1.

The Sustainable Fashion Company is still in the flourishing period and corresponds to the Early
Growth Stage on the Company Life Cycle. Here's why:

• Product Development Focus: They have formed their first product line of the sustainable
women’s clothing made from materials with environmental concerns and dead stock.
This can point to the fact that the company is in the initial stage of development where
the fundamental product service offering is refined.

• Testing the Waters: Used in new and specific, luxury segments it shows initial market
entry and market experimentation. The positive feedback is encouraging, though it
appears that it may be on a lesser degree, which makes it possible for them to sample the
consumers’ reaction while they hone their product-market niche.

• Finding their Niche: Product-Market Fit, is not fully realized and this is one of the major
characteristics that define the Startup Stage. They are probably still developing the
knowledge of the target demographic and making adjustments to the product
accordingly.

• Building Brand Recognition: This particular reason also focuses on branding, which
targets to prove that they are a force to reckon with in the market by creating a catchy
brand out of themselves. This is particularly important in developing a strategic niche
that will give the startup a competitive edge over others and get the customer’s attention.

In conclusion, majority of the issues mentioned concern the fact that the sustainable fashion idea
of the company is only in the early growth stage. They have created a product, opened a niche
market, and are thus, looking for their ideal placement and creating brand recognition.

2.
SWOT Analysis

A. Strengths

● Eco-Friendly Materials: The company uses fabrics such as organic cotton, hemp, tencel,
linen, and dead stock to address the consumers with virtue as they seek clothes of
sustainable products.
● Longevity of Products: Focused on wearing clothes for years, sustainable clothing is a
perfect example of using the call for responsible consumption and its result – waste
minimization.
● Positive Initial Market Response: A preliminary test of positioning has proved clearly
the high product concept and early sales in specialized high status markets are giving a
positive signal and can be twinned with bigger markets.

B. Weaknesses

● Higher Price Point: Practices involved in creating sustainable fashion result in costly
products compared to fast fashion, which may reduce access to this company’s products
to a larger market.
● Undetermined Product-Market Fit: While there has been positive reception to the concept
the company has to worry about market appeal beyond specialty applications.
● Limited Brand Recognition: The competitor’s analysis also revealed that the company is
still in its embryonic stage thus struggled to create a competitive brand image against its
rivals.

C. Opportunities

● Growing Demand for Sustainable Fashion: There is an increased concern among the
consumers with regards to environmental conservation and the negative effects of fashion
industries on the natural environment thus the call for eco fashion.
● Expansion into New Markets: That means the company has the opportunities to expand
beyond the elite, the upper end of the middle-class, focusing on the different price ranges
and different style of clothes.
● Innovative Marketing Strategies: Instagram and cooperation with the environmentally
friendly influencers can serve as the ways to increase brand awareness, reach the
potential clients and gain customers’ trust.

D. Threats

● Competition from Established Brands: Different, major fashion players who jump into
the sustainable fashion market are risks because they might disrupt the market offering
similar products, at a cheaper price or with better brand association.
● Economic Downturns: Consumers have different patterns of spending when the economy
is in a negative or stagnated growth phase. Sustainable clothing, especially the higher
priced garments may be less demanded compared to fast fashion.
 ● Changing Consumer Preferences: Changing trends in fashion may cause the consumers to
move away from anything that’s sustainable if the DC can’t present sustainable goods as
trendy enough.

❖ Challenges and Solutions

Challenges

● Brand Building: Building a brand image in the marketplace when the competition is high.
● Consumer Perception: Two of the strategies mentioned above that are still to be executed
focus on eradicating the idea of having a higher price range than that of fast fashion.
● Market Expansion: Emerging with the appropriate procedures and strategies to expand
the business and find new markets besides the luxurious segment.

Potential Solutions

1) Brand Building:

● Leveraging social media and Influencer Marketing: Use Instagram and promote your
brand by cooperating with green-oriented influencers that are going to attract more
consumers’ attention to your brand and Sustainable Fashion trends as well as emphasize
the stylish facets of the latter.

● Storytelling and Transparency: Use the fact that the brand supports the environment
during the purchase and at the point of using the product by using narratives about
environmental-friendly materials, and socially right production processes. Spread the
values of the brand and the company’s influence on the environment using meaningful
content materials.

2) Consumer Perception:

● Educational Campaigns: Inform the consumers about the advantages of sustainable

fashion in terms of the product’s utilitarian value and environmental impact. Describe
what it really costs to produce clothes and how sustainability is not only good for the
Earth, but also for the people.

3) Market Expansion:
 ● Partnerships with Retailers: Partner up with other environmental friendly companies and
online shops to popularize the products and make them easily accessible. This utilizes
familiar customers, and provides exposure beyond specific targeted markets.

Supporting Evidence

● Patagonia: They have well established their sustainability storytelling and can now claim
with great clarity their supply chain and impact on the environment. Their emphasis is
placed on activism and outdoor recreation which attracts the intended consumers.

