Tweed industry – The Shepherdess

Tweed industry – The Shepherdess 13

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Thesuccess of every business organization is hinged on the ability ofthe, marketing team to penetrate the market and maintain its existingmarket share. Such a bold step is taken despite the competition fromvarious companies within the same industry. The tweed industryrevolves around the cloth hand woven by the islanders whose homes arelocated in Scotland. This form of analysis revolves around theestablishment of various sources of output in order to match otherforms of competition within the industry.

Overthe years, the inhabitants of Lewis and Harris have participated inthe clothing industry through the provision of hand-woven materialsin order to remain relevant in the competitive industry. Even in theface of industrial revolution, this industry has remained relativelyactive in its choice of the traditional manufacturing concepts. Assuch, Lewis and Harris are known for their exemplary manufacturingpolicies that have played a major role in ensuring that they survivethe tough economic times and expand their operations beyond thecurrent operations.

Themarketing strategies in a company go a long way in establishing thenature of success achieved over the years. Therefore, the marketingteam must show a high degree of flexibility and adaptation in theirquest to maintain their relevance in the long run. In this regard, itis important to identify strategies that will ensure success. Thismove can be achieved in various ways. The industry has to beextensively analyzed to determine the niches that can be filled bythe company. Additionally, strategies or conceptual frameworks ofoperations have to be established to ensure that the success of theorganization is provided the utmost importance. The success orfailure of a business organization is therefore solely dependent onthe management team and their analysis of the prevailing market andindustry conditions. Moreover, the ability to identify existingopportunities is also an important concept in the success of businessorganizations in a competitive industry.

Tableof Contents

Situation Analysis 4

Marketing Summary 5

SWOT Analysis 5

Strengths 5

Weaknesses 5

Opportunity 6

Threats 7

Competition 7

Services 7

Keys to Success 8

Critical Issues 8

Historical Results 8

Macro-environment 9


Political 10

Economic Factors 10

Social Factors 11

Marketing Plan 12

Marketing Strategy 12

Marketing Objectives 13

Financial Objectives 13

Target Markets 17

Positioning 17

Strategy Pyramids 17

Marketing Mix 17

Product 17

Price 18

Place 18

Promotion 18

Linking Expenses to Strategy and Tactics 20

Controls 21

Implementation 21

Marketing Organization 21

Contingency Planning 22

Reference List 23


Situation analysis involves ananalysis of the industry through the identification of variousvariables that are likely to affect the operations of a businessorganization within a specific industry (Clarke,2005). It iscomposed of various components such as the identification ofstrengths, weaknesses, opportunities, and threats existing in abusiness organization. Additionally, the situation analysisidentifies competition within the industry as well as the servicesprovided by such a business organization. The keys to success and howsuch factors have been identified and implemented by the corporationsare also an important concept in business organizations.

This section of the industryanalysis also provides a historical background on the performance offirms within this industry. Moreover, the prevailing trends ofperformances are also taken into consideration. Finally, the microenvironmental factors influencing the operations of the businessentity are also taken into consideration since they are correlatedwith the success of all business organizations (Clarke, 2005).


The marketing strategies ofbusiness organizations form one the most important areas ofoperations in the success of a business. As such, the management andsenior administrators lay massive emphasis on the success of suchbusiness organizations. Shepherdess has been undergoing a massivetransformation following period of under-investment and poor salesrecords (Hunter, 2001). Currently, through the integration of variousdesigns, the production rates have sourced to double the amountspreviously available. The marketing strategy has primarily focused onthe inclusion of more than a thousand designs. The industry isswitching from the traditional dull duns to brash patterns that arecharacterized with red, yellow and pink colors. The marketingobjectives are therefore emphasizing the need to portray Harris Tweedinto products that can be associated with the younger generations. Assuch, it is common to identify the company’s products with young,stylish, and new generational products. All the major changes beingmade by the organization focuses its efforts in ways through whichthe products of the company can remain competitive in the long-run.


