CCI15032018_2.pdf Charles tyrwhitt shirts Charles tyrwhitt shirts Assignment 1 MGMT 20143 Think BiG Lecturer Student XXXXXXXXXX 30 march 2018 Charles Tyrwhitt ShirtsStudent XXXXXXXXXXPage 14 of 14...

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CCI15032018_2.pdf Charles tyrwhitt shirts Charles tyrwhitt shirts Assignment 1 MGMT 20143 Think BiG Lecturer Student 12345678 30 march 2018 Charles Tyrwhitt ShirtsStudent 12345678Page 14 of 14 Executive summary This report explores the Charles Tyrwhitt business model using the nine component Business Model Canvas approach to identify the features that had such an immediate impact on Australian fashion retailing. The analysis relies on publically available information. Charles Tyrwhitt’s online model draws on core elements of a direct mail order business relying heavily on renting mailing lists of potential customers with the propensity to buy using the internet capture orders. Growth in inventory holdings and a slowing of the inventory cycle have been compounded by opening new stores in low growth markets and largescale owner capital drawings. Charles Tyrwhitt can reshape its business model and avoid being disrupted by potential new entrants. The following are recommended to achieve future growth: · Move from a propensity driven to a job to be done customer segmentation model · Better understand whether the disruptive innovation concept of zero consumption competition applies to CT · Halt UK store growth and focus on applying the lessons learned in Germany and Australia to Scandinavia and other English speaking markets respectively. Charles Tyrwhitt ShirtsStudent 12345678Page 3 of 14 Table of Contents Executive summary2 Table of Contents3 List of Tables3 I.Introduction4 II.Business model4 A.Building blocks4 1.Customer segments4 2.Key partners4 3.Value proposition5 4.Key activities5 5.Channels5 6.Revenue streams5 7.Cost structure6 8.Key resources6 9.Customer relationships6 B.Interrelationships6 C.Critical success factors6 D.Downside risks7 E.Business model changes7 III.Conclusion7 IV.Recommendations8 Appendix 1 – Charles Tyrwhitt Business Model Canvas9 Appendix 2 – Charles Tyrwhitt performance benchmarks & comparators10 References12 List of Tables Table 1 Charles Tyrwhitt UK & US mailing list profiles4 Table 2: Charles Tyrwhitt web referral commissions Australia5 Table 3: Charles Tyrwhitt sales supported per store by major market5 Table 4: Charles Tyrwhitt Australian sales (2013-2016)6 Table 5: Charles Tyrwhitt Business Model Canvas9 Table 6: Charles Tyrwhitt Australian fashion industry comparison10 Table 7: Charles Tyrwhitt LLP & Shirts Ltd financial performance (2011-2017)11 I. Introduction In 2012 Charles Tyrwhitt (CT) launched an Australian website selling men’s English-style cotton business shirts (Loadman, 2013) with the promise to ‘make it easy for men to dress well’ (Charles Tyrwhitt Shirts Ltd., 2017) and save money buying proper quality shirts in multiples of four. The launch followed the Australian arrival of two fellow tennants from London’s Jermyn Street, the famed home of English shirtmakers for 200 years. Thomas Pink and TW Lewin both opened Australian stores in 2012 (Loadman, 2013). CT offered a web-based shopping experience tailored to men’s apparent dislike of shopping drawing on the infrastructure of a traditional mail-order business. Since 1986 CT has sold over 34 million made-to-measure shirts off the shelf (Confessions of a shirtmaker, 2017) in its principal markets in the UK, USA, Germany and now Australia. II. Business model CT runs a traditional high/low retail strategy (Kaufmann, Smith, & Ortmeyer, 1994) also drescribed as ‘was/now’ (ACCC 2016) where new season stock is quickly discounted and sold cheaply driving sales and moving stock. Their Australian arrival was accompanied by a huge direct marketing and newspaper insert brochure campaign that also sold Jermyn Street in seeming equal measure to CT itself. A. Building blocks Osterwalder & Pigneur’s (2010) nine building blocks approach details CT’s business model (see Appendix 1 – Charles Tyrwhitt Business Model Canvas). 1. Customer segments The defining feature CT’s direct mail advertising is precisely targeting people with a propensity to buy by renting lists. CT now rents its own lists out. Table 1 below describes affluent professional males. Table 1 Charles Tyrwhitt UK & US mailing list profiles Note: nd not disclosed Source: (NextMark Inc, 2018), (NextMark Inc, 2018a) 2. Key partners Access to mailing lists, newspapers and third party referral websites (see Table 2) are essential for CT to develop brand awareness and generate sales traffic. Table 2: Charles Tyrwhitt web referral commissions Australia Source: (Charles Tyrwhitt Shirts Ltd., 2017) Australia Post and couriers to deliver brochures, catalogues, customers orders and product returns. Manufacturers in Vietnam, Sri Lanka and India ensure consistent product quality and supply at lowest cost. 3. Value proposition i. Make it easy for men to dress well, ii. Make Jermyn Street quality and style affordable for everybody by cutting out the middle man and selling direct. (Confessions of a shirtmaker, 2017) 4. Key activities Reliable brochure mailing and courier delivery of finished orders accepted over the internet. A direct mail advertising ‘match back’ process links individual purchases with the particular offer presented to the customer and the rented mailing list by a code (Data Services Inc, 2015). 5. Channels Table 3 details CT sales supported per store in each major market assuming Jermyn Street store supports all sales globally. Australia, Germany and the Rest of the World have no in country stores and buy exclusively online but support 26 percent of 2015 sales at £44.16 millon. Table 3: Charles Tyrwhitt sales supported per store by major market Source: (Charles Tyrwhitt LLP, 2016) 6. Revenue streams In 2012 CT recognised approximately £1 million of Australian turnover driven by former expats that had jumped to £10 million by 2014 (see Table 4). Long term operating profit averages 10 percent (see Table 7) Table 4: Charles Tyrwhitt Australian sales (2013-2016) Source: (Data Services Inc, 2015), (Charles Tyrwhitt LLP, 2016), (Speed, 2014) 7. Cost structure Stock costs are 40 percent of the sale price (see Table 7). Distribution and selling costs are about 30 percent of revenue while administration costs account for approximately 20 percent. 