2010

Dash & Cooper

Concept, Market
Analysis, and Business
Strategy

Travis Corrigan
Founder, CEO
Table of Contents
Executive Summary 3

SWOT Analysis and Business Strategy 5

Influences to the Purchase Decision and Meeting Market Segment Needs 7

Operations and Execution Strategy 11

2
Executive Summary
Dash & Cooper is a startup venture seeking to provide affordable, made-to-measure custom
suits to the Salt Lake and Utah County Regions. The company looks to penetrate niches not actively
pursued by larger competition, establish presence and critical mass, then expand to other segments. To
be a cost leader, the firm leverages an innovative direct-to-market retail method and cost structure to
implement a pricing objective that seeks to undercut established competition in the Student,
Missionary, and Established Professional Market Segments. Dash & Cooper’s management believes in
forgoing traditional expenses such as standing inventory and broad marketing campaigns in order to
achieve the following:

Cost Leadership - Target Price of $300.

Expedient Profitability.

Organizational Flexibility in regards to market reaction.

Strategic Agility to capitalize on market and competitive opportunities, including national

expansion.

Purpose

D&C seeks to position itself as the perpetuator of each individual through the purchase and ownership
of a suit designed specifically for them by them. It believes that the purchase of a suit is more than just
an exchange of money for sewn fabric; that for some, it is one of the last rites of passage for men in our
modern society. D&C looks to be a brand that embodies the modern gentleman – a notion that enables
each man eager to seize his potential and write his own story. Through identifying and understanding
key trigger events in men’s lives, Dash & Cooper can align its service and purchase experience to provide
significant utility to its clients and establish long-lasting relationships.

Marketing Strategy

Dash & Cooper’s strategy of niche marketing and promotion allows for the concentration of
efforts and resources to create the highest possible rate of return in the segment it wishes to establish
market share. While it is understood that time and surgical promotion tactics such as referral incentives
are necessary to execute a successful word of mouth marketing campaign, the company has reduced its
overhead expenses to allow for this to spread and solidify. Providing a personalized purchase experience
including control of the suit design, offering an attainable price, delivering a quality product, and
providing an incentive to refer friends and colleagues will be key to Dash & Cooper’s success.

3
Operational Strategy

As mentioned before, the company will utilize a production-on-demand operational strategy in

order to pass cost savings on to the customer and profitability on to the investor. This will be
accomplished by establishing a relationship with Asian manufacturers capable of providing such a
production method while maintaining a large fabric selection. Dash & Cooper personnel will be
responsible for obtaining preliminary measurements, placing electronic invoices to manufacturers, and
conducting follow-up product adjustments stateside.

Financials

D&C Management wishes to enter the market as soon as possible in order to identify, assess
and react to the needs of its desired markets. As such, it has established that an investment of $54,000
will be needed for seed capital to cover start-up costs (Round 1). This sum will cover pre-launch
administrative expenses, product testing, and the first year of operating expenses. The firm is willing to
offer 45% ROI on this amount, totaling just over $24,000. The ROI will be paid at the end of Y3, principal
will be paid at the end of Y5. However, D&C recognizes that planning is subject to substantial variance
after the firm is implemented and therefore may need to ask for an additional investment, up to
$60,000 within the 1st year of operation (Round 2). Round 2 will be utilized to cover operating expenses,
unforeseeable expenditures, and/or necessary investments in order to ensure the company’s long-term
success. ROI offered on Round 2 will be 25%, interest paid in Y4-Y5, principal paid Y6.

The goal of the following sections serve to demonstrate how the firm’s management plans to use these
silos to capitalize on market opportunities and strategically reduce financial and organizational risk.

4
Swot Analysis and Business Strategy
The SWOT Analysis conducted for Dash & Cooper demonstrates that there are areas of potential to
establish a beachhead within niche markets by meeting needs that are not targeted by the current
market leaders. However, the venture is in a precarious position and must take the necessary steps to
deliver on the promises from which its market positioning is based upon. The SWOT Analysis below
illustrates the factors that D&C must contend with in its effort to establish market share.

