Case Statement:
Your client is the CEO of a lifestyle retail organization in Europe. Your client sells garments, apparel, shoes home decor etc. They have multiple brick and mortar stores and have an online channel, where customers can order products. Customers can also collect their orders physically from nearby stores. You need to study the effects of the digital age and suggest if the client should explore the digital space.
I: Your client is the CEO of a lifestyle retail organization in Europe. Your client sells garments, apparel, shoes home decor etc. They have multiple brick and mortar stores and have an online channel, where customers can order products. Customers can also collect their orders physically from nearby stores. You need to study the effects of the digital age and suggest if the client should explore the digital space.
C: Does our client manufacture their product or get it from a 3rd party? Do they have their own private labels? Are they market leaders?
I: 3rd party manufacturing & yes, they have their own private label. Yes, the client is currently the market leader in this space. Let's move to the case now.
C: I would first like to explore the possible advantages associated with the upcoming digital age.
I: Okay, go ahead.
C: I have categorized the advantages into 4 buckets namely visibility, expansion, customer acquisition and ease of operations (gave a brief explanation and breakup of each bucket based on my understanding of the textile industry and digital trends.)
I: Let's talk more about ease of operations.
C: Sure, I would like to break this category further into 4 different categories, namely omnichannel integrations, reduced workforce, inventory management and manufacturing(gave industry-specific brief for each header and examples of new popping startups in each space, but didn't get to discuss manufacturing here)
I: Why would you talk about manufacturing when I already told you that the client is getting manufacturing done by 3rd party vendors?
C: I would love to give a reason for that. Even though manufacturing is being done by 3rd party, the client must have employees, in-house labour, production managers and a quality assurance team to make sure that the productions are on time and up to the quality. This in itself is a major cost. This can be further cut down if we utilize services of new-age startups like for e.g. Fashinza. This startup takes care of the entire production and quality process for clients and manufacturers in cost-optimized locations like India, China, Bangladesh and Vietnam. Also, they take care of every step of the value chain including sampling approval to final delivery at the client office locations.
I: Alright, if we utilize these, what about new skills required?
C: I have identified 4 different categories of skills required, namely operating knowledge for digital platforms, SEO/online marketing, knowledge about newer territories and App development.
I: If these new skills are required, which employees do you think we can let go of?
C: Looking at the current work force, we can reduce employees from S&M, production & quality, accounting and admin.
I: How would you let go of these employees?
C: We can offer 4 different options. First, since most of the skills mentioned above are not very hard to learn, we can upskill our existing employees and retain them. Second, we can use the standardized method of notice period for them to look for new opportunities. Third, we can offer voluntary retirement to employees and fourth, we can utilize our network in this space to get them into other firms based on their relevant experience and skills.
I: Okay, we can close the case here.
Background Information:
Client: Tile manufacturer – prior industry leader
Competitors: 2-3 major players holding 80-85% of market share
Customers: Both B2B & B2C and selling via dealers
Location/Geography: Based out of Gujarat, catering to the entire Indian market but majorly in NW and Central India
Products: 100’s of SKUs and decline across all
Value-chain: They manufacture and sell through dealers
Case Recommendations:
The company should make a move towards digitization owing to its growing customer base and high growth opportunities.
Digitization would also help in operations optimization and cost control.
Instead of new employees, existing employees can be upskilled and retained in the firm.
Case tips:
This was a very conversational case. The interviewer’s intent was more towards looking at the overall approach instead of arriving at any specific conclusion.
Most recommendations were based on real-life examples, so bringing them into the case worked here.
