Nasty Gal Case Paper Evaluation HD - High Distinction 80%+ For Student Reference

NastyGal Strategic Marketing Plan
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Code Components:
A). Class Email Subject Line (3 points), File Name Format (5 points 1-3, 5, & 8), &
within title page (all 9 points)
1 (code- 4 letters)
2 (-2 digits:
3 (summarize & dont write title or case
study)
G#)
Marketing (MKTG) Class,
Group #, Title:
Case Study Eg on Nasty Gal (Competitor to Zara)
8 (-6 digits (yr, month, day, eg.
160222)) date, due date

Professors name, Students name, email, student#, submitted
B).
9 (week 3, 6 or 11)
BY WEEK 3, STUDENTS MUST PRESENT A PROPOSAL FOR THEIR

RESEARCH PAPER & 400 words for a Grant Application Proposal (100
words each: describe why RMIT is ideal to get a research grant on this topic; who
in & connected to RMIT is ideal to research this grant topic; Describe the purpose of
the grant research project & Outline the problems and issues the project will address (impact on
humanity). For paper proposal - Describe a specific aspect of the WILS
company to be researched (Victoria HealthCare or explain why a different
medical or real estate company in Vietnam will be chosen).
C).PAPERS MUST FOLLOW THIS FORMAT, or REPLICATE (Format, style and

length of an) EXISTING (Marketing Ranked) JOURNAL ARTICLE (ABDC /
D) SSCI).
.
DUE BY WEEK 6 BEFORE MIDTERM PERIOD, students must complete and
present their completed research paper in a basic format (replicating an
existing research paper) with at least 5 high level articles referenced, such as
SSCI or ABDC journal articles. During week 7 - Midterm Break student are
expected to survey 50 to 100 people (preferably not students)
E).
DUE BY WEEK 11 BEFORE FINAL EXAM REVIEW WEEK, students must
present a developed version of these same midterm papers with at least 10
high level articles referenced, such as SSCI or ABDC journal articles. Note
there are more than 10 weeks of term and 10 high level references required.
Students should find and discuss in class each week, one of the articles that
will be used in the final research paper. Minor modifications can be made to
the final paper, but students are expected to present some aspect of research
paper developments weekly.
NOTE: Most charts and images can be placed in an appendix, and thus have the main
contents of the report within 10 pages, as outlined in class requirements, but some
charts and images are included within this report for explanatory purposes, to make
it easier to understand for the Zara product supplier distributor customer
relationship.
This submission is very much on target in terms of fulfilling the assignment requirements.
Nevertheless a few comments - take these as areas for improvement.
1. Needed is a better appreciation for issues beyond marketing. These include strategic
management (as opposed to strategic marketing) considerations, people management/
development, and implications of some of the financial choices (for instance, the role and
activity of venture capitalists once they've bought into a company). THESE ARE NOT PART OF
THE ASSIGNMENT REQUIREMENTS, so view these points as your personal professional
development areas for the future.
2. In terms of effective argumentation, note that it is very important to include examples from
any analysis in the main body discussion rather than say "see Appendix... ". The argument has

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to be convincing in the Main Body - saving word count does not extend to weakening the
argument you are trying to put forth.
3. WATCH YOUR ENGLISH, some of the grammar and word choices EDIT YOUR PAPER
BEFORE SUBMISSION. If Vietnamese info is referenced, good, but you must also
include English translations. Some slang usages were seen, some incorrect tenses were
noted. Normally these wouldn't matter but when the report overall is this solid, even little errors
become distracting and prevent you from getting a higher grade.
I gave atypically thorough (probably too much) commentary because I felt that this much good
and thorough work deserved careful reading and comments commensurate to the quality of your
work.

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Nicely done!
Table of Contents
ABSTRACT /
EXECUTIVE SUMMARY (Teach something new to the world)...........................................................4

1. INTRODUCTION.......................................................................................................................... 5
2. INTERNAL ANALYSIS................................................................................................................... 6
2.1. COMPANY............................................................................................................... 6
2.1.1. Resource-Based View Analysis.........................................................................6
2.1.2. VRIN Framework............................................................................................... 8
2.1.3. Porters Value Chain Analysis...........................................................................9
2.1.4. Company Culture Analysis............................................................................. 10
2.1.5. Competitive Strength Assessment.........................................................11
2.2. COLLABORATOR................................................................................................... 12
2.3. List of Strengths and Weakness..................................................................14
3. EXTERNAL ANALYSIS................................................................................................................ 15
3.1. Context................................................................................................................. 15
3.1.1. Macro Environmental Analysis................................................................15
3.2. Competitive Environment................................................................................ 16
3.2.1. Characteristics of the industry.......................................................................16
3.2.2. Direct and Indirect Competitors.....................................................................16
3.2.3. Porters Five Forces Analysis..........................................................................17
3.2.4. Strategic Group Mapping................................................................................ 18
3.2.5. Driving Forces Analysis.................................................................................. 20
3.2.6. Key Success Factors....................................................................................... 20
3.2.7. Michael Porters Framework for Competitive Analysis....................................20
3.3. CUSTOMERS (positioning)...............................................................................21
3.3.1. Target Market.............................................................................21

3.3.2. Market Size................................................................................22
3.3.3. Market Segmentation of Primary Market......................................24
3.3.5. Customer Insights - Maslows Hierarchy of Needs..........................................26
3.3.6. Customer Value Map...................................................................................... 27
3.4. List of Opportunities and Threats.......................................................................................... 30

4. EVALUATION OF SWOT ANALYSIS....................................................................................31
4.1. ACTIVE SWOT TABLE........................................................................................ 31

4.2. OVERALL CONCLUSIONS DRAWN FROM SWOT ANALYSIS.....................................32
5. CORPORATE LEVEL STRATEGY.................................................................................................. 33
5.1.
5.2.
5.3.
5.4.
5.5.
5.6.
Mission................................................................................................................. 33
Goals and Objectives............................................................................................ 33
Line of Business................................................................................................... 33
Relationship among NastyGals Businesses.........................................................34
Definition and Merits of NastyGals Corporate Strategy.......................................34
Merits of the Corporate Strategy..........................................................................34
6. BUSINESS STRATEGY................................................................................................................ 35
6.1 Product Lifecycle Shakeout Stage.......................................................................35

6.2. Business Level Strategy....................................................................................... 36
6.2.1. Porters Generic Strategy - Differentiation Focus..............................................36
6.2.2. Miles and Snows Business Strategy Prospector.............................................37
6.2.3. Combined Typology of Business-Unit Competitive Strategies...........................37
7. FUNCTIONAL STRATEGY........................................................................................................... 38
8. EVALUATING ALTERNATIVE STRATEGIC OPTIONS......................................................................39
Formulating Strategic Options..................................................................................... 39

8.1. Taking Precaution against Strategic Trap..............................................................39
8.2. Strategies to Prepare for and Survive Shakeout Period........................................39
8.3. STRATEGIC OPTIONS............................................................................................. 40
8.3.1. STRATEGIC OPTION 1: Increase NastyGal Brick-and-Mortar Outlet....................40
8.3.1.1. Advantages and Disadvantages..................................................................41
8.3.1.2. Financial Implications.................................................................................. 41
8.3.2. STRATEGIC OPTION 2: Introduce New Product Line Athleisure Category........42
8.3.3. STRATEGIC OPTION 3: Distributing through Department Stores........................44

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8.3.4. STRATEGIC OPTION 4: NastyGal to Remain their Status Quo.............................46
8.4. COMPARISON OF STRATEGIC OPTIONS.................................................................47
9. RECOMMENDATIONS................................................................................................................ 48
9.1. Chosen Strategic Alternative................................................................................ 48

9.2. Changes to Corporate, Business and Functional Strategy....................................48
9.2.1. Changes to Corporate strategy......................................................................48
9.2.2. Changes to Business strategy........................................................................49
9.2.3. Changes to Functional strategy......................................................................49
9.3. Marketing Mix....................................................................................................... 50
9.3.1. Product and Branding..................................................................................... 51
9.3.2. Price............................................................................................................... 52
9.3.3. Place and Time............................................................................................... 53
9.3.4. Promotion and Education............................................................................... 54
9.3.5. People............................................................................................................ 56
9.3.6. Processes....................................................................................................... 57
9.3.7. Physical Evidence........................................................................................... 58
10. CONCLUSION (Teach something new to the world)................................................................59

11. APPENDIX............................................................................................................................... 60
2.1.1. Resource-Based View Analysis.......................................................................61

2.1.3. NastyGals Value Chain.................................................................................. 64
2.1.3. Industry Value Chain...................................................................................... 65
2.1.3. Value Chain Activity by Activity Comparison...............................................67
2.1.4. VRIN Framework............................................................................................. 69
2.2. Elaboration on Various Types of Relationships...................................................70
3.1.1. Macro Environmental Analysis................................................................74
3.2.2. Direct and Indirect Competitors.....................................................................78
3.2.3. Porters Five Forces Analysis..........................................................................80
3.2.4. Strategic Group Mapping............................................................................ 81
3.2.5. Drivers of Industry.......................................................................................... 83
3.2.6. Key Success Factors Analysis..............................................................84
3.2.7. Michael Porters Framework for Competitive Analysis Missguided...............85
5. NastyGal Product Lines Screenshots....................................................................87
5.4. Part 1: Relationship among NastyGals Businesses...........................................90
5.4. Part 2: Comprehensive analysis of other corporate strategy components and
issues....................................................................................................................... 91
5.6. Merits and Potential Pitfalls of the Corporate Strategy......................................92
8.3.1. STRATEGIC OPTION 1: Brick-and-Mortar Financial Calculations......................93
8.3.2. STRATEGIC OPTION 2: Athleisure Wear Financial Calculations........................95
8.3.3. STRATEGIC OPTION 3: Departmental Store Channel Distribution Cost
Calculations.............................................................................................................. 96
9.3. Marketing Mix Elaboration and Illustrations......................................................97
9.4. Timeline of Implementation............................................................................ 108
9.5. Financial Supporting Documentation..............................................................109
10. Future Phase Recommendation for Brick and Mortar Expansion......................112
11. REFERENCES........................................................................................................................ 113
Academic References............................................................................................ 113

