Group 8 - Royal Beginnings Bride and Formal Buying For A Boutique

Royal Beginnings
Bridal and Formal:

Buying For a Boutique
Group 8
Abhishek Dogra (MBA07121)
Ashish Kumar (MBA07129)
Dhrumil Mer (MBA07149)
Simerjit Singh Saggu (MBA07168)
Ashutosh Tayade (MBA07174)
Case Background
• Anna and Jack Oleson started Royal Beginnings in 1990 in Michigan exploiting the local bridal market.
• RB started business with one stop shop for wedding like bridal gown collections, formal dresses and apparels and
then further diversified the category with Tuxedos along with other accessories.
• Business model was based on 3 pillars i.e. Style, Price and Service with high dependency on suppliers.
• RB withstood local challenges & with good word of mouth, they became the only successful store in their area.
• Their business was quiet seasonal with slow business in the month of October to December.
• The store had full time expert Seamstress (Occasional consultants) with two more consultants in seasonal timings.
• 29% of the RB customers purchased from store stock while 71% of customers preferred getting orders customized
hence it was a high customer centric business.
• Being heavily relied on the suppliers, RB recently faced some issues with them which put pressure on the brand
image and profitability of store.
1. What is most important to Royal Beginnings’ customers? What
does Royal Beginnings provide with respect to fulfilling those
customer needs?
1. Most important to Royal Beginnings’ customers:
a. Customers were price sensitive with an average cost for wedding gown $800; for bridesmaid dress $100-$250 and
for mother’s dress $150.
b. The business had its 3 core factors which customers appreciated the most i.e., style, price and service in no
particular order.
c. Customers were willing to drive long distances due to absence of a store like Royal Beginnings which showed
their loyalty and uncompromisable buying attitude towards quality products.
2. To fulfill Customer needs Royal Beginnings had following measures:
a. New employees were trained on specific standards on approaching customers.
b. Anna with input from her employees chose the best looks from the country's leading designers and the choices
were based on research, current style standards and instinct.
c. The key service element in RB’s success were the seamstress and consultants who provided proper consultation
and appointment services boosting customer satisfaction.
d. Brides were given specific discounts on their wedding invitations to spread positive word of mouth in the market.
e. RB provided a website for the customer to view products and services before visiting which boosted their online
presence and easy accessibility to the customers.
f. Anna used her NBS membership to obtain specific dresses that her customers requested.
2. What factors should be most important to Anna when buying
merchandise to ensure that the aforementioned customer needs
are met?
01 02
Style & Trend Quality
Consumers often want latest Since RB caters to special
styles, trends and fashion while occasions, quality is vital.
buying.
03 04 05
Price Delivery Alteration Flexibility
Catering to a price sensitive Timely delivery are critical as For customized unique
market, RB needs to procure at they cater to special occasion experiences, RB needs to
low prices. market. present variety in products.
3. What were the key issues the Olesons were facing with
suppliers? How did they impact the firm?
a. Delay in Order and Supplier not accepting responsibility:

While RB accepted on order from a customer for five bridesmaid dresses in supplier's recommended eight-week lead
time, the dresses failed to arrive on time and supplier refused to accept their responsibility stating that they were not
liable for international scheduling variance. This led to customer dissatisfaction and Anna had to give discounts to the
customer.
b. Minimum Order Quantity:

Majority of the suppliers required RB to order minimum quantity. Especially they had to order 8 high priced
bridesmaid dresses while 4 low priced ones where the market that Anna and RB were targeting them needing low
priced products. This became a big financial issue for RB.
c. Transactional Partners:
Unlike Tuxedoes partners, other partners were just transactional partners to RB rather than collaborative ones.
d. Customer Guarantee Policy:

One of RB’s long time supplier, Alfred Angelo had tricked them into an agreement in customer guarantee policy which
led to a bad financial situation for RB and Anna.
4. Who has more power in the supply chain – Royal Beginnings or
its suppliers?
In this case, Suppliers had more power in the supply chain due to following reasons:
1. The existing suppliers have high minimum order quantity clause which mandates RB to purchase high range
materials that their customers usually don’t demand frequently.
2. As per the recent delivery failure and miscommunication between sales representative and supply side, Anna on
multiple occasions had to bear the losses rather than the suppliers. This also affected their brand image.
3. 90% of partners were transactional ones which shows the lack of the suppliers being interested in becoming
collaborative ones.
4. Big suppliers have large number of retailers in US and hence they don’t have to depend on a small retailer like
RB.
5. Can Royal Beginnings change the current situation with its
suppliers? If yes, how? If not, why not?
Yes, RB can change their current situation with its suppliers by adopting to following strategies:
1. Instead of having 80% orders distributed among 10 suppliers, they should deal and negotiate better prices with
newer vendors.
2. They should bargain more on vendor managed inventory for sample dresses.
3. As the RB stores have highly qualified designers, they can think of backward integration by launching their own
private label products into the mix.
4. At the time of contract, they should have enough say on the conditions like MOQ, Lead Time, MOP, Freight,
Discounts and more to reduce chances of miscommunications.
5. They should bargain the high end and low end mandated ratio by offering higher margins.
6. Continuously look for a collaborative partner to reduce dependency on specific suppliers.
6. How can Royal beginnings use a formal tool like FMEA in its
supplier selection process?
• RB can assign ranks by calculating weightage of each criteria on a scale of 5 for different suppliers and compare
them against one another to decide which one suits company the most.
• The criteria factors can be Inventory maintenance, Quality, Return/Exchange Policy, Range and Variety of
Products, Delivery time, Shipment cost and Existing relationship.
• The tool will help them analyze potential risks and miscommunications with their suppliers.
• RB can use past transactional data while assigning these scores and after calculating the average they can easily
decide the supplier to go with.
7. What suppliers should they retain? Why? Should they select
any of the new suppliers – Clarisse, DaVinci or Milano Formals?
Why?
• They should retain following suppliers:
1. Jim’s Formals: Long term relationship of 23 years, High reliability and Good service.
2. Alfred Angelo: Long term relationship of 23 years, High quality, Affordable pricing, No additional charges on
plus sizes and Big retail network.
3. Maggie Sottero and Mon Cheri: Highly sought after product among customers and Exclusive territory means no
competitive retailer withing 90 miles of radius.
• They should select following new suppliers:

1. DaVinci: More than 500 retail stores, More variety of products comparatively, No mandatory minimum purchase
quantity and Good service.
2. Clarisse and Milano Formals: Provide specialized offerings of Bridesmaid and Prime collections (45% of RB
sales products) and No mandated floor limit in orders.
THANK YOU!

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Royal Beginnings

Bridal and Formal:

a. Delay in Order and Supplier not accepting responsibility:

b. Minimum Order Quantity:

d. Customer Guarantee Policy:

• They should select following new suppliers:

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