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1. Hugo Boss has both fashion and basic stock items.  What is the difference between the two and how are the two treated as far as determining the inventory levels for each?

Ans. The fashion wear included loungewear, terry wear and swimwear products in the Boss Black, Orange and HUGO collections and they amounted to 198 SKUs. They changed with season. They had to be first designed, prototyped, sampled and then presented to buyers associated with more than 200 Hugo Boss retail accounts. Since they were rarely repeated once featured in a specific collection, they were permanently stocked out once those items were depleted from the inventory.

The basic stock items of Hugo Boss were the never out of stock products or the NOS products. They did not change seasonally is style, color or fabric and remained consistent throughout the year following the same trend for nearly three years. There were 513SKUs of such items under the category of Boss Black body wear and hosiery products. The requirement of prototyping and sampling etc. was not required for such products. The only things needed before the delivery store, for stock items, were plan of production, quality checks and arrangement of shipment. They were always available so that the customers can buy them any time of the year and by no means approach any other brand if the stock was over.

2. Detail and describe the supply chain for the NOS SKU's.

Ans. The product availability of NOS was 97.9% in 2003. The stock outs often occurred during the key replenishment periods like month of December and the stock out patterns differed across production styles. Moros calculated that stock outs among NOS items during 2004 resulted in loss of 1.1% of net sales.

The production planners used to keep on-hand inventory levels equal to 3.5 months of forecasted demand. The production lead time for such goods was eight weeks. Transportation took around two and a half weeks. The orders arrived after ten and a half weeks. The space allocated to NOS items in inventory was 2,500 qm. The cost of holding the inventory was 9-12% of the total cost. Fulfillment of replenishment orders was promised within a week and NOS items were replenished with 48Hours delivery window.

3. What are the competitive advantages of the Hugo Boss brands?  Do you agree with the assertions that Hugo Boss makes as to what their competitive advantages are?  Do you feel there are additional competitive advantages?

Ans. Hugo Boss is known for providing high-quality men's and women's fashion apparel, shoes and accessories. Though it started as a provider of men's business wear, it included women's wear later on. The retail points of sale were huge in number and spanned 100 countries which ensured Hugo Boss's leadership in selling men's wear in the year 2006.

Product leadership, market know-how and intimacy and operational excellence are the distinguishing and advantageous features of the brand. While other luxury goods competitor such as Ralph Lauren, Armani and Prada hired a single major designer to handle the designing and fabrication of their clothing, Hugo Boss utilized the services a team of creative managers and designers.

I perceive Hugo Boss is steadfast on acting on all the upcoming opportunities and is ready to change with the trends and sales figures. As exemplified in the case study, it has a team of dedicated employees who are shrewd enough to make the maximum of all the available information and sales requirements and work strategically towards it. The NOS items are replenished based on a guarantee of 48 hours delivery window.

The company has partnership with global specialists. They have market driven, entrepreneurial brand management setup. The operations are focused on the analysis of and strategic insights into customers and competitors. Hugo Boss works in cohesion with fabric, elastic trimming and accessories specialists.

4. This case study was written in 2007.  In the year 2010 do you feel that the issues presented here are still relevant?  Why or why not?

Ans. The issues are still relevant as the subject in question is the NOS goods which are sold perpetually and are in constant demand. The supply chain has to be maintained keeping in view the producers or the manufacturer's interest. The service level of 99.9% of these goods almost guaranteed that these products would be in stock and available to purchase when needed.

The only possibility when this issue may not remain relevant is when the buying power of the consumers decreases. The movement of stock will be slowed down. The sales will be reduced. Since the economy keeps changing in influence it directly influences the retail industry first and then the production houses later and in a big way.

The other factor can be a complete shift in the requirement of style of NOS items at randomly. Since these facets of sale can affect the inventory control in an effective way and cannot be forecasted, the issues related to NOS can not be limited only to the supply chain requirement as suggested in this case study. 

5. What does Constantine Moros mean by insurance brands?  What is a term that Michael Porter might use for an insurance brand?  What is Hugo Boss's position on insurance brands?

Ans. Insurance brand means any brand that can suffice the requirements of a particular brand of clothes when its stock is not replenished. According the case study done by Constantine Moros, the stocks should be available when needed. This requires a service level of 99.99% for NOS.

Insurance brand was needed for most of the brands as the requirement of a service level of 99.99% was difficult to maintain. But implementing and maintaining insurance brands was resource intensive and costly to monitor so a retailer had to depend on suppliers many times. This dependency could be utilized in a profitable way by replenishing the goods in time.

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