Websites.................................................................................................................... 114

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EXECUTIVE SUMMARY
This report is commissioned to examine NastyGals business environment and derive the best strategic option
that the company should take in order to expand their business and maintain their market position in an
increasingly competitive fashion ecommerce industry.
NastyGal was founded by by Sophia Amoruso in 2006 from just an eBay store selling vintage items that
targets at Millennials aged 18 to 24 years old, synonymous to her age. Amoruso began building her own brand
by establishing relationships with her customers through social media, receiving large responses and
eventually setting up the independent NastyGal website in 2008. The company sales rocketed with 500%
growth each year from 2008 to 2012 and have since received many investments fundings, media attention and
the accolade of the fastest growing company in US.
However, in the last 2 years, NastyGal has kept a low profile about their revenues and initiated changes and
big plans for expansions such as moving into the brick-and-mortar arena and expanding rapidly into different
product lines. These decisions if made haphazardly would be detrimental to the vitality of the company.
Firstly, the report looks at thinking strategically about the NastyGals internal environment. The internal
analysis includes the resource-based framework, VRIN testing, value chain analysis and competitive strength
assessment to assess NastyGals resources, capabilities and cost structure in comparison to her competitors.
These analyses has revealed that NastyGal has cost advantages but would need to further develop
differentiating aspects to help themselves achieve a distinctive competence and sustainable competitive
advantage.
Secondly, the report zooms into examining NastyGals external environment. This has helped the company to
gain insights on opportunities, threats by examining its Context, Competitive environment and Customers
which will impact the business. Notable concepts outlined in this section such as PESTLE analysis has
revealed that the US business environment is favourable for NastyGal to continue its operations locally, while
porters five forces and strategic group map provides depth on the intensity of industry competition and shed
light on the competitive maneuverings of its rivals.
With the extensive analysis on internal and external environment, an active swot table concludes the section
with a list of ways to exploit its strength to pursue opportunities, overcome weaknesses and minimize threats.
A strategic vision of where NastyGal needs to head is being conceptualized through the analysis of its
corporate, business and functional strategies. Based on research findings, NastyGal currently pursues the
corporate strategy of aggressively rolling out brick-and-mortar outlet to increase their offline presence.
Furthermore, NastyGal is currently in the shakeout stage due to the plummeted growth rate and reported
declining sales and was found to adopt a differentiation focus strategy with the role as a prospector. The
corporate strategy was found to be appropriate to the strategy and change to avoid unrelated diversification
and focus on providing differentiated service or product offerings can help them to transform their weakness
into strength to compete against rivals.
After gaining a full view of the way NastyGal is operating, the report prioritizes problems and opportunities,
thereafter proposed 3 strategic options; namely expanding with 1 more brick-and-mortar outlet, establishing
channel distribution with departmental store and launching a new Athleisure product line. The strategic
options are compared and contrasted qualitatively and quantitatively which resulted in the best strategic option
of expanding market reach with a brick and mortar.
Lastly, the report closes with the recommended options accompanied with proposed structural changes to the
Corporate, Business and Functional strategy. A marketing mix recommendation is also provided and supported
with a timeline schedule for implementation and financial supporting documentation attached in the appendix
9.4 and 9.5.

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1. INTRODUCTION
NastyGals Company History
NastyGal, founded by Sophia Amoruso in 2006, started out by selling vintage clothing on eBay.
However, when her account was suspended in 2008 due to policy violations, she launched NastyGal
as an independent domain. Today NastyGal targets Millennials of 18 to 24 years old with products
priced between $30 and $100
NastyGals Development and Growth
To gain thorough understanding of the needs and preferences of her customers, Sophia actively
communicated and engaged them through various social media platforms such as Instagram. As the
sale of vintage clothing began slowing down, Sophia added other products from high street brands to
capture a higher market share. This proved to be effective as it led to significant increase in sales.
Furthermore, to differentiate herself from her competitors, she launched her own private label which
sold better and had higher margins.
Since 2008, the company has experienced rapid growth year on year, from $10 million annual
revenue to todays $100 million. Its social media presence has grown exponentially making it the
most successful company in engaging in two-way communication with customers instead of abovethe-line marketing.
Changes in NastyGals Corporate Strategy
Since its establishment, NastyGal kept by its mission of providing fierce and sexy fashion for the
body-confident, free-thinking and fashion forward girls. However, changes were made when
NastyGal expanded beyond its main business line of vintage fashion to swimwear, intimates,
accessories, cosmetics and other lifestyle products. Furthermore, major shifts was witnessed in 2014,
where Amoruso announced launched 2 brick-and-mortar outlets in a short timeframe and published
her book #GirlBoss to document the success of NastyGal.

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2. INTERNAL ANALYSIS
2.1. COMPANY
2.1.1. Resource-Based View Analysis
Resource-based view analysis provides a comprehensive way of sizing up NastyGals competitive assets. In
this way, strategy changes moving forward can be made without overlooking any company resources that
might be competitively important (Andersn, 2010).
Intangible Resources

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Tangible Resources

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2.1.2. VRIN Framework
VRIN framework helps determine whether NastyGals resources and capabilities are competitive and can
contribute to sustainable competitive advantage (Bowman et al., 2003).
Passing the first two tests thus signifies that NastyGal do have competitively superior resources and
capabilities which are their true strategic assets.
Overall, VRIN reflects that NastyGal possesses competitively superior resources but would have to develop or
add new resources and capabilities to maintain its competitive superiority and profit potential to face imitative
attempts by new entrants or existing companys effort to produce equally valuable substitutes.

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2.1.3. Porters Value Chain Analysis

NastyGals value chain is majority internally manage, from design development to manufacturing to the
customer facing operations. Except for the 30% that is outsourced to the overseas production, other aspects of
the business remains in control.
A comparison is made to evaluate the NastyGals relative cost position compared to the other players in the
industry. However, as NastyGal and its direct competitors have kept their financial statements confidential, a
rudimentary analysis is provided with as much information available. Overall, NastyGals value chain has
shown to be of higher cost advantage than the industry average.
Main areas of Cost Advantages: Marketing and Sales, Product, Technology and System Developments
Marketing
and
Sales
Product,
technology and
system
development
Consequences of Current Cost Structure: Opportunity Cost and Cost of Customer Defection
Customer
Service

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Distribution

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2.1.4. Company Culture Analysis
NastyGals company culture embraces innovations and freedom, flat corporate hierarchy allowing employees
to be creative and adventurous. This culture originates from the former CEO, where Amoruso is recognized as
an inspiring female entrepreneur for the millennial generation. Additionally, the company also has a customercentric culture, taking on a relational approach; leveraging on their customers feedbacks as pipelines for
development.
However, NastyGal has been reported to be in a corporate turmoil since 2014 due to the change of CEO
followed by 10% of employee layoffs (StylePragmatist.com, 2014). Staff loses morale and does not identify
themselves with the vision and strategies of the new leader, Sheree Waterson. Employees felt that company
has no sense of direction and NastyGal was too focused on expanding and achievements, putting profitability
before employees. NastyGal should consider the employees concerns when making future strategy changes.
Overall, the company culture is relatively easy to imitate and does not lead to competitive advantages.

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2.1.5. Competitive Strength Assessment
A competitive strength assessment is done up with the two closest direct competitor Gypsy Warrior and
Missguided to pinpoint NastyGals strength and weaknesses against their closest rivals.

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2.2. COLLABORATOR

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Gains from Relationships Synergy

There are high levels of gains to be achieved from these relationships especially with the concession brands
hosted on NastyGals page. With similar target group, these brands leverages on each others company image,
reputation and expertise to bring their brand awareness and sales to greater heights. Especially for NastyGal,
relationships are a catalyst in its growth which contributed extensively to their brand image, as these renowned
brands serve as a surrogate indicator of quality, credibility and trendiness. The enhanced brand equity
ultimately drove in higher sales and profits, attracted fundings which made it possible for NastyGal to
continually scale to greater heights.
2.3. List of Strengths and Weakness

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3. EXTERNAL ANALYSIS
The report will seek to identify opportunities, threats by examining the Context, Competitive environment and
Customers.
3.1. Context
3.1.1. Macro Environmental Analysis
A macro-environmental analysis is conducted to inform political; economic, social, technology, legal and
environment factors that will impact NastyGals business in US. It will also help to identify macroenvironmental influences that bring opportunities and threats to the company.
Overall Impact of Environment

The threat of doing business in US is low given the political stability, economic vitality, growth of technology
stability of laws governing businesses in recent years. There is an overall strong positive outlook for NastyGal
in terms of their ecommerce store as digital shopping habits continues to be the strongest force in the
bolstering the growth of fashion industries. Furthermore, rapid technology developments and economic power

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of the Global Millennials poses potential for NastyGals brand to achieve greater appeal and scale in the US
environment. Societal trends have also revealed that Millennials are currently into the Activewear fashion and
healthy living, which would signal a potential product line that NastyGal can look into.
3.2. Competitive Environment

3.2.1. Characteristics of the industry
NastyGal is categorized under the fashion ecommerce industry. They have expanded into a multi-category
retailer and pride themselves to create an online destination for free thinking, fashion-forward girl.
3.2.2. Direct and Indirect Competitors

NastyGals direct and indirect competitors are detailed in Appendix 3.3.2.
Its main competitors are the online ecommerce stores like Tobi, Missguided, Gypsy Warrior and Asos. Overall,
specifically Misguided and Gypsy Warrior have major online presence with similar product offerings, site
layouts and are primed to catch up with NastyGal and possibly overtake (Business Insider, 2015)
Besides, there are international brands like TopShop, Urban Outfitters, Zara, Forever 21 competing indirectly
with them. Their offerings are less similar to NastyGals style of provocative, fierce elements but they target
the same Millennials segment and are renowned fashion brands in the brick-and-mortar arena with ecommerce
presence.