The Shepherdess boasts ofnumerous strengths in the Tweed industry, which gives it competitiveadvantage over its competitors. First, Shepherdess produces highquality products that cannot be matched. Additionally, the companyboasts of producing a variety of products. The other strength for thecompany is that it has a brand name that it is associated with. Thebrand is unique and loved by many consumers. Further, the quality andbrand name that Shepherdess has is protected within the law by an Actof Parliament and this adds to the overall perceived valueproposition.


A critical weakness for theShepherdess products is that they are pricier than most of thecompetitive products. The company is not a stand-alone and this seemsto be a weakness in the industry. Shepherdess depends on thirdparties to sell their products to the end consumer. The company hasnot invested intensively in the various promotional activities forits products. Shepherdess is known to have a very poor record inregards to the promotional activities and this can be interpretedthat the company is taking market demand for granted.


There is a lot of progress withinthe Tweed industry and people are embracing technology. Shepherdesscan consider developing and improving website. The improvementsshould be in terms of the design, the products that they are offeredand also improve some of the features. By having these improvementsintegrated the company can consider starting online sales (Hunter,2001).

Further, the company has notexploited a virtual reality-shopping feature something that can beinteresting and entice the new customers. Further, Shepherdess canconsider using a sign-up to mobile messaging apps like the US foundedapp Snap Chat to have the consumers interact and even provide themwith behind the scenes footage of the various brands in existence.Shepherdess can consider incorporating more of digital technology intheir stores for a more stimulating in store experience and alsoremain competitive in the market. Shepherdess should consider givingtheir customers a chance to make orders on the products of theirchoice and have them delivered home. The company should considerusing digital platform as it has not effectively exploited the avenueand this include promoting the brands ethical practices that willultimately facilitate the equity of their manufactured brands. IfShepherdess would consider venturing in online sales, there is needfor it to collaborate with some online giants like Amazon as a way ofensuring that the checkout process remains seamless anduncomplicated. This encourages repeat purchase and customer loyalty.

The company can also overcome theshow rooming trend that is affecting the Tweed industry and this itcan do by ensuring that the sale assistants are available and caninstantly access the products online thus reducing the potential lossin sales. Shepherdess can consider venturing into new markets andthis is to entail developing new lines that target the older marketthat are already in place. Some of these markets are tech savvy andcan easily respond faster and better when a digitally orientedbusiness model is adopted.

Shepherdess has not tapped invarious promotional activities among them including the celebrityendorsement. Having celebrity endorsement is particularly importantwhen getting to the new markets as it can help the company tosucceed. Shepherdess can also consider getting into a collaborationwith some of the luxury brands to appeal to the consumers that arewilling to mix brands at the different contrasting market levels.


As a company that majorly focusedits production on the hand-woven materials, the corporation facesstiff competition from innovative systems that have massiveproduction capacities. As such, the hand-woven products might havelonger production channels before the final product can be obtained.However, through the integration of technology in the productionprocess, several companies are in a position to increase theirproductivity thereby posing a threat to the existence of Harris Tweedand its operations.


The Tweed industry has quite anumber of companies and this means that the competition is stiff.Tweed is produced globally but it is very laughable to have all thetweeds produced globally being compared to that of Shepherdess. Thelack of comparison of every other tweed to that produced byShepherdess is based on quality a quality that is not only verbalbut in real sense tangible (Hunter, 2001). Fortunately, not everytweed producer can claim to be competing with that of Shepherd. Themain competitor is Donegal Tweed of Ireland. The other competition isfrom a combination of other small English tweed producers thatinclude Porter &amp Harding, Lovat Mill, Robert Noble, Harrisons ofEdinburgh, and Johnstons of Elgin. Nonetheless, none of the Englishtweeds aforementioned can offer serious competition to Shepherdessgiven that Shepherdess is an established brand that has beenconsistent, credible and clear in its mandate to the consumers(Hunter, 2001).


Thecompany offers a range of products and services including venturingin designing and making of wide range of clothes like:

  1. Dresses

  2. Waist coats

  3. Skirts

  4. Bags

  5. Jackets

Keysto Success

One of the critical successes forthe company is its ability to create a brand and thus have a historyas it is currently known. Having operated for a very long time, thecompany has created with it a brand that is well known and one thathas maneuvered thorough the different tough economic times, which areinherent in the business environment.

