The University of Queensland BUSINESS 112 BUSN112_A2. CONCEPT MAP AND ESSAY ABSTRACT In this essay, a discussion on the economic concepts of elasticity, market structure, and supply and demand will be covered along with local, state and federal legal regulations within a retail clothing store. For the purpose of this essay, the business will be referred to by “Viva La Apparel.” Inc ...[Show More]
BUSINESS 112 BUSN112_A2.
CONCEPT MAP AND ESSAY
In this essay, a discussion on the economic concepts of elasticity, market
structure, and supply and demand will be covered along with local, state and
federal legal regulations within a retail clothing store. For the purpose of this
essay, the business will be referred to by “Viva La Apparel.” Included in this
essay is a concept map to display relationships between regulatory, political
and economic environments.
“Viva La Apparel” is a local retail clothing store with ambitions to sell affordable and high-quality garments within the south Brisbane region of Queensland.
Clothing within this department store include men and women’s t-shirts, dress shirts, a variety of pants, shoes, dresses, belts and other accessories from
various luxury imported brands. The audience this business targets are people that are interested in fashion and higher-end branded clothes, however, also
targets people who are interested in these types of brands but are looking for cheaper options. How “Viva La Apparel” executes selling certain garments for a
lower price is by buying the less popular colourways and designs by luxury brands that do not have a higher resale value, however, keep the high-status name
of the brand. In order to open this retail clothing store, several legal and economic regulations must be considered for the business to function efficiently.
Market structure is a vital economic concept that must be valued within a business. Market structures refers to the different market characteristics that
determine relations between sellers to each another, of sellers to buyers and more (Aurora, 2017). In this initial process of opening “Viva La Apparel,” the
market structure that will be focussed on will be based on perfectly competitive markets, however, in a slightly monopolistic competition structure. Perfect
competition occurs when there are many sellers, there is easy entry and exiting of firms, products are identical from one seller to another, and sellers are price
takers (Khan, 2016). As retail clothing stores have proven to be successful over the past decades with a frequent increase in competition, following this
structure is vital, however, taking a monopolistic approach will give the business more room to expand into a bigger audience. The model of monopolistic
competition describes a common market structure in which firms have many competitors, but each one sells a slightly different product (Economics O., 2020).
How “Viva La Apparel” uses this structure as well is by being able to sell certain clothing items cheaper than other retailers. How this is accomplished is by
focussing on consumers wanting brand named clothing items. With a lot of brands being in high demand, this can make certain garments hard to obtain, in
which, creates a high resale value. “Viva La Apparel” focusses on selling items from these brands, however, the less popular colorways and designs that do not
have the high resale value as other clothing items from the specific brand. This gives the consumer the high-status feeling of wearing a luxury branded garment
without having to pay the expensive price. Due to product differentiation, this helps the business stand out in the competition whilst also following the
perfectly competitive market strategy by selling some homogeneous (identical) products, but also heterogeneous (disparate) products. With COVID-19 heavily
affecting physical stores with forced workplace shutdowns, consumers are at times only able to purchase certain items online. UK retailer Boohoo claimed a
45% increase in revenue across all its (primarily online) fashion brands during the same period (Aaron O., 2021). In these times of uncertainty with the current
pandemic, e-commerce has proven to be an expanding industry for all product-based businesses, hence why this business will focus heavily on advertising
through online marketing via social media and under the approval of the Brisbane City Council (ABLIS, 2019).