What has the company deal with when starting a fashion business?
As this company is planning on opening a new factory to produce its clothes along with several new outlet stores, it needs to be able to access the raw materials needed for production (fabric, thread, etc.) fairly easily and cheaply. Therefore it is a must that the company is located in the country in the same trading bloc with their material suppliers. This would mean they would be able to access the necessary materials for their clothes without any tariffs or quotas forcing the cost up. Lower costs mean lower prices can be used which would allow them to charge lower prices. This would make them more competitive especially as they would be trying to operate in a new market in which they have little to no experience. As their current headquarters are located in Germany – part of the EU – it would be a good decision to locate in one of the other 27 countries currently in it. This would allow them to one, benefit from the free market and two, be close-by to headquarters and other outlets. Due to the extremely fast-paced dynamics of the retail clothing market, it is essential to be able to communicate with all aspects of the business quickly and without delay. Any sort of delay would cause them to fall seriously behind their competitors like Zara and H&M who would be bringing out new designs to match the current trends and season constantly.