he continues that workers should not be treated less than a human; they should be included in the decision making and should be reward and motivated in the good performance. He concluded that “happy employees are more productive and are liable to save more cost and assist immensely in the achievement of the organisational goal” Eric Beversluis (1987), wrote an article titled “Is There No Such Thing as Business Ethics” that many business man see business as a game such as boxing and basketball where there is no hold for ethical rules, a boxer will not hesitate to harm him opponent if he want s to will, so business should be ready to harm to win as well. Writes such as Conrad Levinson believes business is like a war front and it needs every attacking strategy to counter the consumers and the workers, therefore honesty and fairness are not logically needed in business. However several other writers argue against the assumption of business been a game such as boxing. Ferrell says “business ethics must not only make clear what rules apply to the game but must also develop rules appropriate to non-voluntary character of participation in the game. Jim Balassone an executive in residence at Markkula Centre of Applied Ethics said businesses should adopt the habit of including business ethics as part of the hiring exercise, he continued that honesty and fairness in business does encourage employers to works without supervision or anybody watching. “Corporate culture is built from the top down, and Employees should adopt the ethics honesty and fairness. You are the company, and you set the standards, it is the responsibility of the employer to create a mission statement and goals with a set of values that includes honesty, integrity, fairness and excellence.” (http://www.startupnation.com/articles/1664/1/business-ethics-honesty.asp)

Organisational Relationship – this relates to the way the organisation behaves to the consumers, workers and the environment. The relationship between the organisation and the workers shows how ethical the business is. Employee and employer are expected to work together as a team to achieve the organisational goal. Employees should meet the necessary needs of the employer and avoid exploitation or over using their workers. Timothy Sexton (2007) a writer and web blogger, wrote that the behaviour of the employee in a business is a yardstick of shaping the achievement and the ability of the business to survive in the short and long term run. Sexton continues that “The performance of staff up and down the often labyrinthine hierarchy of the organization is managed through the implementation of bylaws and regulations; these rules can be vaguely defined and rarely enforced, or they can reach almost Nazi levels of discipline. This culture of behaviour and adherence to the rules is tailored both by the shared goals as well as the unique individualism of each employee”.

Proper ethics should be spelt to guide the relationship between the employee and the workers and adequate behavioural ethics should be put in place to address and define the organisational relationship. Though ethics in this sense may seems technical and this is the more reason why an adequate and appropriate ethics should be drawn that will spell out what is right and what is wrong as well as the punishment and reward that accompanies both scenarios. In line with this the business should ensure that a well defined mode of rewarding workers should be spelt and well as bases under which the staffs are entitles to it. To achieve this, the employers should be allowed to be part of the management team such as a representative; on the other hand independent employer union should be encouraged. Also the management should allow the managers to be part of the decision team to ensure that the correct information is passed across to them.

Gary Hansen an Australia press with the Aduki Independent press reported the situation of home workers in Australia. This home workers having a contract under a particular clothing company to make the cloths from, they work more than 15 hour every day for $2 or $3 per hour for seven days. The home workers are mostly women who were enslaved away by the clothing companies. The major aim of the company engaging in these activities is to minimise cost to the extreme, this home workers are not entitled to sick leaves, holidays, overtime payment and though they work from home, yet the working condition is very poor (http://www.aduki.net.au/other-stuff/30-worker-exploitation-in-our-own-backyard, http://www.oxfam.org.au/explore/workers-rights )

This scenario is an example of a bad organisational relationship in the clothing company, the public press charges and campaigns to protect the interest of the home workers. The Retail Ethical Clothing Code of Practice was formed in 2002 which stipulates that every clothing company must be for the fair treatment of his workers. (http://www.labourbehindthelabel.org/)

“In other words, there is no place in an organization for those who suddenly become accepting of the ethical standards only after they have already been caught violating them” (Timothy Sexton 2007).

2.7 CORPORATE SOCIAL RESPONSIBILITY

Business ethics is mostly related to Corporate Social Responsibility, and they are often used interchangeably. This section will clearly differentiate between and business ethics and CSR and it will further evaluate the position of CSR in the business.

Business ethics has been defined to be principles and standards set as a guideline for business operation activities. The concept of business ethics defines the rights and wrongs in the way business operates; they are sets of rules and regulation that protects the rights of the employers and public. Corporate Social Responsibility on the other hand defines the obligation and responsibility of a corporation to protect the affairs of the stake holders including the owner, the employers and the public in general. In other word CSR can be said to be the company’s obligation to pronounce and implement accurate business ethics (Carroll 1991).

Jones (1980) defines CSR as the belief that corporation are obliged to the society other than making profit. A number of controversies have been raised in the past but in recent year, the concept of CRS has been generally accepted as most corporations including the clothing companies, companies are now responsible for welfare of the workers, consumers and the environment, beyond making profit. However one may think what the gain is, for the corporation in exhibiting social responsibility, Crane (2007) said, the pursuit if extra reward may be the reason why corporations now engage in social responsibility or to avoid been neglected by the consumers. Greening and Turban (2000), also suggested that the workers can be more committed and excited to work if the company is socially responsible, at the same time employing social responsibility can a long term investment if the company has contributed reasonably to the development of the community. Friedman (1970) on the other hand argued that the only reason a company will embark on such project is if it’s making a returns from it and in other word should be called profit maximisation strategy not CSR, Bowie (1991) agreed with Friedman to an extent and concluded that, either CSR is to make more money or not at least it still performs the major obligation of social responsibility. The integrity of an organisation as well as his conformity to ethical issues goes beyond formulation of rules and regulation but also requires adequate compliance and not compromised of the ethics to achieve the company’s goal (Ferrell et al 2000).

More companies now adopts the CSR programme, as it aids improvement in the company’s operation and activity especially in relation to human right and environment protection as well as the development of the society. The concept of CSR was raised as a result of the camping against the sweat shops in the multinational companies. The concept addresses issues such as, child labour and workers exploitation, discrimination and harassment, working hours, as well as health and safety issues; it defines the rights and wrongs on these issues and monitors its respect (Clive Crook 2005). Marihugh Cheryl (2006) argues that labour laws and its monitoring are two different issues that need to be addressed separately other than putting monitoring as a function of the CSR; she concluded that, monitoring should not be under the umbrella of the CSR, the monitoring should be independent of the labour law to strengthen the ethical standards to be observed by the multinational corporation as they comply to the labour laws.

Ever since the advent of CSR in the 1990s, much relevance has been attached to the concept especially in regard to the outsourcing of low materials, technology and labour in the developing countries. CSR defines that such outsourcing should not only be for profit maximisation purpose; it should also be responsible of upholding environmental welfare and human right standards. Involving in an unethical activity may results disastrous to the company (CNTAC 2007). Clothing retail companies are also realising their responsibility toward promoting a green environment and upholding human right standard. CSR of any given organisation including the clothing retails should be concerned about their obligation to the society as a whole to increase their positive impact on the society and reduce to a very minimal level their negative impact. The concept of CSR therefore applied to the government, individual and the organisation (http://www.fibre2fashion.com/industry-article/2/179/ corporate-social-responsibility1.asp).

Fiber2fashion site, divides CSR into of an organisation into two;

– Human responsibility: this defines the responsibility of an organisation toward its stakeholders. The organisation is expected to be socially responsible to its employees, customers, competitors, environment, supplies etc. The social responsibility of an organisation and to the consumers is more focused on in this work the they include, conformity wages and benefits, conducive working environment, health and safety etc

– Environmental responsibility: this are obligations of the organisation to ensure a green environment

CSR stipulates that the company should carry out its activities and operation with the interest of its stakeholders in mind, in as much as the business is designed to make profit, it should not affect its employee and consumers as well as the environment adversely, companies should carry out their operation in a manner in which the interest of the stakeholders are protected. Nevertheless some business men argues that the concept is of selfish interest, by engaging in social welfare projects in order to increase their popularity and to make consumers divert their attentions to them.

Zhao Linfei and Gu Qingliang (2009), describe the evolution in CSR as its been described by other researchers, their analysis indicates that the evolution of CSR back in the 1990s have experienced a shift from “obligation and responsibility relative to the society to international and social issues as well as corporate social performance”. Falck and Heblich (2007) analysed that “in the 21st century the concept if CSR has further experience evolution to strategy and competitive advantages”. “Using the concept of CSR, companies can strategically maximise its profits and gain more competitive advantages” he concluded that “companies can do well by doing good, they can make profit and yet make the world a better place at the same time”. Linfei and Gu Qingliang described that “CSR is a voluntary corporate commitment to exceed the explicit and implicit obligations imposed on a company by the society’s expectation of conventional corporate behaviour”. “Organisations can adopt this concept and by doing so gain more profit at the same time” (Falck and Heblich 2007).

CSR can be used as an efficient managerial strategy and can contribute immensely to the success of the organisation, Porter and Kramer (2006) described the concept as a “win- win situation strategic philanthropy”. There several ways in which an organisation can strategise in adopt the concept of corporate social responsibility. On like every other industry, there are numbers of ways in which the textile corporations can fulfil its obligation to the employees, the consumers and the society;

Particularly the employees as a major concern of this thesis, the companies can create an avenue where the employees opinions and complains can be heard and an effective policy should be drawn to provide solutions to their complaints. The organisation can also ensure an adequate policy for settlement of disputes between the employees and between the employees and the managers. The company should provide a competitive and challenging work environment for the employees as well as ensuring as safe working environment of them. Basic ethical remuneration, promotion, and other benefits should also be put in place. Appendix Four illustrates the CSR of Burberry textile company; “Burberry is an organization that strives to fulfil its social responsibility. It provides its employees with safe working conditions, fair policies regarding appointment and remuneration and ethical workplace standards. There is no bias towards age, gender, colour or marital status in its employee policies”.”The staff of Burberry are specially trained in safety conditions at the workplace. It has specified health and safety standards, which are audited annually”.

