Glowing Sky Company in New Zealand

Summary 

Glowing Sky is a family-owned company that specializes in merino wool clothing. Cath Belworthy and her husband Dil founded the Glowing Sky Company in Rakiura / Stewart Island in 1997 (Glowing Sky n.d, para. 1). This Firm started as a small shop printing T-shirt, which has grown immensely, opening retail stores in Waiheke, Invercargill, Wanaka, Dunedin, and an e-commerce site (Brewster, 2018, par. 13). More so, the company has a manufacturing facility in Timaru, which is operated by 10 workers. Currently, Glowing Sky Company has many employees operating in their five shops (Glowing Sky, n.d, para. 13). Glowing Sky specializes in making and selling various merino clothing for women, men, and children, in which all the manufacturing, designing, and retailing are done within New Zealand. The company is committed to keeping its manufacturing process local and where possible doing the job themselves (Brewster, 2018, par. 18). It seeks to produce high-quality clothing and ensure the wellbeing of their community by being involved in the manufacturing process. 

SWOT Analysis 

As a growing company, Glowing Sky has numerous strengths that help it to thrive in the market place as well as penetrate new areas. Glowing Sky's strengths are: 

The Company keeps the manufacturing process local and carrying out the process themselves to ensure the quality of the products as well as their communities’ health (Gurel 2017, p. 996). 

Glowing Sky develops a good customer relationship, in which they treat their buyers as friends, thus helping develop loyalty, which is necessary for their success. 

Glowing Sky's suppliers from New Zealand's Merino Company ensure they get quality fiber. More so, their association with the New Zealand Merino Company, which is an established brand, increases the competitiveness of the organization. 

The company is embracing technology in their manufacturing process, which helps in the production of quality goods (Ommani, 2011, p. 9450). 

A superb performance in their established shops in various locations ensures that the organization can attend to their customers' needs in various parts of the world(Sammut-Bonnici and Galea, 2015, p.4). The expansion to the many markets ensures that the organization has a diversified economic cycle risk as well as various revenue streams. 

The weakness of Glowing Sky 

The company needs a lot of investment in the new technologies especially because of the different geographies the firm is planning to invest. 

Glowing Sky will need to involve a managerial team that is different from the founders to be more competitive. 

The company is not very effective in forecasting demand for its products, thus missing many opportunities. 

Opportunities for Glowing Sky 

The advances of technology are providing an opportunity for Glowing Sky to venture into new markets. 

The free trade agreement by the government has provided an opportunity for Glowing Sky to venture into new markets. 

Threats Glowing Sky is facing 

Venturing into various countries is exposing Glowing Sky to fluctuations of currencies. 

Intense competition because of stable profitability in the clothing industry is encouraging new entrants. 

Macro Environment Analysis using the PESTEL Model 

The external environment comprises of various factors that are beyond the company's control but need an evaluation to realign them with the firm's strategy. The PESTEL model has been applied in Global Sky in helping understand the external factors and evaluating how the business can progress to adapt to the new environment. 

The political factor 

The company avoids environmental legislation issues by using ethical Merino wool brand ZQ to ensure they maintain high standards of animal welfare and guarantee environmental sustainability (Shtal et al., 2018, p. 3). 

Glowing Sky is enjoying political stability in New Zealand, where it has established many retail stores to sell their clothing. 

The company is embracing free trade laws by establishing an online store to access various markets in the world. 

Venturing into numerous countries is exposing the country to currency fluctuations because of the volatile political climates that exist in various markets of the world. 

Economic factors 

Glowing Sky as a clothing company is likely to be affected by fluctuating rates of exchange, especially now that they are selling clothes to the global market (Sammut-Bonnici &Galea, 2015, p.3). 

T he economic performance in different countries is likely to affect the progress of Glowing Sky now that they are embracing the aspect of globalization (Rastogi &Trivedi, 2016, p.385). 

Venturing into various countries is exposing Glowing Sky to fluctuations of currencies especially due to the political problems that affect most of the countries in the world. 

Social factor 

Continued changing consumer buying behavior from online platforms can be a threat to the physical retail outlets of the company (Sammut-Bonnici & Galea, 2015, p.4). 

The company has been transforming since its founding in 1997 from a T-shirt printing store to dealing with clothes manufactured with merino wool to keep up with the changing preferences of their customers. 

The rapid technological 

Establishing an e-commerce site, Glowing Sky seeks to be up to date on technological development to remain competitive, especially in the global market. 

The company is embracing technology in their production process, which ensures it produces high-quality garments. 

Competitors embracing technology to market their products threaten the physical retail outlets of Glowing Sky. 

Environmental Factors 

The company avoids environmental legislation issues by using ethical Merino wool brand ZQ to ensure they maintain high standards of animal welfare and guarantee environmental sustainability (Shtal et al., 2018, p. 3). 