The other success of the businessis its ability to create and build extensive customer trust over along period. Customer loyalty has boosted the revenue streams for thecompany and profits have skyrocketed over the period. Production ofquality products that are unique and unmatched has been a key to thesuccess of the company. Additionally, the company has also been ableto maintain the production of large variety of products.


Thecritical issues in regards to the industry include:

  1. Quality of products

  2. Brands

  3. Building of Customer Loyalty and maintaining customer base


Tweed is unfinished woolen fabricwhich has a significant unpleasant handle to it and mostly it isrough to touch and feeling. The completed cloth can either be plain,have twill weave, support distinctive examples, (for example, theeffectively unmistakable Herringbone design), or can convey differentchecks and tartans, for example, the exceptionally acclaimed Princeof Wales check and the Black Watch tartan.

Nobody recalls the accuratebeginnings of tweed all that can be said in regards to it is thatthis mind-boggling cloth has been delivered by various pockets ofindividuals in the United Kingdom and Ireland since ever. Warmth,water resistance, and toughness are the key qualities of tweed thatroutinely settle on it the ideal decision for casual outerwear forcomfortable high society interests, for example, chasing, shooting,and so on. Be that as it may, as is valid for whatever else one canconsider—not all tweeds are made equivalent. There exists onespecific brand of tweed that can without much of a stretch be termedas the ruler of every one of them and it is basically known as—Wait!Drum rolls please!— Harris Tweed (Hunter, 2001).

Harris Tweed, likewise called ClòMór (Gaelic for `The Big Cloth`) by local people, has been wovenutilizing neighborhood wool by the islanders on the OuterHebrides—Isles of Harris, Lewis, Barra, Benbecula, and theUists—since time immemorial. The cloth has dependably been solelyhand-spun and hand-colored on the Isles utilizing conventionalprocedures and gear. Despite the fact that whatever remains ofcloth-creating Scotland swung to the more refined and financiallyreasonable present day generation forms amid and after the IndustrialRevolution, the Outer Hebrides held their customary ways.

Until the middle of thenineteenth century, the cloth was delivered for minimal more thanhome use or for the nearby market. Nonetheless, in 1843, LadyCatherine Herbert, wife of Alexander sixth Earl of Dunmore, was themain individual to see the huge potential interest and attractivenessof the cloth. Taking off at a business digression starting here,Harris Tweed rapidly turned into the fabric of decision for thenobility and the landed upper class achieving a crest creation figureof 7.6 million yards in 1966 (Hunter, 2001).

The Tweed has seen numerous goodand bad times and highs and lows from that point forward. The startof the present century even saw alerts blown to purchase the clothbefore the creation was for all time suspended because of lowrequest. Be that as it may, late decades have seen an upsurge in theinterest that can be termed nothing not exactly phenomenal.


A PESTLE analysis providescomprehensive analysis of the six critical macro level factors thataffect the business and decisions made by the business (Team, 2013).


For any business, the long-termdecisions reached at and the political environment affects thestability of the business (Kolios and Read, 2013). Given thatShepherds is within the international market mainly within Europe, itis critical that the company monitors the potential threats likebarrier to entry, the dynamic nature of the foreign exchange and thepolitics that is likely to affect the success of the company. A casein point is the recent reports that concerned the falling of sterlingpound against some of the currencies including Euro have effects onthe financial assets of the company.

The demand for wages mainlyfacilitated by the political class that have been witnessed acrossEurope especially United Kingdom will definitely affect Shepherdess.There have been protests to increase the minimum wage. Accepting payrise by Shepherdess will definitely have impact on its finances andeven affect the other activities of the company like the budget forstore expansion or even hamper any ventures into digital developmentin the stores. Setting of safety deficiencies has been encouraged inmost of the companies dealing with cloths and tweeds. This wasparticularly necessitated after the collapse of Rana Plaza factory inBangladesh. To fix the problems, there is requirement of gettingloans or financial facilitation to get proper commercial conditions.This definitely affects the books of Shepherdess.


One of the economic factors thataffect the Shepherdess is the reported decrease in inflation thatmoved from 1.5% to 1.2% and may have negative effects on Shepherdess.The consumers who are not moved by brand loyalty may opt to go formuch expensive tweed producers and other competitors of Shepherdessin the market given the financial freedom.

