How The Fashion Industry Could Be Affected Negatively

I’ll be using Johnny Cupcakes as an example on how the fashion industry could be affected negatively.

Overall External Sensitivity Risk Score is determined by identifying the most significant external factors and weighting them to represent how significant each sensitivity is to the performance of the industry. Examples of external sensitivities that could effect the fashion industry are exchange rates, interest rates, commodity prices and government regulations. (Fashion design Services in the US – Industry Risk Taking Report, 2009, paragraph 8)

An external factor that will affect Johnny Cupcakes is Seasonal Trends. The company experiences some seasonal trends in the sale of its products. For example, sales in the American region are often stronger than the European region. Social and cultural elements are strong contributing factors.

Another factor will be Inventory Management/Supplies/Materials. The Company's ability to manage its inventory has been enhanced by favorable supply conditions in the industry. The Company's manufacturing process requires a high volume of quality components that are procured from third party suppliers. Reliance on suppliers, as well as industry supply conditions, generally involves several risks, including the possibility of defective parts, shortage of components and reduced control over delivery schedules and increases in component costs.

And the last one, Technological Changes And Product Transitions. The shirt industry is characterized by continuing improvements in fashion and design, which result in frequent introduction of new products, short product life cycles, and continual improvement in product price/design characteristics. Johnny Cupcakes must effectively manage a product transition and incorporate technology that will improve customer service and demand.

Especially in the fashion industry, drugs have always been a big factor with models and just with the industry in general. This generates negativity towards the industry but for the past few years the industry have been fighting against it by promoting a drug free environment. More recent the industry became more involved with global warming. Most fashion shows have been promoting Al Gore’s “The Climate Project”. (Mixing fashion with social responsibility, 2007, paragraph 2)

As for Johnny Cupcakes, since the beginning when he started his company, he promotes a drug, alcohol and smoke free environment. He clearly states on his entire blog and life story how he votes against it and spreads the word through his company. (Johnny Cupcake Story, 2008, paragraph 1)

References:

IBISWORLD. (2009). Fashion Design Services in the US - Industry Risk Rating Report. Retrieved September 7^th, 2011, from Mindbranch. Website: http://www.mindbranch.com/Fashion-Design-Services-R538-26221/

Earle, J. (2008). Johnny Cupcakes Story. Retrieved September 7^th, 2011, from The Story. Website: http://www.johnnycupcakes.com/the_story/

Morra, B. (2007). Mixing fashion with social responsibility. Retrieved September 7^th, 2011 from The Star. Website: http://www.thestar.com/article/179291

TOMS Takes Social Responsibility To The Next Level

Blake Mycoskie is the owner and chief shoe giver (CEO) of Toms Shoes, a shoe company based out of Santa Monica. California. But it’s this company’s message that makes it so unique. For every pair of shoes purchased, Toms gives a pair to a child in need, that’s where the companies slogan comes in play; One For One.

While vacationing in Argentina, back in 2006, Blake volunteered to help a charity hand out basic amenities to the people and specifically shoes. He thought to himself that there must be an easier way to get shoes to these people. So the next day he started thinking what if you bought a pair and with that you can make a small profit and still give a pair back? Thus Toms Shoes was born.

In the first 6 months Toms was active, they gave away 10 000 pairs of shoes to children in need in Argentina. Toms first turned a profit 2008 and to date they’ve given away over 300 000 pairs of shoes. They plan to give out one million pairs of shoes by 2012 (2008. Blake Mycoskie: Sole Ambition).

This unique business model is based on social entrepreneurship. A social entrepreneur is someone who recognizes a social problem and uses entrepreneurial principles to organize, create, and manage a venture to make social change. Whereas a business entrepreneur typically measures performance in profit and return, a social entrepreneur assesses success in terms of the impact he has on society as well as in profit and return (n/d. What is Social Entrepreneurship).

Social Entrepreneurship started back in the 60’s but only started to pick up in the late 1990’s (2008.The Challenge of Social Entrepreneurs). The reasons behind the popularity of social entrepreneurship are many. On the most basic level, there’s something inherently interesting and appealing about entrepreneurs and the stories of why and how they do what they do. People are attracted to social entrepreneurs because these extraordinary people come up with brilliant ideas and against all the odds succeed at creating new products and services that dramatically improve people’s lives.

In modern times, charity means the practice of giving to help those in need who are nor related to the giver. Charities also depend on donations from wherever they can to help give back. This isn’t a guaranteed ticket that they will be able to help someone at all times. With Social Entrepreneurship you are able to sustain the gift of giving.

References:

• Schmidt, David. April 2008. The Challenge of Social Entrepreneurs. Retrieved from Inc. Magazine website on September 7th, 2011. http://www.inc.com/resources/leadership/articles/20080401/dschmidt.html
• Wong, Grace. September 2008. Blake Mycoskie: Sole Ambition. Retrieved from CNN on September 7th, 2011, 2010.
• n/n. n/d. What is Social Entrepreneurship. Retrieved from The New Heroes on September 7th, 2011. Website: http://www.pbs.org/opb/thenewheroes/whatis/