Glowing Sky's suppliers from New Zealand's Merino Company source their products ethically, and they are a sustainable source. 

Legal Factors 

The company safeguards the community's health by ensuring they use high-quality raw materials sourced from an established brand New Zealand Merino Company, thus protecting their communities' health (Gurel 2017, p. 996). 

Glowing Sky keeps the manufacturing process local and carrying out the process themselves to ensure they produce high-quality products for their consumers, which is their right. 

Micro Environment Analysis using Porter's Five -Forces Model 

A profitable market, such as the clothing industry in which Glowing Sky operates, attracts many companies, who then enter the industry reducing the profitability for other firms already in operation. 

The threat to new business entrants 

Free trade in New Zealand has encouraged many companies to venture into the clothing business. 

Glowing Sky's unique products, which are produced locally with local materials give them a competitive advantage (Mathooko & Ogutu, 2015, p. 3). 

The company tries to keep the production cost low by obtaining local raw materials and employees who ensure their production process is cost-effective, unlike their rivals. 

By embracing technological developments in the production process, Glowing Sky produces high-quality products, thus ensuring its customers do not prefer their substitutes. 

Rivalry 

The company is innovative and constantly developing new products to remain competitive in the market. 

The company is embracing technological advances, to cater to its customers in various parts of the world through an e-commerce site. 

The company implements a powerful competitive strategy, in which it is considered a local company (Baburaj and Narayanan 2016, p. 4). 

Threat to Substitute 

By embracing technological developments in the production process, Glowing Sky produces high-quality products, thus ensuring its customers do not prefer their substitutes. 

Glowing Sky has remained competitive by ensuring transparency to its customers. 

The company is constantly developing new products to cater for the customers changing tastes and preferences. 

The company produces local products, which are highly desirable by the consumers, who want to associate with New Zealand. 

Customers' bargaining power 

Glowing Sky is not affected by the Buyer's bargaining power as their products are differentiated from the competitors, thus categorizing it as among the few companies, which have remained local, thus leaving buyers with no alternatives of local products (Bruijl, 2018, p.3). 

Glowing Sky is open to its customers, offering low prices compared to its competitors as its production cost remains minimal compared to the international firms. 

The supplier bargaining power 

Glowing Sky has managed to establish a strong relationship with its main supplier, the New Zealand Merino wool firm, who then does not exploit their friendship. 

Glowing Sky has a strong relationship with various farmers who inform them of the progress of the farming of the merino wool thus the company has enough knowledge to ensure that the suppliers do not overexploit their loyalty. 

Models and Key Drivers of Change 

Glowing Sky Company operates in an environment that is constantly changing, offering new opportunities as well as threats. The immediate environment in which Glowing Sky operates is its competitive environment, in which Porter's five models have helped to identify highly sophisticated companies that are the threats to the organization. SWOT analysis, on the other hand, has helped the company to analyze its operating environment, which comprises of the business processes. The PESTEL model helps the company analyze the broader business environment, which consists of the events that are indirectly associated with the firm. However, using the PESTEL model, the business organization could identify threats and new opportunities. 

The environmental analysis process using the SWOT, PESTEL, and Porter's five models in the Glowing Sky company involves four steps. In the first step, the company gets a good understanding of the basic components of its environment, including the structure of the labor force, political processes as well as technological developments that could affect its operations. More so, the company gets a good understanding of the economy's functioning. The second step in the analysis process requires Glowing Sky to select the key drivers of change from the environment that has been broadly identified. 

The key drivers of change that could have a direct impact on Glowing Sky include their operating environment, suppliers, customers, and competitors. Thirdly, Glowing Sky using the various analysis tools examines the historical trends to get a clear picture of the potential impacts of the identified factors on the company's operations. The last stage involves a proper assessment of the key drivers of change while devising appropriate approaches to attend to the concerns identified. Drivers of change identified by the PESTEL analysis include the currency exchange rates, economic growth, and interest rates. The social factors influencing business change include age demographics and attitudes towards health. In the technological aspect, an organization identifies opportunities in investing in creativity and innovation. 

Glowing Sky and the Key Drivers of Change 

Glowing Sky after carrying out an analysis using the SWOT, PESTEL, and Porter's 5 models, it identified various drivers of change, among them technological advances, operating environment, suppliers, customers, and competitors. The Glowing Sky Company has undergone various changes to become competitive, reduce costs as well as obtain a large size to attract international customers. The various analytical tools have helped Glowing Sky to provide answers to the questions of why change is necessary as well as identify the areas that require it (Bruijl, 2018, p.1). Profitable markets, like in the clothing industry like the one Glowing Sky operates, attract many firms, who then enter the sector reducing profits for other firms already in operation. Glowing Sky on the competitive rivalry, whereby it faces competition from big global corporate brands, it produces garments locally without any compromise (Bruijl, 2018, p. 2). More so, their fabric suppliers NZ Company based in Auckland, are a world-leading company in innovation and quality in merino fabrics, thus ensuring they produce quality garments. 

