TAYLOR TILL UNDERWEAR

BUSINESS PLAN
2017-2018
Kaan Keysan
Esercan Deniz
Sevim Buse Beşiroğlu
Ahmet Burak Varol
1.0 EXECUTIVE SUMMARY....................................................................................................................... 4
1.1 TAYLOR TILL ................................................................................................................................... 4
1.2 Mission & Vision ............................................................................................................................ 5
1.2.1 Our Mission ............................................................................................................................ 5
1.2.2 Our Vision ............................................................................................................................... 5
1.3 Team .............................................................................................................................................. 6
2.0 COUNTRY OPERATION: TURKEY ........................................................................................................ 7
2.1 The Climate .................................................................................................................................... 7
2.1 Economy ........................................................................................................................................ 8
2.2 Politics ........................................................................................................................................... 8
2.3 Culture ........................................................................................................................................... 9
3.0 MARKETING ....................................................................................................................................... 9
3.1 Product .......................................................................................................................................... 9
3.1.1 Models .................................................................................................................................... 9
3.1.2 Collections ............................................................................................................................ 10
3.2 Price ............................................................................................................................................. 12
3.2.1 Costs ..................................................................................................................................... 12
3.2.2 Pricing Policy......................................................................................................................... 12
3.3 Place ............................................................................................................................................ 15
3.3.1 Discover the Potential .......................................................................................................... 15
3.3.2 Potential Markets ................................................................................................................. 15
3.4 PROMOTION ................................................................................................................................ 16
3.4.1 Brand Incubation .................................................................................................................. 16
3.4.2 Storytelling Workshops ........................................................................................................ 16
3.4.3 Media Relations & Event Managament ............................................................................... 17
3.4.4 Social Media & Advertisement ............................................................................................. 17
3.4.4 Consulting & Advisory Services ............................................................................................ 19
4.0 OPERATIONS .................................................................................................................................... 20
4.1 Purchasing ................................................................................................................................... 20
4.2 Production ................................................................................................................................... 21
4.2.1 Initial Planning Stage ............................................................................................................ 21
4.2.2 Production Development Process & Design......................................................................... 23
4.2.3 Packaging & Labeling ............................................................................................................ 24

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 4.2.4 Prototype Production & Evalotion ....................................................................................... 25
4.2.5 Barcoding .............................................................................................................................. 25
4.2.6 Commercial Production ........................................................................................................ 26
4.3 Transportation & Warehouse...................................................................................................... 27
4.3.1 Receiving .............................................................................................................................. 27
4.3.2 Dispatching ........................................................................................................................... 27
4.4 Selling & Retailing ........................................................................................................................ 28
4.4.1 KPI’s of Retailing ................................................................................................................... 30
4.4.2 E-commerce and Online Selling............................................................................................ 31
4.4.2.1 Amazon FBA................................................................................................................... 31
4.4.2.2 Website ......................................................................................................................... 32
4.4.2.3 Mobile Application ........................................................................................................ 36
4.4.2.3.1 Why do we need a Mobile Application? ................................................................ 36
4.4.2.3.2 Taylor Till Mobile Application ................................................................................. 39
5.0 BUSINESS STRATEGY ........................................................................................................................ 41
5.1 Improvements of Business Strategy ............................................................................................ 42
5.1.1 Flexible Manufacturing Systems .......................................................................................... 42
5.1.2 Information Network across Companies .............................................................................. 42
5.2 Total Quality Managament (TQM) .............................................................................................. 43
5.3 SWOT Analysis ............................................................................................................................. 44
5.3.1 Strengths .............................................................................................................................. 44
5.3.2 Weaknesses .......................................................................................................................... 45
5.3.3 Opportunities ....................................................................................................................... 45
5.3.4 Threats .................................................................................................................................. 45
5.4 Product Lifecycle ......................................................................................................................... 46
6.0 MARKET ANALYSIS ........................................................................................................................... 47
6.1 General Information in Textile Industry in Turkey ...................................................................... 47
6.2 Turkey Market Characteristics .................................................................................................... 49
6.2.1 Political Conditions ............................................................................................................... 49
6.2.2 Financial Volatility &Risks ..................................................................................................... 50
6.2.3 Physical Infrastructures ........................................................................................................ 50
6.2.4 Consumption Patterns .......................................................................................................... 50
6.2.5 Ethical Issues ........................................................................................................................ 51
6.3 Product’s Position in Turkey & World ......................................................................................... 51

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 6.4 Competitors Analysis ................................................................................................................... 53
6.4.1 Calvin Klein ........................................................................................................................... 53
6.4.2 Zara ....................................................................................................................................... 55
6.4.3 Mavi ...................................................................................................................................... 55
6.4.4 Conclusions ........................................................................................................................... 57
6.4.5 BGC Matrix Analysis.............................................................................................................. 58
6.5 Market Segmentation.................................................................................................................. 59
6.5.1 Demographic ........................................................................................................................ 59
6.5.2 Geographic ........................................................................................................................... 61
6.5.3 Psychographic ....................................................................................................................... 62
6.5.4 Behavioural........................................................................................................................... 63
7.0 Legal Aspects ................................................................................................................................... 63
7.1 Taxes ............................................................................................................................................ 63
7.2 Insurances.................................................................................................................................... 63
7.3 Employment Policies ................................................................................................................... 64
9.0 Financial Analysis ............................................................................................................................. 64
9.1 Sales Forecast .............................................................................................................................. 64
9.2 Sales & Cost of Sales .................................................................................................................... 66
9.3 Stock & Suppliers ......................................................................................................................... 66
9.4 Wages & Salaries ......................................................................................................................... 67
9.5 Fix Expenses................................................................................................................................. 68
9.6 Fix Assets ..................................................................................................................................... 68
9.7 P&L .............................................................................................................................................. 69
9.8 Creditors ...................................................................................................................................... 69
9.9 Balance Sheet .............................................................................................................................. 70
9.10 Financial Ratios .......................................................................................................................... 70
9.11 Breakeven Point ........................................................................................................................ 70
10.0 Conclusion ..................................................................................................................................... 71

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1.0 EXECUTIVE SUMMARY
Even if Taylor Till Underwear aims to get reach leader positioning in Turkey market in
a short term and get commercialize in abroad, we need to mention about all impor-
tant topics that we have to evaluate.

Our product is a men boxer brief which contents 95% cotton and 5% lycra. We crea-
ted a textile product which is produced by 100% natural raw materials also includes
original patterns and layouts. In short term period, TT’s target market is middle-high
income class and 18-45 years old men from all over the world. We have been estab-
lished in Istanbul/Turkey. TT’s core objective is obtaining classy and sustainable con-
sumer mass. The concept that we thought before starting manufacture process was
the prices of well-known brands are superabundant just because of their lo-
gos/images, so we can get a foothold as soon as we provide at least similar quality for
acceptable price. This business plan that we preparing is going to help us to put down
our ideas on a paper and attain foresight power.

Nevertheless an awareness and image of firm are related, they are two totally sepa-
rate terms. Even firms which figure out substantial selling ratios might encounter
with survival problems just because they could not create a good brand image. Crea-
ting a strong brand is not only related with the quality of product that is manufactu-
red by them. It is also related with following actual market and industry, and commu-
nication process between buyer and seller before the selling process. Keeping our
consumer gap alive, spreading our products among different countries, getting diffe-
rentiate ourselves and increasing product range instead of only selling boxer briefs
will play a crucial role to obtain external growth rate that we are currently aiming.
Now, as Taylor Till Underwear company, we are going to show our commercializing
process according to our future plan.

1.1 TAYLOR TILL

Taylor Till is an underwear brand which is established in 2017 in Turkey.All our pro-
dutcs are based on Turkey and manufactured in Turkey.Our core business activity is
textile and main product is man boxer brief.The main contents of the product are
95% cotton and 5% lycra.Literally,all our products are produced from 100% natural
fabrics and they don’t content cancerogenic / artificial colorants.

We supply our fabrics from different raw material producers and whole stitching pro-
cess is run by our 3P textile partners.Our manufacturing and finance department is

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located in Istanbul; at the same time, we are interesting with sales and marketing
process in Spain.

As we need to say, the main target segment of Taylor Till is middle-high income class
consumers because of the quality and performance/price ratio of our pro-
ducts.According to the emerging developments in 2017 and 2018; main market areas
that we would like to reach are respectively Europe, Middle East and Russia.First of
all; we set sight on Spain in Europe because there are many possibilities and advanta-
ges like huge demand ratio of Turkish products in Spain, logistical pros and easy
transportation alternatives, existing in the same customs/tariff union and the profita-
bility of manufacturing based Turkish Lira and earning Euro after the sale transaction.

