Senzhou International: Apparel Industry and Pandemic Impact

This report provides a comprehensive analysis of Senzhou International, a major player in the apparel industry. It examines global trends in the industry, including value chain dynamics, cost considerations, and the bargaining power of various players. The report delves into the key factors contributing to Senzhou International's success, such as its adherence to quality standards, strategic partnerships, and risk-taking approach. Furthermore, it explores Vernon's product lifecycle and the company's transactional cost-minimizing strategies. The report also investigates the evolution of Senzhou International's venture into the United States and assesses the impact of the COVID-19 pandemic on aggregate demand. Finally, it evaluates the potential effectiveness of fiscal and monetary policies that could be implemented to facilitate economic recovery in the wake of the pandemic.

BUSINESS

Table of Contents
BUSINESS.................................................................................................................................................1
Table of Contents........................................................................................................................................2
Introduction...............................................................................................................................................3
Part A.........................................................................................................................................................4
Q1 Global trends in apparel industry In terms of value chain, cost, bargaining power of players...........4
Q2- Major factors that contributed to the success of Senzhou international............................................5
Q3- Vernon’s product lifecycle and the transactional cost minimising approaches.................................5
Q4 – Evolution of the proposed venture by Senzhou international to set up production operations in
United States...........................................................................................................................................6
PART 2.......................................................................................................................................................7
Q1 Impact of pandemic on the aggregate demand of selected country....................................................7
Q2- Potential effectiveness of the physical and monetary policy that can be undertaken in order to
recover from the pandemic......................................................................................................................7
Conclusion..................................................................................................................................................8
REFERENCE............................................................................................................................................9

Introduction
Business environment is the sum of Internet and external factors such as customers, employees,
expectations, supply and demand and management client owners, government, social trends
technology trends etc. It is necessary for the companies to be aware of business environment to
be success in their business.
This report will cover the case study of Senzhou international Who start their business with
manufacturing baby clothes and recently they are largest vertically integrated nightwear
manufacturer in China and they are largest exporter of nightwear with customers like Nike,
Adidas etc.
This report will discuss the global trends in apparel industry In terms of value chain and cost go
well geographical locations, bargaining power of players and indeed institutional roles. It will
remind me major factors that contribute in the success of Senzhou international. Any other word
this report will also discuss about the impact of pandemic on the aggregate demand oof Selected
country and in the end of this report will evaluate the potential effectiveness of physical and
monetary policy that can be undertaken in order to recover from the impact of pandemic.
Part A
Q1 Global trends in apparel industry In terms of value chain, cost, bargaining power of players
The clothing industry is one of the top most industry but in the China and there are various
global trends within the clothing industry in terms of value chain, cost, bargaining power of
players etc (Sheth., 2020). This trends are helping the companies within the industry to operate
there business effectively and they are able to take competitive advantages within the market.
here are some global trends according to the terms.
Value chain trends
Online selling is increasing day by day and it is one of the most important part of the value chain
and it can also be considered at the global trend in clothing industry. companies are creating
their the logistics all over the world through the online. people can easily order there product and
services online Anne company sell it through the logistics. there are many agencies who provide
logistics services we just making easy for the companies to send their products to each and every
corner of the country.
Cost trends
Companies within the clothing industry are becoming more cost effective by using the latest
technology trends within the market. new technology is making the Cloth product more quality
wise with the lower cost. Companies are able to sell their products in lower prices and satisfy the
needs and demand of their customers. this trend is also followed by the Senzhou international
because they are using the best possible technology at their manufacturing area that is helping to
eliminate the waste from the product and making the product more quality wise with lower
prices.
Bargaining power of players

Bargaining power of the players is higher within the clothing industry of China but as a market
leader Senzhou international is able to reduce the power of the suppliers and they are able to buy
the raw material in lower prises from the Suppliers create the final product and sell it directly to
the customers like Nike and add Adidas.
Geographical location
Senzhou international Is creating their products according to the Local fashion Andy people who
like to wear night wear. Following the local trends is making their product more popular and
they are able to sell their products in high quality quantity (Massa., and et.al., 2017). not only
this but companies also following the international Standards to attract the international
customers who can buy their product and services and satisfy their needs.
Q2- Major factors that contributed to the success of Senzhou international
There are various factors that was responsible to make business of the Senzhou international
successful. And here are some of them
Standards for price, quality and lead time
One of the major contribution in the success of Senzhou international was that the company was
able to match the Japanese standards for the price quality and lead time causing quite a stare in
the local market. The local media coverage provided a springboard for the Senzhou international
knitting to receive More blind order.
Partnerships
Partnership was the another big reason behind the success of organisation where they establish
the partnership with the dozens of large corporate clients including the Nike, Adidas, Uniqulo.
this company This company created their relationship and partnership with them through their
quality of the product and services they provide to their client. this helped them to recognise their
brand and attract the big partnerships.
Risk taking
Risk taking is one of the most important part of the business an in 2002 with the support of
Beilun Government Senzhou international purchase the 500- mu Float which lead the
groundwork for the sustainable development the first thing Did after the acquiring the plot was
Spend around 48 Million, building a 60,000 ton sewage treatment pond (Mayer., 2018). Many
people thought that the owner of the company had made the wrong decision in building the pond
but he argued his case the first printing and dyeing technique for appealing fabrics not only
consumed a great deal of water and electricity, it also discharged large amount of sewage.
Q3- Vernon’s product lifecycle and the transactional cost minimising approaches
The product life cycle it’s associated with the management decision an marketing within the
business, and all product go through the five different stages of the product life cycle.
Development stage

