Classic Knitwear and Guardian: A Perfect Fit?
By Yarett Perez
BA-427 Business Policy and Strategy
May 5th 2014
Classic Knitwear was established in 1995 as a manufacturer and distributor of unbranded casual knit apparel it was operated by Brandon Miller- Chief Marketing Officer, Robert Ortiz-CEO and Sandra Chong-CFO. Classic operated in the category of non-fashion casual knitwear, all the revenues were earned on U.S. sales.
Seventy five percent of classic revenues were by screen-print channels (customized t-shirts and other knitwear with logos of everything from rock bands to small businesses to tourist destinations), the other twenty five percent was sold through mass retail channel as a private-label merchandise.
By late 2005, Miller's marketing team began researching a number of proposed product innovations. In February 2006 they landed on an interesting prospect: knitwear treated chemically to repel insects. After this the team set out to analyze the viability of a new national brand of high-quality men's and boy's insect-repellent shirts.
The opportunity arose to negotiate a licensing partnership with Guardian, a manufacturer of insect repellents that offered odorless protection against mosquitoes, ticks, flies and no-see ums. The potential alliance would allow Classic to use the Guardian name on a line of insect repellent shirts.
Guardian Brand had a patented insect-repellant clothing technology. And the product was very innovative, this gives them a good market potential. The opportunity of the market potential combined with the production efficiency of the company, could make a sustainable competitive advantage
They had a cost advantage over the other US producers because of the high-volume and low SKU (stock keeping unit) production runs. With the new Repellent knitwear the SKU will have 16 and they probably had to deal with inefficiency problems on the production.
Classic operated in...