New Product Launch Marketing Plan, Part III
Christy Church, Ayanna Green, Marisa Smith
Armando Salas-Amaro Jr.
May 11, 2015
New Product Marketing Launch Plan, Part III
Market Growth Potential and Competitive Analysis
In terms of market growth with its Innovate to elevate platform, Hanesbrand has succeeded in driving its margin expansion. Considering in 2014, its innerwear segment operation profit grew 130 basis points year after year up to 20.4%. This has surpassed 170 basis point of expansion in the prior year. Yet, it is believed Hanesbrands' Innovate to Elevate platform is currently in its early stages. It is also estimated that Innovate to Elevate platform products account for less than 15% of its sales. Hanesbrands' sees expansion in socks, intimates and kids' underwear as well as marketing tactics are increasing this penetration. Additionally, it is determined that active wear is in earlier stages on Hanesbrands' Innovate to elevate innovations at Maidenform have not started yet. Furthermore, Hanesbrands has been successful at using acquisitions in order to drive earnings growth. Considering, $50 million is spent per year on research and development and 400 people globally that are committed to innovation, this has become a complicated model to replicate, in the view of Hanesbrands that requires both scale and controlled supply chain. What’s more is that Hanesbrands produces nearly 1.9 billion units per year and has 70% of manufacturing employees in three of its lowest cost regions. This is also with less than 3% of its workforce in China. Also, when its manufacturing can internalize high volume styles, it is estimated that savings as much as 15-20% can be achieved. Furthermore, as Maidenform, DBA and Knights are integrated; Hanesbrands advisory believes it can drive an additional $50 million, $95 million and $20 million in operating profit through synergies, respectfully speaking. (Bridget Weishear. 04/24/15) In terms of competitive analysis, Handesbrands advisory believes it has a high degree of confidence in the defensibility of Handesbrands' competitive position, considering advantages that are complicated for competition to replicate including Hanesbrands' large owned and controlled supply chain, core produce positioning in an area where brand is more important than price, in addition to economies of scale that are achieved through a growing portfolio of synergistic brands. (Bridget Weishear. 04/24/15) In terms of competitive analysis, Handesbrands advisory believes it has a high degree of confidence in the defensibility of Handesbrands' competitive position, considering advantages that are complicated for competition to replicate including Hanesbrands' large owned and controlled supply chain, core produce positioning in an area where brand is more important than price, in addition to economies of scale that are achieved through a growing portfolio of synergistic brands. (Bridget Weishear. 04/24/15) Segmentation, Target Market, and Positioning
Pricing and Distribution Strategies
Hanesbrand advisory currently thinks earnings per share could double in the next four to five years in terms of pricing premiums, further leverage of the global supply chain and additional acquisitions that are synergistic to core products. Additionally, it is believed that Hanesbrands leverages extensive manufacturing capabilities in order to produce quality products, in addition to charging an economical price. Furthermore, Hanesbrands operates a large owned and controlled global supply chain which includes 60% of its operations in the Western Hemisphere and 40% in the Eastern Hemisphere, which is thought allows it to maximize low cost production and global distribution. Hanesbrands has 72 facilities that produce 1.9 billion units. Considering it is wholly owned and operated, a research and product design and development team works on...
References: Fully Integrated Marketing Plan for Hanesbrand-Univision. Published by Megan Gill. Retrieved on May 2, 2015 From http://www.scribd.com/doc/58675104/Fully-Integrated-Marketing-Communications-Plan-for-Hanes-Univision#scribd
Investment Thesis. Hanesbrand by Bridget Weishear. 04/24/15. Retrieved on May 2, 2015 from http://analysisreport.morningstar.com/stock/research?t=HBI®ion=USA&culture=en-US&productcode=MLE
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