BUS 5117

Unit 6 Written Assignment

Student Name Withheld

Introduction

Leveraging innovation is a critical aspect of a business strategy and it sets the

foundation for how an organization will strive to remain competitive in their industry. Assessing

innovative strategic moves as a component of the overall business strategy is focused on

ensuring customers remain attracted to the brand. While there are many innovation strategies

that can be leveraged, we will focus specifically on the blue ocean strategy utilized by Stitch Fix

to reinvent the fashion industry. After reviewing the blue ocean strategy concept that helped

launch the Stitch Fix, we will review the strategic moves and analyze the fashion market to

develop one cooperative and one competitive move. We will then discuss which move would be

the most effective choice for Stitch Fix and discuss tactics to help support the move by

implementing it within the scope of the overall strategy.

Company Background: How Stitch Fix Came to Be

The blue ocean strategy can be leveraged by organizations to move into a new or

untapped market where little to no competition currently exists. As indicated by Young (2022),

while this term was originally created in 2005 by Chan Kim and Renee Mauborgne, the term is

in reference to the vast and numerous opportunities that occur in a new or unknown market

when an innovation appears. Blue ocean strategies can be challenging to implement as it

requires identifying the market and often re-inventing the market itself. “Entrepreneurs who seek

to employ a blue ocean strategy must first create their own market, attract customers and

develop a product that has never been tried before. For that reason, successful blue ocean

opportunities can be rare and far between” (Young, 2022, para. 17).

Stitch Fix is an example where they successfully identified and executed a blue ocean

strategy in the fashion industry. Founded in 2011, Stitch Fix re-defined the fashion industry

through their identification of an untapped market in providing a virtual personal styling service.
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Leveraging data and artificial intelligence to identify and understand personal buying

preferences, Stitch Fix has been able to drive retails digital transformation. “Instead of fighting

head-on with physical fashion retailers and eCommerce companies, stitch fix has created a blue

ocean strategy for them by finding their niche in data analytics” ("Artificial intelligence: Stitch fix -

a blue ocean retailer in the AI world," 2021). What originally started as a Harvard Business

School class project by Katrina Lake, transformed into over a $1.5 billion company in 2019.

Newman (2019) provides insight into the fact that while Stitch Fix launched into a new market,

the critical component of their success have been the ability to capture and leverage data which

begs the question of if they are a tech company or a fashion company.

Analysis of the Fashion Market

Retail has historically been a competitive market and could be defined as a “red ocean”

where there are many industry players, the market is extremely competitive and competitors are

focused on attracting and retaining customers through cost cutting, marketing or product

improvements (Young, 2020). With the shift to e-commerce shopping, the retail market has

seen an increase in brick-and-mortar stores like Macy’s, JC Penny’s, GAP. Online retailers like

Amazon have also emerged which have made it easy for consumers to purchase retail goods in

the comfort of their own home. “Whereas traditional fashion brands are either competing on

prices or eCommerce companies on the fastest deliveries, Stitch fix has found their niche is

providing personalized fashion experiences to their subscribers) ("Artificial intelligence: Stitch fix

- a blue ocean retailer in the AI world," 2021). Since their inception, many competitors have

emerged to provide “subscription” boxes for the fashion industry but in other facets of consumer

goods as well. One key competitive advantage that Stitch Fix still holds compared to other

competitors is the use of data to deliver a truly scalable personalized shopping experience. As

indicated by Newman (2019), Stitch Fix has leveraged their “Style Shuffle” concept to collect

more than a billion data points by collecting feedback on fashion styles, age and demographics
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to anticipate shifts in the trends that will impact the fashion industry. “Stitch Fix is setting the

gold standard in retail’s digital transformation. Scratch that—they’re setting the gold standard in

all digital transformation, showing that even industries typically outside the “tech” spectrum can

and should be using data to improve customer experience and sales both” (Newman, 2019,

para. 11).

Competitive & Cooperative Move Strategies

Organizations can choose to employ competitive or cooperative moves to support their

business-level strategy. Competitive moves focus on how an organization gains a competitive

advantage and therefore a stronger market share compared to other organizations in the

industry. While organizations are typically in competition with one another to gain market share,

it should be noted that they can also benefit from cooperating with other organizations. In a

cooperative move, organizations partner with one another through the formation of a joint

venture or strategic alliance that allows both organizations to achieve success. As Stitch Fix

leveraged a blue ocean strategy to create the niche market, there have been more competitors

that have entered the market which requires them to consider subsequent competitive or

cooperative moves.

