Atelier

Project 1. Introductory Basics

Part 1. General Info

1) Proprietors:
1. Investor - Zhukova Alexandra
2. Director – Safarova Safina
3. Chief Accountant – Ibadulaeva Elina.
4. Manager – Mitrofanova Darya
The investor partially finances the project and tasks the manager with
implementing the business idea of creating an atelier «Fashion Home».

2) Clients
Atelier «Fashion Home» creates absolutely different clothes of varied styles for all
ages, genders and sizes of people who want to use our services.


3) Products/services
We can offer you high-quality tailoring of any style, the creation of any model of
your choice, as well as the repair of torn things.

4) Resources
Finance resources:
We are sponsered by investor Alexandra and also we have profits from our
business.
Information resources:
We use information resources such as banners on the walls, commercial TV and in
particular in social networks.
Human resources:
Our employees have important necessary qualities. For example, they should
have an experience in their sphere: perform on machines or manually operations
of varying degrees of complexity for sewing products, taking into account the
range of products, take into account the properties of the materials used in the
performance of relevant work, use equipment, tools and accessories when
performing sewing operations, identify and fix minor problems in the work of
serviced machines.

Material resources
There are should be such resources as:
Ø Fabrics of different material and type
• tissues of plant and animal origin
• artificial fabrics
• synthetic fabrics etc.
Ø Sewing accessories:
• buttons
 • threads
• zippers
• rhinestones etc.

5) Suppliers:
We have two basic suppliers. They are French National Company of fabrics and
Turkish fabrics.

6) Operations:
Ø The ongoing improvement of the provision of services and quality of work
performed
Ø Revenue from creating any styles
Ø Lease labor costs
Ø Equipment costs
Ø Utilities
Ø Insurance
Ø Taxes.

7) Technologies:
The use of specialized sewing machines with different modes of operations.


8) Business partners:
Ø Obtaining permits from state local administration
Ø The bank «Sberbank» for transactions and account opening
9) Competitors:
Ø Selection of business location with the lowest saturation of competitors
Ø Formation of a pricing policy which is lower than at other atelier
Ø Offer of guarantee for work performed.

PART 2. SELECTION OF BUSINESS LOCATION.

EXERCISE 1

Now it is necessary to determine the list of products/services to be offered to clients:
filing clothes
creating any styles
mending clothes
parking near the studio
the accompanying bar and cafeteria

EXERCISE 2
An option for choosing real estate for setting up business is the lease of premises
already suited for this business.

EXERCISE 3


EXERCISE 4
Our atelier "Fashion Home" is located in a residential area near the metro Novie Cheryomushki along
the main road. First, a large number of potential customers live in a residential area, but as a rule they
cannot visit us during their working hours. Location along the main road means a large number of
customers passing by the center. placement in the industrial zone will require significant investment in
advertising, as customers may not be aware of the emergence of a new atelier.

PART 3. STRATEGIC BASICS.

EXERCISE 1 A table of comprehensive mission statement.

Detailed description of corporate mission

Products of services Our organization offers a wide range of services: replacement of
broken zippers, repair of torn clothes (patches), creation of any
design of clothes according to your preference, drawing creative
drawings on clothes, after changing to the size
Target clients People with extraordinary tastes, large sizes, or people who want
to look different from others, also those who have problems with
clothes as a result of its breakdown
Technology We use the latest high-quality work of German sewing machines
with a simpler job performing
Competitive advantages A convenient location allowing clients to visit the atelier service at
any time suitable for the client
Philosophy When using the services of this atelier the client receives high-
quality service, get qualified job done and a guarantee on work
performed. Moreover, the wait time will pass unnoticed in the
comfortable waiting area which offers snacks, drinks, WiFi,
television and more if the work don’t have much time. We strive
to ensure that a visit to the atelier “Fashion Home” is a process
which generates positive emotions for the client!!!

Mission of atelier “Fashion Home” is to provide clients with high-quality
services to ensure that they experience only positive emotions from the
process of wearing our clothes.

