Pumpkin patch fasion company in newzaland

1. Intro

Pumpkin Patch is the largest children's fashion company in New Zealand. The business was founded in 1990 by Maurice Prendergast, an accountant by training. The theory for the company began when a woman acquired a eyesight of providing high quality, yet affordable children's clothing and the business sold its products through mail order catalogue. However, the brand only commenced to take off when Prendergast took over. Originally located as a higher end niche brand, the company has grown quickly since its inception as its customer boosts to encompass the Australasia region and has made significant inroads in the rest of the world.

Pumpkin Patch's products cover all the levels of childhood expansion, from baby to pre-teen. The company offers a diverse selection of products such as normal clothing, nightwear, products, boots and rainwear. Matching to Prendergast, the aim of the business is to produce clothing that make children "drop dead gorgeous".

Currently, Pumpkin Patch has a workforce of over 2, 800 people. It produces more than 2, 000 styles per season and its own products can be purchased in over 220 stores about the world. As though 2009, its profits stood at NZ$412 million.

This article analyzes the performance of Pumpkin Patch. It does so from lots of frameworks, like a PEST examination and Porter's Five Makes model. It then provides recommendations about how to overcome a few of the problems faced by the company and the steps it can take to boost its competitiveness.

1. 1 Current Market Coverage

Pumpkin Patch is the largest company of children's clothing in New Zealand and Australia. It dominates these market segments. The company has also made significant inroads in to the United Kingdom and United States markets. However, its foray into these market segments had not been easy because they are highly competitive and a brand needs to be outstanding to succeed in them. Initially, Pumpkin Patch sustained losses in running stores in these countries but the company learnt from its faults and shortcomings. Eventually, the business reached a turning point and is set to continue its existence in these marketplaces.

Apart from retailing, the business is a wholesaler. Aside from behaving as wholesaler in the abovementioned market segments, it is also present in the center East. Currently, the company has a wholesaling occurrence in 16 marketplaces about the world.

The company views wholesaling as a good starting place to enter into new market segments. It collects valuable customer data through its wholesale business to find out whether it's viable to permeate new markets and formulates its entry strategy based on the data collected.

1. 2 Product Lines

Pumpkin Patch has 13 product lines. Baby Patch is made for newborns to 9 month old infants. It has split lines for young child girls and toddler kids aged between six months to 4 years old. Then there are lines for big girls and big young boys who are grouped between the age range of 6 to 11 years. All these lines fall under the Pumpkin Patch range.

The company has another lines called Urban Angel Woman for preteen and early teen girls. In addition, it has special lines for underwear, nightwear, swimwear, accessories and footwear for newborns to 14 years old under its Pumpkin Patch and Urban Angel Female lines. In addition, it has another maternity collection called Patch Maternity and another for kids' rooms.

1. 3 Fads

The international children's clothes market is vibrant and ever changing. Even though there is not much change in conditions of basic children's clothing, the changes are much more pronounced in the high end market where Pumpkin Patch is fighting. To stay ahead of competitors, a firm needs to constantly innovate.

2. Infestations Analysis

2. 1 Politics

New Zealand is a constitutional monarchy. Its mind of express is the Queen of THE UK, though she actually is represented by the Governor General, who is presently Sir Anand Satyanand. Like all constitutional monarchies, New Zealand has a Parliament. However, unlike many parliaments about the world, the New Zealand Parliament has only one chamber called the home of Staff. New Zealand tactics the concept of separation of forces. The Parliament has legislative powers. Executive powers rest with the Cabinet which is led by the Perfect Minister and contains other ministers. The judiciary controls the third branch of federal.

New Zealand has an extremely stable politics system. Like the majority of democracies in developed countries, it practices a two party system. Elections are organised once every three years. Overall, the government authorities in the united states have been very secure and business friendly. This positively impacts Pumpkin Patch just because a stable federal government with a pro-business coverage offers a conducive environment for the company to prosper.

2. 2 Monetary

New Zealand has today's, prosperous and developed market market with around gross local product at purchasing ability parity per capita of US$28, 250. The New Zealand money is also a stable money that has appreciated in the last year. According to the United Development Programme's Man Development Index, New Zealand was ranked the 3rd most developed country this year 2010.

Export includes 24% of New Zealand's end result. Trade revolves around products such as horticulture, sportfishing, forestry, mining and agriculture. Dairy products and meats are a substantial source of income. This makes the current economic climate vulnerable to fluctuations in global commodity prices. New Zealand's major trading lovers are Australia, Japan, China, the uk and United States.