Also quality products should be made available to the consumers at reasonable price and regular research and development should be carried put to innovate more useful and ethical good for the consumers. Corporations should adopt an eco – friendly concept as well as sustain a green environment. Porter and Kramer (2006) wrote that, “The practice of CSR is a long term investment for the company”. A well planned CSR will aid the reputation of the company, a good reputation is an instrument to attract, retain and motivate quality employees, and at the same time it increases the value of the brand which increases the company’s goodwill (Falck and Heblich 2007).

2.8 IMPORTANCE OF UPHOLDING HUMAN RIGHT STANDARD

Human Right are fundamental staple rights of every individual. Human Rights are basic international standards that protect every human from any kind of abuse including, political, legal and most especially social. Every aspect of the globe ranging from politics to economic, business and legal issues have their aspect in which they make provision for human right standard. Rights to freedom of opinion, freedom of religious, right not to be tortured and several others are typical example of human rights. These rights are generally accepted moral protected by the law at both national and international levels. The government and international bodies are subject with the responsibility of governing the compliance and enforcement of human rights. The Universal Declaration of Human right by the United Nation, the International Convention on Economic, Social and Cultural Rights, the International Convention on Civil and Political Rights, and a number of other documents and treaties are basic references used by international organisation including the United Nation, The European Union, African Union and several others. (http://plato.stanford. edu/entries/rights-human/)

In recent years, there have been numbers of reason why the business needs to be involved in upholding human rights standard not excluding the clothing retail industries. “Business increasingly needs a stable international environment in which to operate, with sustainable market and a level playing field because human right provides a framework for business to understand societal expectation and deliver value to its stakeholder” (Global Compact 2009)

Dr. B.G. Ramcharan (2001), the United Nation Deputy High Commissioner on Human Right at the UDHR conference commented that every individual including corporation should uphold and promote human right standard. Corporation especially, are summoned to carry out their operation in accordance to the declaration of the international laws concerning human rights, they should endeavour to in promoting the rule of law pronouncing in every countries where they operate at the same time they should ensure that their activities those not contradict to the international law of human right “Corporations should never be associated with, and should actively combat, racial, gender, social and other pernicious forms of discrimination. They should actively combat torture, enslavement, arbitrary arrest and detention, enforced disappearances, arbitrary and summary executions and any form of gross violations of human rights”. “They should strictly abide by and actively promote universal implementation of the International Convention on the Rights of the Child so as to ensure that every child on the planet has an opportunity to develop to the fullness of his or her potential”.(http://www.unhchr.ch/huricane/huricane. nsf/view01 /FF3B03E8F317493 4C1256A4000573003?opendocument)

At the Global Compact summit, the top business leader gathers and discussed the integration of human rights into business management, they identified a list of the importance and benefits a corporation would gain from promoting and upholding human right standard:

– enhance company – stakeholder relationship

– Improves recruitment retention and motivation, procedure

– Meliorated risk assessment and management

– Reduced risk of bad publicities

– Improves corporate reputation and brand image

– Allow a safer license to carry out business operations

– Strengthens shareholder and investors confidence in the organisation

– Enhance a more sustainable business relationship with the stakeholders including the governments, business partners, trade unions, sub-contractors and suppliers, workers customers etc (these benefits will be discussed later in this chapter).

Furthermore, organisation should pay special attention to the indigenous population or minorities that seems to be affected by any form of threat and should ensure proper amendment is made to counter the threat to save human right been violated and adopt every possible means to upholding human right and respect ethical standards. They should play their part in supporting national institutions and civil society in their efforts for the promotion and protection of human rights. They should contribute actively, as members of the international human rights movement to education and publicity about international human rights norms so as to help a universal culture of human rights to take roots in all parts of the world. (http://www. gcnordic.net/index.php?r=page/show&topicId=4)

Human rights provides a yardstick to measure the ethical behaviour of businesses, several nations have devised a policy to protect the human rights in its vicinity in which the corporation must abide by. Though the advent of corporate social responsibility in the business is new, and with lots of controversies on business ethics which has been discussed earlier, in this idea UN developed a UN sub commission to promote and protect human right. “The Draft Norm” on the responsibilities and obligations of the transnational corporations, despite the absence of a legal status of the “draft norm” it provides a good framework for the human right in business environment. This drive has pushed the corporation into the inclusion of business ethics in their business policies. (Global Compact 2009)

The question of if business ethics is important or not has been a major debate among economist and business gurus in different perspective, while some business man believes it’s an expensive project to embark on, some believes it’s a good strategy to maximise profit, though the assumption of business ethics on the two bases might be right to an extent, but apparently business ethics has been proven beneficial to both the society and the company. Business ethics and social responsibility of a company have earned the organisation the commitment of the workers, which will leads to efficiency in the business daily activities and production of quality products. It also offered the company workers loyalty, Effective decision and good financial performance.

Trust and fairness are major instruments in the success of an organisation as it defines the reputation of the organisation to be good. “The reputation of an organisation has a great effect in the relationship between the organisation and its stake holders including the workers, consumers, society etc” (Ferrell et al 2002), Wroe Alderson (1965), declared that an “organisation that is perceived to be ethical often have strong and loyal customers as well as strong employee base because of trust and mutual dependence in the relationship”. When an organisation adopts an attitude of trustworthiness it automatically engages in building a trustworthy relationship, Loe (2000) wrote that the “the employees’ perception of their firm has been ethical leads to performance enhancing outcomes within the organisation”. Trust in a company enhance productivity and team work within employee to employee and employees to the employers, “introducing trust worthy climate allows workers to rely and act on the decisions and action of their colleagues and the managers, in such environment, employees can reasonably expect to be respected and considered by other stakeholders” (Farrell, Helen, and Farrell 1998). Stephen Covey (1989) concluded that, “trust is the glue that hold organisation together and allows focusing on efficiency, productivity and profit”, he continued that “trust lies at a very core of motivation, it brings out the very best in people”.

Susan Gaines (1997), conducted a research to study the relationship between the workers, job altitude and performance, she discovered that the commitment of a workers as a result of job satisfaction leads to customers satisfaction and investor are attracted to customers satisfaction. Jaworski and Kohil (1993), discussed that committed workers emerges from the believe of the employee that his or her future is safe with the company and won’t hesitate to make sacrifice for the organisation, the more company is responsible for the care of his workers and the public the more possibility of the employee and the environment caring for the organisation back. If workers enjoy good remuneration, good working environment and benefits it creates an ethical climate for the organisation and increase the commitment of the workers. Aaron (1993) believes when workers noticed the high involvement of the company in community matters it increases their loyalty to the company and feel their participant in the company’s involvement.

Customers are majorly attracted to company’s integrity and quality, especially when the price is comparable to its competitors. Ferrell et al (2000) described that “the prevailing business philosophy about customers relationship, is that an organisation should try to provide products that will satisfy the customers, it is generally accepted that customers satisfaction is one of the most important factors in successful business strategy”, Leo (2000) also commented that for an ethical organisation, his major priority should be on the satisfaction of his customers. Ferrell, Maignan and Loe (1998) agrees and added that, though customers are put first, does not means the company should ignore the employee, environment and other stakeholders, an ethical organisation incorporates all its stakeholders in its social responsibility” they concluded that “workers in an ethical climate must supports and contribute to the understanding of needs and concern of the customers. Ethical conduct towards the customers, will build a strong competitive advantage that could show to a great extent, positive effect on the organisation effectiveness and efficiency”. As said earlier, when workers are satisfied which leads to their commitment, it enables them in satisfying the customers with quality products. Unethical climate for workers is compromising the quality of the organisation which affects the customers as much as the company itself. Ferrell, Maignan and Loe (1998) commented that, “employees working with ethical organisation believe they must treat their partners respectfully regardless of who they are or whether they operates inside or outside the organisation, it becomes essential for them to provide the best possible value of service to all customers”. To a large extent, the workers commitment contributes to the quality position of the organisation as well as gaining competitive advantage for the organisation, an ethical climate will also positively affects the company’s financial position, since the quality of service produced by the workers, enables customers satisfaction, improve the company’s reputation, improves the quality of service which could invariably keep their customers as well as attract new customers. (Michael and Ferrell 1996)

Investors are also interested in the ethical standard of an organisation, the social responsibility and the reputation of the company in which they wish to invest in is of major concern to them, they are also aware of the fact that an “ethical climate is the foundation of efficiency, productivity and profit” (Ferrell and Ferrell 1998) despite this some investors are willing to invest money in the securities of a company but they are first in need of finding out how ethical the organisation is. Negative publicity and legal issues are likely results of organisations not been ethical which and leads to a fatal effect on the organisations performance and growth, and this could out rightly discourage an investor.

esearch has proven that clothing companies that are ethically behaved, emphasis on the importance of human right and engages in business ethics as well as social responsibility are often better in their financial base, therefore business ethics and social responsibility are becoming a major managerial strategy in planning for profit maximisation. Rather than just been a set of rules compliable on organisations, it has become a managerial instrument in gaining competitive advantage. Isabelle Maignan (1997) described that “ethical citizenship is positively associated with return on investment, return on asset and sale growth, it is defined as the extent to which businesses take on the economics, legal and ethical discretionary responsibilities placed on them by their various stakeholders”. Graves and Waddock (1993, 1997) commented that “company cannot be a good corporate citizen, nurturing and developing an ethical organisation climate unless it achieved adequate financial performance in terms of profit, they continue that companies with great resources regardless of their sizes, have the means to practice corporate citizenship, at the same time serving their customers, valuing their employees and establishing trust with the public”.