In our point of view there might be no chance to opening a retail house in Europe
because of working procedures in Europe, political restrictions and requirement of a
huge investment for opening a store. That is why we are going to struggle for to find
out local distributors which can undertake our retailing and warehousing operations.

Taylor Till’s short time period aims are maximizing our product diversity after gain
success in Europe and investing on woman underwear/ sportswear products.Our long
term aims are getting a foodhold in textile industry and create a successful brand es-
pecially in Turkey and Europe.

Our main advantages are production lines that we created by our network, our geo-
political location and easy transportation/ distribution alternative and high quality
products.

1.2 Mission & Vision

1.2.1 Our Mission

Bring our customers the best, most compelling underwear,Provide thorough, respon-
sive, personal customer service. We have a dedicated team to answer your ques-
tions.Process every order with the same sense of urgency. We pride ourselves on
processing and shipping all orders within 24 hours without additional handling fees.

1.2.2 Our Vision

To be one of the most successful three men's and women's underwear retail brands
in our close geography in 2020.

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1.3 Team

Operation Manager will take care of to make sure an organisation is running as well
as it possibly can, with a smooth efficient service that meets the expectations and
needs of customers and clients. All purchasing, production and supply chain mana-
gement process belongs to our operation manager.

Financial Manager will deal with economical figures, all our incomes and expenses
and he is going to provide financial guardiance and support to clients and colleauges
so we can make successful business decisions

Marketing Manager will be responsible for all our products’ introducing, marketing
and advertising processes. He will cooperate with our designer for promotion images
or printed advertisements. He is also going to keep contact with our customers and
visit them for business agreements.

Designer will be responsible to managing, controlling and maintaining of all our

softwares and social media accounts. She will create images, banners and promotion
advertisements. She will design new products’ layouts and boxes as well.

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2.0 COUNTRY OPERATION: TURKEY
Turkey officially the Republic of Turkey , is a transcontinental country in Eurasia, ma-
inly in Anatolia in Western Asia, with a smaller portion on the Balkan peninsula in So-
utheast Europe. Turkey is bordered by eight countries with Greece and Bulgaria to
the northwest; Georgia to the northeast; Armenia, the Azerbaijan and Iran to the
east; and Iraq and Syria to the south. The country is encircled by seas on three sides
with the Aegean Sea to the west, the Black Sea to the north, and the Mediterranean
Sea to the south. The Bosphorus, the Sea of Marmara, and the Dardanelles, which
together form the Turkish Straits, divide Thrace and Anatolia and separate Europe
and Asia.Ankara is the capital while Istanbul is the country's largest city and main cul-
tural and commercial centre, classified as a leading global city.

2.1 The Climate

The coastal areas of Turkey bordering the Aegean and Mediterranean Seas have a
temperate Mediterranean climate, with hot, dry summers and mild to cool, wet win-
ters. The coastal areas bordering the Black Sea have a temperate oceanic climate
with warm, wet summers and cool to cold, wet winters. The Turkish Black Sea coast
receives the greatest amount of precipitation and is the only region of Turkey that
receives high precipitation throughout the year. The eastern part of that coast avera-
ges 2,200 millimetres (87 in) annually which is the highest precipitation in the co-
untry.

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2.1 Economy
Turkey has the world's 13th largest GDP by PPP and 17th largest nominal GDP. The
country is among the founding members of the OECD and the G-20.

The EU – Turkey Customs Union in 1995 led to an extensive liberalisation of tariff ra-
tes, and forms one of the most important pillars of Turkey's foreign trade policy. Tur-
key's exports were $143.5 billion in 2011 and reached $163 billion in 2012 (main
export partners in 2012: Germany 8.6%, Iraq 7.1%, Iran 6.5%, UK 5.7%, UAE 5.4%).
However, larger imports which amounted to $229 billion in 2012 threatened the ba-
lance of trade (main import partners in 2012: Russia 11.3%, Germany 9%, China 9%,
US 6%, Italy 5.6%).

Turkey has a sizeable automotive industry, which produced over 1.3 million motor
vehicles in 2015, ranking as the 14th largest producer in the world. Turkish shipbuil-
ding exports were worth US$1.2 billion in 2011. The major export markets are Malta,
Marshall Islands, Panama and the United Kingdom. Turkish shipyards have 15 floating
docks of different sizes and one dry dock.Tuzla, Yalova, and İzmit have developed into
dynamic shipbuilding centres. In 2011, there were 70 active shipyards in Turkey, with
another 56 being built. Turkish shipyards are highly regarded both for the production
of chemical and oil tankers up to 10,000 dwt and also for their mega yachts.

Beko and Vestel are among the largest producers of consumer electronics and home
appliances in Europe.

Turkish brands like Beko and Vestel are among the largest producers of consumer
electronics and home appliances in Europe, and invest a substantial amount of funds
for research and development in new technologies related to these fields.

2.2 Politics
Constitutionally, Turkey is a parliamentary representative democracy. Since its foun-
dation as a republic in 1923, Turkey has developed a strong tradition of secularism.
Turkey's constitution governs the legal framework of the country. It sets out the main
principles of government and establishes Turkey as a unitary centralised state. The
President of the Republic is the head of state and has a largely ceremonial role. The
president is elected for a five-year term by direct elections and Tayyip Erdogan is the
first president elected by direct voting

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2.3 Culture
Turkey has a very diverse culture that is a blend of various elements of the
Turkic, Anatolian, Ottoman (which was itself a continuation of both Greco-Roman and
Islamic cultures) and Western culture and traditions, which started with the Wester-
nisation of the Ottoman Empire and still continues today. This mix originally began as
a result of the encounter of Turks and their culture with those of the peoples who
were in their path during their migration from Central Asia to the West. Turkish cultu-
re is a product of efforts to be a "modern" Western state, while maintaining traditio-
nal religious and historical values.

3.0 MARKETING

3.1 Product
The competitive advantage of our product is being as good as the brands that serve in
the field of luxury consumption and affordable products that the middle sector can
choose as substitute products.

As a beginning we will proceed with 4 basic products in order to achieve more sustai-
nable and more reliable data on sales forecast. on the long view, we intend to expand
our product scaling and turn to women textile products with a high profit margins in
the textile industry. The products you see below are the products of the basic collec-
tion which have not undergone any digital printing process.

3.1.1 Models
#TT100 : White belt and white fabric
#TT101 : Black belt and black fabric
#TT102 : Green belt and black fabric
#TT103 : Red belt and blue fabric

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3.1.2 Collections
Apart from this, we will have two collections that we produce in order to reach more
niche markets.

Our collections will be sold out as a social responsibility project after the first two ye-
ars and will be sold in limited numbers in stores which we bought 3P retail service.
For bulk orders of these products, customers will have to give 15 days notice, becau-
se we can assume that special collections will take longer than 7 days which is our
normal delivery time because they have to go through digital printing.

2 collections will take place on animals and botany. Animal-based '' Animan '' will be
developed on a black-black boxer brief, and botanical-based '' Bomanic '' will be deve-
loped by applying digital printing on a white-white combination. These products,
which we aim to drive on the market with two products in the first place, will be avai-
lable in our stocks in case of pre-digital printing against possible unexpected demand
situations. When the targeted demand amount is caught, the collections will be
expanded and new products will take place in the market.

10% of the proceeds from the collections of '' Animan '' and '' Botanic '' will be dona-
ted to non-profit-making social foundations based on protecting endangered animals
and plants.

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ANIMAN

BOMANIC

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3.2 Price
As Taylor Till Underwear, we reviewed various pricing policies during the market
entry phase. Before giving our decision, we thought that we should be able to exami-
ne the advantages and disadvantages of various strategies in the name of our brand.

In this case, it will not be possible to capture the high volume of sales required for the
economic pricing strategy in the first place. Due to we have to deal with the local
firms which existing too much in Turkey, It is not right to say that we have poor com-
petitors. Therefore, price skimming strategy will not be advantageous for us. As a
competitive advantage, offering performance / price ratio as affordable will not be
suitable for premium pricing. For this reason, we have set our target as "penetration
pricing". Although it does not seem to be very profitable for us in the first step, we
can follow the policy of increasing the price relatively after creating customer loyalty
and satisfaction.

3.2.1 Costs

3.2.2 Pricing Policy

The strategy we used when determining our price was based on the average prices of
other brands. We use the data from one of Turkey's largest shopping website as the
source, Boyner. As a result, we examined the 3 pack and 2 pack products sold as
promotion as well as the single products. We noticed that the prices of unprinted
fabrics were the same as those printed on Zara and Mavi, but we noticed that Calvin
Klein had some more printed products. High-end firms want additional prices for fea-
tures that are promoted as extra features, without incurring a large cost difference
but the cost of our digital printing as a production will not be a huge cost in our long-
term operations and we will have the advantage of offering our printed products to
our customers at the same price.