Dash & Cooper SWOT Analysis

Strengths: Weaknesses:
Customer-Focused Market Penetration
Mass Customization Business Model Brand Recognition
Simplification of Suit Buying Process Low Resources
and Re-order Fragile Brand Identity
Deep Understanding of Initial Target
Market
Low Cost Structure
o Forgoing Traditional Expenses
Opportunities: Threats:
Gain a Foothold as an alternative Established Market Competition
option in the missionary market o Mr. Mac & Men’s Warehouse
Establish Niche Market not being met Manufacturers not able to meet
by Major Competitors demands
Potential for a Strong Brand Identity Poor Economic Growth

Strengths & Opportunities

Dash & Cooper’s pricing objectives are to offer custom-designed suiting at prices that significantly
undercut the competition. This can be achieved through an innovative cost structure that foregoes
many of the typical overhead expenses realized by its competitors. Because of its direct-to-market
method, Dash & Cooper carries no standing inventory, does not require a retail location and is
leveraging relationships at the University of Utah for further cost savings on database and website
design and construction and graphic design for branding. This allows D&C to operate for a long period of
time without significant revenue streams and at margins that competitors will have difficulty sustaining
in the long-term. Additionally, this allows for the company to continue operating as promotion and
positioning through word-of-mouth begin to spread and solidify. The innovation that drives this business
model releases many of the typical financial and business risks associated with retail. Dash & Cooper’s
management strives to be able to capitalize on as many opportunities in the market, including national
expansion as possible through a system of operations that allows for flexibility, customer responsiveness
and dependability.
5
Threats & Weaknesses

Though the weaknesses that Dash & Cooper faces are typical of any new startup looking to penetrate a
market, its threats need to be addressed thoroughly. As mentioned before, D&C’s ability to capitalize on
market opportunities relies on the operational integrity of the firm. If management is unable to establish
and manage a supply chain operation that produces the quality and consistency necessary to deliver on
its product promises, its brand and positioning are ruined. Though Dash & Cooper has the ability to be a
product and service leader in providing a truly one-of-a-kind personal experience, the main factors that
command the purchase experience are presented as follows:

Not fitting the suit to the client.

Negative advertising through word of mouth.
Cost of shipping (Lack of economies of scale).
Poor logistical consistency (lost orders/shipments).
Throughput time from order placement to final product.

From a business strategy perspective, Dash & Cooper’s significant threat is the lack of growth needed to
establish a regular revenue stream to ultimately break even and reach continued profit growth. To
hedge against this threat, efforts to encourage holistic brand awareness are listed below:

Leverage market testing focus group (consisting of trusted friends and colleagues) as nucleus for
sales team.
Sales presentations to University business academic groups and clubs.
Providing a free custom shirt ($40-$50 value) to the customer for referring a friend or colleague
that makes a purchase.
Simplified repurchasing through website, using previously determined measurements and
product option selections.
Utilize psychological primers in brand creation to establish a brand personality that resonates
with the firm’s customers.
Utilize research on word-of-mouth phenomena in promotional tactics by targeting Innovators
and Early Adopters in each segment.

6
Influences to the Purchase Decision and Meeting Market Segment Needs
As mentioned before, Dash & Cooper’s success is contingent on matching its core competencies with
the core needs of each segments. The effective execution of this strategy relies on understanding the
influences to the purchase decision in each segment. This understanding allows Dash & Cooper to take
necessary action in its promotion efforts to be positioned as the optimal choice in the minds if its
customers. This section will identify the core needs of each segment, how Dash & Cooper’s core
competencies match these needs, and tactics that will be taken to promote and push word of mouth
marketing. It is important to note that D&C is targeting the Innovators and Early Adopters in each
segment –individuals in these categories are typically venturesome, well educated and tend to be
natural leaders in their networks and social settings.

Primary Segment: Students

In 2007, 12,103 marketing, finance, management and other business related students graduated from
the top universities in the state. Of these 6923 were male graduates ready to enter the work place,
illustrated as follows:

University of Utah 1423

B.Y.U. ~2600
Utah Valley University ~ 900
Weber State ~ 1100
Westminster ~ 900
( ~) – Approximate **All numbers take from 2008 Economic report to the Governor***

The socioeconomic factors that are likely to influence this segment are laid out below:

Appearance is visual representation of self and personality – Individualism.

Making an good impression is important.
Seeking fertile career options with high compensation.
Considerable Debt-to-Income Levels due to Student Loans and Credit Cards.

Based off the above points, the following diagram lists the core needs and their matching competencies:

Students – Core Needs Dash & Cooper – Core Competencies

Expression of Individualism.
Impressive Appearance for Interviews, Social
Events and eventually the Office environment.
Affordability
Fitting and Purchase process focuses on attention
to the individual and promoting a lasting business
relationship.
Suits with a multitude of completely customizable
options allows individuals to create the
appearance they desire.
Business Model and Cost Structure allow for prices
that are easily attainable and hard to compete
with.
7
Students – Core Needs (Cont.) Dash & Cooper – Core Competencies
Quality Custom Tailoring ensures a perfect fit and the
craftsmanship is of comparable quality with
competition.