3.0 Chapter Three

3.1 conclusion and recommendation.

The value of business, in wealth and employment creation cannot be underrated, as it commensurate the quality of life and the steadfastness of the economy. Furthermore business role in improving the standard of living is essential, for this reason an accurate business ethics need to be put in place, to uphold the human right and sustain the healthy standard of living, as well as a green environment. Business ethics goes beyond sets of rules and regulation; emphasis should be laid on the importance of pronouncing an ethical climate, as it is beneficial to both to the company, its stakeholders and the environment. More importantly Human rights need to be respected, and business ethics goes a long way in protecting and promoting human rights.

Having understood business ethics practice in a clothing retail company, it can be obviously seen, that an adequate business ethics is a good instrument for upholding human rights standard. Considering the factors that affects business ethics in the business world, such as globalization, it can still be said that a good business ethics put in place may not only benefits the society but could also serve as a good managerial strategy to maximise the companies goal. A number of corporation has shown their interest and have adopted a proper business ethics to be put in place, stories of child labour and workers exploitation have reduced to an extent as the alarming of unethical practices by the clothing companies had been raised by the media. Levis Strauss for instance was the first clothing company to pronounce ethical standard to protect human rights, it stop a $40 million investment to campaign for human right (Jean-Paul Sajhau 2000)

Global business operations include distribution, pricing, development and promotion of commodities across the globe, business should not only adhere to the value and ethical standard of his indigenous country but should also respect the cultural diversity and respect the ethical standard in other countries of operation. Special consideration should be given to cultural issues in the business context as ethical issues are often been raised as a result of cultural difference. Global clothing retail companies should operate on a global trend, though ethical issues may arise as a result of diversity in culture, basic ethical conducts such as fairness, integrity, truthfulness and equality should be pronounced and respected.

Common ethical issues in the clothing retail companies include, child labour, poor working environment, discrimination, sexual and harassment and workers exploitation, though this issues are against the law in most developed country such as US where discrimination is prohibited, and UK where child labour is not allowed, yet this issues still exist within the corporations subcontractors in the developing countries and are justified on the bases of cultural diversity. Clothing companies should pay more attention to these issues and endeavour to understand the human right standards in all the countries or regions where they operate their business. However the corporate strategy defines how the organisation will use its resources to achieve its objective and goal, resources including human and financial resources. The performance and value of the organisation therefore depends on his corporate strategy and its implementation, the clothing retailer should therefore consider these facts in formulating its corporate strategies.

– Business strategy should demonstrate the value of the workers, customers, public and the other stakeholders

– Business strategy should demonstrate and embrace ethical nature of business operations

– Business strategy should understand and consider the implication of the strategy implemented on the stakeholders.

– Business strategy should include check and balances to ensure that all polices put in place are respected and accurate charges should be laid on it violation (http://www.oecd.org/dataoecd /61/23/1900037.pdf)

Finally, having realised that business ethics incorporates more benefits than organisational performance; clothing retailers are therefore encouraged to exhibit honesty, fairness and integrity considering their potential contribution to the environment, as well as to their workers and the customers. If all business understands the benefits of business ethics and social responsibility especially as an instrument of upholding human right standard many nations will benefits from it.

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Global Exchange: Facts about Nike Http://Www.Thirdworldtraveler.Com/Boycotts/Nikefacts_Gx.Html

The Global Compact

A Guide for Integrating Human Rights into Business Management

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How to Define Your Fashion Business Goals

06.22.2020 | Fashion Marketing + PR

Goals provide direction, offer motivation, and give you an opportunity to measure your progress. And, let’s be honest, achieving a goal brings an immense amount of personal satisfaction. Knowing how to define and set your fashion business goals can help you get the most out of your startup.

Learning about SMART Goals

Before you start defining business goals, discover the concept of S.M.A.R.T. goal setting . This practice allows you to set clear and reasonable expectations to maximize your chance of achieving a business goal.

SMART stands for

Specific — “sell more products” is a nice fashion business goal, but it’s hardly detailed. Your goals must be as specific as possible. “Sell (X) pairs of shoes in one week” is much better. Details give goals valuable power that helps drive your actions.

Measurable — numbers are essential for your business. Make sure you can evaluate your efforts by setting measurable goals. “Sell 10 items my first month” is a measurable goal. By the end of the month, you can definitely say whether you’ve achieved it.

Attainable — being realistic is an integral part of fashion business success. “Sell 100 items in one week” is a goal that can boost your revenue tremendously. But is it realistic? How many items did you sell last week? If it’s eight, then “Sell 10 items in one week” is a more attainable variant.

Relevant — while creating a goal, you should keep the current market conditions in mind. During a recession, selling 100 shoes per week may not be relevant. Meanwhile, selling 100 coats per month mid-summer may be impossible.

Timely — each goal should have a deadline. Without it, it’s nearly impossible to measure your success. Define a realistic timeframe for the scope of effort you are planning to provide.

Going from Big to Small Fashion Business Goals

As a fashion designer with a dream, you probably have a huge variety of goals dancing around in your head. To make sure you achieve all of them in due time, you need to break these fashion business goals down.

1. Start with a Broad Goal

Take all the big goals you have in your mind and write them down. They don’t need to be realistic or seem possible to achieve today. Brainstorm for loose ideas and wishes. Choose long-term ideas if necessary, but short-term goals work as well. Try not to go overboard and stick to about three initial broad goals.

Before going to the next step, choose one of the above goals to work with. You can repeat the process for each goal on your list.

2. Break it Down

Each big goal can be broken down into three to five supporting goals. What can you do right now to start getting closer to the big goal? For example, if your big goal is to start a fashion business, you would write down:

• Create a business plan
• Determine which products you want to sell
• Choose a location
• Create a marketing plan

Each of the above goals is separate. You can take one of them, work to make it fit the S.M.A.R.T concept, and go on to the following step.

3. Identify Steps

Each of the smaller goals you have can be broken down into the list of steps to take for achieving them. For example, to create a marketing plan, you could have:

• Identifying your budget
• Hiring marketing professionals
• Defining your target audience
• Figuring out marketing channels

And so forth. Suddenly your broad and long-term goals turn into small actionable steps, which you can start taking today. If you use this process for all your goals consistently, you are bound to achieve most of them in record time.

Identifying Resources

While you are defining your goals, it’s important to understand which resources you need to achieve them. In some cases, you won’t have sufficient resources to work toward certain goals. This may require some reassessment on your part.

The key resources that most fashion designers struggle with are time and money. You may want to beef them up before trying to achieve big goals. Otherwise, you could find yourself struggling to go from one step to the next.

Consider evaluating new delegating and financing opportunities to make sure nothing keeps you from achieving your goals. Meanwhile, a proper evaluation of your resources can help you narrow down your goals.

Reviewing Your Goals

Goals need regular reviewing. The reason is simple. As you start working toward achieving a goal, you can easily be sidetracked by other tasks. In about a month, you can suddenly catch yourself going toward a brand new goal while leaving the old one behind.

Stay on track by completing one action at a time and keeping your initial goal in mind. Allow the top goals to impact your immediate planning.

Examples of Fashion Business Goals

Are you at a loss about which goals to choose? You can use these goals for inspiration.

• Achieve brand recognition
• Increase social following
• Test new idea(s)
• Target reliable distributors
• Hire new (or first) employees
• Increase traffic to your website
• Create a new product
• Look into opening a brick-and-mortar location
• Conduct a marketing audit
• Review your business plan
• Increase productivity
• Reach out to a PR rep
• Complete a SWOT analysis

Defining Your Fashion Business Goals Today

Proper goals are an integral part of business growth and development. Defining them up-front can keep your fashion startup on the right path.

Becoming too focused on setting and achieving fashion business goals can take the enjoyment out of the picture. Allow yourself to have fun with your achievements. After all, this joy is one of the reasons you started this business in the first place.

You are on your way to becoming a successful entrepreneur. Start defining your fashion business goals today!

10 comments

Tamara Bradshaw

Hello, this article was very thorough! The article reminded me of what I learned in school. Thank you so much for this information.

Nicole Giordano

You’re welcome! So glad it was helpful.

Zainab Sarfraz

Very nice article learned so much from this. I recently started my online women’s clothing store. I am outsourcing the products and manufacturing few I am hoping to start completely dependent manufacturing in the future.

All I was doing was just random steps but now I will start to set milestones for my brand and work according to that plan Then way my store name is style4her for now we are working locally and hope in the future we will be able to sell globally if you want some inspirations you can visit the site http://www.style4her.com .

Thanks Zainab Sarfraz

Oluwatoyin Victoria

Thanks for the write up very helpful

Kehinde Yetunde

Thanks for this write up, it’s very helpful and useful to a beginner…

So glad to hear that!

Adebayo Abimbola Sidikat

Hi there. Thanks so much for these tips, they are perfect, facts and relevant . Infact, you made my day. Thanks you

very insightful article. Thankyou

Casey Cline

I’m glad you liked it, Sylvia!

