BUSINESS STRATEGIES

& OUTSOURCING
PROCESS

Names: Gaamidah Francis 218104766

Wandisiwe Dase
Thato Bapela 220373515
Course: Fashion (4th Year)
Subject: FEN470S
Lecturer: Gabriel Kabuluku
Due Date: 26 August 2024
1. Background of who we are.

We are a company called Conscious Footprint that specialises in creating clothing

and footwear that is both sustainable and affordable. The impact the fashion industry
has on the environment is a big concern and we were looking for ways to create
products that would not add to it. With consumers adding to fast fashion, we wanted
to look at ways to lessen the impact on the environment and give consumers ways to
lessen their impact as well.

The approach we have taken is to develop clothing and footwear made with recycled
material. While not all plastics are recyclable, we wanted to try our best to make a
difference and to be more conscious of our role in the fashion industry. One way to do
this was by taking the materials recycling plants collected from the oceans and landfills
and creating our own fibres out of these recycled materials.

Consumers are becoming more and more aware of the consequences of their actions
and the impact it has. Consumers are also keeping companies responsible by asking
questions and requesting companies to be open about the practices they use, to make
their products. E.g. if a company says they are sustainable, consumers want to know
how and which ways they are achieving this.

A few of the processes we make use of to be better for the planet are:

- using BCI cotton,

- using fabrics with fibres made of recycled materials &

- being more water-wise when creating denim.

BCI- Better Cotton Initiative- is an organisation that aims to help cotton communities
to survive and be sustainable while protecting the environment. While cotton is a
renewable source, due to the demand in the fashion industry, many farms have been
damaged due to over-production and soil erosion. Better Cotton provides farmers and
workers with knowledge and better working conditions to have a sustainable approach
to farming cotton, etc. and this in turn has an effect on the whole process of clothing
making (Better Cotton, 2024).

Recycled fabrics are not actually made from recycled clothes for the most part, but are
made of industrial waste. Recycled polyester and nylon are produced from pre- or
post-consumer- or pre- or post-industrial waste materials such as PET plastic bottles,
apparel or nylon fishing nets; material that would otherwise have been sent to landfill
or for incineration (Global Fashion Agenda, 2024). Recycling polyester has fewer
processing stages and uses less energy with a reduction in carbon emissions.

The production of denim uses huge amounts of water and if not properly disposed of,
can have a huge impact on the environment. Because denim has different washes,
the chemical treatments it undergoes, etc. it is important to know what happens to the
waste. Most factories do not rid of the water correctly and often times it ends up in the
sewerage system or in a water source like a river.

Our main goals are to be transparent with customers and to provide products we can
be proud of while also being sustainable. Being sustainable has many factors: to be
sustainable as a business and provide our customers with affordability while being
able to make a profit and maintain longevity; to only work with factories and suppliers
who are Sedex approved and have the same vision as us and the impact we have on
the environment; and to ethically source natural resources for the production of our
goods.

2. The market lifecycle

The life cycle of a product usually has four phases: introductory, growth, maturity, and
decline phases. The introductory phase developing a market strategy, usually through
an investment in advertising and marketing to make consumers aware of the product
and its benefits. Sales are usually slow and depends on the type of product or service
you are launching.

The growth phase is usually when a product is a success and this should see growing
demand promote an increase in production and the product becoming more widely
available.

The maturity phase is when a product is established in the marketplace and so the
cost of producing and marketing the existing product will decline. As the product life
cycle reaches this mature stage these are the beginnings of market saturation.

As competition continues to rise, with other companies seeking to emulate your

success with additional product features or lower prices, so the life cycle will go into
decline. Decline can also be caused by new innovations that supersede your existing
product, such as horse-drawn carriages going out of fashion as the automobile took
over.

At this point, we believe we are in the introductory phase of the market when it comes
to the practices we use in our business. Our marketing strategies consist of using
social media such as Instagram to promote our brand. Instagram and Facebook ads
are great tools to promote our brand as people tend to scroll through these apps
throughout the day. Our ads promote a discount code for the first 50 newsletter
subscribers to spend on launch day. The first 10 people in line at the physical store
will also qualify to get a discount or a gift card towards their next purchase with us. We
want consumers to know our brand before they even see or know the product. We will
also be running a competition on social media where people need to follow certain
rules like tagging 3 friends on one of our posts, this will create more traffic to our social
media platforms and at the end giving a prize to a lucky person.

While all these marketing strategies are commonly used, they work well in creating
brand awareness and we are hopeful it will work for our brand and causes consumers
to be more mindful and more sustainable because having sustainable products does
not necessarily mean that consumers will buy into it. In South Africa, this could be a
struggle as we do not have our own textile mills and being 100% local would be
impossible. While the clothing could be locally put together, the materials will still need
to be imported from countries like China, India and Bangladesh.