The global financial recession of2008 had effect on consumer affecting mainly the younger consumerswho are between the ages 15 to 24. Through the global recessions, theconsumers choose to save rather than spend.

Further, the reports that havebeen released suggesting that there has been economic recovery inEuropean countries have led to surge in online shopping. The sales ofShepherdess are forecasted to increase twofold by the year 2020.

There are also variable cost inthe market that will affect the company. It has been reported thatthere is increase in materials, transportation and labor costs makingthe tweed products and value brands like those made by Shepherdess tobe mainly vulnerable.


Over the past few years,Shepherdess has gained enormously from the rise in number of footballfans with most events being held during the cold weather or winter.Also, owing to the increase in quality of fashionable designs or thereduced economic downturn, consumers are increasingly buying into thevalue segment with a large percentage of the shoppers going for valuesegment. Given the growing and diverse consumer base that Shepherdessdeals with, it has to consider integrating the other attributes andfactors that will entice the consumers to their stores given thatthey will no longer peg their expectations on price alone.

Regarding population shifts,Shepherdess need to be keen enough on the shrinking demographic ofmost of the consumers of its products, the age brackets (15-24 yearolds) given that it is estimated to reduce by nearly 6% in the nextdecade. This will have effect on the volume of sales that are made.The ageing population in the United Kingdom is also expected to be anopportunity and threat for Shepherdess. The aged who are consideredto be above 60 years of age are anticipated to be more than thechildren who are aged below 15. This will eventually make theretailers like Shepherdess to adjust and have proper overhaul ontheir marketing mix for them to meet the needs of the older consumerswho even insist more on quality of the products that they purchase.

Arising from the fact that womenin UK spend more than double the amount on clothing compared to menand more of women also tend to prefer online shopping, Shepherdesscan tailor its process to cater for the changing dynamics.

The other factor is theshowrooming trend which is increasing daily. According to this trend,the customers who often desire the conventional brick and mortarexperience browse for products in the store and then go shopping forthem online. The behavior is mostly ideal and known to the youthconsumers who mostly embrace the online purchases mainly for socialand experiential reasons.

Therefore, the likes ofShepherdess have to provide to the customers shopping andentertainment experience that they can get through the stimulatingdigital technology. Further, in regards to the preferred gadgets anddevices that consumer use for shopping, there is a surge in thenumber of consumers that use tablets and mobile devices. Lack ofrestriction regarding the transportability and simplicity of theshopping is one factor that encourages individuals to use the deviceswith most of the gadgets having the click and collect option.


Shepherdess employs differentmarketing strategies. The strategies are divided into two maincategories including short-term and long-term strategies(Kavaratzis and Ashworth, 2008).Shepherdess is known to have a well-crafted relationship marketingactivities. The company boasts of creating and running a good swatchservice. Often, expensive clothes are not advisable to buy by lookingat a picture on the internet. Usually, one looks forward tointeracting with the cloth, touch it, feel the weight, see the colorsand if possible sit next to the wearer.

Given that there are no outletsthat deal with the activities, one has to rely on dealing with theswatches of the cloth prior to making decision on the place to orderthe cloth for a certain length. Swatch services are often offeredthrough third parties that carry the tweed. Nonetheless, a couple ofthem are expensive and most cases discourage ordering of theswatches. The company needs to give the third parties incentives toensure that the swatches made for them are less expensive or evenstart a swatch service itself and this is done through pointing ofthe third party from where the cloth is ordered.

In the long-run, Shepherdconsiders real estate investment. Consideration of the real estateinvestment is done through identification of the key areas and citiesall over the world where the demand for the products are viable. Thishelps the company to forecast the market situation and build theiroutlets. Having the investments provide the company with two majoradvantages. First, none of the third parties that carry the productsof Shepherd does so exclusively, instead, they carry also theproducts of the other competitors. Therefore, the third parties havevery limited space to carry the Shepherdess’ product varieties andnot the whole offering.