Ayanfemi Victoria

Thanks for this always Nicole it’s always very helpful

Comments are closed.

More Fashion Marketing + PR

Fashion marketing + pr.

Business Plan of Personal Fashion Market and Clothing

Introduction, executive summary, situation analysis, market opportunity, market entry strategy, minimizing personal risks.

For the last two decades, the number of people across the globe (both young and middle aged) preferring urban and casual wear keeps on rising every day. The reason behind it is the growing trend of modernization, urbanization and the need to appear decent and fitting in the current society. Influence from celebrities, influential figures such as actors, artists and pop stats have also played a role in this, and this has therefore facilitated and brought about a ready market for these clothes and other urban products. Buyers of a product are known to be highly lured into buying a commodity by the influential persons they look up to (Luther, 2001).

In my proposed business plan I intend to open a store selling urban clothing with my clothing line products. The products will cater for all people regardless of their gender or age, but with particular emphasis on children, teenagers, young adults and the middle-aged, since I intend to provide the market with products for ladies, men and children. These from research have proved to be the most dedicated and loyal market for urban products. The store will mainly deal with selling shirts, sweaters, fitted hats and jeans. The reason I chose to venture into this business is that the need and demand for these products keep on rising and many people are willing to buy them.

This segment will at the overall description, objectives and goals of the business that I intend to set up. The reason behind coming up with this idea, as earlier stated, is because demand for urban wear keeps on rising each and every day and this will therefore provide a ready market for the products. The store will be set up in an urban area or in its outskirts where the demand is high and it will concentrate on targeting the middle income earners, going by a researched market analysis. Setting up the business in the urban area will not only be advantageous in the sense that there are many customers, but also transportation of the products from the wholesalers to my retail shop will also be easier and faster. Physical contact with potential and actual customers will also be made efficient.

Before venturing into any business activity, it is of utmost importance to first critically analyze the situations under which the business shall be based on (Hisrich, R., Peters, M., & Shepherd, D., 2010). This includes the number and distribution of actual and potential customers, how concentrated and competitive the industry is. It’s also important to take a closer look at your knowledge and skill in the targeted venture. Knowledge in bulks will assist the entrepreneur to make informed decisions especially in serious decision-making situations. When analyzing the situation, it is advisable to look at the current market situation so as to know how to handle the probable existing barriers for example competition and other aspects for example transport, suppliers etc.

Since there has been a rising trend in the demand for urban-wear, this implies that there is a sufficiently ready market for my products. Higher demand for my products is an advantage to me because marketing of the products will be easier and faster, because majority of actual and potential buyers are already conversant with the goods that I intend to be selling at my store.

I intend to market and sell my products domestically because as a small scale entrepreneur, a lot of capital will be required to penetrate the foreign market. Secondly, fully maximizing on the domestic clients through aggressive marketing will as well give me the desired outcome and at the same time maximize on profits. The domestic market is well conversant with the products that I will be selling, and at the same time exploring a foreign market will require a lot of vigorous advertising, marketers and sales persons. When penetrating into the market, the best pricing strategy to use is the competition-based pricing method, whereby when setting the prices for the products, I will have to consider my competitors’ prices and set mine within the same range, but at a price that will be more attracted to the customer comparing to my competitors. Companies with a high amount of start up capital usually prefer high levels of entry (Kennedy, 2006). This is an important note to consider when pricing.

Every business venture leaves the entrepreneur prone to various risks for example financial hurdles. To minimize these risks, it is important to budget the venture’s finances through an expenses forecast. Insuring the business is something else that I will have to do, to cover it in case of fire accidents, looting, collapse etc. I will also observe safety measures in my new venture to prevent myself from health hazards and physical risks. This is achievable through observing safety precautions, putting fire extinguishers at work premises.

Hisrich, R., Peters, M., & Shepherd, D. (2010). Entrepreneurship. 8 th Ed. New York: McGraw Hill.

Kennedy, D.S. (2006). The Ultimate Marketing Plan : Find Your Hook. North America: Adams Media.

Luther, W.M. (2001). The Marketing Plan: How to Prepare and Implement It. New York: AMACOM.

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Fast Fashion and Sustainability Essay

Fast fashion and its environmental footprint, shifts in public opinion and growing role of csr, governmental effort and its relevance, interventions needed, barriers to implementation and steps to undertake.

Finding a balance between development and sustainability has been an objective many people find difficult to attain. The use of resources has been intensifying annually due to the increasing population and people’s growing demand. The fashion industry is now seen as one of the most vivid illustrations of unreasonable use of resources (Bick, Halsey and Ekenga, 2018). Fast fashion can be referred to as “a business model based on offering consumers frequent novelty in the form of low-priced, trend-led products” (Niinimäki et al., 2020, p. 189). On the one hand, this model has enabled millions of people to access more clothes that are more affordable. On the other hand, adverse environmental and social impact has been substantial as well. Due to the shift towards more sustainable business practices, the fast fashion industry is also undergoing certain changes. This paper includes a brief analysis of the ways to address consumers’ fashion-related needs and reduce the negative environmental impact of the fast industry.

To some people, the fashion industry may seem rather irrelevant compared to such traditional giants as the oil industry, but the former has a considerable share in the global market. It has been estimated that the value of the world’s fashion industry is approximately 3,000 billion dollars, which is over 2% of the global Gross Domestic Product (GDP) (Shirvanimoghaddam et al., 2020). The consumption of textile goods has almost doubled during the past two decades and reached 13kg per individual or 100 million tons annually (see Figure 1).

Such significant growth comes at a price that is mainly associated with a tremendous effect on the environment (see Figure 2). For instance, Shirvanimoghaddam et al. (2020) stress that only 15% of the wastes are recycled. It is noteworthy that developing countries are more vulnerable since a considerable portion of the used textile is a part of the second-hand clothing trade (Bick, Halsey and Ekenga, 2018). For example, over 500,000 tons of used textile goods are exported from the USA (Bick, Halsey and Ekenga, 2018).

Recycling mainly occurs in western countries, which makes the environmental burden of developing countries more pronounced (see Figure 2). In addition to the contamination of vast territories used as landfills, fast fashion wastes often penetrate into diverse ecosystems due to inadequate waste management (Mehta, 2019). Textiles produced of low-quality components contaminate the ocean and suburban areas. Since a considerable part of production facilities is located in developing countries, these areas are affected most. The governments of these countries tend to place a lower value on ecological problems, which leads to undesirable effects.

In addition to the environmental impact, the fast fashion industry is closely linked to the consumerism culture that is still prevalent in the world (Niinimäki et al., 2020). According to the social practice theory that is a social theory focusing on the human society and its peculiarities, things are seen as an indispensable part of human existence (Reckwitz, 2002). Things have become something more than objects used to satisfy individuals’ needs. People see things as “objects of the knowing subject” and “constitutive elements of forms of behaviour” (Reckwitz, 2002, p. 253). In simple terms, things have an influence on people’s behavior, and fast fashion can illustrate this process. Many people find it critical to wear fashionable things to be a part of a group (sub-culture) or express themselves (Barnes and Lea-Greenwood, 2018). Others want to buy new things for the sake of acquiring a new thing or in the course of socializing (Afaneh, 2020). Fast fashion offers numerous ways to satisfy people’s needs and make them feel members of a larger community.

E-commerce has contributed to the growth of unsustainable behaviors as purchasing has become even easier and more affordable (Niinimäki et al., 2020). People are enticed to buy more as they can save more (and buy more) without even leaving their homes. The COVID-19 pandemics contributed to the increase in online sales. Niinimäki et al. (2020) emphasize that this business model is even less environmentally sustainable due to the peculiarities of logistics. Container boat transportation typical of traditional retailing is replaced by air cargo in e-commerce, so the environmental footprint is more significant.

Although the human society is still characterized by the focus on consumerism, people are becoming more responsible. Consumers start being more environmentally conscious and try to reduce their negative influence on the environment (Javed et al., 2020). The rise of the corporate social responsibility approach can be seen as companies’ response to this trend. Manufacturers try to develop sustainable ways to produce goods, reduce natural resources consumption, and introduce recycling incentives. C&A is one of the leaders in adopting sustainable practices in the industry (see Figure 3). The third of the garments the company sells can be referred to as eco-friendly goods ( Sustainable fashion , 2020). The retailer claims that they focus on the production of garments of recyclable cotton and try to adopt a holistic approach to the production process in order to ensure the reduction of CO2 emissions and proper waste management (C&A, n.d.).

H&M initiated several projects aimed at reducing its wastes. In addition to second-hand sales and the promotion of more durable fashion, H&M developed the concept of recyclable jeans (Mehta, 2019). The company utilizes natural components to produce jeans and accessories that are easily recyclable. Another fast fashion leader in the global market, GAP, has also expressed its intention to move to a circular industry (Mehta, 2019). The two large textile producers show their commitment to sustainable practices, which resonates with the overall attitudes to the matter in different countries.

It is necessary to add that, along with companies’ willingness to build positive images and adopt CSR strategies, regulations imposed by national governments and international institutions encourage businesses to employ sustainable approaches. These efforts are instrumental in setting the minimum level of CSR activities necessary to improve environmental sustainability and offering directions to move for further development (Mehta, 2019). The primary areas covered within the scope of these efforts include CO2 emissions reduction, recycling, waste management, and resource consumption.