The major sector in the economy is the service sector which is followed by manufacturing, structure, farming and raw material extraction. Travel and leisure is a significant source of revenue and a large employer.

The New Zealand overall economy was badly afflicted by the recent global tough economy. The united states experienced its most severe recession in years and unemployment rates increased to 7%. However, the country's overall economy has shown to be resilient in the long run, judging from just how it bounced again from prior recessions such as the one in the first 1990s.

A rather unconventional aspect of the brand new Zealand economy is its brain drain which includes occurred since the 1970s. Indeed, around 25% of high skilled workers reside abroad in Britain and Australia, which is the best for a developed country. However, the government has made initiatives lately to lure back skill and to pull educated pros from European nations.

As a result of the downturn, Pumpkin Patch's sales and success were affected in '09 2009 and 2010. The business work at mitigating such undesireable effects is to increase its presence in a larger quantity of countries. For example, even though the Australian market was affected by the recession, sales remained strong there.

2. 3 Friendly

New Zealand has a little human population of around 4. 4 million. Around 72% of the populace resides in cities. The four largest locations in New Zealand are Auckland, Christchurch, Hamilton and Wellington. Owing to the high standard of living, the average life span is 78. 4 years for males and 82. 4 for females.

The most New Zealand's inhabitants consists of folks of Western european descent, mainly British descent. That is followed by an inferior percentage of indigenous people, led by the Maori who constitute the major group. The country is also home to a little but growing inhabitants of Asians.

For greater than a hundred years, the needs of the indigenous minorities were sidelined as they were pressured to assimilate British isles culture. However, in the 1980s, the federal government became more accommodating and announced Maori as you of New Zealand's public languages. Currently, there are Maori tv set channels and colleges. A small percentage of Parliament car seats is exclusively reserved for Maori.

Owing to an extended record of assimilation, the overall requirements of all the ethnic groups are the same. Most go directly to the same types of institutions, have similar education opportunities and purchase similar things. Therefore, Pumpkin Patch's products find favour across social lines and you don't have to tailor independent marketing promotions or product lines for different ethnic organizations.

2. 4 Technological

New Zealand might not exactly be at the forefront of leading edge technology. Nonetheless, it is highly advanced in terms of technological program. Internet penetration can be an impressive 80%. E-commerce, e-retailing, business portals and automated reorders are all utilized by businesses to attain competitive benefits. Indeed, Pumpkin Patch has a software system that can be used throughout its value string from the design of new products to supply string management to delivery to customer. This technique is one of the business's most prized resources and it will increase the model to assist it well into the future.

3. Porter's Five Causes Competitive Model

The following is a checklist of the competitive analysis of the global children's clothing market using Porter's Five Forces Model (Porter, 1990). It demonstrates how the various forces impact the competitive advantage of the industry.

3. 1 Threat of New Entrants

Risk of New Entrants is High When:

Standard

Industry

High

Low

High

Low

Economies of scale are

X

X

Product differentiation is

X

X

Capital requirements are

X

X

Switching costs are

X

X

Incumbent's control of distribution channel is

X

X

Incumbent's proprietary knowledge is

X

X

Incumbent's usage of recycleables is

X

X

Incumbent's access to federal government subsidies is

X

X

In the international children's clothes industry, the risk of new entrants is low scheduled to limitations in capital, raw material and consumer preference. While there could be numerous small level players, it needs great capital and economies of range to be in the ranking of the very best five retailers of children's clothes.

3. 2 Electric power of Buyers

Power of Potential buyers is High When:

Standard

Industry

High

Low

High

Low

Concentration of purchasers in accordance with suppliers is

X

X

Switching costs are

X

X

Product differentiation of suppliers is

X

X

Threat of backward integration by purchasers is

X

X

Extent of buyer's profits is

X

X

Importance of supplier's suggestions to quality of buyer's final product is

X

X

Customers round the world are spoilt for choice when it comes to children's clothes. There are many companies who produce all types of clothes for children. Essentially, the market can be divided into three main sections that happen to be low end, mid-range and top quality. At the low end (which is the most significant segment) are discount and standard vendors such as Markings & Spencer and Wal-Mart. The second section is specialty clothing sellers that contain a children's section such as Space. The final segment is for specialty children's clothing such as Pumpkin Patch. However, within each segment, there is normally little product differentiation, especially for the reduced end segment.

