CW1: Inquiry Project on Bershka
Introduction
A question, topic, or scenario forms the basis for inquiry-based learning, an active
learning strategy. Facts and the subject matter proficiency of the instructor are the
primary focuses of traditional education. Discussion of inquiry-based initiatives is the
focus of this article. Study examines how three corporations' fashion and retail trends
affect the Gross Domestic Product of the United Kingdom and how their effect is
reflected in their respective sectors. A section of the report will also analyse about
Bershka. Brexit and globalization are discussed in the article, as well as how retail
shop shops affect the British economy.
Background
Influence of online retail
Online retail sales growth fell by 8.7% year-on-year (YoY) in May, despite being
measured against a negative performance in the same month last year (-6%), as
trading conditions continue to be tough. May’s results also represented a 0.6% dip
month-on-month (MoM) against April, according to the latest IMRG Capgemini Online
Retail Index, which tracks online sales for 200 retailers.The PwC forecast for 2022
predicts 17,219 closures, 7,160 openings, resulting in an overall loss of 10,059
companies. Closures will decline from 48 a day in 2021 to 47 per day in 2022. As a
result of the 2018 flu season, 26% of available jobs decreased. As a result of the
significant changes to the retail scene, the closure rate is expected to decrease. Zara
has been achieving great sales performance as a result of concerns about low pay
and poor working conditions among its UK and foreign suppliers, particularly in
Leicester, where 40% of the company's goods are sourced. Despite widespread
discounting, the Average Basket Value (ABV) has actually been rising notably since
January, reaching a new all-time high of GBP151 (US$184). This is likely due to a
number of factors including inflation, customers ordering multiple items at once in
order to avoid repeat delivery fees, and a general preference for higher quality items
to avoid having to buy again in the near future. Website traffic was also up 8% YoY,
though retailers are reporting lengthy purchase cycles as consumers sit in the
consideration stage for longer. All in all, 23% of fashion online shop users in the
UK use Boohoo. That means, of the 86% who know the brand, 27% use them.
Globalization of products
Globalization has provided the low-cost labour and international markets necessary
for the creation of a global assembly line, which allows for cheaper and faster
production of clothing.A considerable profit margin is achieved by buying or
importing large quantities of clothing in the United Kingdom. Chinese, Bangladeshi,
Vietnamese, Turkish, and other nations supply products to UK online retailers most
frequently. Fashion can be viewed as a manifestation of globalization because of the
rapidity with which Zara develops and distributes new products. Although majority of
Zara's goods are manufactured in Spain, it also produces goods in Portugal, Morocco,
Turkey, Bangladesh, and Armenia. In the past decade, Amazon has grown its network
of collaborations with manufacturers to ensure that workers' rights are protected.
Boohoo.com and most high street fashion stores sell apparel made in Bangladesh,
Pakistan, India, and China. Bershka (Spanish: [ˈbeɾʃka, ˈbeɾska]) is a clothing retailer
company created in 1998 in Spain. It is part of the Spanish Inditex group and they
manufactured 80 per cent of their denim from Bangladesh.
Brexit effects on UK retailers
Importing into the UK is now more expensive and takes longer due to custom duties,
value-added tax (VAT) and freight charges, and additional paperwork. Retailers’
supply chains face difficulties due to different and sometimes arbitrary standards of
export from the UK to EU countries, Brexit resulted in some negative policies. Brexit
prevented VAT refunds on expensive goods. Since Brexit, online marketplaces cannot
sell zero-tariff or quota products. UK VAT refunds have ended, however luxury clothing
purchases may still be repaid 20%. Online apparel sellers are worried about this. Since
January, freight, consumer taxes, customs fees, and VAT have raised fashion prices.
After Brexit, online clothes companies no longer have to negotiate with the EU
collectively, which may lead to lucrative trade arrangements. This might hurt UK
companies. Some have serious consequences. Zara's half-year profits plummeted
after Brexit despite £1 billion in sales. New EU restrictions and rising transportation
costs caused the reduction. At Zara UK, a linen-mix tunic dress costs €58.70 at
£49.99.98% of UK fashion businesses reported higher costs due to paperwork and
bureaucracy, 92% increased freight costs, 83% increased customer costs, 53%
cancelled EU orders, and 44% increased duty-free purchases, according to a survey
conducted by the UK Fashion and Textile Association (UKFT) in 2021. Decathlon
attributes rising prices to Brexit, and Zara charges Brits a 50% premium.
As a result of Brexit, British citizens no longer have free movement or flexible work
permits within EU member states. There are considerable price differences between
Zara's prices in the United Kingdom and the rest of Europe, the largest apparel store
in Europe. a printed kaftan dress that sells for £79.99 at Bershka in the UK – equal to
€93.90. In Germany it is €69.95, and in Spain only €59.95. So British buyers are paying
56% more than the Spanish.Zara has a pricing difference of €49.95 between the
countries of Germany, France, Italy, and Ireland, as well as €39.95 between Spain
and the other four.
Analysis
An initial survey will be administered to measure the sample size before going on to
the study's core concepts. Bershka s administrators, along with classmates,
acquaintances, and family members, will survey a sample of twenty people. As the
primary goal of this project, it is to ensure the efficient and successful evaluation of
source data. Also, secondary data will be analyzed.
Primary data analysis
The questionnaires are attached. Bershka main data collection revealed the same
reputation for its online and physical clothing retail operations in the United Kingdom.