Some of these initiatives include the provision of financial support and tax reduction to high-achievers in dropping the levels of CO2 emissions (Niinimäki et al., 2020). The EU government is introducing diverse regulations concerning waste management, forcing and encouraging companies to recycle instead of bringing their wastes to landfills (Wang et al., 2020). It is important to note that European countries display different approaches and commitment to environmental sustainability. Such countries as Germany, Norway, and Finland have progressed considerably, while less wealthy states lag behind. Trade policies established by the USA are aimed at ensuring global equity (Bick, Halsey and Ekenga, 2018). Such regulations impose restrictions related to importing and exporting used textiles. Companies are encouraged or directly forced to donate to the projects aimed at the development of recyclable industry and similar initiatives (Mehta, 2019).

Further steps in the areas mentioned above are necessary for the minimization of the negative effect of the fast fashion industry. The standards existing in the western world are quite appropriate and under proper review each year (Bick, Halsey and Ekenga, 2018; Mehta, 2019; Wang et al., 2020). In addition to various strict regulations regarding CO2 emissions and waste management, the UK government, for instance, has the Sustainable Clothing Action Plan for fast-fashion companies to follow (Abdulla, 2019). This voluntary plan of action encourages companies to join in and suggest their strategies to comply with the existing and upcoming standards. Numerous retailers and fashion industry leaders tend to join the initiative, which positively affects their overall image and gives an opportunity to contribute to the development of sustainable practices for the entire industry.

The UAE can become a major advocate of sustainable practices for the development of the region. The country posed a number of KPIs to be reached by 2021 regarding waste management, emission reduction, and other environmental aspects. Some of the 2021 environmental targets include the improvement of the portion of treated waste of total waste generated ( Environment and government agenda , 2020). It also aims at reducing the consumption of non-sustainable energy, as well as decreasing CO2 emissions. However, there are no specific restrictions on the fashion industry. Moreover, the policies tend to be confined to the exact practices of companies without paying sufficient attention to the activities of their partners, which has become a norm in the EU countries.

The introduction of new restrictions rather problematic as businesses oppose such laws and try to shape the politicians’ agenda in different ways. Many laws and norms are regarded as unnecessary and harmful restrictions imposed by irresponsible politicians trying to win votes (Abdullah, 2019). Educating the public about potential hazards and possible ways to mitigate the negative consequences can be instrumental in achieving the consensus in the society (Afaneh, 2020).

The provision of direct financial support can also become an effective strategy governments can utilize to make the fast fashion industry more circular. Small and medium-sized companies are facing significant issues related to the COVID-19 pandemics (Brydges and Hanlon, 2020). The situation related to the pandemics can serve as the basis for the promotional campaigns popularizing sustainability. It is possible to emphasize that humans are vulnerable to numerous global challenges, while sustainable practices are key to the successful development of the society.

Large retailers and manufacturers tend to set new standards and norms accepted by consumers. For example, H&M, in collaboration with other fast fashion companies, has launched initiatives aimed at the reduction of their environmental impact (Javed et al., 2020; Mehta, 2019). Such incentives should obtain governmental support that can be manifested in financial or educational aspects. American officials can also promote such initiatives through international platforms such as the World Trade Organization or other institutions.

Although the benefits of such efforts can hardly be overestimated, governments can be reluctant to be involved in such incentives. As mentioned above, financial constraints countries have to face make environmental issues seem less relevant and urgent. Activists should ensure that the most urgent ecological topics are discussed in the society, which will make countries address them. Consumers can also become less concentrated on environmental issues due to their financial issues (Afaneh, 2020).

Activists and governments should pay much attention to raising people’s awareness of the economic burden of less sustainable practices in the long run. Social media have been utilized effectively to discuss numerous issues and encourage people to take a particular action. Such incentives as H&M’s online second-hand platform and such products as recyclable jeans should receive high publicity facilitated by the governmental support (Mehta, 2019). Being sustainable should be synonymous with being competitive, and governments can help businesses see the exact paths to achieve competitive advantages based on environmental aspects.

On balance, societies are becoming increasingly aware of environmental issues and willing to adhere to sustainable practices. Durability and recyclability are seen as more relevant in the modern societies. Governments try to develop regulations and standards, facilitating the changes and shifts towards environmentally friendly behaviors. Although these trends are more pronounced in developed countries, developing states are also integrated into the process of this transformation. However, numerous barriers to the implementation of projects aimed at establishing sustainable norms are apparent. Global financial issues can be regarded as major reasons for the slowdown in changes. Nevertheless, governments, companies, activists, and the public should remain in close contact in their effort to create a more sustainable fast fashion industry. Numerous incentives launched in different countries and regions show that governments can contribute to a gradual shift towards sustainable industries.

Abdullah, H. (2019) ‘UK government outlines steps to fix fast fashion’, Just-Style . Web.

Afaneh, S. (2020) ‘I can’t quit fast fashion as a student, but I can change how I shop’ , Lifestyle . Web.

Barnes, L. and Lea-Greenwood, G. (2018) ‘Pre-loved? Analysing the Dubai luxe resale market’, in Ryding, D., Henninger, C. E. and Cano, M. B. (eds.) Vintage luxury fashion: exploring the rise of the secondhand clothing trade . London: England, pp. 63–78.

Bick, R., Halsey, E. and Ekenga, C. (2018) ‘The global environmental injustice of fast fashion’, Environmental Health , 17(1), pp. 92-95.

Brydges, T. and Hanlon, M. (2020) ‘Garment worker rights and the fashion industry’s response to COVID-19’, Dialogues in Human Geography , 10(2), pp. 195-198.

C&A (n.d.) ‘Our vision: making sustainable fashion the new normal’ . Web.

Environment and government agenda (2020). Web.

Javed, T., Yang, J., Gul Gilal, W. and Gul Gilal, N. (2020) ‘The sustainability claims’ impact on the consumer’s green perception and behavioral intention: a case study of H&M’, Advances in Management & Applied Economics , 10(2), pp. 1-22.

Mehta, A. (2019) ‘ Beyond recycling: putting the brakes on fast fashion ’ , Reuters Events . Web.

Niinimäki, K., Peters, G., Dahlbo, H., Perry, P., Rissanen, T. and Gwilt, A. (2020) ‘The environmental price of fast fashion’, Nature Reviews Earth & Environment , 1(4), pp. 189-200.

Reckwitz, A. (2002) ‘Toward a theory of social practices: A development in culturalist theorizing’, European Journal of Social Theory , 5(2), pp. 243-263.

Remy, N., Speelman, E. and Swartz, S. (2016) ‘ Style that’s sustainable: a new fast-fashion formula ’ , McKinsey & Company . Web.

Shirvanimoghaddam, K., Motamed, B., Ramakrishna, S. and Naebe, M. (2020) ‘Death by waste: fashion and textile circular economy case’, Science of the Total Environment , 718, pp. 1-10.

Sustainable fashion: how are the leaders in fast fashion doing? (2020). Web.

Wang, D., Tang, Y. T., Long, G., Higgitt, D., He, J. and Robinson, D. (2020) ‘Future improvements on performance of an EU landfill directive driven municipal solid waste management for a city in England’, Waste Management , 102, pp. 452-463.

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IvyPanda . "Fast Fashion and Sustainability." December 13, 2023. https://ivypanda.com/essays/fast-fashion-and-sustainability/.

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What tech innovation means for the business of fashion

In this episode of the McKinsey on Start-ups podcast, McKinsey executive editor Daniel Eisenberg speaks with Anita Balchandani, a London-based McKinsey partner who leads the firm’s Apparel, Fashion & Luxury practice in the UK, Europe, the Middle East, and Africa. An edited transcript of their conversation follows.

To hear more episodes of McKinsey on Start-ups , subscribe on Apple , Audible , Google Podcasts , Spotify , or Stitcher .

Daniel Eisenberg: Hello and welcome to McKinsey on Start-ups , I’m Daniel Eisenberg.

When you think about the pandemic’s impact on fashion, what comes to mind? How about sweatpants or pajamas, or maybe jeans and t-shirts? For many people, the answer would likely be really any super casual attire or cozy athleisure, the likes of which so many of us around the world started wearing regularly as our homes suddenly became (and have remained) our offices.

But far from the Zoom calls or runways, the business of fashion has been undergoing a serious makeover. As with so many other industries, the digital transformation of fashion and apparel has radically accelerated during COVID. This has impacted not only how customers interact with brands and retailers, but just as critically, how the industry operates internally, whether managing its inventory, pricing, and supply chain or designing and producing its products.

An industry that has always been (and still is) built on a foundation of creativity and artistic expression is now adding more science to the mix, embracing technology to an unprecedented degree. To help us understand how technology is fundamentally changing the business of fashion and fashion innovation, we are pleased to be joined today by Anita Balchandani, a McKinsey partner based in London who leads the firm’s Apparel, Fashion & Luxury Practice in the UK, Europe, the Middle East, and Africa.

As well as helping clients with developing strategic responses to the disruptions shaping the retail industry, Anita co-leads the industry’s leading thought publication, State of Fashion , in partnership with the Business of Fashion. Prior to McKinsey, Anita was the Global Head of Retail at OC&C Strategy Consultants and served as a Non-Executive Director on the Boards of Space NK Apothecary Ltd and Majestic Wine PLC.

Anita, thanks so much for joining us today.

Let’s start with a broad perspective. What is the role that technology and digitization has generally played in shaping the apparel and fashion industry over the course of the past two to three years? And how did this change with the arrival of the pandemic?

Anita Balchandani: Technology has been playing an accelerated role in the fashion industry over the last two to three years, particularly when it comes to the customer-facing side of the industry. This is impacting where and how consumers are discovering brands and shopping the category, through to purchase, transaction, and commerce.

