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Note...

Below, we have included commentary and a summary of the background knowledge needed to answer the case study questions in blue. Examples of what we would include in an actual answer are in black. 

Unlike for most of the case studies in this course, rather than producing a properly curated and structured "model answer", we've instead focused on discussing the broad range of potential points that could be raised (in part to demonstrate that there are so many ways of approaching case studies such as these, rather than there being single "correct" answers).

1. Analysis of Close Knit’s proposals 

Your supervisor’s email sets out the key points that you must address in your written response. Specifically, you are asked to provide an analysis of Close Knit’s proposals and to complete a strengths, weaknesses, opportunities, and threats (SWOT) analysis of their business. You are also given the opportunity to cover any other topics that you see fit. 

Most law firms will lay out their written exercises in this way. You are given some immediate pointers to start with; however, it will be up to you as to how you address them. You must also keep a look out for any additional questions or points that are thrown up in later documents. Law firms may choose to “hide” important points for discussion by not outlining them in your brief or initial email.

We would recommend addressing Close Knit’s proposals first. Not only is this the first point on the list given to you, but it is the easiest to address given the specificity of the proposals. Furthermore, by discussing the suitability of the proposals to the company and the economic conditions, you will lay foundation for your subsequent SWOT analysis of the business. 

For reference, Close Knit’s proposals are:

  1. New PPE product line
  2. New workwear range

Proposal 1: New PPE product line 

The first of Close Knit’s proposals is the new personal protective equipment (PPE) line. This is a significant departure from the company’s existing offering. The company has identified that their current products are not selling well for a variety of reasons (to be discussed later). One of their solutions is to add a new set of products that they believe consumers want and will continue to want in the future. 

Here are some of the key points you should have drawn out from Close Knit’s internal memorandum concerning the PPE product line:

Here are some of the key points you should have drawn out from the email chain from Close Knit concerning the PPE product line:

You should have also identified the following:

The above represents the information that has been directly communicated to you about the new PPE line. However, mentioning all of these points in your answer only completes part of the task. You will then need to present your own analysis of these points, referencing and quoting relevant documents where appropriate. Although it is impossible to provide an exhaustive analysis of this proposal, the following represents some analysis and conclusions you could have drawn.

Good candidates will have considered the soundness of the claim that PPE uptake in the UK is here to stay. 

 Some specific arguments you could have made with respect to PPE trends include: 

The best candidates will have linked these analyses to a focused conclusion. 

Basic economic theory would dictate that if demand falls, so too does the quantity of the good or service supplied and the price at which it is supplied. If it falls too far, the supply of the good or service will cost the company more than its revenue. This may seem overly reductive; however, communicating these ideas to the examiner will be essential to demonstrate your commercial acumen. 

On a related point, good candidates will have also considered the cost of producing the product line. Although Close Knit claims that the volume of raw materials needed to produce PPE is relatively low, the documents also prompt you to consider other factors that are required for manufacturing, such as labour, machinery, storage space etc.. 

Some specific arguments you could have made with respect to the cost of production of the product line include:

There are ways around this, such as renting the machinery, manufacturing and storage facilities, and employing individuals on zero-hour contracts as freelancers. However, this poses risks for Close Knit. 

The best candidates will have found a way to weave together the discussion of both the demand for PPE and the costs of production. A good way to have structured this section would be to have started with a discussion about PPE trends in the UK. You may then pivot to a discussion of costs by writing something akin to “Even if there is constant or increasing demand for PPE in the UK, Close Knit will have to be mindful of this proposal’s costs”.

Ideally, you want to come to a conclusion where you combine a discussion of both demand and supply, and conclude whether the venture is financially possible to initiate and profitable. 

It may be financially possible to initiate the proposal and be profitable in the long run. However, in the short to medium term, the venture might generate a loss. There may be some question as to whether Close Knit would be able to sustain this loss given the current state of their business. The documents do not have sufficient evidence for you to draw definitive conclusions; however, this is something you may raise as a concern and state that more investigation is required.

The very best candidates will also not miss the extra point of supplying the PPE to customers directly versus to businesses. The documents intentionally do not elaborate on the differences between B2C (business-to-customer) and B2B (business-to-business) sales as this is a topic designed to find the candidates with the strongest commercial knowledge. 

You may conclude with a preference towards B2B or B2C; however, here are some points to consider when constructing your argument:

To score top marks for this topic, you will need to weigh up the above points and add your own analysis. It is a more complex area; however, if you are aiming for the top spot in your assessment centre, you should be prepared for these kinds of challenging points of discussion.

Proposal 2: New workwear range

Close Knit’s second proposal is to extend their workwear offering with a new so-called ‘performance’ line. The rationale behind this is generally suggested to be that as individuals increasingly adopt hybrid working practices, their formal outfits must match such demands, which the new performance workwear attempts to do.

