Finlatics IBEP Project 2
Finlatics IBEP Project 2
Finlatics IBEP Project 2
Project 2
Sustainable Fashion Company
1. According to me, among the five stages, the product of this company is
currently in the first phase of commercialisation stage. In this stage, an
investor is essentially betting on the business plan and the product-market fit
is yet to be developed. As a business plan, the idea is quite relevant in current
times. Consumers are gradually growing to be conscious of their purchase
behaviour in the fashion industry. There is a rise of thrift stores on various
social media apps and consumers largely purchase from them, as their
products are sustainable and some of them also being hand-made and hand-
picked.
In this stage, the investor is quite exposed to high levels of risk and
uncertainty with respect to the entrepreneur’s business plan. The risk in case
of the sustainable fashion company is that the product has low chances of
attracting mass consumers as a considerable amount of them are still into fast
fashion brands that are low priced.
Strength Weakness
Reuse, Reduce, Repair, Recycle Not attracting masses
(less wastage of raw materials) Less adaptable as not everyone
Creates fashion that is will possess the same mindset
individualistic and unique Might not be up to date with
Ethical trends as their main focus is on
Flexibility of using new materials eco-friendly and sustainable
and experimenting with fashion
innovation
Opportunity Threats
Poor image of fast fashion brands Expensive Technology
due to them being in the news for Low pricing of fast fashion
exploiting labour and providing brands attracting majority of
clothes at low prices target consumers
Government initiatives in the Difficult application
support of ethical fashion
Celebrities increasingly
promoting sustainable fashion
will garner quality traction
2. Many shoppers have realised the cost at which cheap fast fashion comes at
and are becoming increasingly aware of its long-term causes. This, along with
the digital world begun the trend for slow and sustainable fashion. It is
starting to become mainstream as the market not only consists of brands but
also thrift store pages on various social media apps that do not burn a hole in
the pocket. One such brand is Levi’s, who are committed to sustainable denim
production. One of their primary focuses is also to reduce water usage as the
process to create the fabric i.e., denim is quite water intensive. They have
launched multiple sustainability campaigns in the past including the “ Buy
better, wear longer” campaign whose motive was to encourage consumers to
be more intentional when it comes to choosing their apparels. Although the
idea are many opportunities in the long-term there are some challenges
Milestone 4- Once the product has maintained a loyal customer base and
gained presence in the market in terms of competitors, the focus would be on
extending their areas of products and launching various campaigns and
widening their technology.
No. of mediums/channels the product is launched in- minimum 6
Customers per medium/portal- minimum 300
Note- The approx. time given to hit the 4th milestone is 5 years
Initial Customers Total customers Convertible
Investment added in 5 years note conversion
per milestone rate (%)
(optimally)
50,00,000 500 <500 23%
50,00,000 750 1250-501 17%-22.5%
50,00,000 1250 2500-1251 11%-16.2
50,00,000 1800 4300-2501 6%-10.5%
The total no. of customers has been taken as a milestone. The initial investment
made in the company is 50,00,000 and the time period is 5 years. The conversion
rates are rangebound for each milestone. For the first milestone, if the company
takes 5 years to reach it then the conversion rate would be 23%. In case of the second
milestone, if the company takes 5 years to reach there, the conversion rate would be
17% and so on and so forth for the other milestones.
4. For a sustainable fashion brand, the customer acquisition cost would mainly
come out of ads across digital platforms and banners which would promote
buying from the brand. A primary cost that the company may face would be
printing flyers for exhibitions, promotional discounts, etc
The company incurs an acquisition cost of Rs 1600 per customer and earns Rs 1200
per customer to reach milestone 1. As presented above, the company stops making
losses from the second year. This is indicative of the fact that the company needs to
keep the customer loyal for a minimum of 2 years for them to make some profit on it.