If anything, during the pandemic that acceleration of digital and e-commerce has completely step-changed; in fact, you could argue it’s what kept the wheels on the bus. When the fashion industry faced the fallout of the lockdowns that took place across many regions, and stores were closed, digital was the only way you could access the category and shop it.

But the expanding role of fashion and technology has not just been about the customer-facing initiatives, but also about the end-to-end initiatives across the organization. It’s how people have designed product, it’s how people have flowed product through. The role that technology has played in keeping the entire fashion value chain going has been immense.

Daniel Eisenberg: There’s a tendency to often think about technology and fashion in the context of what consumers or customers see and touch. But, as you point out, there’s the entire value chain and the back-of-the-store story that is just as important. Can you talk about how technology is being leveraged across the rest of the supply chain in light of disruptions that occurred during COVID, and how the fashion industry is looking at technology going forward?

Anita Balchandani: I think the answer to that is two-sided. On the one hand, we’re seeing, for example, that 23 percent of the investments that have been made in the fashion and retail-tech space have been in supply chain.

But if we step back, I think there is still a lot more to be done on this front. In particular, we’re excited about innovations such as the role that technology can play in much more predictive demand forecasting to enable the flow of product; the role that technology can play in on-demand production; the role that technology can play at the design front end and really eliminate a lot of the waste and the long lead times related to the physical production of samples.

So I think we’re still at the tip of the iceberg, or the foothills, if you will, of all that’s capable here.

Daniel Eisenberg: In fact, McKinsey’s recent “ State of Fashion ” report pointed out how that demand-centric approach is going to have to be a real guiding principle for the industry going forward, including better management of inventory and sharper focus on the best-selling, or core, brands or products. And of course, better management of everything in the supply chain means hopefully that waste can be at least minimized, if not entirely eliminated.

Speaking of State of Fashion , one of the statistics that really jumped out was that up to 73 percent of the industry had actually destroyed value in the wake of COVID. Does technology have a role to play in starting to reverse this trend? How does a player leverage technology to win in the next normal of fashion?

Anita Balchandani: First of all, you’re right, that’s an eye-popping stat. And, if anything, that’s been a trajectory that has been advancing. So every year we see that the proportion of the industry that is value-creating is actually shrinking, with fashion arguably becoming more of a “winner takes all” industry.

Do we think technology has a role to play in reversing this? Absolutely. Typically in the industry, overproduction is a big issue—40 percent of garments are currently sold at a markdown. And that markdown is a huge source of value leakage and profit leakage in this industry. The potential impacts of technology around advance-demand forecasting, AI-guided stock management, promotion, and price optimization are huge.

Another area ripe for change would be waste, more broadly tied into toxicity and the sustainability record of the industry. Even today still only a fraction—it’s less than one percent—of used products are recycled back into the fashion industry’s value chain. So, again, we feel like technology has a huge role to play in sustainable materials, recycling, fashion repair, and creating new streams of propositions and revenues for customers who are increasingly mindful of sustainability.

Finally, another area that we think has huge potential is returns and e-commerce economics. We anticipate that by 2025 fully half of the fashion industry globally will be online, sold via e-commerce. The proportion that will be influenced by online will be far greater. At the same time, we also see that 93 percent of apparel retailers expect returns will continue to grow in importance and cost over the next three years. And when you look at a lot of fashion retailers’ online economics, their P&Ls are pretty challenged, even as they scale. So we do believe that technology has a huge role to play there, with things like omnichannel inventory management and predictive virtual sizing.

We certainly see the potential of technology to solve some of the industry’s biggest pain points and challenges, which fundamentally are sources of profit leakage.

Daniel Eisenberg: You recently did some research in the UK looking at what succeeds in e-commerce, the key outperforming factors. What stood out in those findings?

Anita Balchandani: Yes, we were trying to get under the skin of what really matters, and a few key themes emerged. First, none of what you might call the core “basics of retailing”—product, price, experience—have gone out of fashion. And, actually, making sure that your proposition is strong, effective, and differentiated is as, if not more, important in the current competitive age.

However, it is also very clear that there is huge consumer appetite for new innovation; we’re definitely pushing on an open door with consumers when it comes to fashion tech. We ran another study very recently just to pulse the consumer on “adoption” rates viz and “likelihood to adopt” a number of more fashion tech-forward innovations, such as sustainable clothing, AI-driven customer service, personalized clothing, livestream shopping, et cetera. And we have been quite surprised by the huge proportions of the population that have either already tried, or indicated a very high likelihood of trying, some of these innovations, which one might assume to be still quite niche.

So it is true that the basics and fundamentals of what it takes to operate a brilliant fashion business, to some extent, haven’t gone away. But there is also a lot of consumer openness to evolve that formula, drawing upon a huge host of fashion-tech innovations that are now accessible. And for players to win here, we do believe that both speed and innovation will be of the essence.

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Daniel Eisenberg: You were talking earlier about the use of analytics for inventory management and predictive modeling. Is it fair to say that that until recently the fashion industry has not used these technology tools as much as other industries? Is it in some ways playing catch-up, compared to other sectors?

Anita Balchandani: On the one hand, when you look at online adoption in this industry, while it’s nowhere at the order of magnitude of what you see in consumer electronics or music, it’s definitely well ahead of categories such as food and beauty. You could look at that and say, “The fashion industry and its shift to online actually puts it in a pretty good relative position to other industries.”

On the other hand, because the industry has long been founded on the importance and centrality of creative art design, I think it would be fair to say that the industry has been slower to adopt some of the core disciplines, or the thinking, around how you combine that art with science, how you get the best value, and how you take very effective data-driven decisions in the end-to-end system.

There’s been a lot of talk, clearly, and if you look back over the last five to seven years this has definitely been part of the promise. And over the last decade, 2021 has been the high point for investment into fashion and retail tech. Yet, when you actually look at the quantum of investment, while $18 billion might put it at a ten-year peak, it is still a fraction relative to the scale of the industry.

So we do think there is some catch-up to be done, and fashion tech, if anything, is still at the early stages of its evolution. However, the pandemic has really shone a light on the criticality of getting digital and tech working effectively in the fashion industry—and how it can be a fabulous complement to the art and creative energy that goes into this industry.

Daniel Eisenberg: How does technology factor into the evolution of the in-store experience for fashion brands? Does the physical store have a role to play, and, if so, how is it changing?

Anita Balchandani: I like to think of it as the pandemic forced the industry to collapse the walls between online and stores. Traditionally, you’ve always seen a bit of segmentation by channel—this is our online channel, this is our store channel. With the lockdowns leaving online as the primary source of customer interaction, engagement, and purchase, many retailers simply pulled down the walls that exist between the two main channels.

There were some practical ways in which that took place. One was a huge investment retailers made in clienteling, which effectively meant that in-store colleagues could use mobile phones to engage with e-commerce customers and have digital access to the brand’s inventory. In-store colleagues were able to provide brilliant service to customers who were shopping online.

We saw the rise of virtual appointments, particularly in the higher-purchase investment categories such as jewelry and watches. Many players also used the stores as a source of inventory and points of fulfillment at a time when e-commerce distribution centers were overloaded and running out of inventory.

Suddenly, the walls that existed between the two channels were really brought down, and I think people realized that that’s probably how the customers actually do engage with the brand. The customers are much more brand-driven and mission-driven, rather than channel-driven. Now a whole host of innovations are really helping bring the digital and the physical together, with CRM, clienteling, customer service and experience, and inventory, as the glue that brings all of that together.

Daniel Eisenberg: You talk about what in-store workers can now do with their phones, whether it’s inventory or virtual service. It almost sounds as if those people are getting additional responsibilities, empowered to do more than a traditional store worker might have, say, just a few years ago.

Anita Balchandani: Yes, and we also think that is driving a whole new level of skills and capabilities, and actually making those roles much more exciting and interesting. Because one of the things technology has the power to do is to liberate store colleagues from what you might call the more administrative, routine, and repetitive tasks to spend time on customer service, advice, and some of those other things that enrich the shopping experience and give customers added reason to visit the store or, indeed, the website.

Daniel Eisenberg: You’ve talked previously about the trend of “casualization” of what people are wearing, and buying often these days, especially with so many people staying home to work during the pandemic. I’m wondering to what extent you think that trend will be permanent. And does a shift like that have long-term implications for the industry, such as needing to rely on technology even more to cater to changing tastes?

Anita Balchandani: Fashion has always been centered around catering to changing tastes. And those who have been the most successful brands at any moment in history are the ones that have the had the best pulse on what the customer wants. I do think that this is where tech has a huge opportunity to play in keeping a retailer current on where trends and tastes are likely to go. You could look at data that tells you what’s likely to surge next, and how you can position your offers and ensure that you’ve got the right levels of inventory to back that level of customer demand.

On casualization, while that is a trend that is here to stay, the data is already showing that people are back buying more glamour and special occasion-wear with a vengeance. People refer to this as the “back to the Roaring ‘20s”: we have done some machine-learning analysis of 2021 runway collections, and you can clearly see the expressions of optimism, boldness, and self-expression.

Now it doesn’t mean to say that casualization has gone away. It doesn’t mean to say that, in a hybrid world when we are going to be spending more time at home than we did prior to the pandemic, that athleisure and casualization go away.

But the evidence would suggest that the role that fashion plays in self-expression, in the ceremony of dressing up, is starting to return as people are injecting their lives with more special occasions, and going back to more of a sense of normalcy, as well.