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3.2.3. Porters Five Forces Analysis
In conclusion, the threat of substitute products and new entrants exerts a high pressure on NastyGals
product offering. Coupled with the moderate to high bargaining power of customers due to large amount of
fashion ecommerce players vying for the market share of the Millennials, the outlook of NastyGal competing
in this fashion ecommerce industry is relatively challenging and might face slow growth or stagnation. The
increase in number of competitors, some in equal size and strength, will continue to cause competitive rivalry
within the industry to increase. In order to remain competitive and not be displaced by competitors or pressure
of other forces, NastyGal will need to look into plans to further develop their business, creating points of
difference to gain sustainable competitive advantage over its players.

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3.2.4. Strategic Group Mapping

Strategic Group Map 1: Price vs. Product Line
Strategic Group Mapping is used to identify NastyGals competitors that have similar approach and market
positioning. To better understand NastyGals relative position, two maps are used showcasing different factors;
price vs. range of products and price vs. offline presence.
It can be seen that the closest rivals are Missguided and Gypsy Warrior as they offer a wide variety of products
that span beyond fashion; including lifestyle goods like furniture, home decorations, technology accessories
etc. (Techcrunch, 2014). However, both brands are offering their products at much lower price which indicates
that consumers will likely turn to their site as they are of similar style and more affordable.
In January 2015, Missguided launched a new product line of Activewear, complementing the societal lifestyle
trend found in the macro-environment analysis in 3.1. (Huffingtonpost, 2015). This shows that Missguided is
launching product lines that are aligned to the trends, taking advantage of these opportunities to bring in more
sales to their companies.

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Strategic Group Map 2: Perceived Quality and Price vs. Offline Presence
It can be seen that NastyGal is not the only company looking to build brand awareness by setting up a physical
retail shop. The dotted-lines shows competitive maneuvering where direct rivals like Missguided, Gypsy
Warrior, Tobi are also moving from being an online-only store to opening brick-and-mortars in the US.
Notably Missguided, have build their offline presence rapidly by opening a physical store in 2014 and made
announcements to distribute their products across 296 Nordstrom stores in US (TheFashionSpot, 2012).
With close competitors moving into brick-and-mortar, NastyGal can rethink how to provide a more
differentiated shopping experience that will drive costs both to channels. Overall, increasing offline presence
serves as a good strategy to scale the business and match competitors actions. This will increase brand
awareness beyond the Millennials group but for any prospect shoppers that have a NastyGal Spirit.

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3.2.5. Driving Forces Analysis
Key Findings
3.2.6. Key Success Factors
Key Findings
3.2.7. Michael Porters Framework for Competitive Analysis

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3.3. CUSTOMERS
3.3.1. Target Market
Late Teenager to Mid-Twenties
The profile of the target consumer is defined by Amoruso to be approximately 18 to 25 years old.
Millennials
In other interviews, she also mentioned that her brand would not be limited to a certain demographic, age
range, income or education parameters (PandoMonthly, 2013). It would be for anyone that believes and
identify herself with NastyGals spirit of bold, confident and non-conforming fashion style. Through her social
media engagement with her customers and media discussions about Millennials, it can be concluded that
NastyGal is building a brand that resonates with the entire millennial group (NewYorkMagazine, 2014).
Overall, it can be deduced that NastyGal is currently targeting the Millennials, comprising Amorusos ideal
customer profile of late teens to mid-twenties.

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3.3.2. Market Size
This section uses the industry revenue, population and purchasing power of Millennials in US and California
as an estimate of NastyGals target market size and potential.
Fashion Ecommerce Industry in US
The fashion ecommerce industry in US depicts positive outlook with a market size of 52.2 billion in 2014. The
graph represents the incremental growth since 2013 and depicts a positive forecast with revenue of 86.4billion
in 2018 (Statista, 2015). Furthermore, apparels continue to be the major category that fuels the robust growth
of the US ecommerce industry (eMarketer,2014).

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Population of Millennials
Purchasing Power of Millennials

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3.3.3. Market Segmentation of Primary Market

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3.3.5. Customer Insights - Maslows Hierarchy of Needs
Using the Maslows hierarchy of needs can help NastyGal develop insight into their target consumer which
aids in better understanding and preparation of marketing plans to satisfy the level of need shared by their
target market (Solomen et al, 2006).
Millennials are found under the category of Belongingness. They are concerned with being accepted by
others in the way they dress to fit into a certain reference group. Nasty Gal should continue to build on their
social community, reinforce their brand identity to create positive associations of belonging in a social stratum
of the cool Nasty Gal (Svatosova, 2013). In this way, Nasty Gal would be able to maintain their influence
over their perception of fashion and trigger purchase actions.
.

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3.3.6. Customer Value Map
Customer value map is done up by combining Kim and Mauborgne (2005)s customer experience
cycle with customer value list to find out why customers buy and what factors influence decisions.
This provides a checklist on where NastyGal is delivering value and where opportunities exist.

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3.4. List of Opportunities and Threats

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4. EVALUATION OF SWOT ANALYSIS

4.1. ACTIVE SWOT TABLE

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4.2. OVERALL CONCLUSIONS DRAWN FROM SWOT ANALYSIS

On the scale of 1 to 10, NastyGal currently ranks at 6,
signifying a moderate strength in its overall business situation.
Overall, NastyGal would face difficulties in the long run due to absence of strong sustainable competitive
advantage. Management resources and brand image would be diluted if they were to continue with lack of
focus and head for too many directions. Hence, the diagnosis of this company situation will be translated into
actions for improving companys strategy and business prospects. Notably, the companys strength in social
media and brand image will be used as the strategy forward and to lessen impact of threats from rivals.

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5. CORPORATE LEVEL STRATEGY

This section will analyze and uncover NastyGals corporate level strategy by examining their mission and
goals, line of businesses and relationship among NastyGals businesses.
5.1. Mission
5.2. Goals and Objectives

NastyGal would be focusing on the financial performance dimension. The current objective of NastyGal
would be to increase profitability, as it finds ways to cut its costs and expand its profit margin by producing its
own collection and laying off staff, and also increase its brand loyalty within its group of tech-savvy fans and
consumers (Marieclaire.com, 2015).
5.3. Line of Business

NastyGal is categorized under the fashion ecommerce business, serving mainly the Millennials customer
segments and fulfills their needs of belonging and self-identity through clothes that are a representative of
their perceived or ideal character (Hefferon, 2013). Aside from clothes, NastyGal expanded into accessories,
beauty and gifts and home lifestyle products. Amoruso has tapped into other outlets with the launch of Super
Nasty, a biannual fashion publication inspired by the NastyGal concept with a mission to connect individuals
and spotlight upcoming and iconic talents (Girlboss.com, 2013).

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5.4. Relationship among NastyGals Businesses

Overall, NastyGal performs exchanging of resources and capabilities among its business lines, enjoys synergy
gains and runs a portfolio of investments as detailed in Appendix 5.4. Other corporate strategy components
and issues are also being examined in Appendix 5.4.
5.5. Definition and Merits of NastyGals Corporate Strategy

Overall, NastyGal uses a combination of related and unrelated diversification, expanding into activities that
are both similar and unrelated to the original offering of fashion (Chatterjee and Wernerfelt, 1988). Although
the business has various lines of products, it can be said NastyGal is attempting to operate an overall core
business of a trendy lifestyle with the style influences and spirit of a NastyGal as defined in the
abovementioned section (Refer to 5.1.)

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5.6. Merits of the Corporate Strategy
Appropriate Corporate Strategy

NastyGal has an appropriate corporate strategy to the environment they are operating in. With increasing
intensity of competition, moving towards physical presence can drive brand awareness, demand and ultimately
revenue to both channels. It could also serve as a countermove to competitors that expanded into the physical
space and maintain their position and increase profitability by exposing themselves to more customer groups.
Issue of Unrelated Diversification
However, there are some shortfalls identified in the corporate strategy. NastyGal needs to be cautious of
diversifying into unrelated lines as it has accompanied risks albeit the attractive additional revenue stream.
Most importantly, it dilutes the NastyGals branding of being focused on a specific target group as they would
be viewed as creating products for everyone.

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6. BUSINESS STRATEGY
6.1 Product Lifecycle Shakeout Stage
Nasty Gal is currently found to be in the shakeout stage due to slowing growth, intense competition and
declining profitability compared to previous years.

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6.2. Business Level Strategy

6.2.1. Porters Generic Strategy - Differentiation Focus

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NastyGal adopts a differentiation-focus strategy to market their product.
To continue leveraging on this strategy, NastyGal needs to ensure that their product offerings or business
model are different from competitors and offer unique value to their customers. They have to be reminded of
their customer focus and make moves that are of strategic fit with their customers needs and desires.

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6.2.2. Miles and Snows Business Strategy Prospector

NastyGal pursues a prospector business level strategy, defined as innovative and growth-oriented, where they
are looking into new markets, new growth opportunities and encourages risk taking (DeSarbo et al., 2004).
This can be seen in the various moves that NastyGal has taken.
6.2.3. Combined Typology of Business-Unit Competitive Strategies

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7. FUNCTIONAL STRATEGY
Key areas of NastyGals functional business strategies are discussed in the table below.