When the products are examined, the price of the Calvin Klein classic model is 159 TL
(31,8€), the unit price of the models using colored belts is 53 TL(10,6€), and the ave-
rage price of the printed model is 74 TL(14,8€).

The price of classic and digital printed models of Zara is fixed at 46 TL(9,2€).

Mavi underwear offers printed and unprinted models for 27 TL(5,4€)

Our pricing will be based on policy, components and quality. For this reason, we need
to set the price close to Zara, higher than Mavi and lower than Calvin Klein prices.
After all the operations mentioned above are completed, we have determined our

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selling price to be 32,5 TL (6,5€)considering the average cost of our product, 7.5 TL
(1,5€ max – 1,31 average) and other long-term costs.

We have to say that we are producing a boxer with a higher price than the MAVI
which is one of the most important competitors in the market, the reason for this is
that we are producing a higher quality and rare in the market boxer as a product due
to our production capacity. With sales promotions and advertising support on the
market, we think that users will soon recognize our product and change the un-
derwear preferences they use in the domestic market.

One of our products will provide us a profit margin of € 5 after sale. However, of co-
urse, on the long view, we will have to reach our target sales figures monthly and ye-
arly so that we can cut down on sustainability and non-production costs. This section
will be mentioned in the sales forecast section, and we will talk about the tax, insu-
rance and salary policies that we will pay attention in the financial analysis section.

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3.3 Place

3.3.1 Discover the Potential

The central question guiding our work
has been what "Made In Turkey" means
in a global context. How is it different
or better than "Made In China" or "Ma-
de In Germany"? What competitive ad-
vantage can Turkey claim for itself as it
competes with these nations? And how
can a stronger national brand help an
emerging country forge lasting interna-
tional relationships?

Even if Taylor Till Underwear is Turkish origin company, all our Consumer Packaged
Goods have this label on their covers which means, business partnerships that we
are going to create both inbound and outbound reflect our vision. These partners-
hips ensure quality image management, positioning in industry and new target mar-
ket researching activities. Strong corporate communications allow us to constituting
operable network and increasing awareness of us. So we plan to join corporate or-
ganizations especially with our raw material suppliers about to get strong corporate
image.

3.3.2 Potential Markets

We aim to establish a high quality distribution network in the long run thanks to our
trading activities which will start in İstanbul, the bridge of Anatolia which has been
the location of Asia and Europe and which has hosted important trade routes since
ancient times of history.

We think that we will be able to reach our customers easily due to our location. With
this, we will try the direct distribution alternatives after the use of selective distribu-
tion in short vaults and the use of online stores and applications in long vaults thanks
to our 3P retailing services.

The shopping malls and the great outlet stores in Turkey are the centers where our
target group have the most shopping and we can reach them with the easiest way.
For this reason, we are aiming to make our products more affordable for the whole-
sale stores that display different brands' products and in short vaults we are aiming
to meet the customer easily. Besides, in the long-term, we plan to increase our sales
force thanks to the orders we receive online store and to move the brand awareness
to a higher level thanks to the trade fairs we will attend.

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Of course, during the process of the reaching to our target group, the easy distribu-
tion alternatives of Turkey’s market and lower transportation costs will be an alterna-
tive against the new entrant competitors and an advantage for catching our present
competitors.

Our potential markets, in the short term, will be the target group that we will reach
them through the outlet stores and the shopping malls, in the long term, will be the
young people who live in this geography especially in Russia, Middleeast and Europa.
In terms of accessibility, our online store will provide service in Turkey firstly. This is
why the cost of international transportation in the case of individual purchases is to
eliminate profitability. However, this shall not constitute a huge problem in Turkey.

3.4 PROMOTION

3.4.1 Brand Incubation

First of all we need to create an idea focused crew which require to move on some
specific topics. This crew is going to examine manufacturing capacity of different sca-
les of brands for collecting and forming an estimate of information about usage of
raw materials and the ratio of the risks to taken investments because, this data mi-
ning process will be our first step in an attempt to production in the highest efficiency
and minimum waste of raw materials and labour.

On the other hand, there are certain financial investments that we are planning to
take hold for mass manufacturing to decrease our variable costs and achieve the
economies of scale. Therefore, our crew is going to apply different brand incubation
centres with this business plan to catch opportunities to take investments from big
companies and government. In other respects, Turkish Republic encourages start-ups
and young entrepreneurs who work for industrial area and it really motivates us.

3.4.2 Storytelling Workshops

As we mentioned before, brand image is not that easy to build. That is why our mar-
keting team will perform works for transmit our vision and mission to our potential
consumers and target market.

In two years period, we are planning to join comprehensive fairs and presentations
as a sponsored local firm and concerts which are settled in universities especially in
winter terms. During the summer terms, our storytelling workshops are going to
exhibited in coastal strips which will be relatively easy to introduce high quality Tur-
kish product to tourists and outland based investors. Actually, even small advertise-
ment budgets allow us to arranging fancy exhibitions and creative fairs which we can
promote our products especially in high population density areas.

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3.4.3 Media Relations & Event Managament
The most powerful crew which contained within Taylor Till Underwear is creative de-
sign team will be one of the most important leverage with their six year experience
and relations with well-known brands from different industries. In short term period,
our media relations will generally move on social media management. Our middle
and long term media management aims are making contract with Turkish mainst-
ream TV channels and preparing monthly advertisements which suitable for many
other social media platforms. Also, there might be social responsibility projects which
encourage the young community and entrepreneurs for natural manufacturing and
donating all earnings to TEMA, the Turkish Foundation for Combating Soil Erosion for
Reforestation and the Protection of Natural Habitats.

TT’s core aims about event management especially proceed on fashion fairs and in-
dustrial meetings in Turkey. Therefore, the biggest part of our advertisement budget
will spent for exhibitions and organizations which we can get face to face communi-
cation with our possible retailers and distributors. In middle and long term period, we
plan to make business partnerships like joint ventures with well-known and good
brand reputation firms in Europe / Russia and Middle East.

3.4.4 Social Media & Advertisement

Particularly, rapidly accelarating social media consumption brought sharing special
informations of individuals, disclosing personal datas with third parties, online adver-
tisements in each step of our life and SEO researches in its wake in last decade. On
the other hand, online advertisements and social media has a huge impact on brand
image and awareness; so social media management is going to be so important issue
for both increasing selling volume and formalizing consumer approach.To make qua-
lity social media management, we need to clearly absorb the definiton of this :
SMM can be defined as usage of the existing social media platforms for increasing the
brand awareness among consumers on online platforms through utilization of the
WOM principles (Drury, 2008)

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Digital World have caught absolutely huge growth ratio of every important indicator
in 2018 instead 2017. According to Hootsuite’s analysis approximately 4.02 billion
internet users are equal 53% penetration. 3.19 billion of this community are active
social media users. 2.95 billion of those users connect social media VIA mobile and
total mobil users are 5.1 billion which equals 68% penetration. On the other hand,
approximately 2 billion people are active e- commerce users. When we evaluate the-
se datas for Turkey, 75% urbanized 81.5 million of Turkish Republic has 51 million ac-
tive social media users and %55 of this community visit online retail stores each
month.

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In the view of such information, we thought the desicions that we need to take and
our positioning in social media. In short term period, we are going to use two of most
consumed social media platforms, Youtube and Facebook. We are planning to get
contact with social media phenomenons to apply guerilla marketing techniques on
unforseeable times. Then we might begin to sell on Instagram because in Turkey the-
re is no taxes or VAT’s on Instagram sellings. Our marketing crew will handle SEO app-
lications for Google ads. In middle and long term period, mainstream TV channels will
carry us one step forward, as we said before.

3.4.4 Consulting & Advisory Services

Even so this idea is a start-up project, we believe that collecting right and effective
sources to use will relocate us one more step among our competitors. Therefore first
we need business partners who complete fractional manufacturing process ongoing
with our ideas.

The services that we are going to provide about Consulting & Advisory services will
take shape after we obtain the selling rate that we target and business partnerships
with brands which manufacture in textile industry.

As Taylor Till Underwear, we will acquire an opportunity to evaluate and compare our
selling results according to selling frequency of products in retail stores, age range of
consumers and success rate of reaching our target market through recorded informa-
tions by our 3P retail partners. All results that are collected and evaluated allow us to
draw our short and long time paths. We might develop a server which can record all

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those informations and allows internal data sharing or we can find a service provider
who can do it for TT.

In short time period, consulting & advisory services appear like impossible but perso-
nal data sharing is becoming an industry and we can achieve that plan by collecting
datas. In long time period those datas will be sources for fashion applications, prepa-
red researches by brands which manufacture in textile industry and of course social
responsibility projects.