Daniel Eisenberg: Right. Folks are clearly hungry, some might say desperate, to go out to celebrate something and to maybe make it more special by dressing up after, say, wearing sweatpants for the better part of almost two years.

In terms of the use of technology to help discern and cater to changing tastes, it seems that science is playing a bigger role in the industry than ever before.

Anita Balchandani: We certainly think the importance of science is growing, and that we can find a happy medium where the science enables the art, because it’s actually helping point the art in a more targeted way. At the end of the day, though, this is also about creative imagination, and really bringing things that surprise consumers, and I don’t think technology or science will take that away.

Still, the role that tech and science can play in really solving some of the pain points and the bottlenecks in the industry is critical. You could say the airbrushed view of the fashion industry is that everything is beautiful and looks perfect. But in reality, getting that perfect-looking item or product on the shelves requires a lot of back-of-house tasks, many of which have been manual, wasteful, and the opposite of streamlined. So the role that technology could play to make that much more sustainable, much more streamlined, much less wasteful, and much more effective, is huge.

Daniel Eisenberg: And by that logic, technology could potentially free up even more time for designers’ creative spirits to flourish.

Anita Balchandani: Exactly. As a designer, you could spend even more time doing what you love, which is designing, versus a lot of the other more administrative tasks that are essential to making sure that you’ve got a sample at the other end that is ready to approve. So I think this is very much about liberating those who work in the fashion industry to actually spend more time on the creative side, the customer value-add.

Daniel Eisenberg: Let’s shift gears a little bit and talk about the fashion-tech start-up landscape. Earlier you spoke of the amount of investment going into fashion and fashion-tech right now. What is your outlook going forward? And how much has COVID impacted the view of investing in the space?

Anita Balchandani: You could argue that a lot of the innovation that’s coming onstream is still small in scale and quite niche, but we do believe there is huge growth and runway on a number of fronts. That includes technologies that make shopping more frictionless, but also more fun, because we’re certainly seeing consumers have appetite in fashion not just for shopping experiences that are highly convenient, but also for something that is much more engaging: livestream shopping, conversational commerce, everything that we’re seeing at the interface of the fashion industry and gaming and NFTs.

A large amount of this kind of innovation is still, arguably, early-stage, but there are certainly a slew of new tools to make the entire process of how people transact and interact with brands online much smoother to operate—predictive sizing and AI-driven customer service are just two examples that come to mind. Then you have a whole other swath of innovation around completely new business models: resale, rental, personalized subscription boxes. And finally, all of the innovation having to do with sustainable materials, sustainable clothing, and so on, which is also in the early stages.

Daniel Eisenberg: It sounds like the last two years, as challenging as they have been for the industry as a whole, have not dimmed interest in investing in the fashion-tech space?

Anita Balchandani: Not at all. I think, if anything, people are now increasingly seeing technology and data as one of the things that could be a source of competitive advantage, particularly if you look at some of the moves that the biggest winners in the industry are making with their own heavy emphasis and focus on direct-to-consumer, machine learning, and AI.

Daniel Eisenberg: Is there still momentum behind digitally-native, small fashion and beauty brands? And how has that been impacted by the last 21 months, if at all?

Anita Balchandani: What we’re seeing is continued consumer interest in, and investor interest, in this space. If I look at beauty as an analog, there has been a lot of innovation that’s been in the pipeline that’s started to come out during the pandemic. Even prior to the pandemic, however, the data showed that only five percent of these innovations or digital brands then go on to scale and succeed. So a key skill will be in spotting which of these disruptors will indeed become billion-dollar-plus brands.

Increasingly, what we are seeing is that these new brands’ playbook of scaling is clearly rooted in digital and tech, around community-building with social media and social commerce; around direct-to-consumer engagement; and around personalization. But, at the same time, in order to become a billion-dollar-plus brand, many of these brands are having to adopt a wholesale, or wholesale-like, models, that include physical distribution. I think the playbook to scale is evolving from being purely digital towards one that is increasingly more omnichannel.

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Daniel Eisenberg: Would you say distribution is the biggest obstacle to succeeding at that scaling stage?

Anita Balchandani: I’d say distribution is one of the challenges, for sure, more so in fashion than in beauty, because of the way the contract manufacturing base is set up. But in fashion the supply chain, how it’s set up and friction points in it, is also a major issue, particularly if you’re a brand that’s looking to do something that is more sustainable and technologically ahead of the curve. When it comes to some of the investments in underlying technologies and supply chain or back-end infrastructure that can help scale these more innovative models, there is still a tech deficit in the industry.

Daniel Eisenberg: Sustainability is obviously an important trend, and it was highlighted quite a bit in the “ State of Fashion ” report. You’ve also done reports on the industry and climate change . Walk us through the kinds of business models that are emerging to create value from a “conscious consumption” in fashion.

Anita Balchandani: There’s a lot of exciting innovation in this space, and I’ll maybe just call out a few areas that I’m particularly excited about.

One has been the growth and increase in resale and resale models, which are definitely starting to show signs of being scalable and are attracting more interest from luxury brands. I think increasingly the opportunity to extend the life of a garment, or an object, has some very powerful potential, in terms of what it can do to the carbon footprint of consumption, while still satisfying the intrinsic desire that we, as consumers, have for newness and self-expression.

The next interesting space is the growth and rise of models and brands that use deadstock or recycled fabric to produce garments, something that is capturing a lot of consumers’ attention. Not only are these models producing fashion with a lower carbon footprint, but they are doing so with materials that are not accessible and available all the time, especially in mass quantities, which makes the final product feel that much more special and unique.

Finally, you have the whole space of new materials, biomaterials, eco-fabrics: This is a sector that is growing extremely fast. We expect, for example, the US eco-fiber production market to be around $15 billion by 2025. I think it would be fair to say that these are not yet at full commercial scale. But investment in some of these sectors—be they biomaterials, be they HEMP, what we see players like Bolt Threads or Renewcell doing—is very interesting and worth watching.

Daniel Eisenberg: How long do you think it will take for these alternative materials to become a core part of the industry’s output?

Anita Balchandani: Look, it’s definitely a longer-term play. As a share of actual garments or of products that are drawing on some of these biomaterials or recycled materials, the number is still very low. Having said that, you have a number of key players in the industry that now are partnering with many of these companies, looking to bring these sorts of products to life. Given that kind of collaboration, we are starting to see early markers of this being able to scale and succeed over the next five to ten years.

Daniel Eisenberg: Going hand-in-hand with sustainability are issues like social justice, working conditions, and the supply chain: How much are those issues driving the conversation in the industry and forcing it to think about new approaches to doing business?

Anita Balchandani: Throughout the pandemic, as lots of producing countries like India and Bangladesh were severely affected with lockdowns, the livelihoods of millions of human beings were negatively impacted. I think these disruptions really shed light on the importance of the sustainability debate to be not just about the planet but to really expand into worker rights and social justice. In fact, during the pandemic many brands have been either lauded or vilified for how they have treated partners and supplier workforces.

As a result, increasingly when the industry scores itself on sustainability, social justice and worker rights are critical factors in that assessment. And I think more players are absolutely clear that, even if they’re working with suppliers on an arms-length basis, or with a second tier of suppliers over which they have no direct control, it is no longer acceptable to have worker rights violated and infringed upon. Fashion brands are becoming acutely conscious of making sure that that record is set straight.

In addition to the increased importance of social justice, the industry’s focus on sustainability has moved beyond just focusing on being net zero in terms of emissions to being nature-positive. This means asking the question, “What are we giving back to the environment as well?”

Daniel Eisenberg: Going back to investment themes, social commerce platforms and marketplaces have obviously grown meaningfully over the past few years. Is that still a major area for investment focus in fashion start-ups?

Anita Balchandani: Online marketplaces have absolutely been the powerhouses driving the huge growth and share in online shopping over the pandemic. They arguably took more than their fair share of the growth in consumer traffic and spend, and they continue to be on a scale trajectory and a major focus of investment. If anything, we may start to see some consolidation focused on the winning models start to play out in that space.

As for social commerce, China has always been at the forefront of that trend; it now accounts for 13 percent of total e-commerce in China, compared to four percent in the US. Certainly in the fashion and beauty industry, as we look ahead for the next three years, that is the source of growth, even in the Western world beyond China, that we are most excited about.

Daniel Eisenberg: I know we’re getting short on time, so I just want to ask one more question. We usually end our podcast by talking about a longer-term horizon. By the end of this decade, how much do you think technology will have transformed the business of fashion? And what do you think will stand out as the biggest tech-driven transformations?

Anita Balchandani: There are three main areas of innovation and transformation that I believe hold huge promise. And in a sense, they are equally aspirations and areas where we’re seeing the biggest investment and focus.

Number one would be the role that technology can play in minimizing overproduction, waste, and actually better matching consumer demand and supply. I think there’s a huge potential to pioneer a fashion model that is just much less wasteful, but also much more responsive to what the customer wants and demands.

The second area I would think about is a world in which the fashion industry is really able to reshape its economics, particularly its online economics, through addressing returns the last mile, the flow of goods, and a lot of the waste that exists in the end-to-end value chain. I think that’s there’s great potential there to streamline the value chain to be much more efficient and effective.

And then, finally, I think would be just the promise around new circular business models, new technology, and fabric innovation, things that can enable the fashion industry to make the resources that go into its production and consumption part of a fundamentally better equation.

