Jenny Erwin - Case Study 2 - LXFM 745 01

Table of Contents
01 Secured
Distribution

02 Channel
Conflicts

Success of

03 Company
Owned Retail
Activities
Secured Distribution 3

List possible reasons to implement secured distribution activities from a

manufacturer’s perspective and apply these insights to Hugo Boss’ situation in detail.
 4
Increase Sales
Secured distribution allows companies to offer other their
products to other businesses on a defferred payment
schedule.

Why implement Quick Delivery

Secured More control over products and the supply chain allows
for more responsive product distribution.
Distribution?
Planning Ahead
Secured distribution is a great method for companies to
move their products towards point of sale, staying one
step ahead of consumer demands.
Boss must implement multiple distribution strategies in order to effectively reach its
flagship stores, freestanding stores, factory outlets, shop-in-shops, multi-brand
points of sale, and franchising and licensing agreements, as well as internet sales.

According to the Hugo Boss case study in Strategic Retail Management, "Secured
distribution is the most significant part of Hugo Boss' distribution system, with a
sales share of 57% of the company's total revenue."

5 Secured Distribution & Hugo Boss

Channel Conflicts 6

Describe potential channel conflicts for a manufacturer adding a new company-owned

retail channel and use Hugo Boss to illustrate some examples. Focus on methods that
are suited to managing channel conflicts.
 7

Horizontal Channel Conflicts

These are conflicts between retail formats

Possible Channel
Conflicts
Vertical Channel Conflicts
The shift in power from manufacturers to retailers
In reference to horizontal channel conflicts, Hugo Boss' retail offerings represent
many potential issues. Not only do Boss' retail options compete with one another
(online vs. in store, shop-in-shops vs. flagship stores), but the company's diverse
offerings at different price points could also conflict with each other.

Vertical channel conflicts, however, represent little threat to the brand. Due to Boss'
successful secured distribution system, the company maintains great control over
both manufacturing and retail.

8 Channel Conflicts & Hugo Boss

Success of Company-Owned 9
Retail Activities

Assess the contribution of Hugo Boss’ company-owned retail activities to the long-term
success of the company.
 10
Let others experiment
Hugo Boss' strategy of franchising and then buying out
said franchises in successful areas eliminates some of

How has Hugo the risk of testing new markets. In reclaiming the
franchises, Boss is able to strictly maintain brand image

Boss' company-
and integrity, while also taking advantage of lucrative
areas for the brand worldwide.

owned retail
activities impacted
its success? Full control
Built in to the company's global growth strategy is the
inclusion of new store and shop-in-shops openings. While
this signifies a shrinking wholesale profit, it also enables
the brand to grow quickly.
Thank you