EXERCISE 3
Corporate Vision
Our corporate vision is the creation of a high-qualitative clothes service business which
stands out for its affordable prices and excellent quality of service provided by highly
qualified specialists
Part 4. Strategic Evaluation Tools

SWOT Analysis
Strength Weaknesses
1. Qualified workers 1. Located not in the city centre
2. Good-developed products 2.Small room
3. Fast and quality service 3.High rent
Opportunities Threats

1. Collaborate with famous designers 1. No orders

2. Opening new branches 2. Bankruptcy
3. Collaboration with model agencies 3. No customer
4. Leaving competitors from the market 4.Low profit
5. Tax cuts 5.High costs

SWOT Analysis Matrix

Strengths(S) Score Weaknesses( Score

Strength W)
(S)
S1 Qualified workers 2 W1 Located not 3
Internal

in the city
centre
S2 Good-developed
1 W2 Small room 2
S3 Fast and quality service
3 W3 High rent 1
Opportunities(O) Score Threats(T)
O1 Collaborate with famous 3 T1 No orders 2
designers
O2 Opening new branches
3 T2 Bankruptcy 3
External

O3 Collaboration with model 2 T3 No customer 3

agencies
O4 Leaving competitors from the 2 T4 Low profit 2
market
O5 Tax cuts
1 T5 High costs 1

 SWOT analysis of the organization.

Strength(S) Weaknesses(W)
S1 S2 S3 S4 S5 W1 W2 W3 W4 W5

O1 5 4 6 3 3 6 5 4 3 3
Opportunities(O)

O2 5 4 6 3 3 6 5 4 3 3

O3 4 3 5 2 2 5 4 3 2 2

O4 4 3 5 2 2 5 4 3 2 2

O5 3 2 4 1 1 4 3 2 1 1

T1 4 3 5 2 2 5 4 3 2 2

T2 5 4 6 3 3 6 5 4 3 3
Threats

T3 5 4 6 3 3 6 5 4 3 3

T4 4 3 5 2 2 5 4 3 2 2

T5 3 2 4 1 1 4 3 2 1 1

The corresponding conclusions.

No. Factor Conclusion
S S1 Qualified workers Thanks to qualified employees, profits can increase,
+ O2 Opening new branches which will expand and open branches in other cities
O
W W1 Located not in the city center Poor location may prevent collaboration with model
+ O3 Collaboration with model agencies.
O agencies
S S2 Good-developed Due to the use of developed technologies, there can
+ T5 Hihg cost be big expenses.
T
W W3 High rent Inability to pay rent due to low profits
+ T4 Low cost
T



 Factor Level of Level of Positiv Level of Weig Weight
influen influen e or influen ht of ed
ce on ce on negati ce factor score
bussine industr ve score in
s y nature group
1 2 3 4 5 6 7 8
Legislation impacting the sector 3 2 1 6 0,35 2,1
Political factors

State regulation of competition 2 3 -1 -6 0,05 -0,3

Employment regulations 2 1 1 2 0,1 0,2
Labor law 1 3 1 3 0,2 0,6
Tax policy 3 1 -1 -3 0,15 -0,45

Totаl for political factors group
Economic situation and trends 3 3 -1 -9 0,25 -2,25
Economic facors

Investment climate in sector 1 2 1 2 0,2 0,4

Consumer paying capacity 3 3 -1 -9 0,15 -1,35
Unemployment 2 3 -1 -6 0,25 -1,5
Customs duties 2 1 -1 -2 0,05 -0,1

Total for economic factors group
Changes in client tastes and 3 3 -1 -9 0,4 -3,6
preferences
Social factors

Lack of qualified specialists 1 3 1 3 0,2 0,6

Demographics 1 2 1 2 0,2 0,4
Changes in personal income 2 2 1 4 0,25 1
structure
Media influence 2 2 -1 -4 0,25

-1
Total for social factors group
R&D expenses 2 3 1 6 0,25 1,5
Technological factors

