Case Analysis of Ss

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A better future comes from stricter cost control —— analysis & solutions for SS dilemma A report by Team Zinga Better future, stricter cost control Team Zinga presents Abstract: Sloan Styles (SS) has been making a low profit since 1994. We conduct cost diver analysis, value chain analysis, and strategic analysis in our report. Accordingly, we give our advice on cost control, value chain optimizing and long term strategy. For cost control, we build up step toll system and make styles quota to control the fixed overhead. For value chain, we bring in electronic system and direct model to raise efficiency. Moreover, we improve the payment system and outsource some products to overseas factories. For future strategy, we recommend SS keep its house brand and use “mass luxury” positioning to open new markets. Key Words: Cost control, Step Toll System, Styles Quota, Value chain, Mass luxury 2/ 12 Better future, stricter cost control Team Zinga presents Background and Problems: Sloan Styles (SS) is a New England-based, operated supplier of private label women’s fashion wear founded in 1975. After reaching a peak level in 1993, SS’s profit has been below that for the following 5 years. And its new line of branded apparel started in 1997 wasn’t as successful as expected. Cost Driver Analysis: Firstly, we analyze the profitability by customer, by product and by order size. After calculation, we can see that the CMs of different customers are all near 30% but the profitability varies from over 16% to -6.5%. Especially Nordstrom, it is SS’s second largest customer but it is losing money. And among the top 7 customers, Orvis’ loss rate is the largest.(See Appendix Exhibit 1)As for products, only jackets are earning positive profits (7%) while the others are losing money, especially tops, which earn a -12% profit. (See Appendix Exhibit 2)As to order

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