Finlatics IBEP project 2:

Sustainable fashion company

Sustainable fashion is a movement and a process that promotes changes in fashion items and the
fashion sector in the direction of greater ecological integrity and social justice. Fashion textiles and
goods are only one aspect of sustainable fashion. It looks at the entire system of how clothing is
made, who makes it, and how long a product lasts before it ends up in a landfill. This entails dealing
with social, cultural, ecological, and financial systems that are all interrelated.

Sustainable fashion also considers fashion from the perspectives of a variety of stakeholders,
including users and producers, all living species, and current and future inhabitants of the planet.
Citizens, the governmental sector, and the corporate sector are all responsible for sustainable
fashion. The benefits of product-level initiatives, such as replacing one fibre type with a less
environmentally hazardous choice, are a good example of the necessity for systems thinking in
fashion.

Currently the company is in growth stage and The Growth stage is the second of the product life
cycle's stages, and for many manufacturers, it's the most important for establishing a product's
market position, boosting sales, and improving profit margins. This is accomplished by combining the
ongoing development of consumer demand with the decrease of manufacturing costs using
marketing and promotional activity. The rate at which a product progresses from the Introduction to
the Growth stage, as well as the rate at which sales increase, varies greatly from one market to the
next.

Swot matrix:

Strengths:

 Individualism Exclusive & Unique Aspects of ethics

 Reuse, Reduce, Repair, and Recycle are all words that come to mind when it comes to the
environment. 
 Reduce the number of raw resources used.
 Make new fashion trends Vintage Normcore.
 Governmental assistance Obtaining new environmental labels

Weakness:

 There is a small pressure group.

 Only locally sourced raw materials are used. Slow production.
 Potential for marketing.
 Scale economies Only a local market exists. Price that is not competitive Profitability.

Opportunities:

 a niche market for small businesses Subvention.

 It is socially acceptable to have access to information.
 For SCM, reduce pollution (emissions, Wastewater).
 a new study More durable materials
 Normative improvement Assist international organisations.
Threats:

 Low-cost production Benefits of fast fashion.

 Education for sustainability Consume paradigm Crisis.
 Technology too expensive.
 Old Fashion.

Challenges in sustainable fashion:

At first appearance, the word "sustainable fashion" appears to be simple. However, digging further
reveals that there isn't really a globally agreed-upon definition of sustainability in the context of
fashion; at its heart, fashion is based on the ongoing creation and usage of new goods, which is
intrinsically unsustainable.

This poses a problem since we want to make more responsible decisions, but how do we know what
the proper decision is if no one can agree on what that means? It's becoming increasingly
perplexing, especially as more people talk about "sustainable fashion" while presumably having their
own meanings of the term.

While many brands have yet to reach this stage, we are seeing an increasing number of them
actively address social and environmental challenges. Brands are talking about these issues – and the
most advanced are providing thorough evidence to back up their claims – from the creation of
collections or products made with lower impact materials, to plastic-free or carbon-neutral fashion
shows and events, or partnerships with social initiatives and charitable causes. However, as the
article points out, this is insufficient to classify a brand as "sustainable."

It's critical that companies communicate openly about their good accomplishments (with proper
proof to back up any claims), while also being realistic and open about the impacts and problems
that their supply chains and business practises face – and what they're doing to address them.
Customers find it extremely difficult to make brand selections without this information because they
are not presented with all the data.

Milestone 1:

The two important categories for determining the value of this product would be Clothing stores and
online platforms. The first milestone would test the outreach of the product. Due to the current
situation of the pandemic and all public are quite aware of the environment and its protection from
the mankind and this is the right time to find the product market fit. This would help the company
analysis whether the public are willing to buy the product.

Store tie ups: Minimum 4 medium to upper stores.

Usage per store: Minimum 50 customers.

Milestone 2:

After the product has entered successfully into the market now its time to focus on expanding the
market by following innovative tie ups. This would be achieved by advertising the benefits of using
the sustainable fashion benefits through various marketing platforms.

Store tie ups: Minimum 10 medium to upper stores.

Usage per store: Minimum 100 customers.

Milestone 3:

To stick in market and sustain in the market now its time to focus on expanding through aggressive
tie ups. This indicates the product has found its correct product market fix and ready to deep dive
into market and grab its share.

Store tie ups: Minimum 15 medium to upper stores.

Usage per store: Minimum 200 customers.

Milestone 4:

Once the product has made its presence all over the market, it can work grabbing a higher market
share and making the brand stand all over. The milestone should focus on product ability to stand
amidst the presence of various other fashion products. This can be done by advancing the
technologies and implementing various sustainable fashion products.

Store tie ups: Minimum 30 medium to upper stores.

Usage per store: Minimum 400 customers.

INITIAL INVESTMENT CUSTOMERS ADDED TOTAL NO OF CONVERTIBLE RATE

PER YEAR STUDENTS PER CONVERSION RATE
MILESTONE
50,00,000 500 <500 26%
50,00,000 1000 <1000 18%
50,00,000 1500 <2000 12%
50,00,000 2000 <3000 8%

4. For sustainable fashion, the customer acquisition cost will be mainly driven by placing google ads,
digital ads across all media to adapt sustainable living, boosting social media posts and spreading
knowledge about the sustainable wear advantages and its benefit to mankind and other costs would
include printing the pamphlets for newspapers and offering first time purchase discounts and
participating in various events and marketing about the product.

Customer Acquisition cost = Total marketing expense in given period

___________________________________

No of customers acquired in given period

Total marketing expense to achieve milestone 1: 10,00,000

No of customers acquired till milestone 1: 500

CAC = 2000

Customer lifetime value =average value of customer’s purchase*Total no of purchases

Price per average sustainable product =500

Average value of customers purchase =500

Total number of purchases =1

CLV=500*1=500

Therefore, CAC and CLV for a span of 5 years would be as follows

Avg value of Total no of CAC Total CLV Net profit on

customers purchases customer
purchase
500 1 2000 500 -1500
500 2 0 1000 -1000
500 3 0 1500 -500
500 4 0 2000 0
500 5 0 2500 500

The company incurs Rs 2000 as CAC and earns Rs 500 per customer to achieve milestone 1. As
shown in table above, the company stops making losses year 4 onwards. This indicates that the
business needs to keep a customer loyal for at least 4 years to make profit on it.