State policy on scientific and 2 2 1 4 0,2 0,8

technological progress
IP (intellectual property) 2 1 1 2 0,1 0,2
protection
Emergence of new technologies 1 3 1 3 0,15 0,45
Speed of assimilation of new 3 3 1 9 0,15 1,35
technologies
Total for technologycal factors group
International and national 2 2 1 4 0,25 1
environmental laws, standards
Environmental factors

and requirements
Environmental safety 2 1 1 2 0,1 0,2
Level of awareness of health 1 2 1 2 0,1 0,2
problems
Emergence of new technologies 3 2 -1 -6 0,2 -1,2
taking into account
environmental factors
Healthy lifestyle movements, 1 3 1 3 0,15 0,45

environmental activism


 Factor Weighy Score Weighted
score
Opportunities
Legislation impacting the sector
8,1 4 2,1
Speed of assimilation of new technologies
5,4 4 1,35
Lack of qualified specialists
1,2 2 0,6
State policy on scientific and technological progress
3,2 4 0,8
Changes in personal income structure
5 5 1
R&D expenses
3 2 1,5
Summary score of opportunities 25,9 21 7,35
Threats
Changes in client tastes and preferences
-3,8 3 -3,6
Emergence of new technologies taking into account environmental factors
-3,6 3 -1,2
Media influence
-5 5 -1
Economic situation and trends -2,25 1 -2,25
Consumer paying capacity -2,7 2 -1,35

Summary score of threats -17,35 12 -9,4
Summary score 7,35 _ -3,5

4.3.2 Porter’s model
1.1 Substitues

Parameter score
Parameter Commentary 3 points 2 points 1 points
Substitutes exist
but have only
A substitute is Substitutes exist
recently entered
capable of and account for No known
the
Substitutes(price/quality) achieving the same large share on the substitutes
market and
quality at lower market
account
price for small share
2
Total score 2
1 point Low level of threats from substitutes
2 points Medium level threats from substitutes
3points High level of threats from substitutes




1.2 Industry Competition

 Parameter score
Commentary
Parameter 3 points 2 points 1 points
Medium level
The higher the number of
High level of of Small number
players, the higher the market market of
Number of players level
saturation saturation (3- players (1-3)
of competition and risk of
10)
losing market share
3
The lower the market
growth Stagnation or Slowing
Market growth Rapid growth
rate, the higher the risk of decline growth
rate
restructuring of market
share 2
The product
is
standardized
according to The products
The lower the level of core of
differentiation, the higher
Companies parameters different
the level of standardization
sell a but companies
Level of product and the higher the risk of
standardized also possess substantially
differentiation consumers shifting
product key differ
between
differing from one
various companies on the
features another
market which provide
additional
advantages
1

There is always
an
Tough price There is
opportunity to
The lower the level of competition, opportunity to
raise prices to
opportunity for raising lack raise prices
Limitations on cover growing
prices, the higher the risk of opportunity but
raising prices expenses as
of profit loss due to growth to only at the
well
in expenses raise prices same
as increase
rate as growth
profits
in
expenses
2
Total score 8
4 points Low level of industry competition
5-8 points Medium level of industry competition
9-12 points High level of industry competition



1.3 New entrants
Parametr Commentary Parametr score
3 points 2 points 1 points
Economy of The larger the Nonexistent Only certain Significant
scale production volume, market
opportunities the lower the cost players have
of materials and such
the lower overhead opportunities
costs per item
2
created
Strong brands The stronger the No major 2-3 major
with a high existing brands on players players
2-3 major
level of the market, the account for
players
consumer more difficult it is 50% of the
account for
awareness for new players to market
80% of the
and loyalty gain a foothold on
market
the market
3
Product The higher the level Low level of Micro-niches All possible
differentiation of differentiation, product exist market
the more difficult it diversity niches are
is for new players occupied
to enter the market
2
and claim an
unoccupied market
niche
Market entry The higher the level Low Medium High
costs of investment (payback (payback (payback
required to get within 1-3 within 6-12 period
started in the months of months of longer than
industry, the more start of start of one year
difficult it is for new operations) operations) from start
players to enter the of
market operations)
3
The more difficult it Access to Access to Access to
is to reach the distribution distribution distribution
 Access to target audience, channels channels channels is
distribution the less appealing are full requires a limited
channels the industry is for open moderate
new players level of
investment
3
Government The government No The state has The state
policy can limit or close limitations a limited completely
market entry imposed by involvement regulates
through licensing the state in the the industry
requirements, industry’s and
limitations on functioning establishes
access to important limitations
raw materials, and
3
price regulations
Readiness of If players are Existing Major Any attempt
existing prepared to lower players will players will to offer
players to prices to maintain not lower not lower lower prices
lower prices market share, then prices prices will be met
this presents a by lower
significant barrier prices by
for new entrants existing
players
2
Industry The higher the High and Slowing Stagnation
growth rate growth rate, the increasing or decline
more eager new
3
players will be to
enter the market
Total 21
8 points Low level of threats from new entrants
9-16 points Medium level of threats from new entrants
17-24 points High level of threats from new entrants