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8. EVALUATING ALTERNATIVE STRATEGIC OPTIONS

Formulating Strategic Options
8.1. Taking Precaution against Strategic Trap
As mentioned in section 6.1., NastyGal is experiencing a shakeout period which will gradually transit to
maturity stage. Faced with competitive turbulence, the company would need to adopt strategies that allow it to
maintain its current market position and reignite market growth to prevent falling into strategic traps (Bennett
and Cooper, 1984).
8.2. Strategies to Prepare for and Survive Shakeout Period

There are various methods for extending growth and NastyGal will employ market expansion approach due
to its best fit in terms of its market, competitors and firms characteristics (Moschis, 1994). Market expansion
approach will increase the number of potential customers by targeting more domestic geographic areas or
application segments. NastyGal will develop differentiated positioning focused on untapped or
underdeveloped segments and would be recommended to consider the following moves to maintain
competitiveness.

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8.3. STRATEGIC OPTIONS

8.3.1. STRATEGIC OPTION 1: Increase NastyGal Brick-and-Mortar Outlet
With proven track record and experience of retail management with the 2 existing outlets, NastyGal can
consider the strategic option of increasing their brick-and-mortar outlets across US in a systematic fashion
instead of aggressively rolling them out. NastyGal can expand in the California State, in particular the Los
Angeles City, with a different approach that encompasses the service innovations found in Appendix 3.2.4.
This will help NastyGal to improve on the retail model continuously and gain efficiencies from the learning
curve. Thereafter, they would be able to move into other cities and states with the proven successful concepts
and models in their retail outlets.

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8.3.1.1. Advantages and Disadvantages
8.3.1.2. Financial Implications

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8.3.2. STRATEGIC OPTION 2: Introduce New Product Line Athleisure

Category
With in-house production capabilities, NastyGal can venture into expanding their private label products
through related diversification of Athleisure clothing. This would not be the typical sportswear but rather,
focusing on the fast-expanding fashion-meets-fitness activewear that Millennials are actively pursuing not
just for workout use but as casual and trendy street wear.

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8.3.3. STRATEGIC OPTION 3: Distributing through Department Stores

NastyGal can consider distributing through department stores to intensify their offline presence and as a
countermove to their direct competitor, Missguided (as outlined in Competitive Analysis Framework 3.2.6.).
NastyGal will use a channel partnership with Nordstrom to scale their offline presence across US.
For a start, NastyGal will test it on a small scale by launching their products in 4 outlets, 2 in Los Angeles, 2 in
New York. Through the tie-up with Nordstrom, they would be able to increase their distribution gradually on a
large scale by expanding on the existing locations of Nordstrom stores.

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8.3.4. STRATEGIC OPTION 4: NastyGal to Remain their Status Quo

The last strategic option is for NastyGal to remain as status quo. This section is analyzed to evaluate the
superiority of other alternatives.
NastyGal Sales Trend and Prediction
Looking at the graph, it can be seen that NastyGals revenue has plummeted since 2012 and has been at a
standstill in the past 2 years. It can be concluded that it is not performing at the same momentum as in its early
years (FashionSpot, 2014). Hence, a declining growth pattern with sales revenue less than 100million can be
expected in the year ahead.

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With the negative sales outlook and rough patches in the recent years, it signals that the company
would enter into a maturity stage where growth would be stagnant, if no actions are taken during
this shakeout period.
8.4. COMPARISON OF STRATEGIC OPTIONS

The table below shows a comparison of the abovementioned strategic options based on 7 key factors.

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9. RECOMMENDATIONS
9.1. Chosen Strategic Alternative
9.2. Changes to Corporate, Business and Functional Strategy

As NastyGal progresses from this point, changes will need to be made to improve their business performance.
9.2.1. Changes to Corporate strategy

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9.2.2. Changes to Business strategy
9.2.3. Changes to Functional strategy

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9.3. Marketing Mix

This section will provide a brief summary of the marketing plan for NastyGal brick-and-mortar outlet with
further details and illustrations of the communications in Appendix 9.3. Since the retail outlet will be
considered as a service, the 7Ps of service marketing will be discussed in relations to NastyGals new brickand-mortar outlet (Ivy, 2008).

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9.3.1. Product and Branding
Refer to Appendix 9.3 Part 1

Core Product
The core product in Nasty Gal brick-and-mortar store would be a reflection of the online store. Hence, it will
include both partner labels and private label clothing line. Furthermore Amorusos book will be sold in the
store to increase brand awareness through their success story.
Supplementary Services
To build a unique brick-and-mortar channel that differentiates itself from other fashion retail services, these
enhancing and facilitating services would be supplemented.

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9.3.2. Price
Omni Channel Pricing Strategy
Consistent Prices through the use of Omni-channel pricing will be imperative for NastyGal to win customer
sales and loyalty and avoid damaging their trust when they find varied pricing in-store and online.
Furthermore, customers are highly knowledgeable due to amplified price transparency brought about by
ubiquity of the internet (Retail System Research, 2015)

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9.3.3. Place and Time
NastyGal will open the 3rd outlet at Beverley Hills City, along the streets of Beverly Blvd. It is a popular
destination for tourists and shoppers to find top fashion, competitors such as Forever21, Zara are present in
this vicinity (Tripadvisor,2015). The timings of openings would be kept the same as other outlets.

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9.3.4. Promotion and Education
Education on the new service concepts

To educate customers on how to purchase using the new service concepts, a section called Click-and-Collect
and Fashion Consultation will be added under the Nasty Gals Whats new Landing page.
In the service landscape, instructions on how to buy with the self-checkouts and mobile applications will be
provided through attractive infographics accompanied with clear instructions.
Promotion
As Millennials are heavy users of smart devices, Nasty Gal will leverage on proximity marketing via wireless
distribution of advertising content to shoppers around the area.
Leveraging on Nasty Gals strength of large established following on various social media platforms,
marketing of new outlet will rely heavily on online channels with no above-the-line advertising.

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The launch of new outlet will begin with an opening party where it would include
complimentary refreshments and Amoruso herself can be present to promote her book
simultaneously.
To further portray a young, fun brand to the customers, temporary instabooth will be
available in-store where shoppers can take share photos instantly to their instagram with
hashtag of #Girlboss and #NastyGal to have them printed out on the machine.

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9.3.5. People
People are crucial to the heterogeneity aspect of services (Wyckham et al. 1975). NastyGal would have to
ensure the quality of their service staff as they are responsible for creating positive brand associations in
shoppers.

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9.3.6. Processes
Key failure point in the service process would be identified as customers being unfamiliar and experiencing
problems using the new services in the brick-and-mortar outlet. Nasty Gal would need to take precaution by
ensuring enough staffing in one shift and equip them with the service knowledge to provide assistance to
customers.

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9.3.7. Physical Evidence
The outlet will use an opened glass door concept to provide tangible clues to what the shop is selling in order
to reach out to new potential customers. Taglines that complement NastyGals mission and their website URL
will be displayed to let first-time shoppers gain awareness of their ecommerce business.
With experience in interior design for the first 2 outlets, NastyGal would adopt a consistent look.
To complement the marketing plan and showcase business scalability, timeline for implementation, financial
supporting document and a future phase recommendation is provided in Appendix 9.4, 9.5, 10
respectively.

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10. CONCLUSION
Following the changes made in the corporate, business and functional strategies, NastyGal will communicate
clear corporate direction and execute plans to build the brand towards a renowned click-and-mortar. They will
carry out market expansion by gradually opening their own retail outlets across US instead of aggressively
rolling them out as observed from their moves in 2014. In order to set themselves apart from competitors in
the brick space, NastyGal will continuously offer unique service offerings to provide a strong customer value
proposition through differentiation. To ensure the scalability and sustainability of this chosen strategic option,
a future expansion plan is recommended in Appendix 10. Overall, NastyGal will likely succeed with this
expansion plan and be able to maintain their market position, defend against competition and prevent against
long-run erosion of brand equity or profitability during this shakeout period.

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11. APPENDIX
Appendix A - Culture chart
Company
Mission
We inspire women
to discover their
power to create an
amazing life
This can be seen where the style concept is closely adapted from
Amorusos daring and non-conforming personality. With clothes that
add confidence and attitude, NastyGal wants to help their customers
find their control to change their lives.
Values
INTEGRITY
Integrity: each employee puts the team before their own personal
needs, placing the company above the team and the welfare of their
customers over the company
IMPACT
RESPONSIVENESS
MENTORSHIP
INNOVATION
Impact: measurable effects that the employee has on customer

outcomes. Performance is not measured within departments, by
activities or process. Employees are required to measure their own
performance.
Responsiveness: employees are proactive and prompt to identifying
and solving problems. This also involves producing of multiple
solutions to deal with different scenarios.
Mentorship: employees are both willing to learn and to teach among
themselves. This emphasizes and encourages all employees to learn.
Innovation: employees are expected to be adventurous and not
committed to the status quo way of doing things. Producing and
trying new ideas are exciting and appreciated. This increases the
chances for NastyGal to find ways to gain competitive advantage.
System
Customer-oriented
Technologydependent
Supportive of
innovation
Beliefs
I stopped feeling
like I didnt belong
anywhere, and
realized that I
actually belonged
anywhere I wanted
to be Sophia
Amoruso
Two-way communication with consumers to attain feedback and

opinions on merchandise and style preference.
Majority of marketing takes place online and also a book for
customers to better understand Amoruso.
Unrestrained in generation and trying of ideas.
Authenticity: unlike Zara who avoided having a Zara for fear of

limiting their inventory and growth, NastyGal stays true its
characteristics and not conforming to the changes in popularity.
Flexibility: By being able to adjust to changing plans, NastyGal has
the advance as it started out first being online, hence it could also
bring its community and technology too. This is unlike other retailers
that are now held back but legacy systems.
Exclusivity: By belonging wherever Amoruso wanted to be, she had
decided to launch her own collection. It is observed that own
designed clothes sold better and with higher margins. The clothes
were also exclusive and difficult to imitate. To maintain To maintain
exclusivity, NastyGal always stocks such products edgy designers and
buys short runs to reduce the risk of overloading. Also, the brand
had succeeded without the need for features on other e-commerce
websites with heavy discounting or flash sales.

