Chic by Choice: A Case Study of an SME in the UK Fashion Rental Market

Desklib provides past papers and solved assignments for students. This report analyzes Chic by Choice's success in the UK fashion rental market.

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Abstract
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EXECUTIVE SUMMARY
The main objective of this report is to have a proper understanding
of the SME as they are the major players of the UK economy. This
report will help in the understanding of the startup process how the
startup process is executed. The growth of the SMEs and the
struggles they face.

Contents
INTRODUCTION.....................................................................................................................................3
Findings.................................................................................................................................................4
About the Entrepreneur....................................................................................................................4
The process of startup.......................................................................................................................5
The concept of business and the source of competitive advantage..................................................6
Competitive environment and the current level of demand.............................................................7
Porter's five forces model..................................................................................................................7
Current sales and competitors..........................................................................................................9
Conclusion.............................................................................................................................................9
Recommendation................................................................................................................................10
References...........................................................................................................................................12

INTRODUCTION
SME is basically the Small to Medium Enterprise with employees less than 250
and the basic turn over should be less than 50 million. They are categorized
into three categories depending upon the turnover, they are
 Medium size
 Small sized
 Macro sized.
In medium sized business the turnover should be of about 43million and the
staff capacity should be of 25o or less.
In the case of small size business, the turnover should be of 10 million and the
employee capacity should be of 50 employees. Whereas,
In the case of macro-sized business, the turnover should be of about 2million
and the staff capacity should be 10 or less than 10.
Chic by choice is a UK based SME can be described as the Uber for fashion
which means Chic By Choice gives its customers the opportunity to hire
branded designers to dress straight from the shows at 85% retail price. They
have immersed in more than 15 European markets and having their offices in
various locations such as the UK, France, Italy and Germany and they are
providing dresses from over 40 best designers. The main objective of their
business is to help every woman dream to fulfill their style transformation and
to wear their favorite designer at least once in their lifetime.
The organization was founded in the year 2014 by Filipa Neto and Lara
viderin.. It is a private company and is reported with the net worth of 2million
in the European market. As of now, they are shipping their products to over 15
European countries.
The data which are being collected are of both primary and secondary data.
Which are being collected from various sources such as from journal and many
articles and interviews of the founder and the co-founder on Forbes and
various national and international magazines.

Based on these studies various analysis has been derived as well as the
porter’s model to understand the model of the business. It also helps in the
understanding of the business about the scenarios which the organization has
faced so far, their strength and weakness.
It has also been observed that Chic by choice uses the small business model
used by Uber, Airbnb, where internet plays a very major role as it is an E-
commerce organization and helps to deal with its customers directly without
any third party interference.
Being a rental company logistics plays a very major role, it needs to deliver its
products within a time frame so that the customers don’t face any problem
and most importantly the delivery should in done properly which means
proper packaging and no damage involved.
The main objective of this assignment is to understand the SME and to what
the difficulties the entrepreneurs are facing in starting up a new business and
how they are overcoming those problems. Understanding the growth, profit
and the scalability of the organization. Also knowing about their competitors
the current scenario of the market and how to act upon depending upon the
market, moreover also the most important part understanding the needs of
the customer.
Findings
About the Entrepreneur
Chic by choice was founded by two young ladies Filipa Neto ( founder and CEO)
and Lara Vidreiro(co-founder and COO).
Filipa Neto is twenty-five years old and she graduated from Universidade
Catolica Portuguesa from 2008-2012 with a degree in economics and
management. She has a great sense of fashion and technology. In the year
2012, she worked with Style-in –a box for a year. Then she is also working with
Global shaper(world economic forum) since 2013.
Lara Vidrerio who is also twenty-five years old and also graduated from
Universidade Catolica Portuguesa from 2008-2012. She has a degree in
management. She has also worked with Style-in –a box for a year before
joining chic by choice.