To gain market share in this segment, Dash & Cooper will need to establish itself in the minds of these
students that they are the primary option to meet their core needs. Surgical selection of active
promotion will need to be highly strategic in order to enable a genuine word-of-mouth marketing
strategies. On campus marketing tactics will consist primarily of sales presentations to business and
academic clubs and positioning at campus career fairs. Additionally, leveraging existing faculty
relationships to gain access to these clubs and increase campus exposure will be key to obtain
prospective clients.

Secondary Segment: L.D.S. Missionary

The LDS Missionary Segment provides Dash & Cooper the opportunity to capture a significantly larger
population than grad students with explicit suiting needs. The following is the current market
demographic for potential missionaries in the target regions

Salt Lake and Utah County

19-24 year old Males = 32,804

Assume 50% of these are of the L.D.S. faith = 16,402 in the age range.

The socioeconomic factors that are likely to influence this segment are laid out below:

Parents, particularly mothers, are the primary purchase decision makers.

Missionaries have little, if any income.
Conservative environment, appearance is not a primary concern.
Purchase decisions are often based off the experience and advisement of others in the church
community.

Based off the above points, the following diagram lists the core needs and their matching competencies:

LDS Missionaries – Core Needs Dash & Cooper – Core Competencies

Affordability Business Model and Cost Structure allow for prices
that are easily attainable and hard to compete
with.
Durability Custom Tailoring ensures a perfect fit and will
reduce common wear seen on typical suits offered
by competitors.
Comfort Suits that are custom designed for the user will
ensure higher comfort through a perfect fit and
will be conducive to daily wear.

8
LDS Missionaries – Core Needs (Cont.) Dash & Cooper – Core Competencies

Purchase Experience – Parents want to know that
their son will be taken care of during and after the
purchase.
Fitting and Purchase process focuses on attention
to the individual and promoting a lasting business
relationship.
Direct-to-Market Model allows for replacement
orders to be shipped around the world.

To gain market share in this segment, Dash & Cooper will need to establish itself in the minds of
missionaries-to-be that they are the primary option to meet their core needs. Surgical Selection of active
promotion will need to be highly strategic in order to enable a genuine word-of-mouth marketing
strategies. Again, D&C will leverage existing relationships with LDS members to gain exposure.
Additionally, brand awareness, to some extent, is expected to spillover as customers from the Student
Segment attend church functions wearing Dash & Cooper clothing. Because market competition
commands market domination in this segment, growth in this area will be slower than the Graduate
Student Segment. However, if Dash & Cooper is able to leverage its personalized purchase experience
and its deliverables can match or exceed expectations set by the competition, this will be a fertile and
sustainable segment year after year.

Passive Segment: Established Professionals Segment

This is the largest segment in the professional dress market. This market is also currently the main
marketed group of D&C competitors like Men’s Warehouse and Mr. Mac. Described is Utah Employment
demographic by profession in 2007.

Job Title Number of workers in Utah

Financial Careers 169,937
Professional & Business Service 248,414 Total: 418,351
**All numbers take from 2008 Economic report to the Governor***

Assume 50% males = 209,175 men that are in need of professional dress attire with estimated
replacement needs of 2-3 suits every 18 month to 2 years.

The socioeconomic factors that are likely to influence this segment are laid out below:

Higher income levels than other segments.

Do not enjoy the suit purchasing experience.
Comfort and Fit are primary concerns over style.
Because of high use, likely to have regular replacements.

Based off the above points, the diagram on the following page diagram lists the core needs and their
matching competencies:

9
Professionals – Core Needs Dash & Cooper – Core Competencies
Hassle-Free Experience Fitting and Purchase process focuses on attention
to the individual and business model allows for
simple reorder process to promote lasting
business relationship.

Comfort and Fit Suits that are custom designed for the user will
ensure higher comfort through a perfect fit and
will be conducive to daily wear.
Price Though this segment may not be as price-sensitive
as other segments, a better experience at a lower
price produces a competitive advantage.

Though this is the largest segment in the local suiting market, Dash & Cooper’s management does not
feel the need to actively promote to this market. The reason for passive promotion is because the
purchase decision in this segment is also passive. It is not cost effective to expend limited resources to
actively seek this market because this members of this segment. Though an effort to leverage existing
professional relationships in this field will be conducted, primary strategies will be focused on the first
two segments. It is anticipated that brand awareness spillover from other segments will also occur as
word-of-mouth takes hold and spreads throughout the Salt Lake and Utah County regions.