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2.1.1. Resource-Based View Analysis
Research findings on NastyGals incentive system (Glassdoor, 2015)

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Research findings on NastyGals strong user interface (Fatbit Technologies,
2014)

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2.1.3. NastyGals Value Chain
Primary Activities
The primary activities would relate directly to the physical creation, sale and maintenance of
NastyGals product and services; comprising the following:
Supply Chain
Management
Operations
Distribution
Marketing
and Sales
In 2012, NastyGal
moved the
warehouse to los
angeles to be closer
to her merchants,
suppliers and
business partners.
NastyGal operates its

office in California,
Los Angeles to run its
administrative and
managerial functions.
NastyGal currently
have a online
webstore that sells to
over 60 countries
apart from US.
NastyGal does well

for its marketing and
has a strong
positioning in the
market.
Inhouse production
produce private label
designs to leverage
on their deep
understanding of
their consumers.
500,000 monthly
shoppers with 30%
attributed to
overseas online
shoppers.
Targets specifically at
a group, female
millennials that
identifies with the
NastyGal spirit of
confident and daring
personality.
Operates 2
warehouses 1 in
Emeryville and
another fulfillment
center in
Shepherdsville,
Kentucky.
Intentionally limited
production runs so as
to not have overstock
inventory that results
in discountings.
Provides free
international shipping
beyond $150
purchase
Procurement is done
70% locally (los
angeles) and 30%
overseas.
NastyGal operates a
fulfillment warehouse
in los angeles.
NastyGal operates a
call centre in
Kentucky,
Sherperdsville.
(Topix.com,2012)
As for offline
presence, NastyGal
has 2 physical
outlets, one situated
in Melrose and one in
Santa Monica.
Minimal marketing
costs and rely on
social media
marketing initiated
by their fans on
social media
comments.
Followers Count:
Instagram
1.7million
Sophia
277k followers
Twitter:
270k followers
Facebook
1,174,907 fans
Snapchat Presence
Service
NastyGals service is
matched and
surpassed by
competitors.
NastyGal face a
conflict of protecting
themselves from high
costs of returns and
satisfying the
customers. Today,
they are still offering
a less generous
policy than
competitors.
NastyGal - 30 days,
processing fee of
5.99 and self-paid
shipping fees
Customer service
spreads over the
telephone hotline,
comments or
messages via social
media platform and
the NastyGals email.
Support Activities
These sections will examine the activities that support the primary functions of NastyGal
mentioned above.
Product Research
and development,
Technology and
System Development
Human Resource
Management
Nasty successfully used social media to shape product decisions which increases their
acumen in procurement and leveraged feedbacks as pipelines for development.
NastyGal have also shown to make smooth transitions in embracing the rapid technological
wave over the years. Firstly, they first started and succeeded without using other popular
features of ecommerce websites (e.g. heavy discounting or flash sales). In the future, they
could even leverage on more of such avenues to bring sales to greater heights.
With the increasing use of smartphone gadgets and other portable devices, Nasty was quick
in launching Mobile application in 2013
Furthermore the outlook of possible technology development in the future is looking positive
where they have received funding from silicon valley for use on technology.
NastyGal has seemingly done well in human resource management in the recruitment and
selection aspect but has failed in managing retention, the organization culture and employee
motivation. NastyGal adopted a poaching strategy where they hired employees from
important positions in competing firms such as ASOS, Lululemon, ShoeDazzle and Urban
outfitters and from relevant digital firms like Craigslist to provide insights into the company.
NastyGal strategically hires buyers that have prior experience when expanding into a certain
product line. E.g. hiring lifestyle buyers originally from Lululemon to help grow the company.
On the flipside, Employees posted reviews about company on Glass door, many employees
were wary of the companys future. Several questioned focus of the company, mentioned
that NastyGal was a company with no clearly defined direction on meeting stated goals,
perceived the brand as a hype that would "die" off.
People are a significant source of value, so businesses can create a clear advantage with
good HR practice. NastyGal were not doing well in term of retaining its workers, motivating

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them and leading them to be part of the organization.
General
Administration
NastyGal was under a former great leadership by CEO Amoruso that spearheads the
companys management and overall development goals.
Profitability of the firm grow at a rapid speed from $223,000 in 2008, $10 million in 2010,
$28m in revenue in 2011, $128 million in revenues in 2012 and was valued at $240 million in
2012.
Excellent b2b relationships are also created with popular fashion brands that bring positive
brand associations to NastyGal.
Amoruso led NastyGal in a Star-CEO fashion. She launched her own book detailing her
success story, speaking at various book launch events that hosting customers and fans that
looks up to her as a fashion icon and inspiring entrepreneur.
However with the stepping down of Amoruso, there were problems of deteriorating company
culture and employees motivation due to major changes in directions and too many voices
in the companies by different shareholders.
2.1.3. Industry Value Chain

An aggregate finding of NastyGals close competitors, ASOS, Missguided and GypsyWarrior
Sales Revenue Comparison
NastyGal approximately $100 million in year 2014 (Fashionista.com, 2015)

Missguided - approximately $100million in year 2014 (Independent.co.uk, 2014)
Gypsy Warrior - approximate $1million in year 2014 (Owler.com, 2015)
Networth / Market Valuation

As of 2012, NastyGal is valuated at $240 million (Venturebeat.com,2012)
As of 2013, Missguided is valuated at $80 million (Fashionista.com,2014)
There are no reported news on Gypsy warriors valuation on the internet.
Primary Activities
The primary activities would relate directly to the physical creation, sale and
maintenance of NastyGals product and services; comprising the following:
Supply Chain
Management
Operations
Distribution
Marketing and
Sales
Service
Missguided - With
over 150 new
products hitting
shelves every week
investment in
automation ensures
that ASOS can
improve the accuracy
of the dispatch
process and provide
significant gains in
operational
efficiency. It also
allows for future
capacity expansion in
line with our growth
expectations.
Leverage
opportunities in its
existing international
markets with
particular focus on
developing tailored,
territory-specific
websites and
exploring marketing
prospects."
Marketing focus on
website aesthetic
and functionality, PR
and social media.
Missguided - delivery
to 160 countries
worldwide
Many coupons and

promotion codes
online
Returns and
Refund service,
aspect, most
ecommerce
companies have
an average of 17
days policy and
requires the
shopper to pay
their own
shipping fees.
Gypsywarrior -190
countries at flat rate
of 18.95USD
Gypsy Warrior and

Missguided focuses
on online advertising
and outdoor
advertizing. ASOSs
marketing accounts
for approximately 5%
of their sales revenue
ASOS - 450 new

fashion items added
every week
Supply chain is a key
cost centre for online
retailing. ASOS
reported in its 2013
annual results that
has its warehousing
and distribution costs
were circa 20% of
sales.
Most of the
ecommerce
companies have one
fulfillment centre in
their base country
and ships to the rest
of the world form
'Asos Marketplace'
will allow small
boutique retailers to
sell their fashion
products to Asos
customers,
generating a slice of
the profit and more
traffic for the online
firm
ASOS - ships to over

237 other countries
with free
international normal
shipping.
Establish marketing
department
responsible for onsite
and offsite marketing
campaigns.
Industry average
conversion rate of
Found to have an
average 30%
rate of return.
Missguided - 14
days, self paid
shiping fees
GypsyWarrior -

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there.
3%
Instagram Followers
- average of 800,000
followers
Facebook
- average of 602,000
fans
Snapchat
- no usage of
snapchat till date
Twitter
-average of 416,000
followers
Missguided used
Twitter to achieve an
ROI of 29 on every
1 spent
21 days, self
paid shipping
fees
ASOS - 14 days,
self paid
shipping fees
Call centres to
answer customer
enquiries.
Support Activities
These sections will examine the activities that support the primary functions of
NastyGal mentioned above.
Procurement,
R&D, Technology
and System
Development
Human Resource
Management
General
Administration
Product research and development is driven by the upper-tier and approved by the
two main founders. They succeed at forming a clearly differentiated style of products
that is a mix of only Rock n Rolland and Bohemian lifestyles.
Their shipping system is reviewed as rather efficient that it ships most products with
within 48 hours. However, main cause of complaints stem from the mailing of wrong
items.
Method of getting people onboard: Blog, Website Listings, Linkedin and Headhunting.
Mostly with a two-tier group of employees, corporate and business unit level
decisions are made by the same people and technical strategies by outsourced
talents and employees at the brick and mortar outlet.
The direct competitors did not disclosed any information regarding its management
style and there are neither negative nor positive employee reviews on its working
environment. Hence, conclusions can be drawn that direct competitors are fairly well
managed. This is unlike NastyGal that has gather many negative reviews.
Activities include searching and collaborating with suitable brands, designing

marketing campaigns to be launched online, buying clothing and managing
customers on social media platforms.
All direct competitors have made the move to establishing offline presence; with
ASOS launching popup stores, Missguided distributing through Nordstrom
departmental store, Tobi and Gypsy warrior opening physical retail outlets in US.

