FREEDOM JEANS COMPANY Harvard Case Solution & Analysis

FREEDOM JEANS COMPANY Case Solution

Introduction

In the United States, Freedom Jeans Inc. is considered as the most popular brand that provides its customers high-quality services at affordable prices. The target audiences of Freedom Jeans are men, women, and children. The company fabricates jeans in diverse amenities all over United States and sells to its consumers via department stores. Currently, the market share and profitability of the company is decreasing as the company is facing intense competition from international vendors. Moreover, the manufacturing cost of Freedom jeans is much higher than their competitors as they sell their products to remain competitive in the market as well as edge over their competitors. The annual reports of the company show that they charge approximately 25% higher prices than the competitors, which help them in making profitability into its shipments. Since, manufacturing abroad is less costly than United States; overseas vendors can offer their jeans at a much lower cost than freedom Jeans can stand to offer.

After facing intense competition in the jeans industry, the company decided that it would change its policy of not offering its products on discounts channels. In order to sell its overstocked item and inventory, the company has introduced several stores channels all over the country where they offer a wide variety of products at reasonable prices. However, due to the poor quality products, the cost of reworking increased and shipping cost of stocks is even higher; this appears as the single possible alternative for freedom Jeans. Furthermore, Due to the crashing financial system, the channel stores have botched to generate profitability from company’s expected target audience as formerly visualized by the administration.

Problem Statement

This case discusses issues that the company faced in order to remain competitive in the market. The main problem that Freedom Jeans faced is the intense competition from its competitors, which include Levis, Denim, Wrangles, and New Jeans who are specialized in manufacturing high-quality Jeans products. Moreover, the company was unable to generate profits from its outlets due to the slump in the economy. Due to its inefficient production processes, the company always missed opportunities in the market, which lead the company to financial loses. High set-up time is mandatory for the machinery, which increases inefficiency problems. Furthermore, the company faced high carrying cost for stocks as they overstocked their materials for a long-term period, for instance (raw materials, work in process, and finished goods).

The company failed to maintain its strong relationship with suppliers and distributors. Due to short-term contracts, the vendors and distributors do not take part in the work process, which results in failure of having a strong relationship with vendors and distributors. As a result, the company overstocked a lot of products in its factories that lead the company to financial loss. However, the company puts slight efforts to include consumers in the product design decision.

Some of the major problems with Freedom jeans are repetitive task, lower quality of products, longer delivery time, higher setup time, longer machine downtime, missed opportunities, and inventory= liability.................

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