Jumanji is a global fashion design and retail business, best known for its ‘fast
ID: 325536 • Letter: J
Question
Jumanji is a global fashion design and retail business, best known for its ‘fast- fashion’ clothing. Fast fashion provides around 10 design seasons each year rather than the traditional 4 design seasons offered by many fashion retailers. Jumanji operates over 4,000 stores in 20 countries located throughout Europe, Asia and the USA.
Jumanji does not have any factories. Instead Jumanji outsources all of the manufacture of its own designs to approximately 400 manufacturers throughout Europe and Asia. These outsourced manufacturers are long-term partners of Jumanji.
Jumanji employs its own in-house design team which is based in Jumanji’s northern European Head Office. Jumanji’s design team controls the stages of design from merchandise planning through to establishing the design specifications of each item of clothing. Jumanji also has a number of production liaison offices which are located close to many of its outsourced manufacturers in Europe and Asia. Location of these production liaison offices, close to Jumanji’s key outsourced manufacturers, helps to optimise efficiency and minimise costs.
The production liaison teams are responsible for managing the sourcing and procurement of the raw materials and the outsourced manufacturers' final output. They are also responsible for ensuring that these outsourced manufacturers are adhering to Jumanji’s Code of Conduct, which is mandatory for all of Jumanji’s outsourced manufacturers.
Communication between the design team at Head Office, the production liaison teams and the outsourced manufacturers is managed through an integrated information system.
Jumanji aims to reduce costs in all parts of its organisation. It optimises raw material prices through large volume purchasing and manages its logistics through a just-in– time delivery system. The majority of Jumanji’s stores are leased. This enables it to have total flexibility by being able to switch its stores relatively easily to the best locations to attract customers and leasing also helps to improve Jumanji’s cost efficiency.
REQUIRED:
A. Explain whether the business is following a low cost or differentiation strategy and explain why.
B. Explain the extent to which the strategy you decided on above has influenced the way the business is structured and operates.
Explanation / Answer
A) Jumanji follows a differentiation strategy by providing around 10 design seasons per year compared to the traditional 4 design seasons that are usually offered by most of the fashion retailers. By providing more designs, the firm is able to attract customers who wish to purchase new fashions most of the time. Clothing is all about fashion and differentiation in designs and by implementing this strategy, the firm is able to stay ahead of its competition.
B) As Jumanji adopts differentiation strategy, its business operations needs to be flexible enough to come up with new designs and able to produce the clothes before the start of the season. As the firm's core operations are centered around design and production is completely outsourced to around 400 contract manufacturers who have long-term relationship with the firm with its liason offices in continuous communication with the manufacturers. The firm is able to minimize costs and improve efficiency by locating its production liason offices near to the outsourced manufacturers. By leasing the offices, the firm also minimizes costs and easily move or change the location of stores.
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