Here are the key points you should have identified in Close Knit’s internal memorandum concerning the performance workwear proposal:

Here are some of the key points you should have noted in the email chain from Close Knit:

Some of the main takeaways you should have got from the workwear and remote working news article that concern the new performance range are:

Finally, here are some of the key points you could have derived from the dashboard of data visualisations concerning the performance workwear proposal:

These are only some of the points you could have drawn out from these visualisations. You may have drawn different conclusions. 

Naturally, the arguments made will vary from person to person. The following are some of the arguments you may have made or could have made based on the data and other materials given to you.

You may have argued that a new performance workwear line does not have sufficient demand amongst existing consumers. 

The best candidates would have also identified that even if there was some demand for performance workwear, Close Knit is pricing the product at the same level as more well-established clothing retailers. This is unlikely to work out well for Close Knit. 

Customers have brand loyalty and inertia. They will prefer purchasing from particular brands (especially when it comes to more premium goods) and have the tendency to continue to buy goods or services from a particular brand even if a superior option is available. 

The key point here is that demand alone is not just the solution. Even if there is demand amongst consumers for performance workwear, Close Knit would need to do something extra to convince customers to buy such workwear from them as opposed to their competitors. 

Solution #1 - lower the price

A potential solution you may have considered would be to lower the price of the performance workwear range. Although this would eat into Close Knit’s profit margins, it may be an easy way to lure customers to their products. 

The very best candidates will have considered this solution and evaluated whether it could work. Lowering profit margins in the short run may be advantageous. However, if Close Knit is already struggling financially, this may be an unsustainable practice. 

Solution #2 - higher pricing

In the alternative, a more aggressive pricing strategy could be adopted. 

By pricing the performance range as a ‘premium’ good, customers may actually be attracted to purchasing that product. 

However, be mindful that there are several counterarguments. The main one is that other companies already offer premium suits and have significant market share. Designer brands and even more ‘normal’ fashion retailers like Marks & Spencer offer high-quality ‘performance’ suits. It is unclear how Close Knit would be able to compete with those retailers.

Furthermore, by pricing the performance range higher, the products offered become luxury goods, not necessities. 

Solution #3 - limit the product range

Another argument you may have considered making is to only offer certain items of performance wear. 

The notion of a ‘capsule wardrobe’ has been around since the 1970s; however, it has become increasingly popular year-on-year. This notion refers to the idea that individuals should have ‘essential’ clothing items that remain in fashion and can be easily combined with each other to form an outfit. 

This strategy is less risky as it involves investment in a smaller range of new products. The risk with this is that it may not produce immediate returns. This is a long-term strategy which is designed to pivot Close Knit’s business slowly and change consumers’ opinions of the company’s offering over time. 

Solution #4 - increase advertising

Close Knit could keep prices the same, but increase its spend on advertising and brand awareness. This will add cost to the business, which will reduce the company’s profit margins. In the long-run, Close Knit will hope that increased revenue as a result of its marketing will substantially outweigh the cost of advertising.

As noted, most consumer-facing businesses spend significantly on advertising. Close Knit will face an uphill battle to take on the PR departments of established brands. 

Excellent candidates will note that Close Knit will need to optimise its marketing campaigns to deliver the most effective return per pound invested (e.g. by adopting a guerilla marketing strategy or relying on user-generated content and virality). 

The above discussions demonstrate that there is ample to discuss when it comes to your response. You will not be expected to cover every area. However, you should be prepared to go in-depth with a few arguments and come to a reasoned conclusion.

2. The SWOT analysis of Close Knit’s Business

This component of the case study question is inherently broader. Although it is the third question that asks you to cover ‘any other topics or solutions that you think are relevant’, you may choose to include these points here as opposed to in a whole other section.

Note that we explain the most relevant case study frameworks - including the SWOT framework - in our Introduction to commercial awareness course, which we would recommend completing before carrying out this case study.

A SWOT analysis can be broken down as follows: 

 

Beneficial

Detrimental

Internal

Strengths: characteristics of Close Knit that give it an advantage over its competitors.

Weaknesses: characteristics of Close Knit that give it a disadvantage compared to its competitors.

External

Opportunities: things outside the business that Close Knit could exploit for its own benefit.

Threats: things outside the business that could pose problems for Close Knit.

The first two points on the top row (strengths and weaknesses) are regarded as internal: they are things that are a part of the company or its business model. The remaining points (opportunities and threats) are regarded as external: they are thought of as occurring outside of the business (i.e. they influence the environment in which the business operates). 

When conducting a SWOT analysis, it is helpful to remember some typical points that often feature in each category. But remember: what is a strength or opportunity for one business may prove a weakness or a threat for another. For example:

When you are structuring your written response, specifically regarding a SWOT analysis, we would recommend ordering your response by internal/external qualities or beneficial/detrimental qualities. This will ensure your answer has some cohesion and you do not end up repeating yourself.