While our products are made of recycled materials, to produce these materials in
South Africa is a bit tricky. We do not have the facilities for it and if we do have the
facilities, the prices to produce materials locally is often more expensive than doing it
overseas. Because of the technologies available in countries like China, India and
Bangladesh, we have had to resort to them to produce our products.

Our suppliers who work with factories in these countries have to make sure the
factories follow certain criteria such as being Sedex compliant where the factories
have to comply by having fair labour, no underage workers, the building has to be
approved, the working conditions should be clean and fair, etc., where denims are
produced, proper disposal of the water should be in place such as being treated with
chemicals and re-using it or by making sure the water is treated and the amount of
chemical percentage is suitable to be disposed of through the sewerage system.
Another issue we face is consumers who do not make conscious decisions when
purchasing clothing. Often turning to stores such as Shein and Temu for “affordable”
products but do they ask the questions of who made their clothes and do they know
where it comes from?

For now, our main strategy is outsourcing. The fashion and textile industry in South
Africa needs a lot of work before we can move production to 100% local. The
weakness of the Rand to the Dollar and inflation also makes it difficult to keep factories
open in South Africa. Our goal is to have a working mill and factory where we can
create skills development and jobs and to create fabrics and clothing with a clean
conscience and know that we have made a change both locally and abroad and that
we have tried our best to save the planet for future generations. This might take a few
years but we are open to collaborating with local companies to achieve this.

3. Choice of strategies

INTRODUCTION TO STRATEGIES

- In the context of expanding our business, strategies can be broadly categorized into
two main categories: generic strategies and strategies of development.

Generic strategies, developed by Michael Porter, are fundamental approaches that

can help a company gain a competitive edge in the marketplace. These strategies
include:

- Cost Leadership: Focusing on minimizing costs to become the lowest-cost producer

in the industry.

- Differentiation: Creating unique products or services that offer value to customers

and make them willing to pay more for those products or services.

Chosen strategies:

In regard to our company's expansion, we are employing the following three strategies
to grow our sustainable and affordable clothing and footwear business:

1. Differentiation Strategy: By emphasizing sustainability and transparency in our

production processes, we aim to stand out from the competition. Our focus on recycled
materials and eco-friendly methods will appeal to the increasing number of consumers
seeking environmentally responsible options.
Product Development: In addition to our commitment to sustainability, we are
focusing on innovation in product design. By creating new clothing and footwear lines
that incorporate advanced recycled materials, such as ocean-reclaimed plastics or
sustainably sourced cotton, we will stay current with consumer demand for eco-friendly
products.

Market Penetration: As we are still in the introductory phase of our market lifecycle,
our strategy is to increase brand awareness and capture a larger share of the existing
market. To achieve this, we are utilizing social media platforms, offering promotions,
and running competitions.

Implementation Steps

1. Brand Positioning and Marketing:

- Create and implement a comprehensive marketing strategy that emphasizes our

brand's focus on sustainability and affordability.

- Utilize social media platforms like Facebook and Instagram to connect with target
audiences, highlighting our ethical practices and environmental responsibility.

- Engage consumers through educational content about the negative impact of fast
fashion and the benefits of our products.

Product Innovation: Invest in research and development to continuously improve the

quality and sustainability of our products. Explore new recycled materials and improve
production processes to reduce environmental impact. Collaborate with suppliers who
share our vision of sustainable fashion.

Supply Chain Optimization: Outsource production to countries with advanced

technologies while maintaining strict oversight to ensure compliance with ethical
standards. Invest in local production capabilities in South Africa to reduce reliance on
international suppliers and create jobs.

Transparency and Consumer Education: Provide clear, accessible information

about our supply chain and production practices.

Conclusion
Our chosen strategies are designed to establish our brand as a leader in sustainable
fashion while also ensuring long-term business viability. By focusing on differentiation
through sustainability, developing innovative products, and penetrating the market
effectively, we are laying the groundwork for future growth and success.

4. The process of outsourcing and other motivation for choice

In the 1990s, companies began outsourcing variety of activities beyond transportation(

McGrath, 2007). Their objects were twofold: 1) reduce cost and 2) to concentrate on
their core competencies. When we started our company, we faced the decision of
weather to outsource or insource, recognizing that the choice is not universal and
hinges on factors such as cost, control, quality, and strategic goals. Outsourcing can
offer substantial cost saving, specialized expertise, and operational flexibility, but it
also carries risk related to quality control and security. On the other hand, insourcing
provides enhanced control, better alignment with company culture, and improved data
security, though it may be more costly and les scalable(2023).

