ls industry study on fh|folded&hung

Ateneo De Manila UniversityJohn Gokongwei School of Management

Leadership & Strategy Industry Analysis

Retail Industry

FH | folded&hung

Cheng, Jezelle C.Lazatin, Raphaela Kercee

Molaer, Micaela Fe D.Panopio, Lee L.

Santiago, Dan Nico Templo, Iris G.

Uy, Arvy Brian M.Young, Joanna Clarisse O.

THE RESEARCH

Methodology

• Industry study for Folded and Hung

• Using first hand interviews, documents from the company and direct observation of some management and business procedures

• Internal and external environments of the firm

Significance of Research Findings

• A basic necessity --- clothing• better understanding of the overall business structure

• internal and external business• and the business strategies• analyze key points for the success of the business

• recommend sound changes• GOAL: enhance its current business and management strategies, boost its efficiency and most importantly maximize its profit.

THE FIRM

AND ITS INTERNAL ENVIRONMENT

Background History• Established 1998 at the heart of Greenhills

Shopping Arcade by Dr. Ronald Pineda• Now under Adenip Incorporated, a 100% Filipino

owned company• F&H | Folded and Hung caters to males and

females, 18 to 35, belonging to upper class socio-economic status

• Head office is located at Barangay Sta. Cruz, Quezon Avenue, Quezon City, Philippines

• Currently, it has forty-four branches and ten franchises nationwide, and an online store

• Total Assets in 2009 amounted to 43,589,083.00, and revenues amounting to 389,213,919.93

Ownership & Management Profile

*Dr. Ronald Pineda, Mr. Feliciano Pineda II, Mr. JR Pineda and Ms. Claudette Pineda are siblings, stockholders of Adenip Inc., and altogether manage the brand name F and H | folded and hung.

Vision

To be a globally recognized fashion brand in 2014

Mission• We commit to build a lifetime customer relationship

by providing them with the best fashionable products, affordable prices and excellent customer service.

• We commit to provide our employees with competitive compensation, personal and professional growth and a dynamic and healthy working environment.

• We commit to provide our stockholders with good returns on investment.

• We commit to build a productive and lifetime business relationships with our suppliers and corporate alliances.

• We commit to provide support to the community in their continuous social and environmental developments.

ValuesTEAMWORK “One family, one goal”

INTEGRITY“Our name is our guarantee”

“Your business, our business”

MALASAKIT

Treat the company as your own. Deep concern towards the organization translated into concrete and effective

actions that will yield mutual benefit to employee and the

company.

EXCELLENCE “To be the BEST”

Marketing & Sales Management

• Market: upper and middle class

• Distribution: primary and secondary– Primary: Mall of Asia, TriNoma, The Block

– Secondary: Isetan and Tutuban

Advertisements

• Billboards, poster• Sponsorships• Fashion shows• Sales promotion

– As low as 70% discount (twice a year)

– Surplus products from seasonal end

Human Resources Management

• Sales Staff– 18 to 25 years old– College experience– 5’3” (female); 5’7” (male)– Pleasing personality, good taste in

fashion and must be stylish and fashionable

Human Resources Management

• Office Staff– Late 30s– 4th year degree in college– Fashion Retail Management (a plus to

the management)

Human Resources Management

Recruitment and Selection

1. Screenings2. Interview3. Selection process (for

manager)4. Submission of

requirements5. Orientation6. Good to go!

Financial Management

Company Net Sales Total AssetsF&H Php 339.2

millionPhp 43.6 milion

Bayo Php 350.6 million

Php 180.1 million

People R People Php 666.3 million

Php 213.9 million

Financial Management

• Current ratio= 1.057: 1

• Acid test ratio= 0.059:1

• Return on Assets= 17.09%

THE INDUSTRY

& ITS COMPETITIVE ENVIRONMENT

Industry definition

Folded and hung, along with Kamiseta, Bayo and People are People belongs to the retail fashion industry.

Retail fashion industry is generally limited to garments and accessories that address what is in and what is not, what the consumers will patronize and what they would just ignore.

Background history

• Kamiseta launched its first store in 1992, and from then, many stores were opened in the different key cities in the Philippines and in some foreign countries.

• As of September 2008, the company has a total of 64 stores in the Philippines and in other countries such as Indonesia, Malaysia, USA (Guam), Dubai and Bahrain.

• endorsed by foreign actresses and supermodels

Background history• Bayo opened its first mall branch at

Robinson’s Galleria in 1992. It was in 2001 when Bayo started to offer franchises.

• Bayo, as of July 2009, has 58 retail outlets – 18 of them franchises and the rest company-owned – nationwide.

• Bayo’s success in the fashion industry is partly because of its aggressive brand promotion through fashion events and chic adverstising campaigns.

• Bayo expresses its full pride in being Filipino. Like Folded & Hung, Bayo sticked with Filipina models.

Background history• People Are People sells products with different brands under its

name such as Bittersweet, Stitch, Fortune Cookie and Sewn with Love for apparel, and Syrup for shoes.

• The company buys products from these brands and sells them under the larger and more popular brand name that is People Are People.

• People Are People can be considered as a classy and more expensive tiangge that is situated inside shopping malls with fixed price.