The reputation of a company plays an important role in attracting new customers. The
quality of a corporation's products and the level of customer service they provide are
the most important factors for providing online services. It will be required of this
corporation to ensure that both of these elements are included in such a way to ensure
a substantial position in the industry as a whole.
Secondary data examination
The purpose of this study is to compare and analyse three important market analysis
models.
The five forces model of Porter
Porter's 5 Forces Bershka 's competitive environment and sector-affecting influences
are examined. Bershka 's market position, rivals, customers, suppliers (vendors and
partners), financial strength, future scope, and alternative strategies have been
analyzed.
Threats from new competitors: Bershka provides rapid fashion, therefore new rivals
are few. Customer quirkiness, product differentiation, brand development, and
economies of scale make it difficult for new rivals to enter. Supply-side economies of
scale lower product costs, making competition tougher.
Threat of Alternatives: Retailers offer varying prices, quality, and product offerings;
therefore, product substitution is common; however, clothing is limited, so substitution
by necessity is rare. It is unlikely that Bershka will be replaced.
Customers' negotiating leverage: A buyer's/customers negotiating power is modest.
To attract and retain customers, Bershka and other fashion retailers have indirect
negotiating power. For Bershka to continue providing fresh new fashions to its clients,
the company uses vertical integration strategies in its supply chain.
Power to Bargain of Suppliers: Suppliers have a very limited bargaining power.
Among other countries, Bershka manufactures most of its products in India, Spain,
Bangladesh, Morocco, and Portugal. Moreover, Bershka has its own manufacturing
facilities, so it does not have to rely on other companies for its supplies.
Competitive Competition: Bershka rivals H&M, GAP, UNIQLO, Mango, and Forever
21. This industry is competitive and price-sensitive due to the enormous number of
small and major fashion retailers. Bershka employs vertical integration in their supply
chain to offer customers new designs. By 2025, quick fashion firms are competing with
diverse items and value propositions.
PESTEL analysis on Bershka
Political: An organization's operations can be affected by politics. Trade agreements,
taxes, and government laws determine how an organization develops. There is a
possibility that government rules about international and native brands will affect
Bershka, as they operate in multiple countries.
 Bershka benefits from EU free-trade policies. Bershka has been able to access
raw materials and export overseas thanks to this deal.
 After spreading across numerous countries, regional governments must
consider their policies. India and China have red tape issues for Bershka.
 Bershka 's supply chain and operations may be impacted by political unrest in
countries near the EU.
Economical: Supply-demand connections affect company growth, raw material, and
labor pricing. Inflation, economic downturn, and financial crises may hinder corporate
growth. Economic variables may impact Bershka’s business strategy:
 Bershka may find cheap labor amid Spain's high unemployment rate. Bershka
expanded because to inexpensive labor and materials.
 The stylish, affordable apparel offered by Bershka attracts customers. New
clients are being attracted to their brand and longtime customers are being
retained.
 Bershka sells worldwide. Thus, globalization impacts its growth. The
corporation suffers from worldwide economic slowdowns. Financial crisis
worldwide. Bershka 's functionality is flawed. Bershka may suffer when inflation
increases and customer spending decreases. In this economy, brand financial
development may be hampered.
Sociocultural: Brand image maintenance requires a lot of effort. A sociocultural issue
affects Bershka 's large clientele.
 Despite its low prices and popularity, the brand is highly respected in the
community. Consumer relationships benefit Bershka.
 There has been a rise in online shopping. Bershka strives to make online
shopping as simple as possible. Customers are being satisfied by improving
logistics.
 Bershka caters to adolescents and communities seeking modern designs.
Affordability makes fast fashion popular.
Technological: Companies no longer rely on storefronts. Online brands attract
customers. Technology may impact sales :
 Prospective clients might be attracted to their website if it is well designed. It's
possible to boost revenue by marketing to online communities.
 Bershka explores client needs using modern technology and a global network.
Improvements are suggested.
 Logistics and supply chains can be streamlined with technology. Brand loyalty
is boosted by customer satisfaction. Logistics and inventory are improved by
RFID.
Ecological: Bershka retail operations are unaffected by environmental concerns. Ecofriendly businesses abound. It encourages green business.
 Bershka is owned by Indicted. Several sustainable targets have been set.
Stores that use less energy and recycle packaging are eco-friendly.
 Brand that specializes in fast fashion. There is a likelihood of waste. A waste
reduction initiative is being implemented by Bershka.
 Eco-friendly items are promised by the company. Animal welfare, sustainability,
biodiversity, and other issues are respected by them.
Legal: Local legislation should impact a brand operating in multiple countries. Legal
challenges could affect Bershka 's sales, a fashion business.
 Trade and labor limitations may effect manufacturing and supply networks. EU
free trade guarantees Bershka’s raw resources and exports. Laws of its
operating countries may also affect it.
 Trendy clothing may lead to copyright and trademark issues. They may face
copycat claims. Adidas and Balenciaga imitated their designs.
 Legislation in a particular region may determine Bershka’s tactics for regional
expansion.
SWOT analysis
Strengths
Weaknesses