8. Key resources Mailing lists and match-back capabilities/infrastructure are indispensible for direct mail advertisers, along with a website to accept orders. 9. Customer relationships Regular direct mail and email of current offers, promotions and catalogues to past customers and potential future prospects supported by an internet order platform. B. Interrelationships CT prints and mails 35 million brochures annually with 15 million sent to prospective buyers identified from rented lists (Data Services Inc, 2015) that generates 75 percent of sales turnover (Elejalde-Ruiz, 2014). The linkage between mailing houses, key partners, that rent lists to CT of potential buyers, customer segments, is foundational. The CT value proposition ‘make it easy’ links the customer to the cost advatages of a direct channel online/mail order distribution and the revenue strategy of multibuy bundles of four shirts ‘affordable’. ‘Quality and style’ also links offshore suppliers with cost and revenue through profit margins. CT’s 130,000 square foot warehouse in the UK fitted with 30,000 square feet of racking ensures customer segment demand is met by sufficient stock to avoid missed revenue opportunities due to stock run outs (Roberts, 2017). It also allows for apparent mass customisation by holding stock in multiple sleeve lengths and fits thereby linking customer demand for well fitting shirts and revenue opportunity. Linking the cost and revenue is inventory mangement and the ‘was/now’ pricing tactic (ACCC, 2016) that ensures old stock doesn’t become dead stock by continuous rolling discounting of slow moving stock. It delivers savings to customers and clears stock, albeit at a reduced margin. The centrality of the Jermyn Street brand to CT’s marketing success is interesting. Cooperating with Thomas Pink and TW Lewin by promoting Jermyn Street quality separately CT itself, makes an interesting link between lost revenue through competition and key partners that support sales. This was first described by Nash (1950) and extended (1953). C. Critical success factors "I used to run a dodgy old catalog business and suddenly I was running a very sexy Internet business, almost overnight" Nick Wheeler, founder Charles Tyrwhitt (Elejalde-Ruiz, 2014) The match-back process is fundamental by linking the customer characteristics that decribe a propensity to buy on the rented mailing list, with the offer presented and the composition of purchase outcome. Feedback refines insights into future list selection and offer creation (Data Services Inc, 2015). Continuous process improvement and the application of capital investments allows CT to improve speed of fulfilment at lower cost and with fewer errors. Recent commissioning of a conveyor system in the warehouse facility enables 7500 orders to be processed each day by two people rather than seven or eight staff previously. (Roberts, 2017) In 2016 CT stores supported on average £6,778,000 in sales for each store against between $500,000 and $776,000 on average in Australian stores. Table 3 above breaks this down by CT primary market to the point where a single store in London’s Jermyn Street supports £44,160,000 in sales in Australia, Germany and the Rest of the World. D. Downside risks In the five years between 2011 and 2015 CT owners withdrew and distributed £44,971,000 (Table 7) potentially impeding CT’s ability to grow and invest. CT holds stock for on average from 75 days in 2011 to 131 days in 2016 (see Table 7). Australian fashion retailers hold between 90 and 100 days (Table 6). Old stock is harder to move and is often written off at great financial cost. The ‘was/now’ tactic resulted in the ACCC fining CT $10,800 for essentially fabricating the ‘was’ price; no customers had purchased at the high price. If trust in the credibilty of the retailer diminishes the business model is at risk of failing. Movements in foreign exchange (FX) markets can add costs to global businesses. CBA (2015) reported 70 percent of retailers had FX induced cost increases but only 43 percent had raised prices. Further the UK’s exit from the European Union is predicted to add a further 10 percent to costs (Bridge, 2017). E. Business model changes I would move toward better understanding buyer behaviour moving away from propensity to causality (Christensen et al, 2016). I would seek to observe buyers and precisely understand what job needs to be completed that gives rise to a purchase. CT’s success may in part be attributable to Christensen’s (2016) disruptive innovation concept of competing against zero consumption. Perhaps men didn’t buy shirts at all and their partners, parents and children were in fact purchasing shirts in department stores for them. Web based purcahsing by men themselves possibly was an ideal market entry point that needs to be understood. Expansion in high growth, low cost markets such as Germany and Australia is potentially undermined by the expansion of stores in low growth markets such as the UK and France (BCG, 1970). I would halt UK store growth. Expand online offerings in Scandinavia following the learnings from the Germany and similarly expand into Ireland, Canada and New Zealand applying Australian lessons. III. Conclusion The preceding analysis is based on public information. CT has been wonderfully successful in the application of old school direct marketing practices to the cost and distributional efficiencies of the internet. The future is not without risk. Perhaps the greatest risk is that without next level insights, CT may be open
Answered Same DayApr 01, 2021MGMT20143Central Queensland University

Answer To: CCI15032018_2.pdf Charles tyrwhitt shirts Charles tyrwhitt shirts Assignment 1 MGMT 20143 Think BiG...