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2.1.3. Value Chain Activity by Activity Comparison
Primary activities:

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Support activities:

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2.1.4. VRIN Framework
Valuable
In house design and production capabilities
NastyGals label products are valuable as they are exclusively designed in house
private labels exclusively designed in house which fits the company image and
collaborations
Inter-organizational relationships established
The profile of brands that are currently selling on the page are also valuable
connections that has helped to enhance the credibility of NastyGals brand
name.
These popular brands create positive brand associations

Unique and Strong Marketing
Created naturally through conversations with customers and relationships built

with them on various social media platform
Public Relations and Identification Influence
Sophia Amoruso acts as an icon of NastyGal, creating identification influence

among Millennials through large social media followings which contributes to
effectiveness of customer-oriented and social media marketing strategiesAs
Increased brand recognition and awareness across many countries due to the
ubiquity of internet and growing internet penetration in many countries.
Rare
Low Entry Barriers invites more players that can replicate NastyGals business
Fashion ecommerce sites are common now, easy to setup and can be quickly
replicated.
Fastest free overnight sipping
NastyGal has been the first and only rare online ecommerce site to offer the
fastest free overnight shipping above $150 purchases while other companies are
struggling how to offer similar methods at affordable price. This makes
customers receive their items faster and fulfill their immediate gratification,
which creates an exciting and rare in the ecommerce market.
While online stores like Amazon are struggling to figure out how to offer faster
shipping to customers at accessible price points, NastyGal went ahead and
decided to offer free shipping on all overnight orders of more than $150
(Techcrunch, 2014)
They're the first fashion-focused site we know of to do that, and it's an ecommerce game changer. (Racked 2014).
Debt Free Business
Besides that, they also had a rare feature of early tech businesses which was
profitable and debt free since day one. Unlike other brands, borrowing money
was not their option to grow the business.
Low Marketing Costs
NastyGal also had close to zero marketing done to achieve what they have today
and they do not have a marketing department unlike other ecommerce
companies. They relied solely on comments that came in through sophias
following on social media and their profiles on various social media platforms.
Inimitable
Strong Customer Relationships established over the years
NastyGals engagement with social media cannot be easily copied by other

brands. Many major brands tried to enter into social media but have failed as
they are unable to find an authentic ways to engage their customers.
Well-loved and Original Private Label Designs
NastyGals private label lines also coupled with style concepts influences from
Sophia Amorusos daring and non-conforming personality that many millennials
look up to. Therefore, other firms will find it impossible to recreate such a
character to represent their firms and thus makes it difficult to take away
NastyGals position as a well known brand in the market.
Strong Public Relations and Media Spotlight
The marketing strategy of writing a book and using the inspiring story of rebel
turned girl boss is good to sufficiently inspire and show ability to relate to

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consumers. It will be difficult to imitate as not many competitors have such an
inspiring story to tell.
NonSubstituta
ble
NastyGals assets such as its original, unique, unconventional private label

designs and strong brand image. Being recognized as the fastest growing
retailer, NastyGal pioneered in selling non-mainstream clothes that adds
confidence and attitudes to customers.
However, these can be easily matched by rivals that possess resources and
capabilities to perform the same conceptualization and design function.
2.2. Elaboration on Various Types of Relationships

Online retail platform
eBay was the first online retailer on which Amoruso used. Without
formal business training, its founder, Amoruso, sold vintage
clothes on eBay and turned it into a company that attracted $65
million in outside funding and generated $100 million in annual
revenue at the last report. The site provided access to NastyGals
end users.
Her clothes, scouted at house clearances and thrift stores all over
US were selling for incredible prices. After a spat with other eBay
users that accused her of artificially inflating her prices, breaking the sites rules by linking it to
her MySpace page, she was kicked off the site. She then moved on to buying the domain name
NastyGalVintage.com and grew her business proper. It has since then grown to become the
fashion empire that is now NastyGal.com.
Brands that sell through NastyGal

Such brands are edgy and carefully selected to make up the most of NastyGals products. Some
of them seek to reach out to fashion-forward and free thinking girls that make up majority of
NastyGals customer base. Hence, they supply lines of provocative and sometimes exclusive
pieces that get sold off NastyGals website with the help of her online marketing.
Sam Edelman, the shoe brand, initially turned a

cold shoulder. Amoruso however showed them
NastyGals website and promised to deliver the
brand street credit. After that, soon it opened the
door for a deal with Jeffrey Campbell, another
shoemaker (NewYorkTimes, 2013).
Jeffrey Campbell has since become one of the most

recognizable brands on the site. The brand was well
established before partnering with NastyGal, but the
partnership has created a new channel for its more
provocative styles.
Other popular brands that sell their product through
NastyGal include MINKPINK, UNIF, Cheap Monday, Vans
and Biko.

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Style collaborations
For Love and Lemons
NastyGal has also recently partnered with this Los Angeles-based label to design
together an 11-piece summer collection. @@@@ (sales, how both entities has
benefited each other)
A sheer summery dress from the collaboration
M.A.C
M.A.C, the young and colorful makeup brand, has also collaborated with Amoruso to create
lipsticks and a signature nail lacquer. The 3 colors of deep purple, bombshell red and rich
burgundy has sold out on NastyGals site. Customers are also encouraged to post pictures of
themselves using the lipstick and adding the hashtag #MACxNastyGal to stand a chance of
having their photo on the NastyGal page (Blog.NastyGal, 2014).
Exclusive M.A.C x NastyGal colors (From top to bottom, Gunner, Stunner and Runner)

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Teva x NastyGal
Summer festival season brings on a fashion dilemma: How do you maintain your style
knowing youll be on your feet in the hot sun for hours? Do you focus on looking good at
the expense of comfort, or the other way around? This year, Teva partnered with our
friends at NastyGal to give you the best of both worlds. Our iconic Original Universal
Sandal gets the NastyGal treatmentfeaturing two unique styles that are sure to make
you stand out from the crowd.
"To us, it really is the perfect partnershipthe de facto festival outfitter and the
ultimate festival-sandal maker came together to solve a problem, and we couldnt be
happier with the results."
- Lorie Pointer, Teva Product and Design Director
Affiliate Sites Marketing Partnership

NastyGal also sells through 2 affiliate sites that serves as a intermediate customer to
promote and market their product to end consumers. They are synonymous to online
shopping malls, where NastyGal is one of the residing shops, driving sales to their page
and earning a certain percentage out of every deal.
1. LYST
2. SHOP SHAPE

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Fashion bloggers and influencers

Influencers can be effective opinion leaders. A good blogger adds value and expertise because
he/she discovers, evaluates, compares and introduces products to a wide audience. In the
beauty and fashion industry, customers tend to follow a number of bloggers each time to see
what is trending.
Hence, NastyGal reaches out to fashion bloggers by gifting and sponsoring them with NastyGal
products. These bloggers help NastyGal to appeal her products to their loyal following of fans.
Some of these bloggers include KayKay Blaisdell and Rachel Lynch. These bloggers have the
power to shape public perception of NastyGal for the better.
Style bloggers Rachel Lynch (left) and KayKay Blaisdell (right) promoting
NastyGals products

Page 82 of 133
3.1.1. Macro Environmental Analysis
POLITICAL
Political Stability
Political stability is the degree which political institutions can support business and investors needs
(Economist Intelligence Unit, 2015). US has shown a generally incremental trend of political stability and
absence of violence in over the past decade, ranking at 65 th percentile in 2013 (Worldwide Governance
Indicator, 2014). With reference to the cross-country comparison map based on EIU data, it further highlights
that USA is one of the most political stable countries. Therefore, USA can continue to offer a stable and
predictable environment for business investment as they consistently rank among the countries with the fewest
political and security risks for businesses.
Political System
USA operates under a democratic system, governed by effective, fair and transparent laws and regulations.
Unlike communist countries (e.g. China), US government do not exert power over businesses or intervene in
the free market, thereby allowing businesses to compete freely (Kotabe et al., 2011). This denotes a favorable
environment for NastyGal to operate its business in.
Political Agreements - Free Trade Areas
US has free trade agreements (FTAs) with many countries worldwide and is in its rounds of negotiations for a
Asia-Pacific and European Union trade agreement, known as Trans-Pacific Partnership and Transatlantic Trade
and Investment Partnership respectively. This helps to build strong regional pacts to boost trade with lower
tariffs. With these trade agreements, NastyGal can benefit from the free trade agreements should they require
importing of materials of their private label or more cross border transactions when they increase the portfolio
of brands they carry on their site.
ECONOMIC
Gross Domestic Product (GDP)
The GDP Growth Rate denotes a positive and stable growth from the 2014 to 2015 time period. Furthermore, it
has remained its average of 3.26% annual growth since records in 1940s till today. According to the
information by Bureau of Economic analysis, this growth has been bolstered by the large increase in consumer
spending (Bureau of Economic Analysis, 2014).
Disposable Income
Simultaneously, Disposable Personal Income reflected an all-time high of 13429.30 USD Billion in May of
2015. In the recent years, it has experienced incremental growth and depicted an increasing trend that is
forecasted to continue in the next few years (US. Bureau of Economic Analysis). Correspondingly, the
Consumer Sentiment; also known as the Index of Consumer Expectations shows an increasing trend, highlight
consumers viewing positively for their financial situation and holds optimism for the general economy
prospects. This highlights that consumers will continue to spend instead of cutting back on their expenditure.