Glowing Sky is embracing globalization and new technology in its operations. The stores in Dunedin, Invercargill, Stewart, Waiheke, and the new website help to avail their clothes to their buyers (Brewster, 2018). More so, the application of the highest knitting technology ensures the company produces high-quality and beautiful clothing, which offers them their competitive advantage over new market entrants. Glowing Sky is constantly aligning its production and distribution to the shifting technological environment by establishing a website to cater to their international clients, hence curbing the market rivalry problem. 

Glowing Sky focuses on its strengths and its unique selling points. It is a company that is growing but still focuses on remaining local, which has always been its competitive strength over its rivals. The Company has been changing its products since 1997, searching for potentially profitable products (Brewster, 2018, par. 4). Today it focuses on their merino clothing, which tends to be in higher demand than other products. More so, the company uses biodegradable, and sustainable ZQ wool, which is the leading ethical brand of merino wool (Glowing Sky, n.d, para. 3). Moreover, the company is concerned with animal welfare, social responsibility, and quality of fiber, which ensures they do not harm the environment in which they operate. 

Glowing Sky has been vigilant on its external factors and evaluating how the business can progress to adapt to the new environment. In this aspect, the company acknowledges the farmers' importance to the business, and they respect their hard work. They treat them as partners, valuing their feedback, which creates a good impression of their brand. More so, Glowing Sky's respect for land and nature, by ensuring they produce their garments ensures that their neighbors remain supportive of their work, by becoming their customers and their friends offering feedback, which is necessary for making the company's decisions. Moreover, the firm's competitive advantage is its transparency, innovation, and adapting to the new changes in the environment. 

Other Analytical Models 

Stakeholder Analysis 

Glowing Sky can employ a stakeholder analysis to understand the parties that are necessary for the implementation and success of the new online platform they want to implement to reach out to the global market. The first step in this approach will be to identify the stakeholders necessary for this project, including employees, their issues and concerns, and their readiness for involvement in this particular project (Lelea et al. 2014, p.3). More so, the management will need to analyze the gap between their skills and what is required for the project, thus highlighting approaches necessary. Thirdly, the management will need to select the parties to be involved directly with the project, explain to them their responsibilities while determining their communication needs (Lelea et al. 2014, p.3). Lastly, Glowing Sky's management will need to devise practical ways of integrating all the stakeholders in the project, including providing progress reports as well as room for providing their inputs to the project. 

A stakeholder analysis is also necessary for Glowing Sky in the adoption of the organic cotton merino wool in the production of baby clothing. Therefore, through identifying and sorting the type of involvement of every party and assessing their interests towards the project, Glowing Sky will identify the areas in which they are likely to face potential resistance (Bryson, et al., 2011, p.2). Through analyzing the customers, they will understand their tastes and preferences to make an informed decision to ensure the project becomes profitable. More so, analyzing the employees will understand their skills and willingness to participate in this new project to ensure its success (Varvasovszky & Brugha, 2000, p. 239). Nonetheless, the company will devise techniques to involve its various stakeholders in the project. 

Boston Consulting Growth Matrix (BCG) 

The BCG is an approach that applies to Glowing Sky Company as it is a multiproduct business organization. The composition of the products within the business portfolio is important to the success of the company (Mohajan 2018, p. 2). Using the BCG matrix one can understand the relative contribution of Glowing Sky’s products. 

Question marks 

In New Zealand, where Glowing Sky majorly operates, there are many established business rivals. Thus, introducing organic cotton merino wool for baby clothing would be considered a question mark, as the company competes against existing market leaders. 

Stars 

Stars comprise the successful question marks. For example, Glowing Sky is a market leader in its production of purely local products. As a way of retaining its leadership position, the company is opening a website to attend to its global customers. More so, it is constantly developing new products such as using organic merino cotton wool for their baby garments. 

Cash Cows 

The division termed as a cash cow in Glowing Sky is its production of purely local garments, in which the customers are amazed by keeping the production and raw materials purely local (Mohajan 2018, p.3). These products are the most profitable in the company and ought to be maintained. 

Dogs 

Products or division referred to as dogs in the Glowing sky are cotton clothes as they had a low market share. Therefore, they need to be fully replaced by merino cotton products, which tends to be more profitable (Mohajan, 2018, p. 3). Thus, through the application of the BCG matrix, Glowing Sky can make informed marketing decisions and determining investments that are likely to give more profits. 

References 

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