Daniel Eisenberg: That gives us a lot to think about. Fashion is obviously such a key part of all of our lives, and the intersection of technology with fashion will continue to capture our attention.

Anita Balchandani: I like the challenge of the ten-year view, because I do believe it’s time for the industry to look at where it would like to be in ten years, and then work back from there. To take full advantage of these technologies, the industry will need that kind of lens, one that poses the question, “How do you completely reimagine what you do, versus tweaking and refining the system that we have?”

Daniel Eisenberg: Well, watching the industry, especially in the resale category, it has been encouraging to see how they’re starting to embrace that kind of disruptive innovation. Whereas a few years ago many players seemed wary of these new models, more are now really starting to take part in them. They’re striking partnerships with online resale marketplaces and getting their customers involved, while making sure that the brand still remains a key part of the equation. So it seems like that’s a positive indicator of an industry becoming more open to change.

Anita Balchandani: I’d absolutely echo that view.

Daniel Eisenberg: Anita, I want to thank you so much for taking the time to speak with us today. It’s been a great conversation.

Anita Balchandani: And a great opportunity for the fashion industry to not waste a good crisis here, and take the opportunity to really reimagine itself.

Daniel Eisenberg: Indeed. Well that’s our podcast. Thanks again to our guest, Anita Balchandani, a London-based McKinsey partner who leads the Apparel, Fashion & Luxury practice in the UK, Europe, the Middle East, and Africa.

As always, I want to thank our great McKinsey on Start-ups production team—Molly Karlan, Polly Noah, Sid Ramtri, Myron Shurgan, and Katie Znameroski.

And of course, thank you for listening. We hope you’ll return for future episodes of McKinsey on Start-ups .

Anita Balchandani is a McKinsey partner based in the London office who leads the firm’s Apparel, Fashion & Luxury practice in the UK, Europe, the Middle East, and Africa. Daniel Eisenberg is an executive editor based in the firm’s New York office.

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January 1, 2016

Dress for Success: How Clothes Influence Our Performance

What you wear can influence your thinking and negotiating skills, and even hormone levels and heart rate

By Matthew Hutson & Tori Rodriguez

Joanne Yong Getty Images

The old advice to dress for the job you want, not the job you have, may have roots in more than simply how others perceive you—many studies show that the clothes you wear can affect your mental and physical performance. Although such findings about so-called enclothed cognition are mostly from small studies in the laboratory that have not yet been replicated or investigated in the real world, a growing body of research suggests that there is something biological happening when we put on a snazzy outfit and feel like a new person.

If you want to be a big-ideas person at work, suit up. A paper in August 2015 in Social Psychological and Personality Science asked subjects to change into formal or casual clothing before cognitive tests. Wearing formal business attire increased abstract thinking—an important aspect of creativity and long-term strategizing. The experiments suggest the effect is related to feelings of power.

Informal clothing may hurt in negotiations. In a study reported in December 2014 in the Journal of Experimental Psychology: General , male subjects wore their usual duds or were placed in a suit or in sweats. Then they engaged in a game that involved negotiating with a partner. Those who dressed up obtained more profitable deals than the other two groups, and those who dressed down had lower testosterone levels. 

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For better focus, get decked out like a doctor. In research published in July 2012 in the Journal of Experimental Social Psychology , subjects made half as many mistakes on an attention-demanding task when wearing a white lab coat. On another attention task, those told their lab coat was a doctor's coat performed better than either those who were told it was a painter's smock or those who merely saw a doctor's coat on display. — Matthew Hutson

Inspired by findings that winning combat fighters in the 2004 Olympics had worn red more often than blue, researchers investigated the physiological effects of wearing these colors. As reported in February 2013 in the Journal of Sport and Exercise Psychology , they paired 28 male athletes of similar age and size, who competed against one another once while wearing a red jersey and again while wearing blue. Compared with fighters in blue, those wearing red were able to lift a heavier weight before the match and had higher heart rates during the match—but they were not more likely to be victorious. — Tori Rodriguez

Trying too hard to look sharp can backfire. When women donned expensive sunglasses and were told the specs were counterfeit, as opposed to when they thought they were real, they cheated more often on lab experiments with cash payouts. Fake sunglasses also seemed to make women see others' behavior as suspect. Authors of the study, published in May 2010 in Psychological Science , theorize that counterfeit glasses increase unethical behavior by making their wearers feel less authentic. — M.H.

The Red Sneakers Effect

It's not news to anyone that we judge others based on their clothes. In general, studies that investigate these judgments find that people prefer clothing that matches expectations—surgeons in scrubs, little boys in blue—with one notable exception. A series of studies published in an article in June 2014 in the Journal of Consumer Research explored observers' reactions to people who broke established norms only slightly. In one scenario, a man at a black-tie affair was viewed as having higher status and competence when wearing a red bow tie. The researchers also found that valuing uniqueness increased audience members' ratings of the status and competence of a professor who wore red Converse sneakers while giving a lecture.

The results suggest that people judge these slight deviations from the norm as positive because they suggest that the individual is powerful enough to risk the social costs of such behaviors. — T.R.

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Market Analysis for Clothing Industry

The need for growth and expansion is an essential part of every business organization. Companies tend to spread their operations in various areas to enlarge their market share. Business organizations usually venture into foreign markets to increase their rate of returns and expand brand awareness. Before taking the initiative of getting into the new market, it is necessary for the firm to have deep insight into the industry in the given country. Lululemon is a multinational business company that deals in the clothing industry. The apparel company wants to expand its operations into the Finland market. This paper will analyze Finland’s market for the clothing industry in terms of market size, consumer buying habits, behavior, growth trends, geographical regions, competitors, and government regulations.

Finland is a country in the Northern part of Europe with a total population of about 5,500,000 people and a Gross Domestic Product (GDP) of $67,870. The fashion industry has been progressing effectively in the country, with most of the players being small and medium-sized companies. These firms produce clothing for sportswear, festive seasons, and professional attire. The consumers value quality, style, brand, and comfort they derive from the product.

Market Size and Growth Trend

In the country, the clothing industry consists of about 5 percent of the market share as shown in figure 1. The regional market size amounts to about US$4.4 billion. Most of the sales revenue in the market comes from the purchase made by female consumers who value quality style and taste (Dang 32). The growth rate of the clothing industry is expected to increase by about 4.25 percent annually, as displayed in figure 2.

Consumers’ Buying Behavior

Consumer buying behavior refers to the customers’ activities before buying the commodity. In the Finnish fashion market, customers are influenced by several factors while deciding on what apparel product to purchase. Clients’ behaviors would probably result in them connecting or even buying the product (Haralayya 215). In the country, consumers’ buying behavior is majorly influenced by social factors, personal aspects, cultural and psychological factors. In the industry, most competitors consider the social factors that derive how some consumers make choices on the type of clothing they purchase, for example, individuals from the high social class prefer fancy and classy products than people from low society. Other customers also value the motives a product generates for them, which satisfies their psychological needs. Personal factors like age and sex also determine the decision to buy products in the market.

Geographical Regions

The clothing firms usually set their stores in areas with a high population like urban centers, towns and cities. Most cities and towns’ populations consist of individuals of the working class that have enough income to purchase the products. Due to the high number of people in such locations, companies are capable of making a good return on sales. Most of the local and international clothing industries have their stores spread in most cities and towns within the country.

Competitors in the Finnish Apparel Market

The industry consists of small and medium-size local firms that offer clothing products to consumers. Some foreign firms have also invested in the Finnish fashion industry. They include H&M, Lindex, Zara, and Gina Tricot. The table below shows a summary of the competitors with their market value.

Table 1: Competitors in the Clothing Industry

Potential Market Size of Lululemon Retail Company

According to the ability of Lululemonn athletica to offer quality products, it will be easier for the business organization to capture the attention of most consumers with its brands like ivviva brands. The firm’s specialization to make clothing products for men, women, and children will increase consumers’ market base. The product’s design and quality will make the firm experience high sales that would approximately generate $275 million.

Policies and Regulations

Openness and transparency of decision making.

The policy allows the Finnish government authority to receive reports from domestic or foreign investors that might be affected in the industry in any way. According to Ben‐Aaron, in the market, transparent principles can reduce the cost of information (72). Through this policy, foreign companies are capable of understanding various administrative regulations in the industry. This is possible because they can quickly and easily access the information.

Non-discrimination Policy

The Finnish government authority has measures that ensure there is no discrimination in the industry to enhance fair competition regardless of the origin of the commodity being sold in the market. The policy is important for Lululemon Company since it will discourage the element of product discrimination, which can result in low sales. Having the equal opportunity, foreign investors have a chance of competing in the market.

The Finnish Trade Act

This policy requires any foreign firm that wants to launch a business operation in the country to submit a notification to the Trade Register that is held by the National Board of Patents and Registration. These processes have been simplified to reduce the burden and time taken to process the legal documents. It is aimed at reducing the restrictions that can hinder external business organizations.

Works Cited

Ben-Aaron, James, et al. “Transparency By Conformity: A Field Experiment Evaluating Openness in Local Governments.” Public Administration Review, vol. 77, no.1, 2017, pp. 68-77. Web.

Dang, Thuy. “Interest of Female Consumers in Finland about Sustainable Fashion: Survey on Female Consumers in Finland,” 2021. Web.

Haralayya, Bhadrappa. “Effect of Branding on Consumer Buying Behaviour at Vijay Bharat Motors Pvt Ltd, Bidar.” Iconic Research and Engineering Journals , vol. 4, no. 12, 2021, pp. 207-222.

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