● Everlane: Some of the business organizations have adopted transparent pricing and the
use of storytelling in taking the consumers through the real cost of the product and the
cost of doing business in the right manner. This has created a culture of brand
consciousness and indeed civilization through consumption.

If properly leveraged with aspirational marketing communication, pointed brand positioning, and
relevant market growth, and the firm can manage the competition and become a key player in the
wide initiative for sustainable fashion.

3.
The business requirement of the Sustainable Fashion Company is to raise Rs. 50 lakhs for its
expansion. For this funding to be secured the company has the following proposed convertible
notes/ milestones. These are major highlights for both the investor and the entrepreneur, so
progress is always measurable and everyone is pointing at the same goal.

Milestones:

1. Market Validation (First 6 months):

Here the emphasis is to substantiate market relevance. Based on this analysis, the
company expects to generate Rs. 20 lakhs as the revenues in a year that will prove that
the business model has found its initial target market. This increases the paid up capital
by Rs. 5 lakhs resulting into a conversion of 10 percent of the investment.

2. Brand Recognition (Next 6 months):

Thus, creating brand recognition is a vital tool in the long-term strategy. To increase the
presence on social media, the milestone is to gain 50 000 followers on various profiles;
To create successful collaborations with appropriate influencers, the goal is to connect
with 10 influencers. On achieving this target, the next 20% of the investment (Rs. 10
lakhs) gets converted into equity.
 3. Market Expansion (Next 12 months):
Market growth which is the expansion should be the priority. The firm’s strategic
objectives are to penetrate 5 new segments and generate Rs. 50 lakhs of sales. This
results in, the conversion of an additional 30% of the investment (Rs. 15 lakhs) into
equity.

4. Sustainable Growth (Next 12 months):

The last activities aim at sustainability and coaches have to pay much attention at this
activity. The objective is to earn a gross income of Rs. 1 crore in a year with the
achievement indicating gradual and steady growth to show sustainability of the business.
This sees the conversion of the remaining 40% of the investment (Rs. 20 lakhs) to equity
on reaching the above mentioned milestone.

Convertible Note Details:

● Interest Rate: Thus, to encourage the investor, the note shall be cumulative with interest
being 8 percent per annum.
● Maturity Period: The note will only come due after 3 years which gives the company the
opportunity to hit its targets and to find a formally recognized round of investment.
● Conversion Discount: There is also a provision that the convertible note is discounted at
20% on the company’s valuation next time the firm is fundraising. This compensation
ensures that it also rewards the investor for early stage risk taking.

This structure works well for everyone to have a win-win. The company gets its capital
requirements to fund its objectives, while the investor gets possible value if the firm performs
well. If targets are met, the investor transforms part of the note as stock to get an ownership stake
in a business venture.

Convertible Note Detail Description

Interest Rate 8% per annum
Maturity Period 3 years
Conversion Discount 20% discount on the next valuation round
Conversion Triggered By Milestones achieved at pre-defined intervals
Milestone Breakdown
Market Validation (First 6 months) Achieve Rs. 20 lakhs in revenue
Conversion for this Milestone 10% of investment amount (Rs. 5 lakhs)
 Secure 50,000 followers and 10 influencer
Brand Recognition (Next 6 months) partnerships
Conversion for this Milestone 20% of investment amount (Rs. 10 lakhs)
Enter 5 new markets and achieve Rs. 50 lakhs
Market Expansion (Next 12 months) in revenue
Conversion for this Milestone 30% of investment amount (Rs. 15 lakhs)
Achieve Rs. 1 crore in annual revenue with
Sustainable Growth (Next 12 months) consistent growth
Conversion for this Milestone 40% of investment amount (Rs. 20 lakhs)

4.
Customer Lifetime Value (CLV):
Factor Value
Average Purchase Value Rs. 5,000
Purchase Frequency 2 times/year
Average Customer Lifespan 3 years
CLV Calculation Rs. 5,000 * 2 * 3 = Rs. 30,000

Customer Acquisition Cost (CAC):

Factor Value
Marketing & Sales Expenses Rs. 10 lakhs/year
New Customers Acquired 500/year
CAC Calculation Rs. 10,00,000 / 500 = Rs. 2,000

Analysis:

In this case, through this analysis, the picture painted is a positive one. Hence, we find that the
CLV of Rs. 30,000 is substantially high compared to the CAC of Rs. 2,000 suggesting a number
of profit-making opportunities in customer acquisition. Yet, the company requires customers to
make a repeat purchase , hence the breakeven point is at least one business cycle or 1.5 years.
Since these customers order the products twice a year, subsequent orders signify pure profits in
the company.
Conclusion:

The proposed business of the fashion type company involved in using eco-friendly products in
their line of production shows good potential in catering for the needed market. Contemporary
issues can be solved by creating a strong branding concept, using the right marketing approaches,
and developing market penetration schemes.