4.0 OPERATIONS

4.1 Purchasing
As a buyer, simply maintaining adequate sources of supply is not enough. Making su-
re that suppliers are the right suppliers, selling at the right price—and then seeing
that they keep serving well, are important seeing that they keep serving well, are im-
portant activities.
Although the impact of purchasing on a company’s profit is great, it is not easily achi-
eved! It takes a skilful team of buyers under a competent manager who understands
scientific purchasing techniques and methods.

As Taylor Till Underwear, there will be two main targets during the procurement pro-
cess:

i) Assure economic supply through the procurement of goods, supplies and

services to keep the company in operation.
ii) Contribute to profits by efficiently controlling the total cost to the objec-
tive.

Sometimes under fire from many conflicting sources, buyers must get the most
value in goods purchased at minimum cost. At the same time, the manager and
buyers must keep inventories low to maintain or achieve high turnover ratios.

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 First of all we are going to identify our specifications to clarify our demands to
complete orders which come from 3P retailers. We don’t have our own manufac-
turing facility yet. So, our production process will continue in local sewing studios.
For this reason, pricing researches before we begin the manufacturing process will
impact our profitability of overall activities. In short term one person in our team
will interest with procurement process. To operate effectively, the purchasing
executive must become a coordinator representing total company interests, and
not solely those of purchasing. We will explain all costs which equal to each com-
ponent of the product and ratio of purchasing amount to manufacturing volume
in our financial analysis part.

4.2 Production

4.2.1 Initial Planning Stage

We receive product plans and quality specifications from the customer, draw up a
proposal for the manufacturing method and overall schedule, and based on this in-
formation calculate a rough cost estimate. After doing this and dealing with any other
issues, we consider the feasibility of manufacturing the proposed product on a com-
mercial scale.

As we said before, our main product will be boxer briefs which includes less compo-
nents and the most effective per using material. The main reason of this situation is
high consumption rate in Turkey and short life cycle of this product. You can easily
realize that situation when you go shopping for your home because even home ac-
cessorize companies prefer to promote textile products as sub-core business activity.

21
Rapid textile manufacturing flow and low variable costs in Turkey directly affect this
situation.

As we know, textile products which are made in Turkey, sent to origin countries for
labelling and packaging operations. Then they are imported to Turkey under the la-
bels of global brands. Today, most of well-known brands like Lacoste, Tommy Hilfiger,
Zara and even Burberry apply this process to keeping low their labour costs. This cyc-

22
le causes to excessing the export deficit. That is why manufacturing by our own raw
materials and relatively low labour costs ensure to bringing together the products
and customers with affordable prices and this provides us high profit margin during
our export activities in long term period.

On the other hand, we plan to execute our transportation activities by a commercial

vehicle that we are going to rent. Although, all warehousing process is going to run by
3P warehouse service supplier. We will mention the details about it under the title of
Transportation& Warehouse management.

4.2.2 Production Development Process & Design

Identification of area of utilization and evaluation of components are really important
to present a high quality product to our customers. As we said before, we are plan-
ning to take ourselves one step forward by make use of our core competency : provi-
ding high quality on affordable price but the main question is, how can we catch our
correct target?

Especially, the colours and patterns of our products will be classified according to the
age gaps, selling areas and retailing zones after the digital printing process. 3P retail
stores and records after we obtain the online selling processes will play crucial role
during the classification process of it.

Our boxer’s bottom size which is fabric exists from %100 cotton. We preferred to use
cotton coating in interior side of belt even if it is more costly comparing to normal
lycra boxer belts because it makes feel more comfortable and effective against get-
ting sweat. As a result, a high quality boxer comes to exist which is manufactured
from %95 cotton, %4,7 lycra + %0,3 cotton coating.

All cutting, sewing and ironing processes will be handled in 3P manufacturing areas
that we are going to find and all designs are going to be created by ourselves. Whole
products feature our own patterns and lines but they need to undergo a process of
digital printing. We will explain all commercial production process by an infographic.
We plan to reach different customer groups by creating creative collections. You can
see two different product types which is applied and not applied digital printing pro-
cess.

23
The third step that we are going to mention is going to include audition and quality
control process to meeting our quality requirements. Especially, we will tell legal pro-
cess to promote our product and necessity documents like Ecotex that we can obtain
from Turkey but first we need to talk about creating packages and labels.

4.2.3 Packaging & Labeling

24
Obviously, the package of the product catches consumers’ interest if they are desig-
ned creatively. So, we aimed to design a package model both looks attractive to yo-
ung age customers and not going to disturb middle-old age community. You can see
‘’T’’ and ‘’L’’ letters as a pattern which are mostly found in our brand, Taylor Till.

4.2.4 Prototype Production & Evalotion

Based on the product plans and quality specifications received from the customer,
and the product specifications and product manufacturing plans determined in the
Product Development Phase, we produce a prototype. We then work with the cus-
tomer to establish whether the product meets the required quality standards. We
repeat this process of product development, prototype production and prototype
evaluation until the prototype reaches the standard of quality required.

Of course there will be some legal restrictions about health and ergonomic for evalu-
ation the prototypes that we are going to produce. So we need to obtain OEKO-TEX
Standards document after the examination process of our products according to
component and chemical contents.

In case of fulfil the conditions, the applier has right to obtain the label which is writ-
ten “Confindence in textiles passed for harmful substances according to Eko-tex stan-
dart 100”. OEKO-TEX is a label brand which states international safety in textile in-
dustry.

4.2.5 Barcoding
One of the operations that we have to execute on the products which are going to
sold in retail stores. Barcoding operations allow us:

 Recording inbound and outbound acts and stock level changing

 Tracking manufacturing operation and it makes easier audition process
 We can easily evaluate production and quality control
 Conditions of order and manufacture are tracked and taken precautions.

In Turkey, print barcode will be more expensive than label barcode. So, we are not
planning to use print barcode in short time period because mainly, the targets while
the barcoding process are :

 Identifying one product

 Identifying different features of one product ( pattern, color etc.)
 Identifying different packaging types of product
 Showing the price of good.

25
 So in case of our production volume, classifying each of our products according
to models and colours and applying print process each of them will be more
expensive compare to purchasing labels because in short term all packages will
be same and sorting them one more time is only an extra cost for us.

4.2.6 Commercial Production

When all the preparations are complete, commercial production begins. Even
at this stage, modifications and improvements are made to the manufacturing
line, and our engineers are continually trying to improve their work. The whole
team actively cooperates to make high quality products as efficiently as possi-
ble.

In our point of view, commercial production process will be relatively easy just
because of overflow manufacturing area and contract-production alternatives.
So, the main thing that we have to handle is finding a 3P manufacturer in short
time period. They also apply ironing, packaging, labelling and barcoding pro-
cesses alongside cutting and sewing.

26
4.3 Transportation & Warehouse
The process that we need to apply after packaging of all products is sending them to
retail stores and 3P warehouse service supplier which delivers them to our customers
according to the orders in proper time period.

In short term, we would like to work with a local logistics firm and we get benefit
from parcel freight alternatives through our production volume. So, we can execute
LTL freight alternatives and we can create a dynamic distribution web instead of cent-
ralized and heavy transportation system.

In long term, our aim is obtaining our own warehouse facilities which are close to
demand and possible retail stores but it means energy, maintenance, labour and ot-
her miscellaneous costs. Therefore, we are going to get all these services as 3P for a
long time period.

Transportation and warehouse activities exist approximately %40 of overall Supply

Chain activities so we need to take right decisions on right time. Let’s see our two
main warehousing activities and our distribution process:

4.3.1 Receiving
Receiving is going to be the basis for all the subsequent activities of the warehouse
that we arrange in accessible and affordable locations. When our ready for sell goods
reaches to warehouse, receiving process begins. As we know, goods need to be pas-
sed through receiving process rapidly otherwise that might be some problems which
cause by waiting on the queue and losing opportunity cost. Then they become avai-
lable for picking customer orders. The dispatch activity is the customer-facing aspect
of the warehouse so it must operate effectively to ensure that all goods are dispatc-
hed to the customers on time. Our priority will be put away the goods to the required
location with minimum handling & minimum delay possible.

4.3.2 Dispatching
After order picking, the goods need to be brought together and made ready for dis-
patch. This step is going to include various activities like labelling – tagging – assembly
– testing – packing into cartons for delivery process from warehouse to end user.
In short time period, we are planning to use same package design for each product
and they will not have digital printed features of product just for decreasing cost per
each unit. That’s why our warehouse partner will carry of that and they put labels on
packages according to our requirements like size color etc.

27
Obviously we will identify the delivery time spesifically in our web sites or other e-
commerce areas that we run a selling operation. So our cosumers will be informed
about the delivery time. Most of the vehicles may need to leave at about the same
time of day. Good co-ordination is necessary to avoid the load taking up valuable
marshalling area space for longer than necessary. Of course that part belongs to our
transportation service provider as well.

