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Issue Ezra has only a few US stores and is considering further US expansion. The issues to be considered include whether or not expand, and how to go about expanding should that avenue be followed. Analysis There are many factors influencing the expansion decision. Retail fashion is an extremely competitive industry with many players, most of whom are established brand names with a national presence and high advertising budgets to make sure consumers are aware of them. Sara’s policy is to do as little advertising as possible.
But this will limit the rate of expansion, or limit the growth in sales volume at the new stores as word of mouth spreads. Sara’s main competitive advantage is its lean just in time delivery system that allows their stores to have the newest and hottest fashions on their shelves before their competitors. This system can work, but it will limit how quickly the company will expand in a market the size Of the united States. Sara’s zero-inventory system poses specific challenges to expansion ; namely that manufacturing and logistics networks must grow at the exact same rate as the company.
To aide with this the company has a state-of-the- art information infrastructure to ensure a tight linking between retail sales and manufacturing. EZRA is a known brand and even though it does not advertise its brand name can be leveraged for expansion. Press coverage for the upcoming stores will make people start talking and result in growing the anticipation of a new store opening. Additional manufacturing and distribution centers will be required for the united States. Since Sara’s goal is to get its clothes to the market fast, manufacturing centers will need to be close.
Apparel manufacturing is labor intensive, however the costs can be minimized by the building of manufacturing centers in South America with distribution centers positioned in the IS. S. Ports. Recommendations Ezra should expand into select U. S. Cities – Los Angels, Washington, Chicago, and Florida. This expansion must match the ability of its existing supply chain to provide what is needed in the stores. This expansion Will provide better information for future expansions. Ezra should advertise initially to reach its customers.
Magazine articles will rate awareness of the brand which will be spread by word of mouth. Ezra must ensure that its stores are still located in the main fashion districts of each city it will expand in.. Sara’s strengths are the fast speed that it brings a new product to market and the way it is able to control its costs by not allowing inventory buildup and using information technology to quickly adapt to changes in the market. The company must keep doing thighs the way it did before its expansion to make sure that it does not lose its competitive advantages.