ARMOUR GARMENTS COMPANY (CASE ANALYSIS)

I.

SUMMARY OF THE CASE

Armour Garments Company (AGC) was a manufacturer of high
quality undershirts in the Philippines established on 1954. For ten
years, it has been a flourishing enterprise having only 25 workers at its
onset and accumulating up to 250 workers by the year 1967. The bulk
of its products were sold to wholesalers in Divisoria and in turn are
distributed all over the country. In the mid 60s, more undershirt
factories opened and threatened the market share of AGC but the
company was quite confident with its reputation as a high quality
manufacturer of undershirts. Then in 1970, the fashion trend of the
country change as it is wont to do. It became unfashionable to wear
undershirts and this furthered the declining sales of AGC.
The company decided to introduce a new brand, Blossom, which
was of the same quality with its Armor and Marca Troca brands but
are cheaper. Unfortunately Blossom was undermining the sales of its
sister brands so the company decided to discontinue its production.
With the failure of the marketability of its traditional products, AGC
decided to venture into ready-to-wear business. They introduced a polo
shirt line, jeans and printed shirts but the results were unfavorable.

II.

STATEMENT OF THE PROBLEM

How can the Armor Garments Company reduce its losses and cope
with the ever increasing competitiveness of its market?

III.

STATEMENT OF THE OBJECTIVES

1. Encourage middlemen, like the Divisoria wholesalers, to be loyal to
the Armor Garment Companys products.
2. To be able to compete with the emerging competition and gain profit.

IV.

ALTERNATIVE COURSE OF ACTION

 First solution is to partner up with the raw materials suppliers and to

give longer credit terms and other benefits to the middlemen. One
advantage of is the product costs will decrease. Also, more
middlemen will be loyal to the products and they could also advertise
it. But, the market is still limited and there are no improvement in the
products thus the problem of the market trend is not addressed.
Additionally, competitors might copy this strategy and they might
also offer longer credit terms.
Another solution is to set new styles and to create products for
women. With the new styles and merchandise for women, there will
be more potential customers. Also, as women are more interested in
clothes, there are greater chances that there will be more buyers as
with the male only products. The disadvantage of this is that the
company might have difficulties with the different production process
for womens clothes. Also, womens taste in clothes are more fickle.
This can be an obstacle for the companys designers as they will
have to update their designs frequently.
Another option is to venture into the high end market and supply
some celebrities with the clothing line for endorsements. One
advantage is the high exposure of the products and the big influence
of the celebrities to the fashion trends of the public. Also, AGC could
have more profit since high end products could have higher
revenues. But, there will be major changes to the design and
manufacturing process. Also, having endorsers will be costly and
there is no assurance that the celebrities influence is great enough
to persuade consumers to buy the products.

V.

RECOMMENDATION AND CONCLUSION

The optimum option is the second alternative. There will be major

changes but the benefits far outweigh the risks. The first alternative
just addresses one face of the issue while the last alternative is more
risky and more costly with very high probability of failure. The AGC
could slowly develop their designs and introduce it to the market. The
losses theyve incurred will gradually be lessened with the new product
offerings. They must let go of their sentimentality towards their
traditional products to be able to move forward and to contend with the
aggressive competitors.
With these changes, the company will be better suited to compete in
the market. The managers of AGC must be willing to lead the
transformation of the enterprise.