2.1 Bargaining power of buyers
Parameter Commentary Parameter score
3 points points 1 points
Share of If a few buyers are Several clients A small portion The sales
buyers making large-scale account for of clients volume is
accounting purchases, the more than account for evenly
for large company may be 80% of sales approximately distributed
portion of forced to make 50% of sales among all
sales concessions to them clients
2
Aptitude to The less unique the The The company’s The company’s
switch to company’s product, the company’s product is product is
substitutes higher the likelihood product is not partially entirely unique
that the buyer can find unique and unique, with and there is
a substitutes with there are fully distinctive nothing
additional risk for the analogous features which analogous on
buyer products are important the market
available on for clients
the market
2
Price The higher the price The buyer will The buyer will The buyer has
sensitivity sensitivity the greater always switch switch no price
the likelihood that the to the product producers only sensitivity
buyer will seek a lower with the lowest if there is a
price with a competitor price significant
price
difference
3
Consumers A lack of satisfaction in Lack of Lack of Full satisfaction
are not quality creates latent satisfaction satisfaction with the product
satisfied with demand which can be with the key with the
the level of satisfied by new features of the secondary
quality entrants or existing product features of the
available on competitors product
the market 2
Total 9
4 points Low level of threats of client loss
5-8 points Medium level of threats of client loss
9-12 pints High level of threats of client loss

3.1 Bargaining power of suppliers

 Parameter Commentary Parameter score
3 points points 1 points
Share of If a few buyers are Several clients A small portion The sales volume
buyers making large-scale account for of clients is evenly
accounting for purchases, the company more than 80% account for distributed among
large portion of may be forced to make of sales approximately all clients
sales concessions to them 50% of sales
2
Aptitude to The less unique the The company’s The company’s The company’s
switch to company’s product, the product is not product is product is entirely
substitutes higher the likelihood that unique and partially unique and there
the buyer can find a there are fully unique, with is nothing
substitutes with analogous distinctive analogous on the
additional risk for the products features which market
buyer available on are important
the market for clients
2
Price The higher the price The buyer will The buyer will The buyer has no
sensitivity sensitivity the greater the always switch switch price sensitivity
likelihood that the buyer to the product producers only
will seek a lower price with the lowest if there is a
with a competitor price significant
price difference
3
Consumers A lack of satisfaction in Lack of Lack of Full satisfaction
are not quality creates latent satisfaction satisfaction with the product
satisfied with demand which can be with the key with the
the level of satisfied by new entrants features of the secondary
quality or existing competitors product features of the
available on product
the market 2
Total 9
4 points Low level of threats of client loss
5-8 points Medium level of threats of client loss
9-12 pints High level of threats of client loss

Conclusions:
The most influential force is the consumers’ bargaining power, which means that
particular attention should be paid to their needs. Suppliers play an important role,
as without necessary fabrics atelier will not be able to perform the services which it
advertises. The activities of competitors should be monitored, including their
pricing policy, in order to preserve and increase the number of clients. New
entrants present a certain threat. In this industry there is practically no threat from
substitute services.
 Qualitative risk assessment

Access to The more Access to Access to Access to

distribution difficult it is to distribution distribution distribution
channels reach the channels channels channels is
target are full requires a limited
audience, the open moderate
less level of
appealing the investment
industry is for 3
new players
Government The No The state The state
policy government limitations has a completely
can limit or imposed limited regulates
close market by the involvement the
entry through state in the industry
licensing industry’s and
requirements, functioning establishes
limitations on limitations
access to 3
important raw
materials,
and price
regulations
Readiness If players are Existing Major Any
of existing prepared to players players will attempt to
players to lower prices will not not lower offer lower
lower prices to maintain lower prices prices will
market share, prices be met by
then this lower
presents a prices by
significant existing
barrier for players
new entrants 2
Industry The higher High and Slowing Stagnation
growth rate the growth increasing or decline
rate, the 3
more eager
new players
will be to
enter the
market
Total 21
8 points Low level of threats from new entrants
9-16 points Medium level of threats from new entrants
17-24 High level of threats from new entrants
points
 Project 2. Financial Model
Part 1. Rational For Potential Revenue

