Choosing a Location for a Startup Company Assignment

Choosing a Location for a Startup Company Assignment Words: 1504

Assignments are to be submitted using student ID numbers only; do not include your name. Please note that assignments that include names or that do not have the box below checked will not be graded. Please check the box and record your student number below to indicate that you have read and abide by the statements above. Professor Name: Richard Florida 1001031 723 Choosing a Location for a Startup Company Dear DISC Founding Team, Thank you so much for allowing me to develop your location strategy.

In this paper, I’m going to talk about NYC, Milan, San Francisco and Toronto as he optional locations of your company’s head office, design studio, and retail spaces including opus. 1 l. Identify Optional Locations When choosing a location for a startup company, we usually begin with the places: 1) where the company’s founders are familiar with; 2) where the company’s target customers widely distribute in; 3) where the company’s main competitors have exposure to. . 1 Familiar Locations A location which you are familiar with is crucial to your business. In a familiar location, you know the demographic com position and further the target customers well, have the basic sense of the rental and labor cost, and eve stronger access to industrial and social resources, I. E. The designing, marketing, and distribution. Without living in a place for a certain period, it is hard to say we are familiar with it.

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Brief your background: three alums of the University of Toronto; one with a design background has worked for major labels in NYC and Milan for seven years; another is a Rattan MBA with five year experience of being a corporate strategy consultant; the third majored in computer science and has worked with social media companies, including Twitter in San Francisco. 2 According to above, we initially identified four potential locations: NYC, Milan, San Francisco and Toronto. You either studied or worked in the four cities for several years so that are familiar with these locations. . 11 Target Customers Your company is selling high-end t-shirts and casual wear, and defining the products as the “uniform for the creative class”. 3 Creative class is defined by the occupations that people have, and is divided into two components: super- creative core of the creative class and creative professionals. Super-creative core of the creative class includes scientists, engineers, professors, poets, novelists, artists, entertainers, actors, designers, architects, nonfiction writers, editors, cultural figures, think-tank researchers, analysts and other opinion makers.

Creative professionals work in knowledge-intensive industries, I. E. High-tech, the legal and health care professions, financial services, and business management. 4 To pursue the target customers, we should take the industry distribution into consideration when assessing the optional locations. 1. 111 Competitor and Example Given that you take James Peers as main competitor and would like to follow Wary Parser’s business model, let us take a look at these two companies individually. James Peers James Peers was founded by James Peers in 1996 with a head office in Los Angles, California ASSAI.

Today, the brand includes collections for women, children, men, home and a complete indoor and outdoor furniture collection. There are two distinctly wearable collections under the brand: Standard James Peers for high-quality basics and James Peers Los Angles ready-to- wear items. The latter collection, James Peers Los Angles, includes jackets, sweaters, pants and dresses. 5 Besides its head office in Los Angles, James Peers has a design center in West Hollywood, boutiques as well as retailers in and outside the United States.

Specifically, the James Peers Boutiques spread in 23 cities domestically (five in NYC, two in San Francisco) and 12 cities overseas including four in Canada (one in Toronto), six in Japan and two in United Kingdom. 6 James Peers has nearly 100 retailers allocated in 23 states in the United States and 60 retailers in 18 counties. Speaking of our optional cities, there are five retailers in NYC, five in Milan, three in San Francisco and six in Toronto. 7 Wary Parker Wary Parker is an American brand of prescription aware founded by Neil Blumenthal, Andrew Hunt, Jeffrey Raider and David Gigolo in 2010 with its dead office in NYC. The company’s positioning and objective: to creative boutique-quality, classically crafted aware at a revolutionary price point. 9 Most glasses with high-end fashion house brands are overpriced. Instead of designing and producing their own aware, the high-end brands (upstream) sell their rights to specialized companies (downstream) to do it all for them. The downstream companies design, manufacture and sell the glasses for astronomical prices to optical stores, and then pay royalty to the upstream companies for using their brands.

Then, optical stores double or triple the rice of frames and lenses before selling them to the customers. To provide high quality glasses with reasonable prices, Wary Parker designs its own brand aware in-house and sells to the customers online directly. NO royalty passed on to the customers. The company’s web-based sales channel cuts out the optical stores so that further reduces the price afforded by the customers. Wary Parker has seven stores and seven showrooms in ten states around the United States. There are four stores in NYC.

II Those retail spaces offer the customers the first-hand experience of the products and are a compliment to the online sales channel. Wary Parser’s contribution to the community and the environment makes its brand more distinguished. “Buy a pair, give a pair” – for every pair of glasses purchased, the company provides a pair to someone in need. There are estimated one billion people cannot afford their glasses which can increase their income by 20%. Wary Parker cooperates with non-profit organizations to ensure that each sale of its frames will give someone in need a pair of glasses. L Wary Parker is an only carbon-neutral aware brand. The company commits to reduce the environmental impact on every stage of its production and sales. 12 II. Location Assessment 11. 1 New York City NYC has been described as the cultural and financial capital of the world. 13 It is the most-populous city in the United States, with estimated 8,405,837 residents as of 2013. The people live in NYC are more than the combination of the people live in the next two most-populous U. S. Cities (Los Angles and Chicago). 3 As of 201 0, the city’s population consisted of 44% white, 25. 5% black, 0. 7% Native American and 12. 7% Asian. 14 NYC is a global hub of commerce and international business. The city is a major center for several industries in the United States including banking/ insane, retailing, world trade, transportation, tourism, real estate, new/ traditional media, advertising, legal services, accountancy, insurance, theater, fashion, and the arts. Medical research and technology, non- profit institutions, and universities are important sectors as well. 5 According to the creative class I introduced above, NYC is full of people with occupations defined as creative class. In other words, there are plenty of target customers in the city. However, given the high ratio of elites in each industry, ifs hard for a startup brand which focusing on high-end T-shirts to be recognized and pursued promptly. Moreover, the rental and labor cost of the super NYC is too high to afford, your company has secured and sufficient financing though. The last but not the least, your main competitor James Peers already established five boutiques and five retailers in the city.

To utilize the collective effect and to avoid the over-fierce competition, I suggest you set several retail spaces in NYC. 11. 11 Milan Milan is a universally acknowledged global capital in industrial design, fashion and architecture. 16 It is the second most populous city in Italy with a population of 1. 3 million. 1 7 Along with NYC, Paris, and London, Milan is graded as one of the fashion capitals of the world as well. 18 Many of the most famous Italian fashion brands, such as valentine, Gucci, Versa, Pravda, Airman and Dolce & Cabana, have headquarters in the city.

Numerous international fashion labels also operate stores in Milan. Considering Milan as an assembly point of world class traditional high-end fashion brands, I would recommend that your company set a design studio there. Your founder who used to work for the major labels in Milan might have strong connections with the local design talents. Talented people are the engine of the design and innovation. Locating in the fashion capital will enable your design studio follow the main trend closely. 11. 111 San Francisco San Francisco is a leading financial hub and the cultural center of Northern California.

It is also the second major city in the United States after New York City with estimated population of 837,442 as of 2013. 19 San Francisco has a diversified service economy including financial services, tourism and high technology. 20 As of 2012, approximately 25% of workers worked in professional business services; in government services; 15% in hospitality and leisure; 11% in health care and education; and 9% in financial activities. San Francisco is also a popular tourist destination known for its cool summers, fog and steep rolling hills. 21 Obviously, as compared to NYC and Milan, San Francisco is not that trendy.

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