4.4 Selling & Retailing

Taylor Till Underwear’s retailing operations are going to remain limited with local re-
tail houses because of the regulations on low distribution networks and low part-
nership alternatives. In 5 year forecast, retailing operations are going to gain accele-
ration by increasing customer satisfaction, loyalty and residual selling volume. So all
of our 3P distribution and retailing costs will decrease ongoing our cost effective stra-
tegies.

After a while, we target to create a software entire all departments to identify cus-
tomer requirement, customer satisfaction and after selling support. Our customers
can also send their comments and idea on our website. By the agency of this software
we can easily clarify and define demand levels in each retail store. It makes possible
to organize promotions according to request of consumers. In our point of view, retail
stores are centres which we can evaluate and forecast customer demands at opti-
mum level and make pricing strategies which will directly affect our long term selling
strategies.

28
In middle and long term period, becoming a chain retailer from a single store might
appear like a profitable opportunity for selling strategy but fixed/variable costs and
online and virtual store alternatives exceedingly changed the rules of international
commerce especially in last 3 years.

According to Credit Suisse forecast, 13 million m2 retailing area in 8’640 stores will
close down. This level is higher than the level after American economic crisis. This
trouble negatively affects labour market in US. According to Bureau of labour statis-
tics there have been created 17’000 new job opportunities in 2016 but there were a
big loss approximately 9’000 monthly in retailing industry. On the other hand, online
retail purchasing activities exist 10% all total retail purchasing activities but it increa-
ses rapidly especially in last 5 year.

29
4.4.1 KPI’s of Retailing
The key drivers of retailing industry play role as KPI’s especially for identifying and
executing of businesses long term pricing and selling strategies. Each relation
between these key drivers should be taken into consideration. As we know, innova-
tion takes a crucial role in 21th century so we need to take into account all these KPI’s
and interactions between them carefully. If we examine all these factors, we can re-
cognize that the regression of retailing and improvement of e commerce activities
particularly in last decade.

Alongside all these factors, one of the important issue that we have to take care
about is financial sufficiency. Opening a retail store requires necessary legal docu-
ments and permissions, products, monthly rent or purchasing value, labour cost and
effort of selling process which exist in our stock. We had tried alternative ways to
improve solutions for decrease all these effort and costs. There might be 3 logical
way that we can use as short and long term period strategy. TT’s target consumer
mass which we get connected by web-site or application is going to get accelerate the
selling process and sharply decrease our fixed costs. On the other hand e-commerce
factor will increase our liquidity alongside of selling in retail houses.

30
There will be used a special mobile application which is totally created by ourselves to
reach forecasted annually selling volume. Besides, we are planning to make business

agreements with fashion applications which serve on both IOS and Android platforms
like Chicisimo, Modtuber etc. alongside to creating online showcases like Ebay, Aliba-
ba and Instagram.

4.4.2 E-commerce and Online Selling

4.4.2.1 Amazon FBA

We have discovered a virtual showcase which can run transportation, inventory and
all warehouse non-core activities in the name of us as known as Amazon FBA.

31
4.4.2.2 Website

32
33
34
35
4.4.2.3 Mobile Application

4.4.2.3.1 Why do we need a Mobile Application?

Mobile applications are becoming more popular in the world. Nowadays many start-
up companies and many industries are implementing the mobile apps for their busi-
ness to improve their business and attract more customers to the business. Every day
the new devices are arriving to the market with innovative features, thanks to
growing technology. The evolution of mobile technology with the new devices has
made our lives simpler.

Today people take their mobile up when they want to check any information on the
internet. There are a number of apps available for everything like shopping, booking
the tickets, gaming, bill payment and money transfer. If we don’t want to miss out
opportunity in our business, our customers should have our app on their hands.

Why do we need a mobile application for our company:

36
 To be visible to our customers at all times: Statistics show that people spend
too much time on his or her mobile device. While probably only a handful of
applications make up the bulk of this total usage, it doesn’t change the fact
that each user has to unlock, scroll, and scan their device for the apps they’re
looking for. Being “in the way” can be an advantage to our company, as our
mind unconsciously does record every image and text (or well-designed app
icon!) it comes across — even if it happens unnoticed.

statista.com
 To create a direct marketing channel: Apps serve many functions: they can
provide general info, prices, booking forms, search features, user accounts,
messengers, news feeds, and much more. One of the biggest benefits of hav-
ing a mobile app is that all the information we’d like to provide to our
customers – including special sales and promotions – is right at their fingertips.
Through push notifications we’re getting even closer to a direct interaction,
and can easily remind customers about our products and services whenever it
makes sense.
 To provide value to our customers: Under favour of our mobile app, we are
going to get an opportunity to create additional values for our customers like
discount coins or shopping reward systems. We are planning to offer special
promotions for limited time period or serving mini games just for fun. So time
wasting on our app will be increase.
 To build brand and recognition: To providing our application's apparency on
mobile markets is going to increase our brand awareness.Although, our cus-

37
 tomers can be directly informed via our notifications and follow the lastest
opportunities.
 To get through from the competition: Rakiplerimizin mobile market üzerinde
bulunan varlıkları ile başa çıkabilmek için bizim de mobile market üzerinde
görünür olmamız ve müşterilerimize ulaşmamız business ımıza fayda
sağlayacaktır.

 To Cultivate Customer Loyalty: With all the noise out there — roadside ban-
ners, billboards, flashing signs, newspaper ads, flyers, coupons, websites, web-
site banners, Facebook ads, and email marketing — we slowly lose our impact
on customers because of the immense amount of advertising surrounding us
all. It’s time to go back to making a true and sincere connection with your cus-
tomers, and making them a loyal lover of our product and service. Mobile ap-
plication provides us staying closer to our customers, and being just a “finger-
tip” away at all times.

38
4.4.2.3.2 Taylor Till Mobile Application

39
40
5.0 BUSINESS STRATEGY
As we know, business strategies are long term working strategies which include firm’s
own appropriate organizational structure, corporate culture and plans that need to
move one step forward. Especially emerging, expanding, compatible and intensive
oversea demand industries like textile require a good investigation and evaluation
process about SWOT analyses for creating a good Supply Chain Management system.

As we said before, Taylor Till’s main target is commercializing Consumer Packaged

Goods to target customers; middle life cycle, quality products that they will be satis-
fied and never will hesitate to purchase. Therefore, we think that our business stra-
tegy should not adhere to only one concept. Two useful concepts that are based on a
hybrid system like cost leadership/ differentiation strategy might carry us one step
forward among our competitors. First of all, we have to identify this hybrid system’s
advantages and disadvantages.

In our point of view, this hybrid strategy provides us two main alternatives. By making
use of cost leadership opportunity, we are going to sell our products with low profit
margin and this allows that we obtain an occasion to compete with our opponents
relatively easy. On the other hand, differentiation strategy makes possible that arran-
ging premium promotion alternatives and product differentiation/ value added servi-
ces after our market place get appears among the others. So we are going to get an
opportunity to deliver value added products on affordable price to our target consu-
mers.

Obviously, we can’t manufacture as differentiated as other premium brands or we

can’t catch price leadership advantage as other firms which are only focused on this
strategy but Taylor Till Underwear believes that catching core competency leverage is
possible if we apply both low cost production line and differentiated characteristic
product gaps.

The most compelling part that we thought is capturing high manufacture volume to
obtain low cost core competence advantage. We are going to explain all details about
demand procurement, cost of one product and financial requirements to implement
it in financial analysis part.

41
Unfortunately there will be some disadvantages of this hybrid strategy:

 Consistent price decreasing policies of our competitor brands

 Adding differentiated features of competitors to their products that consum-
ers are willing to pay
 Losing competency alternatives during the time and the probability of effec-
tive usage of TQM by our competitors.

So, we need to mention about improvements that avoid from these cons:

5.1 Improvements of Business Strategy

5.1.1 Flexible Manufacturing Systems

We have to improve an effective and flexible manufacturing system according to de-
mand forecasts, unforeseen demand probabilities, consumer and 3P retailer’s feed-
backs. Of course, our acceleration level we gain after e-commerce is going to be
unignorable factor during the construction of FMS. True inventory management and
incidence of purchasing decisions will play crucial role on this point because respon-
ding different consumer groups and parcel manufacturing activities will require effici-
ent/time flexible manufacturing system. That is why the intensity of production vo-
lume in our first year should be multiple times more to keeping them in our inven-
tory.

5.1.2 Information Network across Companies

As Taylor Till Underwear, we forecast that we will need an information network
software which includes real time linkages between suppliers, distributors, retailers
and subcontractors who help us as 3P service providers. Evaluation, implementation
and execution of real time informations allow us to run our order stock recycling,
transportation and warehousing activities with maximum efficiency and minimum
mistake. In short term, we will not need this kind of comprehensive and complex

42
software because we had to stay local for a while during we competing to clarify our
place among other competitors but in middle and long term period, we can outsour-
ce this INS requirement from a successful business partner.

