Assign Fashions Ltd: Competitive Advantages and the Analysis of Revenue Streams

The business under study is Assign Fashions Ltd. It is a ltd company located in downtown New York that specializes in high-end fashion wear for women and men. The business is the authorized distributor of various fashion brands that do not have a physical presence in the city. This has given it a monopoly when it comes to the particular fashion brands it sells. 

The company does a lot of online sales which now form a significant part of the company’s revenue although floor sales in its stores are still performing quite well. Stock for sale is gotten from the various high-end fashion houses although the company also imports various shoe brands straight from manufacturing facilities overseas, mainly China. 

The store has a relatively wide distribution channel in the city that enables it to ensure that their stock reaches their two main stores in the City in good time. Other clothing stores that get products from Assign get their orders delivered within a few days of ordering depending on their locations but average turn-around-time within the city is 24 hours. 

Marketing forms a large percentage of the Company’s recurrent expenditure as the company constantly engages celebrities and other social media influencers to wear and market their clothing which is quite expensive depending on the level of the celebrity engaged. 

b. You assumes that you calculate the income statement for 3-6 months period and use the excel sheet to analyze the data, and generate reports in form of table and graphs, 

The Company experienced a slight dip in revenues between January and March but recovered to record very high revenues with June registering the highest revenues recorded within the period. 

The total expenses also fluctuated but not directly proportional to the revenues although a rising trend was recorded in the last three months of the period. 

This fluctuation in total revenues and total expenses can be seen properly when plotted on a line graph as done below; 

c. A flowchart of the general business processes at Assign Fashions. 

d. Assign Fashions’ current IT system and its problems. 

The IT system in the company is two-pronged consisting of an accounting system and a separate Point of Sale System. The Point of Sale system is installed in the two stores and primarily helps in reconciling the sales from the two stores and manage inventory. Inventory management will include transactions such as deliveries to clients, incoming deliveries from suppliers, transfer of stock between the two stores and also any returns from clients. The POS system is then linked to the accounting system which is installed only in the company’s main stores. The accounting system picks various totals from the backend of the POS system that will now be used for accounting purposes. These records/ totals include daily POS sales, cash sales, credit sales, and the various stock balances. It then places these records in the correct accounting journals which the company accountant will look at to come up with final accounting documents such as income statements, profit and loss statements, debtors and creditors journals and any other relevant documents. 

The main problem with this system is that it is not an all-in-one system where all documents can be sourced from one system. For one to view inventory movement, it has to be done from the POS system while the detailed financials relating to these stock movements are viewed from the accounting system. This process is very tedious especially when auditing is being carried out. The POS system and the accounting system are also procured from two different companies who also maintain their respective systems. This is very inconveniencing to the company in cases where there is a system failure as the companies sometimes do not take responsibility and blame each other for the failure which truly affects the company’s operations. 

e. Design or suggest the advance information system with description 

The company could do well with a full ERP (Enterprise Resource Planning) solution. This would do the job of both the point of sale system and the accounting system eliminating the tedious linkages and the process of having to access two different systems to get a proper insight of the business. This solution would take care of the inventory management right from ordering from supplier, shipping of the stock, distribution and eventual sales of the inventory. Unlike the earlier setup, the ERP solution would allow for material costing which would factor in charges such as import duty, insurance-in-freight among other charges that could not be shown in the point of sale system. This is because the POS system only took the cost price of a product and did not allow this cost to be broken down into its constituent elements. 

Another advantage of such a solution is that processes such as auditing and detection of fraud would be much easier since everything can be queried from one system. Any system failures can also be quickly fixed by the company maintaining the system without the bureaucracy and blame-shifting that is witnessed when dealing with two companies. Another huge advantage of such a solution is it usually modular and scalable thus growing with the company as such solutions are usually made to cater to a range of company sizes from small, medium to large sized enterprises. This means the company does not have to change the IT system once it grows to a particular level where it will only need to add a particular module that will cater for the increased capacity of the business or even give a more complex type of report analysis.