Page 83 of 133
Rise in US Currency
The US dollar is currently enjoying its fastest rise in 4 decades, strengthened dramatically against other major
world currencies and is expected to grow continuously (Citibank, 2014). This makes the overseas outsourced
productions cheaper to NastyGal due to the stronger purchasing power. However, this also signifies more
expensive exports and the possible effect on the NastyGals foreign customers reducing their spending (CNN
Money, 2015).
Growth in Apparel and Footware Market
The apparel and footware market in the US is growing at a rapid rate, continuing to grow in 2015, driven by
combination of growth in digital innovation and sportswear to the highest 8% sector growth. Internet retailing
sector remains highest performer contributing to this growth (Euromonitor,2015). This increasing trend
suggests that NastyGal will have a promising future in the market and continue to thrive in their business
category of apparels and footwears.
SOCIO - CULTURAL
Demographics
Population size
US ranks the 3rd largest country, estimated at 325 million as of 2015 (Worldometers.com, 2014) Of these,
approximately 85% belongs to urban population with California being the most urban state. The large
population of America signifies a large market full of boundless potential for NastyGal to continue its business
and expand its name across the whole country. Californias urban population also serves as a favourable
environment for NastyGal due to the level of needs and lifestyle trends that would match the desire to purchase
on fashion ecommerce sites (eMarketer, 2014).
Millennials
As mentioned by Sophia Amoruso, NastyGal selected to target the Millennials. This target segment alone
makes up approximately 80 million, spending approximately $600billion each year, predicted to grow to
$1.4trillion by 2020. This trends signifying a substantial size and profit potential for NastyGal to continue to
tap on (eMarketer, 2014).
Female to male ratio
The ratio is currently at 9.67; signifying 967 males per 1000 females. This shows a larger female percentage
which is ideal for the nature of NastyGals business and females are also the ones that are driving the growth of
fashion brands (Euromonitor, 2013).
Indulgence Culture
According to the recent study of Geert Hofstede, a new dimension Indulgence vs. Restraint was added to the
existing model. US ranks high in Indulgence which signifies a community that allows relatively free
gratification of basic and natural human drives related to enjoying life and having fun. Hence, consumers are
likely to indulge in lifestyle goods like catching up with the latest fashion trends to fulfill their desires
(GeertHofstede, 2015).
Lifestyle
It is also found that in the recent years, there is a healthy lifestyle trend in US where Millennials are getting
more active in exercising and have been cautious about their consumption and diet (Euromonitor, 2012).
Additionally, the fashion industry has witnessed a surprising trend of Millennials, especially ladies, dressing up
in sportswear as casual wear. It is quoted that sportswear are comfortable, cool and trendy. Many big fashion
brands like forever21, topshop, h&m, gap has turned to launch their activewear cum streetstyle fashion line

Page 84 of 133
(Huffingtonpost, 2012)
TECHNOLOGICAL
Internet Penetration
US has an internet penetrate percentage of approximately 85% (World Bank, 2014). Being one of the country
with the highest internet penetration and population, it can be inferred that more and more people will get to
know NastyGals brand as they turn to online shopping. More ecommerce players are also predicted to emerge
in the new millennium due to consumers being engulfed by technology changes.
Social Media Marketing
Technology changes have triggered a shift in advertising where US consumers are highly receptive to social
media marketing, especially the digital natives millennials (MarketingMillennial.com, 2014). Furthermore, the
platforms that are rated important among US marketers are Google, Facebook, Twitter and Linkedin
(eMarketer, 2015) which have already been leveraged strongly by NastyGal, showing that they have done well
in the aspects of social marketing.
Online Buying Trends
Just like other highly developed countries, US consumers continues to purchase more online and decreased the
amount of purchase in physical stores. According to a survey by Accenture, 41% claims to practice
showrooming where they examine merchandize at retail stores and shop online to find the lowest price or
better options. This shift is due to high penetration of mobile smart devices to allow search on the go.
ENVIRONMENT
Green Initiatives in Fashion Industries
There has also been an emerging trend of fashion brand looking into making "sustainable clothes" as an effort
to promote green initiatives in the US (Fashionista.com, 2012) These brands make use of organic cotton, linen,
hand dyed fabric and recycled materials to produce their items as much as possible and emphasize on no-waste
production. NastyGal can possibly consider this product line especially when growing amount of Millennials
are starting to be environmentally conscious as helping the world and reducing wastage helps them to feel good
buying the product.
GreenPeace Detox Campaign
One of the biggest negative media spotlight that has shaken consumer confidence in fashion brands is the
hormone disrupting and cancer causing chemicals to be present in 20 leading high street brands such as
Armani, Esprit, Gap, Levi's and Zara. Zooming into Zara's case, being the world's largest fashion retailer, the
amount of toxic footprint is the largest and have shocked many consumers. NastyGal should commit to green
initiative in light of such issues to raise public trust and confidence in purchasing their products as consumers
are getting more curious and wary of what goes into their products especially when production is outsourced.
Corporate social responsibility
Additionally, the US Federal Reserve found that 3 out of 4 companies of the highest revenue companies in US
operates CSR Program. NastyGal can possibly look into this area in attempt to increase their social footprint
and brand name in the society.

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LEGAL
Illegal Employment Practices
Main big brands in the fashion arena often outsource their production to other lower cost countries to achieve
economies of scale and higher profitability. As a result of the pursue for high profits, some big brands like New
look have been found to operate sweatshops in china, exploiting man hours, providing low pays; which is
against the home and host country employment laws. Therefore, in this aspect, NastyGal should make sure her
partners are legal and law-abiding, licensed operating production factories to prevent negative media spotlight
and bad publicity which affects reputation.
Tax, Employment and other Business Laws
California is one of the highest tax countries for business within US. According to Washington Times article in
2015, it states that businesses are fleeing california due to its high tax and tight regulations and are instead
going to Texas with lower tax rates. Rising or high tax spells unfavourable environment for NastyGal and
should there be business developments, such as opening a brick and mortar, other states can be considered.
Ease of Doing Business
US is ranked 4th in the world for Ease of Doing business index. It is a free market economy which allows
businesses to compete freely. Furthermore, this index also indicates that the country has better, stronger and
usually less complex legal rules and regulations, stronger Intellectual property rights for businesses which
spells favourable environment for NastyGal to operate its business .

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3.2.2. Direct and Indirect Competitors

Direct Competitors

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Indirect Competitors

Page 88 of 133
3.2.3. Porters Five Forces Analysis
Threat of
New
Entrants
(Moderate to
High)
Bargaining
Power of
Customers
(Moderate to
High)
Threat of
Substitute
products
(High)
Bargaining
Power of
Suppliers
(Low)
Low barrier of entry due to low capital cost of setting up an online business
Increasing of brands selling similar products going online instead of brick and mortar due
to convenience
Consumers brand loyalty towards a brand is not that strong
Buyer demand is growing rapidly as more consumers turn to shop online, thus new entrants
can expect to earn a sizeable amount of profit.
Existing industry members (Misguided and Gypsy Warrior labels) are expanding their
market reach by entering new product segment.
Diverse range of online retailers available in the market

Consumers are generally price sensitive when shopping online as they are unable to touch
the products physically hence would switch to alternate website that offers better price to
reduce risks
Ever changing trends and preferences in apparel industry
Customers are well-informed due to the evolution of the internet
Good substitutes for NastyGal are readily available and more attractively priced (e.g.
Misguided and Gypsy Warrior labels)
Buyers have low to no switching costs to switch to these substitutes as there are no lock-in
incentives like membership.
Sales of substitutes brands like Misguided and Gypsy Warrior are growing fast enough and
can possibly catch up NastyGal
Apparel industry is highly competitive with major international brands
Due to perceived risks shopping online, some consumers would prefer shopping at physical
stores instead
High Availability of Suppliers for Overseas Production

o
NastyGal produces 70% in locally and the remaining 30% from overseas
manufacturing suppliers such as China.
o
Bargaining powers of these suppliers are low due to the saturated manufacturing
market where there are many alternate suppliers that the company can choose
from; thus suppliers have lesser control over their prices which gives a lower
bargaining power.
Accounts for Large fraction of their revenues
o
Due to the ability of NastyGal to purchase in bulk amount from these vendors, the
large purchase revenue would be a significant amount to the vendors, making
their bargaining power lower.

Page 89 of 133
Competitive
Rivalry
within the
industry
(High)
Reasonable and competitive pricing to attract customers

The returns policy was less flexible and generous compared to some of NastyGals
competitors
High spending power of competitors to come up more flexible returns and delivery policy
3.2.4. Strategic Group Mapping

Research on Offline Presence of Respective Competitors
Competitors
Remarks
Missguided
No. Of
Outlets
in the
U.S.
0
It will open its first concessions within Nordstrom stores in

across USA in 2016.
Gypsy Warrior
Gypsy warrior outlet in Ridgewood, US.

Opened in Year 2013
For its first store, it was said to be a success by providing

their customers with an even more immersive experience.
There are also plans to open a series of brick and mortar
storefronts in the US.
http://www.profiles98.com/profiles98mag/gypsy-warrior/
ASOS
The boss of ASOS, Nick Robertson, feels that the physical

store environment would feel limited compared to online.
Hence, there are no physical stores at all.
http://www.retail-week.com/multichannel/onlineretail/asos-boss-nick-robertson-questions-need-forphysical-stores/5040983.article
The closest it has tried was to launch pop-up stores

outside of the US in Australia. This marketing ploy was
greatly successful gaining ASOS 67,000 fans on Facebook,
a lot of word-of-mouth with 2.68 million people talking
about it on Facebook and sales on the Australian sites
were up to 29%.
Zara
A recently opened outlet in 2015 at Soho Building in New

York City.asos
52
Inditexs strategy in the U.S is to focus on large, flagship

stores and its online operation. Hence, in the year of 2015,
they had planned to open more than a dozen stores.
http://www.reuters.com/article/2015/01/08/usinditex-usa-zara-idUSKBN0KH1LR20150108
Topshop
The flagship Topshop store along NYCs Fifth Avenue
56