Although you will have developed your own analysis in your answer, here is a summary of what you may have discussed or wanted to have discussed (presented in a SWOT-style grid): 

 

Beneficial

Detrimental

Internal

Strengths

  • The high street store in central London.
  • The lack of high street real estate in low footfall locations.
  • A product type that is rooted in tradition and historically constantly demanded.
  • An established online presence.

Weaknesses

  • The lack of physical presence outside of London.
  • A weaker brand than larger fashion retailers.
  • No mentioned marketing strategies.
  • The costs associated with the London property.

External

Opportunities

  • The development of new ‘performance’ workwear materials.
  • A trend towards combining traditional workwear with casualwear
  • Remote working is not permanent. and there is some return to the office.
  • Consumer and market trends towards ‘performance’ workwear.
  • Inflation can mask changes in price or leading with a higher price for the performance workwear line.



Threats

  • Close Knit is not the first mover in the ‘performance’ workwear market; other fashion retailers have customers with stronger brand loyalty.
  • Poor economic conditions are likely to dissuade individuals from buying additional (normal) workwear.
  • Inflation results in a rise in the price of labour, raw materials, energy, and land.
  • The general decline of the high street and the movement towards shopping online.

 Here is some further explanation of a few of the more nuanced points.  

1. The high street store in central London is a blessing and curse.

2. There are existing trends towards performance workwear. 

You may have a different analysis to what we have presented to you; however, what is crucial is that you do not just provide the SWOT analysis. The best candidates will develop ‘what next?’ action points. 

At the end of this section, you will want to summarise your key findings and your recommended next steps in a short paragraph. You will have covered a lot of material and so it is imperative that you remind the examiner of what your main points of analysis were and what your recommendations are.

Finally, it is worth noting that we have ensured we discussed the points regarding inflation and the London store. Although these are not points covered by your supervisor, it is something that the client themselves asked your supervisor to advise on. These are some examples of ‘hidden’ questions or points that you may find in your actual written exercise assessment. Be on the lookout for these and make sure you have discussed them in your response.

3. Any other topics or solutions that you think are relevant.

We have covered a huge amount so far, so you will be forgiven for feeling a little overwhelmed. However, it is still worth noting that your supervisor’s email invites you to discuss ‘any other topics or solutions that you think are relevant’. We mentioned that you will probably include these additional points in your SWOT analysis as opposed to having a section dedicated to miscellaneous remarks. Nonetheless, we feel it is pertinent to give some help regarding how you could come up with points that are not prompted by the materials.

Most candidates with good commercial awareness and technical knowledge will not struggle coming up with a few of their own points. However, if you happen to struggle with this, consider running through a rough political, economic, social, technological, legal, and environmental (PESTLE) analysis. Note that we explain the most relevant case study frameworks - including the PESTLE framework - in our Introduction to commercial awareness course, which we would recommend completing before carrying out this case study.

You do not need to include everything in your written responses, but by systematically working through those main topic areas you may generate some ideas relevant to Close Knit’s scenario.

Here is a short PESTLE analysis of Close Knit’s situation. You are likely to have more points than this but see how your ideas compare to the ones we have selected. 

Political

The coronavirus pandemic and the war in Ukraine has caused a steep rise in raw material costs and supply chain disruption. This may affect Close Knit’s factors of production and their distribution ability.

Economic

The coronavirus pandemic saw interest rates at an all-time low. However, with interest rates returning to more ‘normal’ levels, debt financing may be less viable. This will affect Close Knit should it want to use debt to finance any of their proposals.

Social

There is increasing awareness around the negative impacts of fast fashion. This can affect Close Knit depending on where they source their labour and materials from. If they choose to outsource their manufacturing, they could risk damaging their reputation.

Technological

The advent of ‘dropshipping’ has led some clothing businesses to be exclusively online. Close Knit will need to be prepared to compete with these new online competitors and ensure that they are not caught out in a race to the bottom.

Legal

In tougher economic and political climates, there is a greater chance of supply chain disruptions. If Close Knit faces such a disruption, they will need to be prepared to enforce their supply contracts or risk losing supplies and consumer confidence.

Environmental

Consumers are shopping more sustainably and demand environmental conspicuousness from the brands they buy from. Close Knit will need to ensure that they are sourcing their current (and future) raw materials from sustainable, ethical sources or risk public condemnation.

When in doubt, think about the large, macroeconomic events that are currently occurring and see if you can link these to the business in question. Also consider the relationship between supply and demand, and any related implications. For example:

We hope that you have found the written case study materials and this corresponding commentary helpful. The key to success in written case study exercises is research and practising writing your answers under time pressure. You may find that this case study has touched on topics or concepts that you are unfamiliar with. We encourage you to take the time to research these topics and build up your understanding. Once you feel more confident, you can always return to this written case study to test yourself and corroborate what you have learnt.

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