Harrington, a leading manufacturer, and retailer of high-end women's apparel (Harrington Collection) need to evaluate an expansion opportunity into the active-wear market. Sara Huey, the VP of Strategic Planning, asks two of her colleagues to create a market evaluation (incl. financial implications, trade & competitor reactions, risks etc.) and an assessment of whether the company will be able to successfully launch the aforementioned new product line.
Richard S. Tedlow; Heather Beckham
Harvard Business Review (3258-PDF-ENG)
September 26, 2008
Case questions answered:
- What is the Harrington Collection?
- What services/products do they offer?
- Should they outsource production or manufacture in the United States?
- What market are they currently targeting?
- What are the costs to break even?
- Please complete Exhibit 9 and do a demand and profitability analysis.
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Case answers for Harrington Collection: Sizing Up the Active-Wear Market
This case solution includes an Excel file with calculations.
1. What is the Harrington Collection?
The Harrington Collection is a clothing company that is focused on high end, elegant women’s apparel. For the past 3 years, the company has had declining sales and is currently reviewing the feasibility of entering the women’s activewear market. They could either roll this into their current Vigor brand, which is “better” clothing, or create a new division within their Harrington Line. The market is trending more towards activewear clothing, which Harrington does not currently offer.
There are a couple of options that the company could do in addition to enter the activewear market such as outsourcing their products which could lead up to 50% in cost savings along with eliminating their overhead costs. This option could possibly hinder their current stance with the industry because they are a company focused on having high-quality products.
The current activewear market consists of low-quality products so, if Harrington were to enter the market they could gain a stance of high-quality activewear women’s clothing which would fit in line with their current objectives.
If Harrington Collection were to go ahead with their decision to enter the activewear market, there are a few costs that must be considered. The separate spreadsheet titled Figure 9 will detail these costs. The company must take into consideration…