Chic by choice started with a small concept when one of the founders, Filipa
realized that they were spending a lot of money on their dress for a party or
any occasion by seeing into their Instagram and Facebook photographs, so
they wanted to come up with a new idea to where they can a complete access
to expensive clothes without spending much in it. After understanding these
they decided that this can be only be achieved by the use of proper fashion
and technology.
The whole business idea is related to involving fashion and technology. Being
their first startup they have to deal with various obstacles before starting their
venture in terms of funding, location and being different from their
competitors.
The process of startup
The founders realized that they are spending too much money in their
clothing, they also realized that once they wear one outfit they didn't want to
repeat it again as the dress loses it charm and none compliments it again. This
led them to the idea of Chic by Choice
The founders started to take part in various funding competitions where they
worked with different tech people as a team but they didn’t find much success
in it. After that they also attended a few more competitions where they
progressed more and hence they decided to carry out various tests on people
to know how well people will understand their product will they accept the
product.
They decided to fix a time frame of six months where they can decide and try
to get the funding, as it the base for any business. It was during their third
startup competition as it can be the launch pad for their business and a step
forward in fulfilling their dream. With this they started off with their consumer
studied should websites and using the social media platform by creating pages
on facebook which will help in analyzing the customers and their demands.
After that, they submitted an application to Decoded Fashion where had the
chance to talk with their CEO Liz Bacelar who appreciated the idea and decided
to launch their website.
It took them off about three months to raise their first investment from the
Portugal company Faber Ventures. The most difficult task was to convince

them about being digital and investing in E-commerce which is something new
in the global scenario and involves high risk. Currently, they have also some
new investors Nullo Miller, Paulo Maetus pinto, Portugal capital venture, and
Startup Libso and the Edge Group.
Currently, Chic By choice has about the staff capacity of 11-50 employees and
the CEO and the COO. It is a private company based on profit and raised the
capital of about 2million.
Being a startup they had to face a lot of challenges such as fundraising, making
people aware of the product and services which are being provided. Then the
major thing the logistics because they have to deliver the product in a given
time frame and they also have to receive their products in the same way. So
they have to make sure that the delivery which is being done should be proper
without any manhandling and damage to the products. Then gathering more
audiences on their site to create a more base of customers as they are the
crucial part of any startup.
Working of Chic by choice
1. Explore and select here you can go through their wide range of
designer option straight from their catwalk and provide them with the
date of delivery but it should be always two days prior to the event.
2. Order select the size with 4to 8 days time period and also book an
alternative size for extra care but no extra charges are involved in it. You
can order up to 4 months in advance.
3. Enjoy you will receive your dress well packed on the address provided.
Wear it on a special occasion.
4. Return after enjoying your experience you can send it back with the
same packaging but it should be dry cleaned and with minor repairs if
any.
The concept of business and the source of competitive advantage.
The main idea of this business is rent fashion which means renting luxury in the
most major market in Europe. With the help of Chic by choice, women can rent
designer dresses which they have admired in various stores. Chic by choice has
partnered with various designers, merchants and brands and shipping their

products across Europe. They have collaborated with various brands such as
Dolce Gabbana, Dior, Jenny Packham, Elie Saab, Lanvin, 3.1, Phillip Lim, Etro,
and Pilato. Their main target is women from 20s to 40s as they are more keen
to fashion and want to try a favorite brand or designer outfit once. Renting
this luxury creates an aspiration among them.
There are various competitors are out there for Chic by choice such as Girls
meet the dress.com, dream wardrobe, hire the catwalk, MY celebrity.com and
Drexcode these are their most major competitors in the market.
But Chic by Choice has well identified their competitors so they have tried to
keep themselves different from others. So they have decided that they have to
keep themselves premium with premium designers on their portal and they
have also come up with the disruptive stock model which they have tried to
continue well without any hazard. They are also making sure that the vision of
the customer is well lept in the mind and to have the complete focus on the
vision of the customer rather than diverting it into some other direction.
They are the only one in the market who are shipping their products to 15
countries and they are the only one who is doing the stock model which is not
done by any other in the market.
Competitive environment and the current level of demand
It has been observed that in the UK they have various competitors who very
much have the same business model and more direct. They have competitors
such as Girlsmeetdress.com, Dreamwardrobe.com, Hirethecatwalk.com, and
Mycelebritydress.com. they are offering various services to the customers
with a wide range of choices and selections and also fashion choices as per
season and offers on their first rent and most importantly providing the proper
fit.
There are various external factors that play a major role for CBC and their
various competitors such as the offers, selection of dresses, the varieties they
have, the rental services and the proper fit. (Home, 2019)
Porter's five forces model

The potters five forces model basically deals with the five basic competitive
forces of every industry and also related to the strengths and weaknesses and
identifying the corporate strategy which is needed. The forces are namely
 New competitors in the industry
 Competition
 Suppliers
 The threat of new products
 customers
Potters model for Chic by Choice

