Michael Kors Case Study: Navigating the UK Fashion Retail Landscape

Desklib provides past papers and solved assignments for students. This report analyzes Michael Kors' success in the UK fashion retail market.

RETAIL THEORY AND
PRACTICE

Contents
Introduction to retail........................................................................................................................3
Introduction to the company............................................................................................................4
Key relevant changes within the UK fashion retail.........................................................................6
Relevant changes within the micro environment.............................................................................9
Suggest and discuss strategies and tactics that could be used.......................................................11
Recommendations..........................................................................................................................13
Conclusion.....................................................................................................................................14
References......................................................................................................................................15
Appendix........................................................................................................................................17

List of figures
Figure 1: Michael Kors....................................................................................................................5
Figure 2: Business environment......................................................................................................8
Figure 3: PESTEL............................................................................................................................9
Figure 4: Environments affecting business....................................................................................10
List of table
Table 1: Table for PESTEL analysis.............................................................................................18

Introduction to retail.
Retail: It deals with the business on the industry in the form of small outlets or branches of the
business to sell different services and goods to the users as well as customers. The word “Retail”
has been taken from the French word “Retaillier” which has meaning to cut anything in small
pieces or to break down a complete work in small parts. It consists of different functions such as
the distribution of goods and services, selling of goods and services, consumer services like
transportation, professional services, etc. (Timmermans 2017).
Fashion retail: It is a branch of retail business in which starts with the purchase of fashion
goods from fashion designer & manufacture and ends with selling those fashion goods to
different users which resulted in revolutionary changes in the retail business from last few years
(Fibre2Fashion 2012). “Michael Kors” has been taken for the study of fashion retail business.

Introduction to the company.
Here, in this report, “Michael Kors” which is leading company in the field of fashion retail has
been chosen as a case study for the analysis of the retail industry in the field of fashion.
Michael Kors: Michael Kors Holding Ltd. Is one of the leading company in the present world
for designer accessories and ready to use fashion goods. It was established in the year 1981 by
Michael Kors at New York and currently running in different areas of the world such as New
York, London, Paris, Dubai, etc. It has more than 800 stores and approx. 14 thousand employees
currently with the trade names and signatures as “Michael Kors Collection and MICHAEL
Michael Kors labels” and also have online websites for the fashion retails available for different
countries (Michael Kors 2019). It deals in 3 segment operation which is as follow:
 Retail
 Wholesale
 Licensing
Figure 1: Michael Kors

Source: (Pan, 2017)
The total revenue calculated for the year 2018 was about 4.72 billion U.S dollars for Michael
Kors. It has won multiple awards in the field of fashion industry and famous for his respect and
philanthropy from millions of users and customers. It has the vision of providing the latest and
modern fashions to the customers worldwide and helping them in creating a luxury lifestyle all
over the world (Michael Kors 2019). It deals in different fashion sectors which have been given
below:
 Fashion clothing
 Handbags
 Shoes
 Watches
 Jewelry

Key relevant changes within the UK fashion retail.
Fashion retail industry and business are one of the top trending business in clothing, foot wares,
jewelry, etc. resulting in a large amount of revenue generation by attracting a large number of
customers and used worldwide. It provides a large number of employment for both workers as
well as professionals in the field of fashion design, manufacturing, transportation and retailing.
The complete fashion business depends on various factors which play a significant role in the
changes in UK fashion retail (Dover 2018). Some of the factors have been given below:
 Taking the right decision for the latest fashion clothing, goods, and services.
 Understanding the current needs of users and customers.
 Complete analysis about latest trends in the field of fashion.
 Demanding goods and service of fashion.
 Pricing of fashion goods and services.
 Promotions and advertisements for the latest goods and services.
The overall business environment of the fashion industry has been divided into multiple sub-
environments for the success of the fashion business including better relationships with users and
customers of the fashion goods and services. Different sub-environments has been given below:
 Marketing environment.
 Micro environment
 Macro environment

