Name: Ignacio, Khervin F. Date: Dec.
3, 2023
Strand & Section: BSOA – 2A Prof.: Sir. Mark Raffy Bacay
Case Analysis
I. Introduction
Memo Fashions Limited was incorporated on April 24, 1984. It is a clothing and lifestyle
brand for men and women, offering elevated casuals made for life’s everyday hustle. Their
mission is to provide accessible, durable, and high-quality products designed to be used and
loved for a long time. They believe in the form, function, and flexibility of well-designed,
well-made everyday wear. They give you pieces you can wear whenever and wherever.
II. Time Context
The company has been dealing with the ongoing problem of decreasing profitability as a
result of competition for a while now. The store is located in the 1st Floor Mall of Asia
Complex, Jose W. Diokno Boulevard, Pasay, 1300 Metro Manila.
III. Viewpoint
Person or group of persons who can solve the problem:
Bernie H. Liu (Owner)
Employees
IV. Central Problem
The central problem lies in the company's inability to generate profits, primarily due to the
intense competition within the industry. This lack of profitability hinders the company's
growth and sustainability.
V. Objectives
The objectives for addressing the central problem are to:
A. MUST Objectives (Urgent and Critical)
To be able to implement strategies to increase sales and market share.
To be able to improve pricing strategies to maintain profitability while remaining
competitive.
To be able to enhance customer satisfaction to retain existing customers and
attract new ones.
B. WANT Objectives (Long-Term and Aspirational)
To be able to become a recognized leader in the industry.
To be able to establish a strong brand reputation and loyal customer base.
To be able to create a positive and motivating work environment for employees.
VI. Areas of Consideration
Several factors contribute to the central problem of declining profitability due to
competition. These factors can be analyzed using SWOT analysis.
Strengths
Strong brand reputation: A strong brand reputation can help to attract and
retain customers, even in a competitive market.
Loyal customer base: A loyal customer base is more likely to continue doing
business with a company even if its prices are higher than those of its
competitors.
Experienced management team: An experienced management team can help to
develop and implement strategies to improve profitability.
Weaknesses
High production costs: High production costs can make it difficult for a company
to compete on price.
Limited product portfolio: A limited product portfolio can make it difficult for a
company to attract new customers or retain existing ones.
Weak online presence: A weak online presence can make it difficult for a
company to reach new customers and compete with online-only retailers.
Opportunities
Expand into new markets: Expanding into new markets can help to increase
sales and revenue.
Develop new products: Developing new products can help to attract new
customers and retain existing ones.
Increase online sales: Increasing online sales can help to reach new customers
and compete with online-only retailers.
Threats
Increased competition: Increased competition can put pressure on prices and
profits.
Economic downturn: An economic downturn can reduce consumer demand and
make it more difficult for companies to compete.
Changes in consumer preferences: Changes in consumer preferences can make
it difficult for companies to sell their products or services.
VII. Alternative Courses of Actions
A. Solution 1: Enhance Marketing Efforts - Recognize the features and benefits of your
product or service for potential buyers.
Advantages:
Increases brand awareness and attracts new customers.
Establishes a strong brand identity and differentiates the company from
competitors.
Disadvantages:
It takes time to see significant results.
Requires significant investment in marketing and advertising
B. Solution 2: Optimize Pricing Strategy - The process of finding the optimal price point
for a product or service.
Advantages:
The company can maximize its revenue and profit margins while remaining
competitive in the market.
The company's products or services can attract customers.
Disadvantages:
Can lead to customer dissatisfaction and a loss of market share.
It could erode long-term brand equity and reduce profits.
C. Solution 3: Cost Leadership Strategy - A business model that focuses on reducing the
cost of production and offering the lowest priced products to outperform competitors
and gain market share.
Advantages:
The company can generate higher profit margins and improve its financial
position.
Allows the company to offer competitive prices, attract more customers, and
gain market share.
Disadvantages:
Could result in standards for services or product quality being compromised.
Cost-cutting initiatives may have a negative impact on employee morale and
motivation, which could lower engagement and productivity.
VIII. Recommendation
In order to overcome the obstacles to profitability brought on by intense competitors, the
company should adopt a cost leadership plan based on the analysis and the prospective
benefits. The business can lower its cost structure and obtain a competitive edge in the
market by simplifying administrative expenses, establishing advantageous agreements, and
improving operations.
IX. Plan of Action
Cost Structure Analysis:
Activity: Conduct a comprehensive analysis of the company's cost structure to
identify areas for potential cost reduction.
Responsible Party: Finance and Operations Teams.
Market Research and Product Optimization:
Activity: Conduct market research to identify cost-effective product/service
adjustments that align with customer preferences.
Responsible Party: Marketing and Product Development Teams.
Customer Communication Strategy:
Activity: Develop a clear and transparent communication strategy to inform
customers about cost efficiencies and any product adjustments.
Responsible Party: Marketing and Customer Service Teams.
Employee Feedback Mechanism:
Activity: Implement a feedback mechanism to gather insights from employees
regarding the impact of cost-cutting measures on morale and motivation.
Responsible Party: Human Resources.
Reinforce Company Vision and Values:
Activity: Communicate and reinforce the long-term vision and values of the
company to maintain employee motivation and commitment during the cost-cutting
process.
Responsible Party: Leadership and Management Teams.
References:
https://find-and-update.company-information.service.gov.uk/company/01810877
https://memofashion.com/pages/about-us