Access to Specialized Expertise

1) Quality and Consistency: Rather than outsourcing the process of handling ocean
plastics—an approach that can raise concerns about maintaining quality and
standards—we use our specialized recyclers to collect these materials. This ensures
that the recycled plastics meet rigorous quality standards, which is crucial for producing
durable, high-performance garments. Occasionally, we do outsource the recycling of
used soda bottles and manufacturing waste to create new polyester fibers for clothing.
2) Technology Proficiency: We sought to collaborate with a local company and
thus partnered with Green Shield, a South African firm specializing in converting
ocean plastics into high-quality fibers. They use advanced recycling technology
to transform plastics into sustainable materials for garment production. By
leveraging their expertise, we ensure that ocean plastics are efficiently
processed into durable, high-performance fabrics while concentrating on
design, marketing, and upholding our commitment to environmental
sustainability.

Scalability and Efficiency

 1) Supply Chain Management: Instead of dealing with the complexities of
ensuring that external factories meet our rigorous standards, we have chosen
to insource garment sewing to manage it in-house. This approach allows us to
more easily monitor and control the environmental impact of our production
processes, ensuring adherence to sustainable practices and minimizing waste.
Additionally, insourcing offers significant economic advantages, leveraging
South Africa's growing textile and apparel sector, which is renowned for its
skilled craftsmanship.
2) Cost Efficiency: By sourcing recycled and eco-friendly materials, we reduce
raw material costs over time and decrease our reliance on costly virgin
materials. Our partnerships with manufacturers who enhance their processes
ensure that our products are durable and long-lasting, which lowers the
frequency of replacements and overall consumer costs. Additionally,
incorporating in-house production and local sourcing boosts cost efficiency. In-
house production allows us to better control quality and cut outsourcing costs,
while local sourcing reduces transportation expenses and supports our
sustainability goals, leading to further cost savings.

When considering a strategic design for outsourcing, , the following steps are crucial:

1) Define Objectives and Goals: Our aims is to enhance sustainability, reduce

production costs, and ensure high product quality. By clearly outlining these goals
helps in selecting outsourcing strategies that align with these objectives.

2) Assess Core Competencies and Needs: Sine we have fashion design

background we excels in product design but may seek to outsource manufacturing to
leverage specialized expertise and reduce production costs.

3) Select and Vet Outsourcing Partners: we have to carefully select manufacturing

partners based on their ability to meet environmental standards, quality expectations,
and ethical labor practices. We might have to choose partners who use sustainable
materials and adhere to our social responsibility criteria.

4) Conduct Risk Assessment: we would assess risks such as potential compliance

with environmental regulations, and the impact on their brand reputation. We would
consider factors like political stability in the partner’s region and the partner’s ability to
meet production deadlines.

5) Establish Clear Contracts and Agreements: we would have to draft detailed

contracts with outsourcing partners specifying environmental standards, quality
requirements, and ethical practices. Contracts might include clauses for regular audits
and compliance checks.

6) Ensure Effective Communication and Coordination: we have to would set up

robust communication channels and project management systems to ensure smooth
coordination with outsourcing partners. Regular meetings and updates would help
address any issues promptly and maintain alignment with our sustainability goals.

7) Implement Monitoring and Performance Evaluation: we would have to establish

metrics to monitor the performance of outsourcing partners, including adherence to
sustainability practices, product quality, and delivery schedules. They might use third-
party audits and regular inspections to ensure compliance.

8) Ensure Compliance with Environmental and Ethical Standards: our outsourcing

strategy would include rigorous checks to ensure partners comply with their high
environmental and ethical standards. This might involve certifications for sustainable
practices and fair labor conditions.
9) Develop a Contingency Plan: we would have to prepare for potential disruptions
by identifying alternative suppliers and creating backup plans to handle any issues
that arise with their primary outsourcing partners.

10) Review and Adjust Strategy: we would periodically review the effectiveness of
their outsourcing strategy, assess how well it meets their sustainability and quality
goals, and make adjustments based on performance data and evolving business
needs.
GLOSSARY

BCI: Better Cotton Initiative is the largest cotton sustainability

programme in the world.

Cost efficiency : is about spending less money than you make .

Insourcing: is the assignment of a project to a person or department

within a company rather than to a third party.

Outsourcing: is the business practice of hiring a party outside a company to

perform services and create goods that traditionally were
performed in-house by the company's own employees and staff.

Recycling: is the process of collecting and processing materials that would

otherwise be thrown away as trash and turning them into new
products. Recycling can benefit your community, the economy,
and the environment.

Sustainability: consists of fulfilling the needs of current generations without

compromising the needs of future generations, while ensuring a
balance between economic growth, environmental care and
social well-being.

Supply chain management (SCM): is the monitoring and optimization of the

production and distribution of a company’s products and
services.

Technology proficiency: is the ability to use technology to communicate effectively and

professionally, organize information, produce high-quality
products, and enhance thinking skills.
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