Key_Success_Fector

Key Success Factors Key success factors are crucial compositions of companies’ competency on which companies’ strategies and daily activities should be based. Each industry has its own set of KSFs selected according to main characteristics of the industry’s products and the requirements customers have. Therefore, for different industries key success factors could vary greatly from one to another. For instance, innovation is sure a key success factor for PC manufacturing industry while it is certainly not necessary for retail industry. Additionally, even if two companies are in the same industry, they are likely to have different preference when choose which KSFs they will focus more on in order to become more competitive due to their individual differences. In today’s business world, having the ability to find the most suitable KSFs for the industry a company is in is becoming more and more imperative for business to win in the competition. In order to find out our industry’s KSFs, we discussed in details about in which way children’s garments companies could create value to the customers and what the most powerful weapons are which lead companies to the world of success. For our industry, children’s clothes manufacturing and retailing, we consider these four things to be our KSFs--quality, price, style and service. First of all, the most fundamental concern of customers when they consume children’s clothes is quality. Children are more vulnerable than adults. Therefore, customers are stricter to the standard of quality of children’s clothes than to that of adults. Although one recent research in Shanghai shows that 90% of parents who are born in the 1980s concern most about whether the design of children’s clothes is fashion or not, as a ethical company, we should always put customers’ benefit in the first place (“Quality,” 2011). On the other hand, the price of a product is a major concern of manufacturers. In 2010, Guangwei, Maozhu, and Wangui concluded, “a change on sale price per unit of a product is the most direct and obvious factor which can affect profit of the product” (p. 75). According to this rule, competing in price is one of the most common ways that companies use. Also, price is the second most important thing parents think about when they consume clothes so they are likely to switch to another company if the price of a company is too high. Another factor is that more and more companies start to pay attention on is the design of children’s clothes. Unlike the old days when good quality and low price are the only concerns, nowadays, children’s clothes are tend to be unique in style and modern in design because parents want their kids to be special and pretty. Take my aunt for an example, when she went out shopping for my niece, no matter how experience a dress is she will buy it at last as long as that dress fits my niece very well and she can afford it. On the contrary, companies whose products are lacking of personality are continuously losing their market share. Being able to create one’s own style and keep refreshing it becomes very crucial for a clothes company to develop. Last but not least, high standard service which is one of the most appreciate character of customers is also an important KSF. In China, you can always hear the saying that customer is god. This shows exactly how much a customer means to a company. When customers are shopping in your store, they are purchasing not only products but also delightful experiences. As Xiucheng, Huarui, and Ying (2008) concluded, “good service create a positive effect on consumers’ attitude, emotion, and behavior” (p. 1). According to this conclusion, high quality service does add value to companies’ image. Using the analysis above, we compared four companies in the children’s garment manufacturing industry, list each factors and rank them in order. Competitive KSFs Analysis Table | |Quality (Good) |Price (High) |Style (Unique) |Service (Good) | |BalaBala |1 |1 |1 |3 | |PEPCO |2 |2 |3 |2 | |ABC |3 |3 |2 |1 | |Wahaha |4 |4 |4 |4 | As you can see, in first row, it shows the quality of products of each brand. When making products, companies like BalaBala sets high standard requirements, from the use of cloth and cotton to the manufacturing process. Also, all of the companies choose to use new technique equipments in the processing stage. In the end, we check the quality of products with a high level requirement, any product that is not match the standard will be pick out. In one word, companies will do whatever we can to make sure that our products fit their customers’ expectations. In the Price row, BalaBala appears to have relatively high price. Since it provides high quality cloths, its cost is certainly higher than Wahaha which hold a low price to attract customers who consider more on the price part other than the quality and comfortableness of the products. As a result, its unit price is much higher than that of Wahaha. Also, when compared to other three companies which are also target at the middle-level families BalaBala’s price is still higher. However, it has the highest market share. According to a research done through China by TA Weekly (2011), “the top 10 children’s garments brands have a total market share of 41.34% in which Adidas and Nike are No.1 and No.2, BalaBala is No.3” (p. 96). The reason why they can keep a large market share while having the highest price is because they managed to attract customers’ attention by the next factor we are going to talk about. This factor is design style which separates Wahaha from the rest of the companies. When it comes to clothing design, companies will hire the best designers they can even if it means the highest payments. The idea is to give the cloths an image of young, fashion, unique and confidence. Nowadays, children want to be special. They always want to have things that show their personality and distinct themselves from others and so are their parents. The parents hope that their child could stand out among all the other kids. Therefore, successful companies’ products will give them what they want. The last factor is service. Some people may not consider service as a key factor to a manufacturing company because they think that as long as the product is good customers are willing to buy it. This may be true decades ago but in today’s fierce competition customers are facing a numerous market with thousands of choices, sometimes there may be only slightly difference in the product. At such condition, customers always tend to go to the one with better service. Companies, for instance ABC and PEPCO, pay much attention on its service and they have a very good reputation among customers. On the other hand, BalaBala and Wahaha are not so good at it. My roommate told me once she went BalaBala’s store to buy her little niece a dress, salesperson treated her very bad. When my roommate ask her questions about what size her niece who is 6 years old should have and other information like this, the salesperson appears to be very impatient. And when she left without buying any cloth, she heard the salesperson complained in a lower voice. As a result, my roommate will probably choose another brand other than BalaBala when she buys children’s clothes now. Although problems like this may only exists in very few of BalaBala’s many stores, it probably will hurt BalaBala’s reputation anyways which leads to negative effect on its sales. Therefore, companies should continue to improve our service as a way to create value to customers. Strategic Map and Analysis [pic] In this map, BalaBala, PEPCO, and ABC make up a strategic group. This is because they all set their target market as middle-class families which are willing to pay more money for superior quality while Wahaha aim at lower level customers who care more about the price than its quality. The size of the circle represents the market share of each company. In this map, we don’t see much competency difference over BalaBala, PEPCO, and ABC because there is not much difference in quality between us and other three companies. So we could use another strategic map to show how they perform in the style part. [pic] This map shows how the style affects the industry. Wahaha falls out of the strategic group comprised with BalaBala, PEPCO and ABC because it aims at provides its target customers with common cloths with low price. Furthermore, as we can see in the map, there is a potential market where middle unit cost and high designed children’s clothes are provided.