For development stages often refers to the value of that. in this stage cost are accumulating with
the no corresponding revenue. some of the products can need around years and large capital
investment to develop then test their effectiveness. and similarly done by the Senzhou
international they take time to launch their product on the international level.
Introduction
Introduction stage is about developing a market for the product and building awareness among
the people. the marketing costs are higher at this stage as it is necessary to reach output potential
customers. 2 aware people about product and services of the Senzhou international company use
the social media marketing and create awareness among the big brands on the international
market.
Growth
In the growth stage the product has been accepted by the customers and companies are starving
to increase their market shares (Parker., 2018). For innovating products there are limited
competition at this stage so the prizes can remain at the higher level both products and profits are
increasing and market is aimed at the board audience.
Maturity
In this stage competition will increase becausr companies operating on the international level so
the product features may need to be enhanced and this is what company did to take competitive
advantages. Senzhou international improve there quality of the growth more higher and match
with the international standards so they can sell their products.
Decline
The decline stage of the product life cycle is associated with the decreasing the revenue due to
the market statuelation, customers needs an hire competitions in the market.
Approach to minimise the transactional cost
To reduce the transitional cost, Senzhou international use various methods like online marketing
is one of them, they use online marketing tools to aware people about their product and services
and target the customers easily and decrease the transactional cost of the company (Curtis.,
2020). Similarly they also open their business on the online where they save the transactional
costs like rent, employees, utilities it easy this is how company minimise their transactional
costs.
Q4 – Evolution of the proposed venture by Senzhou international to set up production operations
in United States.
Senzhou international Had established the presence in various development countries including
UK, Japan etc. Venturing into the US market was considered a different situation, there were
three main positive reasons for doing manufacturing in developing countries likely U.S. market.
force was that the chairman Fuyao, Noted that the total cost of building a plant in the US was no
higher than the China (Krotov., 2017. ). The China was the top in terms of overall manufacturing

competitiveness in 2016 an other was the US and it was predicted that in 2020 it will overtake
the China.
Second the US legal system was solid and stable as compared to the other countries. Considered
about the local government might provide the foreign investors with the incentives as building a
factory in US could we create hundreds of jobs for the local communities which was proposed by
the Senzhou international
3rd it has been a long time since Senzhou international had established the partnership with the
Nike and Adidas. This was the offer that if company opened there manufacturing plant in the US
done it will be easy for the other companies as well to establish a good relationship with the Co
an sell their products in lower prices and satisfy their customers needs.
PART 2
Q1 Impact of pandemic on the aggregate demand of selected country
Aggregate demand is the economical measure Of the total amount of demand for all the finished
goods and service produced in the economy. Aggregate demand consist of all the consumer
goods, exports, capital goods, imports and government spending’s.
COVID – 19 pandemic has used impact on the aggregate demand of the China. It is because
China was the country from where this disease spread an it create the fear in the customers mind
To buy product and services from the Chinese companies. China was the top leader in the world
in terms of export But after they pandemic export of product and services goes down Which
directly impact on the countries GDP (Mendling and et.al., 2018. ). Pandemic has affect on the
supply of the product and services within the country as well. People started saving their money
due to the pandemic that affect the supply of the product and services and most of the companies
shutdown due to the pandemic. foreign investment also goes down do the pandemic And many
big brands take exist from the China market an look for the other markets like Indonesia,
Vietnam etc.
On the other side government spending also goes down but still government announced the
packages for their SME’s so It can be boost and China know that small businesses has huge
impact on their economy and contribution on their economy.
Q2- Potential effectiveness of the physical and monetary policy that can be undertaken in order
to recover from the pandemic
Physical policies refers to the use of government spending and tax policies Physical policies
refers to the use of government spending and tax policies to influence economic conditions,
specially micro economic conditions including the aggregate demand for the goods and services,
inflation, employment an economy growth (Akrout and Diallo., 2017). It is necessary for the
Chinese government to refer their physical policies and spend on the small businesses for the
improvement in agreement demand. they can also reduce the taxes on the product and services so
customers. Through the physical policies Chinese government can also provide the employment
through the jobs development and help their economy to grow effectively.

Monetary policies announced by the central Bank of the country, the monetary policy increase
the liquidity to create economic growth and reduces the liquidity to prevent inflation, Central
bank may use the interest rates, Bank reserve requirements, and the number of government bonds
that bank must hold. it is necessary for the central bank to announce then monetary policy for
helping the small businesses within the China (Geissdoerfer, Vladimirova and Evans., 2018).
They can provide low interest rate loan to the small businesses so small businesses can start their
business again through the lawn and help economy to grow again rapidly.
Conclusion
As per the report has been discussed the global trends in apparel industry In terms of value chain
and cost go well geographical locations, bargaining power of players and indeed institutional
roles. It has been reminded the major factors that contribute in the success of Senzhou
international. Any other part this report has been also discussed about the impact of pandemic on
the aggregate demand of Selected country and in the end of this report has been evaluated the
potential effectiveness of physical and monetary policy that can be undertaken in order to
recover from the impact of pandemic.

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