By Shepherdess having its outletwill ensure that there is increase in the offerings and this will inthe long-run translate to higher sales and profits. Additionally,having company owned and fully and entirely run outlet is conceptthat integrates well with the perception that consumers have in themarket about Shepherdess being high end product. Through the outlets,the company will minimize the issues and problems such as having theconsumers get to third parties to have to look and shop for what isconsidered as top quality.

Additionally, Shepherdess createda geographic segmentation plan. It makes no sense to ship anexpensive product to a country where most of the individuals areputting on tees and shorts in most seasons and durations of the year.Undoubtedly, there will be sales but of great sense is to establishwhether the sales that are made justify the expense that is borne onmost of the distribution channels. The countries or cities that havecolder climatic conditions and a good number of individuals withsufficient purchasing power are greatly considered by the company.


The Mission of Shepherdess is toprovide full line of products and services for the tweed community.Shepherdess promotes latest designs and fashions made from tweeds.


The main financial objective ofShepherdess is to increase the shareholder value in the market by 15%every year.


New Decisions Available

Functional Areas Emphasized




Set prices

Doing adverts

Public Relations

Sales Forecast vs. Production levels

Marketing plans

Income After Tax $ = 2,605,026

Awareness % = 0.15

PR % =0.09

Sales volume (Volume) =44,000





Income After Tax $ = 918,080

Awareness % = 0.25

PR % =0.10

Sales volume (Volume) =11,350

Distribution % = 0.50



Production Efficiency


Bonds issue

The Company Operations Management and


Income After Tax $ = 2,183,320

Awareness % = 0.26

PR % =0.11

Sales volume (Volume) =12,400

Distribution % =0.50

Quality % = 0.75

Debt $=400,000


2nd Product Launch

1st Product Redevelopment



Product Development




Income After Tax $ = 6,655,955

Awareness % = 0.27

Sales volume (Volume) =66,200

Distribution % =0.50

Quality % =75


Income After Tax $ = 6,655,955

Awareness % = 0.30

Sales volume (Volume) = 66,000

Distribution % =0.50

Quality % =60


Maturity of Bonds

3rd Product slot



Waist coats and Jackets

Income After Tax $ = 5,810,391

Awareness % = 0.28

PR % = 0.11

Sales volume (Volume) = 31000

Distribution % = 0.50

Quality % =0.75

Skirts and Dresses

Income After Tax $ = 4,710,591

Awareness % = 0.30

PR % =0.10

Sales volume (Volume) =15,000

Distribution % = 0.50

Quality % = 0.60


The level of competition for anybusiness is gauged by the position of the business in regards to thecompetition of the company. Notably, a critical point for the companyis the products that they offer and normally the products have to bebetter than what is offered by the rest and thus have to remaincompetitive than the other products.


According to Kotler and Amstrong(1996) marketing mix refers to a set of controllable tacticalmarketing tools including product, price, place and promotion thatmost of the firms blends to produce response it needs in the targetmarket.


The product quality that isproduced by Shepherdess is unique and unmatched in the market. Thevarious products that offer competition just comes close to it butmatching the quality of Shepherdess is something that is yet to beachieved in the market. There is intense competition in the market inregards to the variety of tweeds that are offered but those fromShepherdess still stands out. Shepherdess still offers the bestproduct variety of tweeds in terms of the cloth designs and the clothweights as compared to any of the competitors. The company offersmore than 4000 pattern and color combination of tweeds. The featuresas well as the size offerings of the tweed by Shepherdess is stillabove board and offers the company a competitive edge over the rest.The brand name of Shepherdess is something that nobody can dream ofmatching in the near future. The brand and the name remainsoutstanding.


Price is made up of elements likethe list price, the discounts, allowances, the payment period, andthe credit terms. Even though the pricing of Shepherdess is quitehigh to some extent in comparison to the other products from thecompetitors, the perceived value that the consumers get from theproduct justifies the price. The other elements of the price that arein existence are a bit common between the Shepherdess products andthe competitors and nobody seems to take advantage at all.