3. 3 Electric power of Suppliers

Electric power of Suppliers is High When:

General

Industry

High

Low

High

Low

Concentration in accordance with buyer industry is

X

X

Availability of swap products is

X

X

Importance of customer to the dealer is

X

X

Differentiation of the supplier's products and services is

X

X

Switching costs of the customer are

X

X

Threat of forward integration by the dealer is

X

X

The relative ability of suppliers in the global children's clothing retail industry is high. This is especially true for suppliers of raw materials as there are most of them and there are many suppliers. Hence, suppliers do not have very much clout to determine prices since there a wide range of low cost alternatives especially in Asia. Hence, suppliers have to appease vendors if indeed they want to achieve the desired degree of sales. The turning cost is also relatively lower in this industry.

3. 4 Threat of Replacement Products

Threat of Alternative Products is High When:

Basic

Industry

High

Low

High

Low

The differentiation of the alternative product is

X

X

Rate of improvement in price-performance relationship of alternative product is

X

X

There are few dangers of replacement products for children's clothes. Parents generally dote on the children and would not deprive them of necessity like clothing. While reasonably priced clothes can be used as substitutes for expensive ones, there are no real alternatives to clothing, unless one lives in primitive societies in which natural chemicals can be used as clothing. Cruel is the parent or guardian who deprives his children of clothing, so this market is kept from the treat of substitute products.

3. 5 Depth of Rivalry

Power of Competitive Rivalry is High When:

General

Industry

High

Low

High

Low

Number of opponents is

X

X

Industry growth rate is

X

X

Fixed costs are

X

X

Production differentiation is

X

X

Switching costs are

X

X

Exit obstacles are

X

X

Strategic stakes are

X

X

The international children's clothing retail market is intensely competitive. Many sellers clamour for a market that is experiencing static development. As a result, they employ a variety of tactics to keep up and possibly improve their market talk about. New entrants must offer something unique if they want to create a serious risk to the set up competitors.

4. Action Intend to Mitigate Impact to Business

  1. Continue to dominate the Australian and New Zealand market segments. By leveraging on our dominance of these marketplaces, we can use them as cash cows in our bid for international expansion.
  2. Continue developing ground breaking products that are popular by consumers. Differentiation helps to set us aside from competitors and helps to build competitive edge.
  3. Obtain more suppliers. This will enable the business to get the lowest possible price as a hedge from the growing cost of recycleables.
  4. Build more powerful networks of distributors that can help the company build a better global presence.

5. Current Strategies

5. 1 Marketing Strategies

Strategy

Reasons For Adopting

Product Differentiation

To identify the brand as a higher end producer and shop that markets quality products and stylish designs. Very successful in cultivating the brand image.

Market Segmentation

Developing different segments for different age groups such as newborns, infants, small kids and pre-teen. Very successful as it ensure continuity of patronage by customers.

5. 2 Man Tool Strategies

Strategy

KNOWN REASONS FOR Adopting

Nurture human capital

To enable employees to understand their full probable. Successful in getting new employees and retaining existing employees.

Develop a good commercial culture

To enhance teamwork and assistance among employees, to enable those to be creative and impressive. Successful in fostering a good working environment that is conducive and nurturing.

5. 3 Functions Management Strategies

Strategy

KNOWN REASONS FOR Adopting

Quality Manufacturing

To maintain the highest standard of quality throughout the creation process. Quality starts with the quality of design and ends with the grade of the done product. Very successful strategy as the brand is synonymous for high quality

Inventory and offer chain management

To ensure that inventory can be found when it is needed and also to avoid unnecessary stock pile-up and redundancy. The system is very responsive to changes popular and is versatile to adjust to last second changes in product design.

5. 4 Fund Strategies

Strategy

KNOWN REASONS FOR Adopting

Effective working capital management

To ensure that the business has sufficient cashflow because of its working capital while reinvesting surplus as capital expenditure.

Cost management

To ensure that we now have no cost overruns and that the creation process is low fat and efficient to reduce wastage. Successful in keeping costs relatively low even during intervals of rising costs.

Maximize returns to shareholders

The company's stock gone public a few years ago and the goal is to make the stock a sought after investment. To get this done, the company has to carefully balance both brief and long term strategies to ensure good dividends and capital appreciation of its stock. Overall, the business has been successful judging from its stock price and dividend payout.