Current sales and competitors
in the global market, it has been seen that there are various competitors of E-
commerce business, with the emergence of the economy there have been
observed significant growth in the market and there is also the growth of the
internet users so it important for CBC to take measures for customer retention
on their websites. As it is important because the customers play a major role in
the growth and sales of the company which will lead to more profitability.
Being a startup they have to invest more in their marketing of the products and
to attract more limelight than their competitors.
There have been observed major players in the rental market and each of their
best to attract more customers and to increase the sales as much as they can.
Being an internationally identified startup and catering many nations it has
taken the most profitable and intelligent strategies to increase their sales than
their competitors, they have tried for increasing their attractiveness which will
lead to more sales of the products. In the time frame of within three years they
have made their own benchmark with a net present value of up to 3% and the
cumulative NPV being (1.733.387,91€).
(Home, 2019)
Conclusion
It can be concluded from the all above findings and discussion that Chic my
choice which is owned by two young entrepreneurs come up with this very
innovative idea with is too unique and they most importantly understood the
problems which are being faced by women in buying expensive clothes for just
for a single occasion and wasting more money in this luxury and they have also
fulfilled the dreams of various women to wear the dress of their favorite
designer or their favorite brand which they could afford as they are highly
overpriced. They understood the current scenario of the market and needs and
wants. They faced major problems in getting their seed fund raised they
struggled they participated in various startup competitions. But they
successfully convinced Faber ventures initially they were a bit reluctant in
investing in any e-commerce organization as it involves very high risk and
secondly it was a very new concept which was brought up by very young

individuals. Chic by choice have also understood what every girl wants to wear
and also sensed how expensive the price of brands are.
Chic by choice have also understood what every girl wants to wear and also
sensed how expensive the price of brands are. They also provide with a wide
range of dresses for every occasion and from a wide range of designers and
brands which are highly expensive.
They understood their competitors and they understood the current market
scenario of the fashion industry. They thoroughly studied the working of their
competitors and they know what their competitors are doing and how they
trying to expand. They have tried to differentiate themselves from the
competitors in various ways by having the stock model concept which is only
being opted by them. They are providing shipping of their dresses across
fifteen countries in Europe which is the major aspect as they are the only one
to do so. They have kept the high focus on themselves as they believe that
keeping the focus on themselves can be a game changer for them. They work
on a very simple business model which has helped them to avoid any
confusion. They have maintained the loyalty of their customers which means
they have a fixed set of customers as well as growing customers. Being a
startup they have understood their strengths and weakness and they are
working hard to overcome this weakness so that they won't face any negative
consequences in the near future for them.
Recommendation
Chic by choice has to focus on their old as well the new customers. They have
to work on the overall customer satisfaction will in the growth of the
reputation of the company. They can introduce a new system in their
organization such as improving the logistic facilities, customer care, undergoing
customer reviews.
They have to align their goals and objectives and take necessary strategies
according to that. Chic by choice have to undergo a careful analysis of their
internal and external environment which will help in driving their future
growth and opportunities. They have to look after their finances and where
they are investing they should carefully monitor the flow of money in the

organization. They also have to understand their sustainable competitive
advantage. They have understood the market and opt for strategies which can
be carried out easily. They also have to need to facilitate their logistics so that
they can run smoothly and effectively which can also help them in
differentiating them from their other competitors, effective logistics can help
in quicker and smooth delivery of their services.
Chic by choice was to understand that the European market is a highly
profitable market which can help the company to grow in a very faster pace.
They can upgrade to new software and technologies where they can easily
monitor their customers, their requirements such as the size they need, color
specific designer and the specific collection of the brand or the designer.
They can create a whole new customer experience in the E-commerce world
which means they can have a new algorithm, new systems. These changes will
help in attracting limelight and the whole new customer base for themselves.
They can also collaborate with new brands which can provide with their very
latest collections which are not easily available. They can also come up with
various offers and collections which will attract the youth specifically more as it
becomes a bit cheap for them. They can come up with interactive sessions
where they can have one to one discussion with their customers, this helps the
customers to be brand loyal and gains a trust within the customers, as they
feel more connection with the brand. They can collaborate with various
competitors which will help in the access to more designs and more brands,
they can help in more expansion of the organization. More the expansion more
id the profit for the organization. They can collaborate with fashion blogger as
they can promote their band, they can also come up with various
advertisement strategies which will be helping in spreading a good word of
mouth.