Identify the company’s main sources of revenue

 Direct expenses
Item Unit of Volume Purchas Number Cost of Prime cost of 1 Gross
measur e price of procure portion margin
ement of 1 unit procure ment per day
ments
Repair hours 1 500 5 2500 500 208450
clothes
Custom hours 1 4500 4 18000 4500 192950
drawing
Grind hours 1 750 30 22500 750 188450
down
and
adjust
seams
Take hours 1 500 13 6500 500 204450
measur
emets
for
sewing
Release hours 1 36700 10 367000 36700 472450
clothing
line
Organiz hours 1 150000 60 900000 150000 8789050
e a 0
fashion
show
Sew on hours 1 13000 40 520000 13000 158950
a
propose
d sketch
Re- hours 1 5000 16 80000 5000 309050
trimmin
g
clothing
Total 100165 210950 1052380
00 0
Gross 231523
margin 600
per
month

Part 2. Calculation of gross margins of 1,2 and 3 levels and profit

Number of clients served and weighted average price of services provided to each client.
 Per Per Per
year month day
Complexity coefficient(number of services provided 1 1 1
to each client per visit)
Number of clients serviced 23760 1980 90
Weighted average price per visit,rubles 2343 2343 2343

Direct expenses
Purchase Prime Gross
Unit of price of 1 Number of Cost of cost of 1 margin
Item measurement Volume unit procurements procurement portion per day

Repair
clothes hours 1 500 5 2500 500 208450

Custom
drawing hours 1 4500 4 18000 4500 192950
Grind down
and adjust
seams hours 1 750 30 22500 750 188450
Take
measuremets
for sewing hours 1 500 13 6500 500 204450

Release
clothing line hours 1 36700 10 367000 36700 472450

Organize a
fashion show hours 1 150000 60 9000000 150000 8789050
Sew on a
proposed
sketch hours 1 13000 40 520000 13000 158950

Re-trimming
clothing hours 1 5000 16 80000 5000 309050

Total 10016500 210950 10523800

Gross margin
per month 231523600


Direct expenses (staff)
Item Cost of Numbe Amoun Number Total Numbe Total
1 hour r of t of per r of cost
of work hours employe day workin per
es g days month
manager 900 5 4500 1 4500 22 99000
Sewer 500 8 4000 6 2400 22 528000
0
Dressmark 650 8 5200 4 2080 22 457600
er 0
Designer 720 8 5760 3 1728 22 380160
0
Investor 850 3 2550 1 2550 22 56100
Chief- 740 8 5920 1 5920 22 130240
Accountant
Director 1000
6
6000
1
6000
22
132000
Total 178310
0

Gross 178310
margin per 0
month(2nd
level)

Indirect expenses
Item Total per cost
month
Accounting 7000
Amortisatio 12000
n
Rental 80000
Other exp 7000
Total 106000
Gross margin per month (3nd level) 1677100






Taxation system

Revenues per 605700
month
Expenses per 277890
month
Credit 0
payments
Tax base 167710

Tax rate 1

Amount of tax 9558

Profit per 1761223
month

Item Variable Fixed Profit before Sales volume

expenses expenses taxation
VINCE 124000 277890 167710 0










 Project 3. Varied topics: Planning + HR + Risks
Part 1. Hierarchy of goals and corporate strategy

Posing to take place in the

industry of clothing
Business Learning and
Finances Clients
processes growth

Increase profit by Increase the number Implement a system Increase the level of
10% over the course of clients by 14% of online orders and automation in 1 year
of the year within 3 months fast delivery by 30%

