Classic Knitwear is a publicly traded company which operates in the unbranded category. It is a manufacturer and distributor of non-fashion casual knitwear. The main business comes in from Wholesalers and Retail Channels. The company is at a stage where the cost advantage which it has due to its state of art offshore production facility is short lived and they are facing the threat of losing out to big players. The main problem for Classic Knitwear is the push from the board members to increase the gross margins consistently over 20% which right now is around 18%. Due to lack of brand recognition and poor tie-in promotion relations with any other company in the market; the company and its top executives are finding it extremely difficult to fulfil this requirement criteria. Thus, the case basically explores challenges in new product development and brand management. Classic Knitwear is thus considering partnering with Guardian (manufacturer of insect repellent) and launching a new clothing line to improve their margins.
The SWOT analysis carried out on Classic Knitwear and it’s tie-up with Guardian highlights the following points: Strengths
State of the art offshore production facility with Classic Knitwear -
Cost advantage due to low SKU count and economies of scale -
Market share of 16.5% in the wholesale category which makes Classic #2 in this sector -
Brand name and credibility of Guardian in insect repellents can help in attracting the attention of target audience and improved sales -
Guardian is a EPA Registered Category 4 company which reinforces the trust on the brand Weakness
Classic Knitwear has no brand recognition
Low Gross Margins of Classic Knitwear
Small share of 1% in Private Label sector
Inconsistent demand pattern of goods (More during Sale time which reduces the reliability on forecasting techniques) -
Low investment budget for marketing and other promotion activities with...
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