5. 5 Research and Development Strategies

Strategy

KNOWN REASONS FOR Adopting

Horizontal integration

Acquisition of other brands that are related to Pumpkin Patch's central business. For instance, the acquisition of HBK Female was targeted at increasing the preteen market share. Such acquisitions are usually successful.

New Product Development

To increase the process for new product development to cater to demands in the market. Product development time has been greatly reduced and the number of services offered is impressive.

5. 6 Sales Strategies

Strategy

Reasons For Adopting

Retail Stores

To showcase the full range of the company's products in a tailor made environment that highlights their unique features. Retail stores create higher brand presence. The approach is prosperous in Australia and New Zealand though it required commitment to achieve other markets.

Wholesaling

To introduce the company's products in new markets or where it is not possible to start retail stores. Wholesaling also suits the retail stores. It really is an important part of determining the viability of markets through customer data collection and feedback.

5. 7 Logistic Strategies

Strategy

Reasons For Adopting

Centralized Distribution

All products are shipped from the central warehouse in Auckland. This plan enables the company to monitor of all its sales and circulation as well as reaching economies of scale. The method is effective as it provides all shipments promptly and without happenings.

Logistics systems

To enable the company to react in a fast and well-timed manner to the demands in its source chain.

5. 8 International Business Strategy

Strategy

Reasons For Adopting

Wholesaling

This may seem to overlap with the sales strategy as the aims are similar. Wholesaling sometimes appears as an important first step in deciding the viability of foreign markets. Data accumulated from inexpensive activities can be used to formulate growth strategies.

Retail stores

Once the business feels it is preparing to move beyond wholesaling, it then sets up retail stores in target market segments. These stores serve to improve brand consciousness among customers and to provide a complete shopping experience.

6. TOWS Matrix Analysis

TOWS MATRIX

Strengths

1. Strong brand

2. Good commercial culture

3. Excellent production process

Weaknesses

1. Centralized decision making.

2. Weak presence in the international market

3. Sometimes decrease to react to changes in the global market.

Opportunities

1. Penetrating new marketplaces such as Asia and SOUTH USA while strengthening existing markets.

2. Horizontal integration by acquiring other clothing brands.

3. Vertical integration by diversifying into other product lines like infant dairy powder.

SO Strategies

1. Establish proper partnerships with new marketers and open up more stores in abroad markets.

2. Acquire other brands that are of strategic importance, such concerning provide new technology and design or even to eliminate competitors.

3. Diversify into new product lines that are related to Pumpkin Patch's primary business.

WO Strategies

1. Decentralize some decision making activities to release top management to focus on international global strategy while offering greater autonomy to branch professionals.

2. Acquisitions of other brands may help the company to obtain skills and technology that may help it beat some inner weaknesses.

Threats

1. Copycat products by second-rate rivals.

2. Stiff competition on all fronts.

3. Economic depression that can dampen sales.

4. Natural disasters like the recent earthquake that may disrupt production and offer chain.

ST Strategies

1. Leverage on the business's strong brand position of quality and excellence.

2. Differentiate by producing ground breaking design and always keeping yourself one step before rivals.

WT Strategies

1. Formulate contingency programs for worst circumstance scenarios to determine what the business should to endure should the most severe happen.

7. Key Success Factors for Proposed Strategies

  1. Open at least one new store in each market for each year. Finances must anticipate to allocate cash for this function.
  2. Increase the amount of new designs and shorten the new product development time.
  3. Obtain multiple resources of raw material to acquire better prices and services, and cultivate romantic relationships with new suppliers.
  4. Increase the amount of distributors for focus on markets.

8. Execution of Proposed Strategies

Strategy

TIMEFRAME

Open at least one new store in each market per year

6 months

Increase the number of new designs and shorten the new product development time

Less than six months but done on a continuous and random basis

Obtain multiple resources of raw materials

2 to 5 years. This is a long term strategy as it will take time.

Increase the amount of distributors for aim for markets

1 to 3 years

9. Summary

Pumpkin Patch is a successful company in its home basic. However, it is an extremely small international player in the children's clothing market. Therefore, it includes tremendous growth potential provided it pursues the right strategies. This record outlined some of the key issues experienced by the business and proposed advice that will help improve the current situation. Through hard work, strategy and creativeness, the company can achieve much success in the future.

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