Implement a Implement
Reduce system of Organize on-
the sale
expenses by benefits/ site/online
system
23% over 1 Discounts for
within a 1 training every
year regular 6 months
customers month
provide the
Increase service of Implement a Organize
revenues by clothes’s monthly monthly
25% per delivery 1 coupon motivational
month month system lectures

 Corporate Strategy Map

Part 2. HR management
A responsibility Matrix for the customer service process
Processes Positions Manager Sewer Dressmaker Designer

Repair of clothes P R

Custom drawing R P

Grind down and adjust seams P R

Take measurements for sweing P R

Release clothing line R P

Organize a fashion show R P

Sew on a proposed sketch P R

Re-trimming Clothing P R

A responsibility Matrix for the top-level business processes

Processes
Investor Director Chief Manager Administrator Designer
Positions Accountant

Management of R
finances
Management of R P
production processes
Management of sales P
R P
Management of R P
personnel
Management of R P
document flow
Management of risks R
Legal Support R P

Procurements of R
materials and parts
Accounting R
P

Equipment R P
maintenance
Security R P
Administrative issues R P
Part 3. Responsibility Management
Qualitative risk assessment
Assessment of
Risk probability Risk mitigation measures
(low, medium,
high)
Administrative risks
Inappropriate medium Perform analysis of marketing
development strategy and strategy
Problems related to medium Develop a personnel
employee management system, including
management material and psychological
motivation, social support
Marketing risks
Inappropriate medium Adopt a professional approach
concept to the selection of the concept
based on knowledge and
experience from the
implementation of similar
projects
Emergence of new medium Monitor competitors and their
competitors approaches to doing business
and implement the appropriate
measures to remain
competitive
Competitors high Monitor competitors and their
acquiring advantages approaches to doing business
and implement the appropriate
measures to remain
competitive
Decline in demand low Adopt measures to increase
the number of clients
(advertising, special initiatives,
etc.); improve quality of service
Operational risks
Higher prices on low Correctly calculate costs.
fabrics Carefully analyze and choose
reliable suppliers
Incorrect layout of low Commission a layout plan from
work area an organization which is
licensed and specializes in the
development of such projects
 Financial risks
Devaluation of low Settlements on the
national currency development of the project are
in rubles. Expenses on fabrics
from foreign manufacturers are
individually agreed upon with
the client.
Political risks
Changes in medium There is a likelihood of
legislation changes in the system of
taxations, tax rates as well as
documents regulating the
atelier; but these changes will
similarly affect all participants
of the market. At the same
time, correct tax planning and
optimization are important.
Legal risks
Mistakes in low Seek legal assistance from a
fundamental qualified law firm
corporate documents
Failure to secure low Analysis of the legal
necessary permits requirements and consultations
and support from the
appropriate specialists.
 4 Project. Value Chain.
Part 1. Identification of business processes of higher
level.

Executive-level processes
Management processes:

Management Manageme
of material
nt of sales
and technical

Provision of
production
personnel

Management support processes:

Legal
support

Risk and
competition
management


Core processes:

Sales and Purchase of Environme
customer material and
nt Analytics
service production

Auxiliary processes:

Accounting

Part 2. Value Creation Process

The process of value creation:


Accepting an order from a customer


Individual tailoring is discussed


Take measurements from the customer and change the details



Order registration


The pattern is made to the client


The client comes to see the patterns


Get advance


Fitting of clothing made for the customer


Accept payment from customer


Give the finished order to the customer
 Part 3. Porter’s value chain

Support Activities

Management
Infrastructure Finance
Administrative tasks

Recruitment and selection

Human Resource Regulation of labour relations
Management Personnel assessment
Strategic planning
Conducting meetings
The newest steamers
Technology development High-quality sewing machines
The release of a new clothing line
Fabrics
Procurement Thread,needles,a variety of decorative jewelry to fabric
Purchase of dummies
Primary Activities
dummies
mirrors
Inbound logistics fabrics
paper
steams
sewing clothes
Operations organization fashion shows
release lines clothes
Advertising
Introduction of new artists
Marketing and sales
Benefits
Cooperation with advertising Agencies
Comfortable waiting rooms
Conditions for fitting(separate
Service and support rooms with examples and large
mirrors)
Hiring an individual designer