Place is a critical area ofconcern for any business (Constantinides, 2006). Shepherdess mainlysells its products through the third parties and these include thesellers, retailers and even wholesalers. The other place whereconsumers can buy the cloth is visiting many of the hundreds ofindividual crofters that are place. The company still does not havesufficient outlets. This has poised to be a major disadvantage forthe company though it has been addressed in different ways includingthe fact that competition is just within the same platform. Notably,Shepherdess should consider this as an opportunity for it to explorethe market before others get on board.


Promotion entails many activitiesincluding advertising, personal selling, doing the sales promotionand even carrying out public relations (Ivy, 2008). The company hasnot paid attention to promotion efforts and more efforts need to beput in place to ensure growth for the company. Through promotion,more of potential consumers will get on board.


  1. Financials




Forecast sales revenue

Net income

















BUDGET FORECAST (Profit &amp Loss)


Forecast Sales Revenue


Net income

(Profit After Taxation)

Remaining Funds Available

(Cash + Overdraft after investments)


Selling &amp Distribution Expenses





Brand Advertising


Product Advertising


Product PR


Distribution Channel Support


Finished Goods Warehousing


Product Development Projects


Inventory Disposal Loss


Production Mgmt Expenses

Unallocated Factory Overheads*


Administration Expenses



Legal Fees


Miscellaneous Expense


Financial Expenses

Interest on Short Term Debt


Interest on Long Term Debt




LinkingExpenses to Strategy and Tactics

In ensuring that the businessdeals of Shepherdess proceed as planned, the company will have toreduce the debt level that it has both in the long and short term.Further, given that there are no outlets that deal with theactivities, one has to rely on dealing with the swatches of the clothprior to making decision on the place to order the cloth for acertain length. Swatch services are often offered through thirdparties that carry the tweed. Nonetheless, a couple of them areexpensive and most cases discourage ordering of the swatches. Thecompany needs to give the third parties incentives to ensure that theswatches made for them are less expensive or even start a swatchservice itself and this is done through pointing of the third partyfrom where the cloth is ordered. This can be explained by theanticipated amount of expenses that will be set aside for theproduction process(Thompson, 1969).

Finished warehousing and willform part of the long-run investment by Shepherdess. Consideration ofthe real estate investment is done through identification of the keyareas and cities all over the world where the demand for the productsare viable. This helps the company to forecast the market situationand build their outlets. Having the investments provide the companywith two major advantages. First, none of the third parties thatcarry the products of Shepherd does so exclusively, instead, theycarry also the products of the other competitors. Therefore, thethird parties have very limited space to carry the Shepherdess’product varieties and not the whole offering.

By Shepherdess having its outletwill ensure that there is increase in the offerings and this will inthe long-run translate to higher sales and profits. Additionally,having company owned and fully and entirely run outlet is conceptthat integrates well with the perception that consumers have in themarket about Shepherdess being high end product. Through the outlets,the company will minimize the issues and problems such as having theconsumers get to third parties to have to look and shop for what isconsidered as top quality.

One of the weaknesses of thecompany has been on the promotion of the goods and services that itoffers. A large chunk of the budget is allocated and will go intopromoting the efforts of the company and thus will ensure growth ofthe company. Promotion in this case will entail advertising andexpenditure on public relations. The expenditure on promotion willensure that more of potential consumers will get on board.


The company will ensure thatevery relevant structure is put in place to ensure that each criticalpart of the project is fully implemented. Implementation will be donein accordance to set time lines. Further, the organization is torecruit project coordinators to ensure that implementation of thestrategies are done in letter and spirit.


Themarketing organization of Shepherdess is pegged on the fact that thecompany seeks to grow. The growth for the company in this case isincrease in sales. The sales should increase in regards to theindustry the business and geographical locations of the stores. Thecompany as highlighted in the financial objective will seek to have15% increases in the shareholder value and this is only possible withthe growth in sales of the company(Martindale,1967).

Partof the marketing organization will be carrying out businessintelligence and this is to help the firm get more information inregards to the performance in the markets (Olson, Slater and Hult,2005).


The contingency plans that areput in place is considering having 10% of the financial expenses putaside to cater for any issue that might arise and had not beenplanned for. Further, various safety measures have to be put in placeand part of the safety measures include having proper commercialconditions to do the business and avoiding hazardous effects andissues that might lead to problems or business closure.


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