5.2 Total Quality Managament (TQM)

43
5.3 SWOT Analysis

5.3.1 Strengths

Quality Price Location

Despite cheap production costs According to the Because we are a company of
and the large investments in performance/price relation, Istanbul origin, in the short
textile industry in Turkey, many among the major brands in the term we have easy access opti-
companies aim to profit from market, our price is more pre- ons to domestic awareness and
version instead of creating ferred with quality and usage target market. In addition to
brand, for this reason, the use and the product is sold at af- this, we are achieving sales
of quality products and raw fordable prices on the market. opportunities in the city which
materials is not among the has more middle age popula-
priorities of most companies. tion and is the most crowded.
However, the products we use
meet quality criteria in order to
create completely customer
loyalty and sustainable sales
policies. We promise our con-
sumers a product that is resis-
tant to washing and ironing in
long-term use.

44
5.3.2 Weaknesses

Start-up Limited Resources 3P Manufacturing

In a country where there are If, in the short term, there will The production visibility will be
many competitors, disadvanta- be no financial resources avai- a very difficult process for a
ges of being new in the market lable by government-sponsored short time, as all production,
leads to the difficulty of a mass lenders or private angel inves- transport, storage, distribution
production in the short run and tors, our products will continue and retailing operations will be
the cost of all promotional and with outsource operations for a carried out by other compa-
advertising activities to be long time and will literally pre- nies.
promoted. vent us from making our own
production and sales. We will
also try to integrate with diffe-
rent departments with fewer
employees and have to comp-
lete multi-taskings.

5.3.3 Opportunities

Discover the potential 360° Demand Inbound Reputation

Turkey’s recently growing eco- The underwear market is now Because the quality perception
nomy and forward-looking in competition with reputation of local products in Turkey is
export investments allow the and social status, not just from low compared to the products
products produced in that do- a need. For this reason, male abroad, a company that will
mestic market to be opened consumers are seeking new implement domestic produc-
abroad. For this reason, incen- models at more affordable tion and international marke-
tives are given to domestic prices, causing competition to ting policy direct the customers
producers before the opening grow within the industry. It who are not affiliated to a spe-
of the outer market and the becomes a sector that has no cific brand in the market di-
Turquality branding policy and doubt about profitability with rectly to their products.
the reputation of products ab- quality products and proper
road. marketing.

5.3.4 Threats

Competitor Market Volume

New products and new ent- Mass production policies of
rants threatened by our com- competitors in a constantly
petitors are making it difficult growing industry; far exceeds
to dominate the market. Many the production capacity of
firms negatively affect the pro- start-ups trying to enter the
cess of building awareness of a market. This prevents the who-
company that has entered the lesale rates from falling and the
new market while seeking ot- high profit margins that can be
her companies' market shares. captured in the short term.

45
5.4 Product Lifecycle

Introduction: We think that sustainability is easy because it looks like especially to be

very competitive textile market in Turkey and the manufacturing costs can be difficult
to advance in our industry due to the advantage of a large volume for each firm, but
the product is a regular purchase of a man and a non-substitute product. That's why
we did not start our initial sales volume from the bottom of the chart. We believe
that our monthly sales will be accelerated within a year after a regular sales agree-
ment with our target customers. It seems to take about two years, but we can keep it
shorter with effective promotion and alternative discount options.

Growth: At this stage in which our sales and profit margins will rise, we plan to incre-
ase our production volume and gradually drive our new products to the market. At
the same time, we aim to invest in the product development department to add new
components to competitor analysis and products and to increase our advertising
budget to bring our position in the foreground.

46
Maturity: The more healthy our long-term strategies are and the decisions our com-
pany will make in this period, the longer the maturity period will be and the higher
our market position will be.

Decline: If our customers are not satisfied with the quality of our products after a
long period of time, or if the alternative leads to other products, we do not expect a
good scenario. However, in order to prevent this, pursuing fashion and actual busi-
ness experience in the textile industry will not only help us sustain sales and produc-
tion, but also as a vision. In this case, we can protect our existence as a textile com-
pany following the trends.

If we will evaluate the industry and the sector we serve according to the BCG matrix;
the men's underwear sector is a market with a high market growth rate. In addition
to this, we are a new company entering this market, so our relative market share is
low. So, we can place our company and the first position of our product in question
marks. At this point there will be some situations we need to evaluate. We need to
make some strategic decisions for some of the products in this category. If we can
make the right investments in the right product, we can take some of the products in
this category to the stars class by taking market share from the competitors, or we
can drop our support to the dogs side.

In this case, we can duplicate collections in our printed products with original adverti-
sing campaigns, such as social responsibility projects that we have already mentioned
in digital print products or awareness projects that many companies (PRODUCT) are
conducting against HIV virus and we can go one step ahead of our opponents in the
market. On the long view, we may move on to the price increase in the products that
we will carry to the stars group, and we can differentiate from our competitors in the
star group by directing our investments in these products which increase our profita-
bility. Other products with low profitability can be sold at lower prices in our produc-
tion volume and we can integrate these products into our cash cows group.

6.0 MARKET ANALYSIS

6.1 General Information in Textile Industry in Turkey

Turkish textile is outstanding industry among other business sectors according to
exporting performance and not only in Turkey, even in European and Asian countries.
Turkish textile industry’s market share into overall textile export of the world is 1.7%
and its found among the 15 biggest countries.

47
Turkish textile industry’s added value that brings in Turkish economy constitutes 28%
of total imported industry and also solves one of the biggest social problem of Tur-
key, unemployment rate of young citizens.

On the other hand, Turkey had export surplus 1.6 billion US Dollars in home textile, 1
billion in knit fabric, 850 million in textile fabric, 120 million in technical textile in
2017. Also, Turkish textile and garment industry had 200 billion US Dollars in last two
decades.

48
6.2 Turkey Market Characteristics

Especially, despite political volatility and military operations, Turkey has grown
11.8% in 2018 by force of retail selling alternatives and effective usage of young la-
bour force. You can realize 14.8% growth in industry sector when you compare activi-
ties which compose GDP in last 3 quarter of 2017. So, Turkish currency is worth for
investment even lose its value against US Dollar and Euro. We think that we need to
take right decisions in short term to reach expected market share in Turkish market.
Obviously, active and effective usage of low cost labor force will be crucial for us.

However, efficiency levels of the labor market, institutional infrastructure and higher
education and vocational training were cited as the negative elements (World Eco-
nomic Forum, 2012). Additionally, small- and medium-sized enterprises (SMEs) play a
very important role in Turkish economy owing to their large share in total number of
enterprises (99%) and in total employment (77%). But their average workforce and
turnover are much lower than the SMEs in the EU or in most other OECD countries.

6.2.1 Political Conditions

The 2001 national financial crisis created devastating effects on the Turkish economy.
The Turkish public never forgot the coalition parties that caused the 2001 financial
crisis and they punished all of them by discarding from the parliament and bringing
completely a new party to power in 2002 elections. Although the single party go-
vernment brought a relatively smooth and relaxed political climate which led to a
well-functioning business environment, the tension between the conservative and to

49
some extent Islamist government and the secularists has never softened. The wars in
the neighboring countries of Syria and Iraq, the domestic Kurdish rebellion, unsteady
relations with Israel, and never ending negotiations between Turkey and the EU re-
garding the process of Turkey’s EU membership create a risky and unstable business
environment for the country in recent years.

6.2.2 Financial Volatility &Risks

Turkey’s attractiveness to foreign investors was boosted by the economic and judicial
reforms imposed by the EU commission during the EU integration process. Financial
markets and the banking system were redesigned and well-regulated after the 2001
crisis. According to the World Bank , the financial services sector is a noteworthy in-
dustry of Turkey and after a decade-long banking reform, the country has shown
substantial progress in the sector in terms of increasing in size, offering more diversi-
fied services, becoming more complex organizations and using more sophisticated
technologies.

6.2.3 Physical Infrastructures

A country’ infrastructure quality directly affects the ability of a firm to engage effecti-
vely in business as well as its market entrance decisions. In recent years, investments
in infrastructure and in utilities were promoted and the telecommunications and road
network were modernized by the Turkish government. Public utilities in Turkey such
as power, piped water supply, sanitation, and sewerage are not problematic in the
industrial areas, but there are still some shortages in the backward areas especially in
the east and southeast parts of the country. Since energy remains a major import,
energy prices are high and the demand for exploring and gas resources is very high.