• does not spend anything on well-known personalities as its endorsers

Major Players and their influence

People are People

Kamiseta Bayo

ResourcesMarket sizeIndustry power or influence

Industry Size

• Market size of 97 million people

• US$2.51 billion in revenues

• Largest employer in the manufacturing sector

• Over 1 million employed

Marketing Practices and Strategies

• latest trends in the runway

• 18 to 35 years old• middle and upper

socio-economic status• recent trends made

them focus on the more sexier and eye-catching looks

• Seasonal product packaging has colourful designs

• laminated paper bags

Marketing Practices and Strategies

• fashion shows• campaigns and

have press releases

• mainly thru billboards

• retail stores in malls and boutiques

Procurement of Materials

• Suppliers of these four companies are locally sourced, the materials of which come from both local and foreign region within Asia Pacific.

Product Development

Production Process

Other Major Players

Human Resource Practices and Strategies

1. Uses jobsDB.com2. Checking of resume

of the applicants3. Given text for

screening4. Managers pick for

employee (job specialization)

5. Final interview6. List of requirements

and referral forms

Human Resource Practices and Strategies

Requirements:• Diploma/ transcripts of

records• Previous employment

certificates• NBI or police clearance• SSS ID or E-1 form• TIN ID or TIN form 1902• Pictures (3pcs. 2x2 and

5pcs 1x1)• Occupational permit (to be

claimed based on work location)

Human Resource Practices and Strategies

Bonuses• Wedding: Php 2,000• Deaths: Php 5,000

– Immediate family (single): father, mother, siblings

– Immediate family (wedded): spouse, children

Human Resource Practices and Strategies

• 18 to 25 years old• 5’2’’ (female); 5’6’’

(male)• Please personality• Knowledge in field works• Hardworking, can

handle pressure• Good interpersonal

attitude• Flexible schedule

Human Resource Practices and Strategies

• Female, preferably single• 19 to 25 years old• 5’2’’ in height• Pleasing personality and

fair complexion• Basic knowledge• Good communicating skills• Eye for details and be able

to multi-task

Human Resource Practices and Strategies

• Audit assistants• Merchandising

assistants• Cashier or staff• Quality controller• Sewer

Growth and Expansion Strategies

KamisetaProduct Introduction: • feature new

products in their websites

• Advertisements, press launches, campaigns, and fashion shows

Market Development

• Stores in popular malls and hangout places

• Offer franchising

Growth and Expansion Strategies

Kamiseta

Growth and Expansion StrategiesIndustry

Innovations

Bayo: produce a clean and classic image

Kamiseta: create cool casual and classic look

Diversification• bags, belts, accessories, shoes and

underwear

Growth and Expansion Strategies

ANDGLOBAL

ENVIRONMENT

THE NATION

AL

Socio-cultural Environment• Change in fashion • Change in lifestyle

• Weather • Age

Socio-cultural Environment

Technological Environment

Barcodes

Computer-aided design (CAD)

• Electronic Data Interchange (EDI)• The Garments and Textile Export Board Network (GTEBNet)

• Electronic Visa Information System (ELVIS)

Technological Environment

Automation

Technological Environment

Product Delivery: Containerized Shipping

Industry Capacity Analysis

• largest employer in the manufacturing sector --- textile and clothing industry

• great increase in foreign direct investment in the past five years

• requires a minimum of 2.5 months stock-to-sale ratio per store

Abilities or Constraints to Meet Demands

• invest in the right things for the business• textile and garments industry in the

Philippines lack the capacity to invest in new manufacturing technology

• lack of locally sourced raw materials for the products

• High cost of labor child labor

Political And Regulatory Environment

• Taxation Laws• Consumer Quality Product

and Safety• Price Act• Employment Laws

– Age Discrimination in Employment Act

– Equal Opportunity Employment Act

– Occupational Safety and Health Act

• Laws on Importing and Exporting Goods– Import Laws– Export Development Act

• Retail Trade Liberalization Act• Safeguards Measure Act

Political And Regulatory Environment

Natural Resource Environment• Wastewater from

polyester manufacturing plants

• Autumn sales in India because of global warming

• Climate forces fashion system to change

Industry Analysis

Industry Life Cycle Analysis

Industry Life Cycle Analysis

Shakeout stage:

• “survival of the fittest”• settle on a “dominant design”

signature look:Folded and Hung sells top quality and globally-competent products that are “stylish/trendy, fun-loving, confident and free-spirited”. The company’s products reflect the lifestyle and personalities of its customers with its hip, stylish and fashionably-designed clothing line and accessories.

Industry Life Cycle Analysis

• Market saturation is nearly complete.

• Industry growth begins to slow.• Weaker competitors go out of business.

• Remaining players get bigger through consolidation.

Porter’s Five Forces

H E L P F U L H A R M F U L

I

N

T

E

R

N

A

L

Highly visible

Strategic locations

Relative cheapness

High quality merchandise

Fresh, youthful vibe

Small differentiation from other

brands

Non-exclusivity

Limited reach

Small range of products

E

X

T

E

R

N

A

L

Exportation

Creation of sub-line of clothing

Diversified target markets

Diminishing market share

Foreign competitors

Key Success Factors

• Product design • Maintenance of quality • Market distribution • Distribution and

promotions • Communication • Human resource

Conclusionand

Recommendations

Conclusion

• most probably never run out of business• change in trends• great potential in terms of income• International trend local market• continues to successfully uphold its

corporate mission in the pursuit of excellence

• globally recognized fashion brand in 2014

Recommendations

• Invest in Research and Technology

• Observe Market Behaviors• Watch-out for Fashion

Trends

• Cosmetic Products• Going Green• Expand into the International

Market

Thank you for listening!

Cheng, Jezelle C.Lazatin, Raphaela Kercee

Molaer, Micaela Fe D.Panopio, Lee L.

Santiago, Dan Nico Templo, Iris G.

Uy, Arvy Brian M.Young, Joanna Clarisse O.