Figure 2: Business environment
Source: (Burton, 2015)
Macro environment: It consists of different factors such as technical, legal, political, economic,
demographic, etc. with which the complete business or industry of the fashion retail has been
surrounded is called “Macro Environment”. All these factors affect the complete business on a
large scale or on a global level and resulting in the great changes worldwide in the field of the
fashion industry from the last few years. The major effect of the macro environment has been
recorded on the profit of retail business as well as an increase in competitions within the fashion
retail sectors of the UK. All these changes and factors have a large impact on the complete
business which cannot be changed by the retailer instead they need to change their business
practices according to the changes in the macro environment to increase the profit as well as
revenue generation for the business (Claessens 2018). The analysis of key factors of the macro
environment in the fashion retail sector has been done on the basis of PESTEL methodology.
PESTEL: It consists of six key factors for the analysis of the macro environment of the retail
business (Gockeln 2014). Details of key has been given below:
 Political
 Economical
 Social

 Technological
 Environmental
 Legal
Figure 3: PESTEL
Source: (Slidebooks, 2018)
The detailed explanation has been shown in table number 1 which has been attached in an
appendix.

Relevant changes within the micro environment.
Impact of Micro Environment on fashion retail: All the micro factors which have an impact
on the decision making, strategy of the business as well as the performance of the business in the
field of fashion retail has been included in the Micro Environment. It plays an important role in
the success of fashion business and analysis of different activities to develop new improved and
progressive rules and strategy for the fashion business (Chand 2014).
Figure 4: Environments affecting business
Different factors which have been included in the micro environment of the fashion business has
been given below:
 Competitors
 Customers
 Suppliers
 Media
 Shareholders
 Employee
 Government
Competitors: It consists of multiple competitions on the basis of product, services, quality, and
policies in comparison with other companies of the fashion business or retail available in the

market. For example, products and services available in the retail market by other fashion retailer
or company.
Media: It has a great impact on the fashion business due to increase in advertisements and
promotions related with fashion clothes, goods, etc. resulting in increasing attraction as well as
awareness about latest trends and fashion among the users.
Customers: It also has a large impact on the fashion retail market due to the changing behaviors
and demands of the customers. Different activities have been done in order to meet the latest
trends and demands of the customers in the fashion retail business for customer satisfaction.
Suppliers: It also plays an important role in the fashion business as different raw materials as
well as new designs from the fashion designer and manufacturers have been supplied by the
suppliers to different retailers and outlets of fashion goods. It helps in the selection of the best
supplier for the business or company. For example, the supply of raw fabrics for clothing.
Government: It consists of all the government rules, regulations and policies designed for the
fashion retail or business in order to maintain quality and satisfaction level of the users,
customers, and workers involved in the fashion industry. For example, safety and health rules by
the government of the UK in fashion retail.
Shareholders: It also plays an important role in the fashion retail and business which provide
funds for the retail outlets or business to improve the wealth of the business and to provide
strength for the business.

Suggest and discuss strategies and tactics that could be used.
Business environment including both micro and the macro environment has significant
importance in the field of fashion retail business in the UK region resulting in multiple changes
in the demand as well as trends of the latest fashion among the users and customers.
Influence of Micro-environment factors on Michael Kors: Micro-environment factors have a
significant impact on the development of Michael Kors fashion retail business, their outlets and
online websites used worldwide. Some of those factors and their influence has been given below:
Customers: Michael Kors deals with the latest fashion clothes, foot wares, bags, etc. on their
stores as well as online websites with attractive pricing for different products and goods as a
result, a large number of customers and users has been attracted towards the Michael Kors
business.
Suppliers: Michael Kors has strong management for the staff and multiple experts to check the
quality starting from the manufacturer to the retail outlets for the goods purchased and supplied
from different suppliers. It has strict rules for the suppliers for the best quality of raw materials to
be supplied.
Competitors: With the help of a strong team of experts and professionals in Michael Kors, it
keeps eye on the latest fashion trends, products, and goods available in the market from other
companies in order to withstand unique in fashion goods and services.
Influence of Macro-environment factors on Michael Kors: Macro-environment factors also
has a significant impact on the development of Michael Kors fashion retail business, their outlets
and online websites used worldwide. Influence of different factors has been given below:
Political factors: Michael Kors has developed all the documents and policies of the business in
accordance with the policies designed by the government and political bodies for growth and
improvement of the business.
Economical factor: Selection of raw materials and the activities of the employee working at the
production of fashion goods and services has been done to minimize the pollution and climatic
changes in the environment. It develops trust between the company and its customers by saving
the natural environment.