6.2.4 Consumption Patterns

Turkey’s population of nearly 81 million is relatively young with 15-64 year olds acco-
unting for 69% of the population. Therefore, the market is dominated by the con-
sumption preferences of this group. The country suffers from highly unequal income
distribution. The latest statistics indicate that while the richest 20% of the households
command 46.6% of the total disposable income, the poorest quintile’s share remains
only at 6.2%. With a Gini coefficient of 40.4, Turkey ranks as the 48th worst income
distribution economy among 113 countries Urban population possesses 74.3% of the
total disposable income and their spending constitutes 76.1% of total consumption
expenditures. According to the results of 2012 Household Budget Survey of TUIK ,
while the expenditures on housing and rent had the highest share in total consump-
tion expenditures with a rate of 25.8%, the share of expenditures on food and non-
alcoholic beverages was 19.6% overall in Turkey. The shares of expenditures were
1.8% for health 2.3% for educational services in total expenditures in Turkey. .

50
6.2.5 Ethical Issues
Because of the lack of legal protection for intellectual property rights, Turkey has
been ranked the second biggest imitator country after China in the world from PC
games (VCD, DVD, Internet piracy, illegal logo use, software, etc.) to the most presti-
gious textile brands, jewellery, and automotive spare parts. Legal framework regar-
ding the protection of intellectual property rights was just amended in 2008 and new
regulations included serious penalties from imprisonment to heavy fine for illegal imi-
tator firms.

6.3 Product’s Position in Turkey & World

Before we start, you need to know our HS code of our product : 610711.

The markets with greatest potential for Turkey’s exports of 610711 Men's underpants
& briefs of cotton, knit/crochet are Germany, United States of America and United
Kingdom. Turkey has closest export links with Bulgaria. United States of America is
the market with the highest demand potential for 610711 Men's underpants & briefs
of cotton, knit/crochet.

In our point of view, the biggest problem of Turkey are branding and marketing pro-
cesses. Even if we manufacture high quality products which has added value and rela-
tively low variable costs, we can’t obtain high profit margin. Unfortunately, this situa-
tion causes excess of import each year and it increases day by day. As Taylor Till, our
target is creating a Turkish brand which follows actual trends.

Therefore, we need to evaluate our export potential and countries currently impor-
ting boxer briefs from Turkey to understand possible dynamics for our long term sel-
ling strategies:

51
Source: exportpotencial.intracen.org

Source: trademap.org

52
As we can see in distributions, countries which hold biggest export potential of Tur-
key, also countries are currently importing our product. Therefore, we can aim our
target markets as first Russia, Germany in Europe and United States.

6.4 Competitors Analysis

As Taylor Till underwear, our short term target is taking good position in Turkish texti-
le industry, increase our profit margin to invest in new products and getting common
in market share. Therefore we need to analyse our competitor to clarifying our short
term actions and absorbing the mottos of big companies. In this case, we choose
three big companies which are currently continue their selling operations in Turkey.
One of them is, representative of luxury consumption, Calvin Klein. Second one is the
textile revolutionist, ZARA. Third one is Mavi, a native brand which dominates Turkish
textile and still continue retailing operations in United States.

There is going to be 5 main factors that we are going to classify the brands:

 Segmentation
 Targeting
 Differentation
 Branding
 Positioning

6.4.1 Calvin Klein

Calvin Klein is an international textile titan which sells their products in both
luxury and middle level consumption market. CK realizes their 30% of manufacturing
operations in Turkey and executes retailing operations since 2007.

As you know, luxury consumption is one of the main factor that is perceived the life
standards especially in emerging countries like Turkey.

According to CampaignTurkey, CK is the third biggest luxury brand after Louis Vuitton
and Gucci which obtains yearly $6200 million selling ratio even if their expensive
boxer brief alternatives by force of true market positioning and correct marketing
techniques. (December, 2017).

Of course there is a reason why we choose CK as a competitor instead of Louis Vuit-

ton and Gucci. CK can easily reaches to middle-level consumers by their promotions
and extraordinary social media usage. In our opinion there are 3 impacts that affects
CK’s market position in Turkey :

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i) Expenses of high-class consumers in luxury textile sector and increasing demand
rate of middle- level consumers to luxury

ii) Increasing attention rate of young community to products which are consumed by
social media phenomenons, singers and actors.

iii) Opening luxury shopping malls in big cities that have high population zone

CK’s pricing strategy is really attractive for both young and middle age consumers.
When we examine the pricing strategy of CK, we can realize that solo products of
them have higher prices than 3 pack promotion products. It sounds weird but the
logic behind this strategy is making consumers feel ‘’special’’ because there is no dif-
ference between these products.

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6.4.2 Zara
The INDITEX company produces 25% of its collections in general, before the season
arrives. This always gives the company an advantage in the textile world. Another
application that gives advantage to 5 firms is that they have made frequent visits to
cities such as New York, London, Milan which are the pioneers of the textile and fas-
hion sector in the years that they were founded and analyzed customer potentials
and developed their designs by adding what they see in these cities. Despite this, it
was told about Zara, who had a problem in Turkey sales recently, taking retail stores
from Turkey in the press two years ago but Zara denied this.

After that, Zara closed the companies that could not provide profitability in Turkey
because it could not catch the sales figures targeted in the interior parts of the ratio
and in two of Istanbul's largest shopping centers they are preparing to open two big
stores. As far as we know from this, competition in Istanbul still continues in the texti-
le sector and retail stores should be located in Istanbul instead of other Anatolian
cities, which have a lower income level economically.

6.4.3 Mavi
Mavi Jeans is a Istanbul based wholesale and retail fashion company that develops
and sells products in the style of lifestyle clothing, especially with strong experience,
expertise and accumulation of Jean and Jean products. Except Turkey, it operates in
34 countries. The company's domestic market share is 2.3% in ready-to-wear and
23.5% in the Jean market in 2016.

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Mavi Giyim has a very fast growth potential in Turkey’s clothing retailing sector and
when new stores are opened, the sales revenue is increasing with individual growth.
Successful operating expense management and advertising results also support the
growing profit margin. The company ,which is growing 18% annually on average, is
increasing its investments in the international arena, in addition to this, the company
achieved cash flow of 63 Million TL in 2017 and 18% of its sales from outsourced sa-
les.

There is also a disadvantage for competing against the international market for Mavi.
Especially in the past 5 years, profitability is decreasing in foreign operations due to
the value TL lost against the dollar. Although the foreign exchange-based rent expen-
se in Turkey and abroad is managed well, it can be shown as a risk factor in this pe-
riod when the TL is weak.

In addition, new entrepreneurs who want to take a rapid path in Turkey clothing sec-
tor like us and us are bringing innovations by raising competition in the market and
they are trying to reveal their differences. If textile firms with Mavi and other high-
income streams can not manage this process, new players, who provide innovation
and meet customer needs and add value can be disrupted especially during this pe-
riod.

One of Mavi's greatest advantages is that it has a lot of advertising activity in Turkey
and the priority it gives for television advertisements. As Taylor Till Underwear, we
know that we should give much importance to social media and television appearan-
ces.

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6.4.4 Conclusions
We have examined companies that can direct the textile market in Turkey and we
produce products as good as they are in the underwear industry. When we examined
the strengths and weaknesses of all companies, we reached the following conclusi-
ons:

1. to carry out retail operations in more specific areas and close to the target
mark rather than mass distribution by selective distribution
2. If we think that we are going to sell less in the winter months, to keep invento-
ry control at the top level considering the demand surplus or the possible sales
going well in the spring season
3. having the production of collection products ready in advance
4. Using services like social media ads and SEO, which is entirely focused on con-
sumer
5. to determine pricing policies well and keep prices always at the optimum level
6. to separate the budget for the brand image and the television advertisements.

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6.4.5 BGC Matrix Analysis

If we will evaluate the industry and the sector we serve according to the BCG matrix;
the men's underwear sector is a market with a high market growth rate. In addition
to this, we are a new company entering this market, so our relative market share is
low. So, we can place our company and the first position of our product in question
marks. At this point there will be some situations we need to evaluate. We need to
make some strategic decisions for some of the products in this category. If we can
make the right investments in the right product, we can take some of the products in
this category to the stars class by taking market share from the competitors, or we
can drop our support to the dogs side.

In this case, we can duplicate collections in our printed products with original adverti-
sing campaigns, such as social responsibility projects that we have already mentioned
in digital print products or awareness projects that many companies (PRODUCT) are
conducting against HIV virus and we can go one step ahead of our opponents in the
market. On the long view, we may move on to the price increase in the products that
we will carry to the stars group, and we can differentiate from our competitors in the
star group by directing our investments in these products which increase our profita-
bility. Other products with low profitability can be sold at lower prices in our produc-
tion volume and we can integrate these products into our cash cows group.