Reliable

Quality of products

Customer service
Opportunities

Inefficient
management

Ineffective strategies

Ineffective promotion
Threats

It allows for market exploration

Substitute products

Productivity and profitability increase as a

Reactions to Brexit
result

Market competition
Significant gains can be made in market

Inflation is rising.

share
Recommendations
An investigation of a broader scale will be the basis for the goals and issues of this
section.
The impact of Brexit on the business is uncertain at this point. Tariffs on domestic
products are one of these obstacles.
The performance of a business is also significantly affected by these issues. Business
expenditures may increase as a result of Brexit-related worries. It is therefore possible
that the quality of goods offered online is not the same as that in a physical store.

The company's brand management is negatively affected by Brexit from each
of these viewpoints. Bershka should determine the market size and demand for
its products before launching a campaign.

A company should minimise its product line or innovate if this is not the case.

To promote its products, the company should make use of efficient marketing
methods and combinations.

Promoting second-hand items is also an option for gaining a large market
share.

Talent management is required to improve corporate performance, since
employees must produce new ideas for analysing the market from every angle.
Conclusion
Leaving the European Union marked an important milestone in British history.
Businesses are uncertain about the future of their market positions when governments
make such decisions. Domestic businesses and the economy benefitted from this
Brexit. Bershka online brand management is the primary objective of this study.
According to the objectives and procedures of the study, this study will be conducted
in its entirety.