As previously mentioned, Dash & Cooper seeks to gain market share through word-of-mouth marketing.
Promotion and advertising to this group with key on perpetuation of the individual and an enhancement
of personal appearance through the wearing of a custom-designed suit. A Referral Program that offers a
free custom shirt for every customer that refers a prospective client resulting in a purchase will help
incentivize satisfied customers to spread word-of-mouth promotion. As already mentioned, other tactics
of active promotion will be initially employed while the firm seeks to penetrate its designated niches.
Dash & Cooper will need to establish an efficient supply chain to ensure that the products deliver on the
promises to ensure solid positioning against the competition. This is examined more explicitly in the next
section.

10
Operations
Purchase and Reorder Process

In order to achieve cost leadership, Dash & Cooper will utilize the mass customization capabilities of
Asian manufacturers. The following list describes the purchase cycle and estimated process time of each
operational stage in chronological order:

1. Tailor meets with customer at customer’s home (1-2 hours).

a. Measurements taken.

b. Customer customizes suit by selecting design and fabric sample options.

c. Customer pays in cash or Credit Card (Credit Card is processed through Apple iPhone
Application).

2. Customer’s information and order are placed into the database; order is sent to overseas
manufacturers (1 day or less).

3. Suits are produced and shipped the customer’s shipping address (2-3 weeks).

4. Using Shipment Tracking Numbers for timing accuracy, Dash & Cooper contacts customer to
schedule follow-up fitting.

5. Tailor meets with customer at customer’s home (1-2 hours).

a. Follow-up measurements are taken (updates made to database).

6. Tailor takes the suit for adjustments, Dash & Cooper returns finished product (1-2 days).

A reorder process mirrors the above layout with the exception that an initial fitting is not needed. A
customer is given a login number for the company website. When a customer wishes to purchase more
items from Dash & Cooper, logging into the website utilizes measurement and previous options
selection information stored in the database. The customer can then review fabric patterns, make
selections and process payments online.

Strategy Execution

To implement the above order workflow, the firm’s founding team needs to establish the tangible
operational infrastructure necessary to bring orders to customers. The following content lists the
deliverables needed and commentary on the efforts D&C’s management team has made already:

11
 Manufacturer Relationship- The founding team has begun the process of searching for
manufacturers through EC21.com a global business-to-business online marketplace to place
buying and selling leads. After contact has been made, bids will be sent to top candidates in
order to begin selection of an amicable contract relationship.

Website and Database – Discussions with Jeff Hassett, Assistant Professor at the University of
Utah Master of Information Systems Program, to utilize a team of MIS Candidates and faculty to
build a custom database and website. This will provide a low cost (potentially free) option to
obtain an asset that is crucial to Dash & Cooper’s operational infrastructure. Currently, the team
has been formed and a meeting to discuss project costs and the firm’s needs is expected to be
scheduled soon.

Shipping Logistics – This is currently a large challenge for the founding team. Dash & Cooper will
not obtain order volumes needed for economies of scale on overseas shipping costs for some
time, thereby affecting unit costs. Yohauna Allart, President of Premier Tax & Accounting,
specializes in small business consulting has been established as a contact in the founding team’s
network. Conversations with her have indicated that she has worked with clients executing the
same business model and needs. As such, D&C management will be pursing her as a resource in
finding a cost efficient solution.

In-House Tailor – As implied in the purchase process section, an in-house tailor is cornerstone to
Dash & Cooper’s whole operation. Product quality is highly dependent on this skilled individual,
especially in the follow-up adjustment stages. Additionally, this person occupies a majority of
customer contact throughout the purchase process. D&C’s founders have begun cultivating a
network in the local fashion community to find an individual that produces quality
craftsmanship and possesses a personality conducive to interacting with our clients. Kish Carter,
President of Kish Clothing, is a strong resource and possible candidate for this position and the
firm. He has extensive fashion knowledge given his sixteen years of experience in the industry,
including work at Tommy Hilfiger. In addition to being a fashion designer, his company, Kish
Clothing provides custom-designed denim jeans for the Salt Lake City consumers thereby
lending a substantial expertise in tailoring. Dash & Cooper’s founding team continues to
cultivate this relationship and meetings are scheduled in the near future to discuss this
operational objective.

Market Testing and Feedback

D&C recognizes that the most effective market research is realized when the system is actually tested. In
order to find and correct the operational threats to the brand without actually ruining the brand, Dash &
Cooper will conduct product and operational testing with a focus group. This focus group will be hand-
picked to represent the different segments that the company wish to occupy and ask to go through the
purchase process. Management considers this one-time program as a necessary part of the start-up
process. As such, the firm plans to finance this one-time program with capital provided from Round 1 of

12
Funding. Through several rounds of testing purchases, the company is able to gain a realistic idea of the
problems they will encounter in the market place that may not have been thought of in the planning
stages. Additionally, they will be able to find and implement solutions including contract negotiations
with manufacturers before the enterprise “goes live”.

13
14