Competitive Move Strategy Recommendation: As the primary market for the personalize styling

service was women, Stitch Fix could leverage architectural innovation to expand into other

target audiences such as Maternity, Tweens, Children and Men. As indicated by Kennedy

(2020), architectural innovation can leverage existing technology to create new markets of

audiences that did not previously purchase the product or service. In this instance, Stitch Fix

can leverage their existing “Style Shuffle” technology and apply it to other target audiences. This

would offer the potential competitive advantage of covering multiple target audiences using data

and algorithms and continue establishing brand recognition with new consumers.
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Cooperative Move Strategy Recommendation: Stitch Fix could benefit from formulating a

strategic partnership with the UK-based startup app, Superpersonal, which creates a virtual

version of the user that can then model clothes and thus allow users to see what designs might

look like on their specific body type ("7 innovative ideas changing the fashion industry," 2020).

The Superpersonal app was designed with personalization in mind and aligns with Stitch Fix’s

operational model. Both Superpersonal and Stitch Fix would benefit from one another by

allowing Superpersonal to reach more users and allowing Stitch Fix to expand their “Style

Shuffle” technology.

The Most Effective Move for Stitch Fix & Implementation

As Stitch Fix has large brand recognition, continuing to differentiate themselves from

other emerging competitors is crucial. With their large focus on scalable personalization, I would

suggest the most effective move for Stitch Fix would be to employ the cooperative move of

partnering with a digital app like Superpersonal that can be applied and expand their existing

technology that is already giving them a competitive advantage. “The online retail market is

projected to reach $4.88 trillion by 2021, according to Statista. This technology could play a

critical role in boosting sales. Major retailers are already using augmented reality (AR) apps to

entice shoppers” ("App turns ordinary shoppers into fashion models," 2019).

To implement this strategic partnership, I would recommend using a positioning strategy

as indicated by Singh (2012) which will allow Stitch Fix to “…achieve scale- or scope-based

advantages, optimize market segmentation, or acquire a new customer base”. Stitch Fix can

reach out to Superpersonal to initiate the strategic partnership conversation and showcasing the

cost benefit analysis (CBA) of partnering together without the need to create a new entity. This

can be executed as part of Stitch Fix’s overall business-level strategy to drive innovation and

expansion of their existing technology into other markets which will allow them to maintain their
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competitive advantage as organizations like Amazon launch their own personal shopper

experience.

Conclusion

Leveraging a blue ocean strategy as a part of a business school assignment allowed

Stitch Fix to redefine the fashion industry using a mail-based personal stylist model. Their

unique model has allowed them to create an innovative technology in order to capture customer

styling preferences and identify emerging fashion trends based on a large amount of data points

that continue to give them a competitive advantage in the market. As they continue to see

emerging competitors and substitution competitors, Stitch Fix would benefit from utilizing and

executing a cooperative move that would allow them to partner with a company such as

Superpersonal to enhance the shopping experience and contribute positively to their existing

technological platform. This tactic can be directly incorporated into their business-level strategy

and ensure customers remain attracted to their brand.

References

7 innovative ideas changing the fashion industry. (2020, January 9).

Springwise. https://www.springwise.com/innovative-ideas/fashion-week-innovations

App turns ordinary shoppers into fashion models. (2019, October 29).

Springwise. https://www.springwise.com/app-turns-ordinary-shoppers-into-fashion-

models/

Artificial intelligence: Stitch fix - a blue ocean retailer in the AI world. (2021, January 21).

Retail Ritesh. https://www.retailritesh.com/tag/artificial-intelligence-stitch-fix-a-blue-

ocean-retailer-in-the-ai-world

Kennedy, R. (2020). Strategic management. Virginia Tech Publishing.

https://vtechworks.lib.vt.edu/handle/10919/99282

Newman, D. (2019, September 9). Stitch Fix: A Useful Case Study For Retail's Digital

Transformation.

Forbes. https://www.forbes.com/sites/danielnewman/2019/09/09/stitch-fix-a-useful-

case-study-for-retails-digital-transformation/?sh=657b41fe7d4c

Singh. (2012, February). Strategic partnerships. Wharton Executive

Education. https://executiveeducation.wharton.upenn.edu/thought-

leadership/wharton-at-work/2012/02/strategic-partnerships

Young, J. (2022, January 14). Understanding the calm waters of blue ocean market

opportunities. Investopedia. https://www.investopedia.com/terms/b/blue_ocean.asp