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6.5 Market Segmentation

6.5.1 Demographic
The population density of Turkey is 98 people per kilometer square. The population is
mainly comprised of the Turkish people, who make up 75% of the total population,
while Kurdish make up 18%. Other ethnic groups take up the remaining 17% of the
total population. The languages spoken by the majority are Turkish and Kurdish, while
minority groups speak other languages. The main religion, followed by 99.8% of the
population, is Islam, while other religions are followed by the minute .02% of the po-
pulation.The literacy rate of the population is fairly high - about 87%. The male lite-
racy rate is almost 95%, while the female literacy rate is almost 79%. Almost 70% of
the total population live in urban areas. The rate of urbanization is 1.7% per year. The
total fertility rate is around 2.13 children born/woman.The population is fairly young
with almost 27% ranging from 0 to 14 years of age, while 67% are 15 to 64 years old.
Only around 6% are above 64 years of age. The largest city in Turkey is Istanbul,
which has a total of 16million people. The second largest city is Ankara, which is also
the capital and has almost 5 million in population. There are many other major cities
in Turkey, but the most important and heavily populated ones include Izmir with 4
million, Bursa with 2.5 million and Adana with 2 million population.
Population 80,845,215 (July 2017 est.)
Age structure 0-14 years: 24.68% (male 10,209,284/female 9,745,057)
15-24 years: 15.99% (male 6,601,471/female 6,324,277)
25-54 years: 43.21% (male 17,691,703/female 17,243,428)
55-64 years: 8.58% (male 3,448,232/female 3,492,199)
65 years and over: 7.53% (male 2,712,323/female 3,377,241)

Labor Force
Turkey's labor force is around 30.5 million people, which makes Turkey the 3rd lar-
gest labor force market in Europe.Turkey’s young population is an important contri-
butor to labor force growth and has boosted the country’s rank over its competitors.
Turkey has posted the largest labor force growth in relation to EU countries.

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60
6.5.2 Geographic

Turkey is situated in Anatolia (95%) and

the Balkans (5%), bordering the Black
Sea, between Bulgaria and Georgia, and
bordering the Aegean Sea and the Medi-
terranean Sea, between Greece and Sy-
ria. The geographic coordinates of the
country lie at: 39°00′N 35°00′E .The area
of Turkey is 783,562 km2 (302,535 sq
mi);land: 770,760 km2 (297,592 sq mi),
water: 9,820 km2 (3,792 sq mi).Turkey
extends more than 1,600 km (994 mi)
from west to east but generally less than
800 km (497 mi) from north to south.
The total area (of about 783,562 km2
(302,535 sq mi)) consists of about
756,816 km2 (292,208 sq mi) in Western
Asia (Anatolia) and about 23,764 km2
(9,175 sq mi) in Southeastern Europe
(Thrace).

Anatolia is a large, roughly rectangular

peninsula, situated In Asia. The Anatolian
part of Turkey accounts for 95% of the
country's area. It is also known as Asia
Minor, Asiatic Turkey or the Anatolian
Plateau. The term Anatolia is most
frequently used in specific reference to
the large, semiarid central plateau, which
is rimmed by hills and mountains that in
many places limit access to the fertile,
densely settled coastal regions.

Anatolia is a large, roughly rectangular peninsula, situated In Asia. The Anatolian part
of Turkey accounts for 95% of the country's area. It is also known as Asia Minor, Asi-
atic Turkey or the Anatolian Plateau. The term Anatolia is most frequently used in
specific reference to the large, semiarid central plateau, which is rimmed by hills and
mountains that in many places limit access to the fertile, densely settled coastal re-
gions.
The European portion of Turkey, known as Thrace , encompasses roughly 5% of the
total area but is home to more than 10% of the total population. Istanbul, the largest

61
city of Thrace and Turkey, has a population of 11,372,613. Thrace is separated from
Anatolia (the Asian portion of Turkey) by the Bosphorus , the Sea of Marmara , and
the Dardanelles ; which collectively form the strategic Turkish Straits that link the
Aegean Sea with the Black Sea. Mount Ararat, Turkey's tallest mountain with an ele-
vation of 5,137 m (16,854 ft), is the legendary landing place of Noah's Ark and is lo-
cated in the far eastern portion of the country.

6.5.3 Psychographic

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6.5.4 Behavioural

7.0 Legal Aspects

Taylor Till Underwear is goind go be a limited company. The main liabilities of a limi-
ted company in Turkey are governmental taxes, worker’s insurance premiums and
worker rights.
7.1 Taxes
First of all, our main tax types which we have to obliged to pay are VAT (18%) and
Corporation Income Tax (22%).

Corporation Income Tax is a tax type that is received in exchange of corporate’s ear-
nings. Corporation income tax is calculated from earnings that taxpayers’ net corpo-
ration profit which is obtained in one accounting period.

VAT(18%) is a consumption tax placed on a product whenever value is added at each

stage of the supply chain, from production to the point of sale.

Other taxes that we must pay as a limited company in Turkey are:

 VAT Stamp Tax : 81€

 Acounting Stoppage: 240€
 Withholding Stamp Tax : 27€

7.2 Insurances
According to Social Security Institution, insurance premiums are identified based on
minimum wages. We can say that this insurance institution is a helping platform of
financial contribution of our people who carries same risks. The main target of social
insurance companies is finding out those people and providing financial supports to

63
covering their financial damages. Turkish community get benefit from this insurance
service by paying their insurance premiums to SSI. The minimum social insurance
premium for the least worker level is identified 132€ after the last regulation of Tur-
kish Insurance Act in 2018.

7.3 Employment Policies

Workers’ right are guaranteed under the act of 4857 as known as ‘’work law’’ in
Turkey. The general rights of workers’ in Turkey are:

 Minimum wage  Paid Annual Leave

 Social Insurance  Weekend
 Severance and Notice Pay  Public and National Holidays
Right of Search  Material and Moral Indemnties
 Right of Return

9.0 Financial Analysis

9.1 Sales Forecast
We examined our sales forecasts on 4 periods existing 3 months for each year. The
first determinant factor that firstly we have taken into consideration was manufactu-
ring capacity.

There is a secret agreement between manufacturer and company owner: if you dont
have sufficient raw materials for producing at least 2000 units, nobody helps you.
They don’t even think about your offer, directly reject. This secret procedure can be
assesable like a protection policy to protect their profit margin. That’s why we deci-
ded to produce the minimum producing level, 2000 units.
Because of all those factors, we are going to afford all those minimum starting amo-
unts. We are going to compare different manufacturers which can provide us optimal
commercial producing cost and then we take desicion for agreement.

The first 3 months will be adequate to obtain a small but passionate customer group
in a retailhouse which has really good selling rates. From now on we are going to
keep continue to increase our manufacturing volume according to demand rate and
unforeseeable demands in special days, until the end of the year.

For our retail operations, we are going to deliver our products to two big retailer
Boyner and Gencallar respectively 70% -%30. The reason behind this is the huge retail
store of Boyner which is located at really intensive point of Istanbul. By the way, we
deeply believe that we can catch our sales forecast because according to the general

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manager of ISTINYEPARK, this shopping mall hosts 340 thousands of visitors per
week.

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9.2 Sales & Cost of Sales

9.3 Stock & Suppliers

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9.4 Wages & Salaries

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9.5 Fix Expenses 9.6 Fix Assets

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9.7 P&L 9.8 Creditors

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9.9 Balance Sheet 9.10 Financial Ratios

9.11 Breakeven Point

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10.0 Conclusion
We are fully motivated and dedicated to do this business as Taylor Till Underwear.
We are going to keep continue to our business really happy just because we provide
high quality products to our customers and we believe that we will ensure the cus-
tomer satisfaction in short time period. First things that we thought before we start
this job were low labour cost and accesibility of any kind of materials about textile in
Turkey. We believe this business will be sustainable and profitable company. Therefo-
re, we are open to new stream of products, new trends and we are going to serve
result oriented services in our long term activities.

The main reason behind why we are doing this business is that we would like to crea-
te new trend and fashion stream among young and middle age target customers.
That is why we will continue this job with full of passion and self sacrifice and we will
be well known and succesful brand in both inbound and outbound operations.

When we examine our financial analysis, we recognize that we can easily reach our
estimated capital to maintain our business carefully. These numbers also help us to
set up a good quality life in Turkey.

We plan to go toward online selling instead of retail houses in short term period. This
will be more profitable because we are not going to pay rent and stoppage for an
open store, only extra cost that we need to calculate will be our inventory cost. We
plan to spend this amount to develop ourselves in online platform and to release ad-
vertisement. By the way we have really good designer wihtin our constitution. This
situation will be taken us one step forward.

Terminally, our long term projects contains to being common in Russia, Middle East
and European market. After we complete the legal liabilites which we need to execu-
te export operations we are going to have the right to comment on textile industry
until 2025.

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