Sarabjeet answered on Apr 02 2021
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Running head: Organization’s business model
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Executive summary
Afterpay offers payment services moreover provides a good cargo payment platform including shoes, clothing, personal care, watches, auto parts, sports, and food products. This report also discusses the business canvas model that AfterPay uses 9 building blocks moreov
er the interrelationship that may exist in the building blocks. Finally, CSF Afterpay must achieve sustainable success, and downside risks, and business model changes discuss in this report.
Contents
Executive summary    2
I.    Introduction    4
II.    Business model    4
A.    Building blocks    5
Key partners: Local stores and financial partners.    5
Value Propostion: Tie-ups with existing supermarkets and vechicle showrooms, no warehouses and extremly quick services.    5
B.    Key relationships that exist across the nine building blocks    6
C.    Critical success factors    6
D.    Downside risks    7
E.    Business model changes    8
III.    Conclusion    9
IV.    Recommendations    9
Appendix 1 – Afterpay Business Model Canvas    10
References    11
Introduction
Afterpay is the Australian economic technology business operating in an Australia, the United States and New Zealand. It allows the retailers to now purchase their clients as well as pay later, without the requirement for the traditional credit, interest and upfront fees. The consumer pays a section of purchase amount after payment, and post expense pays merchant prepayment. The consumer pays the residual items in the installments each four weeks and if consumer pays on timely, they just pay for items they purchase.
Business model
AfterPay allow its customer to "buy instant" funds to purchase and use existing business models of the times. It is called “factoring” of receivable account. This is an association that sells account receivable to lenders, generally at the discounted price (Erlyana & Hartono, 2017). Often, factoring is also arranged among the industry and lender, as well as consumer doesn’t know the strategy. AfterPay also allows its clients to "purchase instant" funds to purchase and use existing business models. It is called “factoring” of all accounts receivable. This is the organization which sells receivables to lenders generally at discounted price.
Building blocks
Customer segments: Company has application through which consumer may order the products by selecting multiple stores. They also will order from a laptop using web-based interfaces (Christensen, Kent & Stewart, 2010).
Key partners: Financial partners and Local stores.
Value Propostion: The Tie-ups with the existing supermarkets moreover vechicle showroom, no warehouses and quick services.
The Key activities: The Payment for consumer buy over four alike installments, unpaid each two weeks. Also Allows consumer to compensate over time.
Channels: Afterpay’s website of Afterpay, mobile applications, for the all iOS phones and android phones (Bond, Bugeja & Czernkowski, 2012).
Revenue streams: In FY18, the underlying sales process throughout Afterpay platform total calculated more than the 2.18 billion$. FY18 basic sales for fourth quarter were around $737 million, and a raise of 172% from fourth section of 2017 economic and 38% raise from eighth section.
Cost structure: Technological set-up costs as well as salaries to the permanent workers of the Afterpay. Ther are providing commision base payments to the shoppers.
Key resources: Afterpay has a partnership with lots of local shops or stores and skilled shoppers, as well as the technology is the key resources of the Afterpay.
Customer relationship: With social media for example Snapchat, twitter and Facebook Afterpay easily attract the more consumers towards itself (Baxter, 2014).
Key relationships between nine building blocks
AfterPay unique and promising business solutions will set up the installments and amounts based on each product or automatically get the original preauthorization and the installment payment via payment gateway AfterPay. Full standard system email is set to automatically indicate the debit failure customer's...
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