Now, lets analize how the pieces of a fashion business fit together according to what we studied in previous lecture about Business models. The way company manages:

  • customers
  • communication channels
  • distribution channels
  • supply chain
  • how they build the revenue model

Managing BMs based on four pillars – Customers, Product offer, Infrastructure, Revenue model.

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First pillar, Customers (Who are your customers?) The value proposition (exclusivity, value for money, fashionability, status…) that is also identifying the segment of clients targeted by that value proposition (affluent, fashion victims, connoisseurs…)


Second pillar – Product Offer (What do we offer to a certain customers?), that is delivering a certain value proposition( timeless/iconuc leather goods, fast fashion apparel, designer shoes, fragrances…)


Infrastructure (How do you manage supply/value chain?), the third pillar, the way the value chain is organized (degree of vertical integration, role of key suppliers, international scope)


Revenue model, last pillar, answers the question How company will earn income and generate profits? (margins versus volumes, licensing fees…)


Every pillar has its building blocks

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Market segments and BM from bottom to top:

  • Mass Market: Mass Basic Retailers and Mass Vertical Retailers
  • Premium: Premium Brands and Fast Premium Brands
  • High End: Luxury and Fashion Designer Brands

Value proposition is defined by:

  1. Price
  2. Creativity
  3. Exclusivity
  4. Image

…and level of defining aspects goes higher from bottom to top segments ↑

image

Responsiveness of supply chain to fashion trends and seasonality goes like that:

Classic → less responsive and Fashion → more responsive. The graphic shows Luxury brands, Fashion designer brands, Premium brands and Vertical retailers in the mass markets, which organizing their four pillars for having a sustainable positioning and an income flow.

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