Page 90 of 133
Topshop has managed to successful foray in US with a new

flagship store in New Yorks fashionable Fifth Avenue and
other stores across East and West coasts.
http://www.independent.co.uk/news/business/analysis-andfeatures/what-does-it-taketo-sell-to-america10490609.html
Tobi
Sold through Threads 4 Thought stores, it has a shopfront

based in San Francisco California in the US.
Free People
Free People has stores all over but also has its reach to
consumers in countries that do not have its stores. This
allows it to have high accessibility to customers around
the world.
95
Dorothy Perkins
Their largest store is online which ships to over 110

countries and receives approximately 1.2 million
customers every week. This expansion has gained them a
huge online presence in the states.
It has no physical store in the US yet.
H&M
The major powerhouse in retail has been accelerating

store-opening plans this and new store openings will most
occur in China and US.
379
US is the companys second-largest market after Germany

and is regarded as an important growth market.
http://www.statista.com/statistics/268522/number-ofstores-worldwide-of-the-hundm-group-by-country/
Urban Outfitters
Store expansion has kept the growth of Urban Outfitter

afloat. It has since help revenue to grow sharply.
530
http://www.forbes.com/sites/greatspeculations/2015/09/09/
urban-outfitters-tiny-foreign-business-is-outpacing-itsdomestic-growth/
Forever 21
With both online and offline presence, it is the 5th largest

specialty retailer in the US. Forever 21 and XXI stores are
located all over US making it extremely accessible for
customers.
491

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3.2.5. Drivers of Industry
Changes in
long term
industry
growth rate
1. Increased shifts to internet shopping and prediction of long-term growth

rate
US and China adds up to 55% of global

internet retail sales in 2014
US is predicted to maintain its position as

the 2nd largest retail ecommerce market
in 2018, totaling to approximately
$500billion
Demand will continue to grow and

influence intensity of rivalry in industry as
more potential entrants enter for a share
of the lucrative market
1. Sustainability of Brick and Mortar
The growth of ecommerce have shown to not affect brick and mortar stores in US
Depicts continued strength of brick-and-mortar retail

with $10 out of every $11 retail sales still spent in stores.
Ecommerce companies are still looking into expanding to brick space due to positive
outlook.
(eMarketer.co, 2015)
Service
Process
Innovation
1. Click and Brick service concept
Physical space is becoming a trend in the ecommerce world as a competitive move to

expand their customer base and increase brand equity
realizing the importance and value of creating customer experiences that leverage
physical store presence and basic human interaction
E.g. Although earning their reputations as e-tailers, Missguided, Tobi and other fashion
ecommerce and other online brands have opened storefronts in an effort to forge
brick-and-mortar connections with consumers.
(Retail Infosystem News, 2012)
2. Click and Collect service concept
Product and
marketing
innovation
Process where consumers order online and pick up (collect) their items at a physical
destination.
Ecommerce have been working on partnerships to allow increase not just
convenience to customers but save on logistic handling costs
Collect at partnering outlets e.g. local post office, transport hubs or general
departmental stores
(Cnbc.com, 2013)
1. Pop-up Retail Concept
Trending in the United States where fashion ecommerce brands open short term
spaces physically
Avenue for ecommerce business to provide customers a tangible cue, physical
experience through pop-up stores
Gain feedback and insights, physically interact with customers and drive
conversations.

Page 92 of 133
Drive brand awareness and demand generation to

their online business and often induces media
attention
2. Catwalk Video Display Trends
ASOS pioneered in offering catwalk videos of their

products which is the greatest move forward for
fashion ecommerce
Long gone are the days of simple flat images of
products.
Shoppers can have better judgment call on whether fashion pieces will work for their
body shape
3. Fit Visualizer Tool
New product service that ecommerce are

implementing where it helps online retailers to
visually illustrate the size and fit of clothing and
shoppers buy clothes with the perfect fit.
Reduce the fit related returns, increase sales, as
well as improve the shopping experience.

Page 93 of 133
3.2.6. Key Success Factors Analysis
On what basis
do buyers of
the fashion
ecommerce
products
choose
between
competing
brands is
sellers in the
market today?
Given nature
of competitive
rivalry
prevailing,
what resources
and capability
must the firm
have to be
competitively
successful?
What
shortcomings
are almost
certain to put
players at
significant
competitive
disadvantage?
1) Strong Brand Identity
Fashion ecommerce sellers need to build brand awareness and positive brand
associations
Customers will choose a brand when they are familiar with it or identify with the brand
message
2) Product Value
Shoppers will purchase based on their perceived value (benefits that they are getting at
the price they are paying)
If a product is priced on the higher range, the brand would need to highlight its quality
to customers.
Delivering consistent quality will help companies gain higher probability of lifetime
shoppers on their pages (Shopify, 2015)
3) Level of Customer Service
Online shoppers looks for superior customer service as they view the physical distance
as a risk and psychological cost (clothing may not fit, damaged items during shipping)
According to a research by Zendesk, an eCommerce customer service company:

o
55% of online shoppers are willing to recommend a brand due to outstanding
service
o
85% of them would pay 25% more to ensure superior customer service
1) Resources to invest in overcoming Intangibility aspect of ecommerce stores
Tools and Information that aid decision making:

Size charts, Fit Visualizer, Clear Pictures, Catwalk Videos
Increase physical touchpoints

Brick and Mortar Stores, Pop up Stores, Roadshows or Exhibitions
2) Marketing and Branding Capabilities
To build a strong brand image and reputation
To create a brand identity that establish connections with target consumers lifestyles
3) Customer Relationship Management Capabilities
As cost of switching for ecommerce purchases are low, building strong customer
relationships and loyal customer base is important to ensure high return customers and
lower defections
Good customer support and service recovery

4) In-house Design and Production Capabilities
Innovative and original designs through private labels that are representative of the
brand image are popular among online shoppers.
1) Poor customer service, slow response time and poor product quality
Insufficient resources behind customer service team
refund and return, service recovery, Customer Issues Going Unnoticed

2) No unique identity and specialization, Poor branding and PR
A lot of e-commerce stores are trying to be a generalist shopper, selling a wide variety
of products.
Brands should look into specializing instead of being everything for everyone
3) Engaging in absurd price wars
Many ecommerce join competitors in price war, e.g. flash sales, discount codes
More time should be spent differentiating products or service bundles.

4) Unappealing web store and poor user experience
insufficient, low quality visuals, information not readily found, low user intuitiveness

Page 94 of 133
3.2.7. Michael Porters Framework for Competitive Analysis Missguided
The following information are gleaned from various press releases.

Current
Strategy
Misguided has been able to expand their brand appeal through innovative product added to
their collections.
They want to continue with their current strategy to offer more choices for their consumers
A key focus area for Passi and the team is on offering a more convenient delivery and
returns proposition "to mirror the convenience of click and collect"
Missguided-branded stores could also be part of the brand's future, solidifying its presence
on the high street. recent launch in a handful of select US department stores Nordstrom in

Page 95 of 133
April of 2015. (Yahoo news, 2015)
Objectives
Capabilities
To generate awareness of their brick-and-mortar stores through advertising promotions,

social media and during launch of events.
To increase recognition of their and reach out to wider market through the integration of
both of their online and physical stores
To increase more physical touchpoints with their customers through distribution in upmarket
departmental stores or shelve space in current fashion brand outlets.
To encourage consumer engagement with the brand through the content of their social
media so as to increase the presence of their online store
To stretch its price architecture to satisfy consumer demand at a range of price points and
increasing their products which leads to a one-stop destination for their target market.
To achieve growth in overseas markets
In order for Misguided to be successful, there are some key strengths which it
possessed.
Has clearly defined target audience who are interested in celebrity inspired fashion
Strong social media identity and claimed to use almost zero marketing costs
Has incorporated the characteristics of creativity into their website which is innovative and
attractive. They also communicate with their consumer about their latest updates daily
through their website.
Use of incentives to encourage new followers on their social media pages.
In House Design and Production Capabilities said 95% of the ranges are designed in house,
while between 50% to 60% comes from UK factories.
Besides strengths, they do have weaknesses as well
High visibility of negative feedback such as technical website difficulties and transactions
errors on their social media page.
Negative identity on search engine
Assumptions
CEOs view about the competitiveness in fashion ecommerce industry:
Not really, because let's say the customer has $100 to spend each month -- they want a
variation. We focus very hard on our products, and I think as long as the product and our
prices are right, I don't think the market is saturated. The customer always wants choice, we
just have to be better than our competition. (Fashionista.com, 2014)
CEOs view on the current strength of Missguided:
I think we do a lot of things better than our competitors. I think Zara group got fast fashion
to the masses, they're launching a collection once a week; we launch collections every day.
We're landing at between 150 to 200 new products on the website every week, and I really
think we're not fast fashion, we're rapid fashion. The way we built the business up, I'd say
we're very agile, and very active, and within our customer database, things change very
quickly. What might be hot today, next week it's not hot, and we've got to be able to react to
that. (Fashionista, 2014)
CEOs view on expansion into US.
Globalizing the brand is a key mission to me. I think our 16 to 34-year-old customer is
pretty similar in terms of what she buys globally. We haven't done a massive amount of
offline marketing in the U.S. A lot of our visitation is word of mouth now, so that's
something we encourage more. (Fashionista.com, 2014)
CEOs view on opening brick and mortars store
Online shopping has undoubtedly changed the retail landscape, but the appetite for fast
fashion has not completely displaced customer engagement with bricks-and-mortar. They
will continue to will debut its pieces in upmarket departments stores in the coming years.
Missguided-branded stores could also be part of the brand's future, solidifying its presence
on the high street. "As an online brand, it's hard for our customers to touch and trust our
product," (Yahoo News, 2015)
CEOs view on the idea of making the company public for investors to trade:
Founder Nitin Passi dismissed the idea of floating the company in the near future, choosing

Page 96 of 133
to reinvest in the business for further growth, according to an interview in the Mail on
Sunday. (Drapers Online, 2015)

Page 97 of 133
5. NastyGal Product Lines Screenshots
Original Line of Business
(1) Clothes
Expanded Lines of Businesses over the years

(1) Accessories

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(2) Beauty
(3) Gifts and Homes

Page 99 of 133

Page 100 of 133
5.4. Part 1: Relationship among NastyGals Businesses

Page 101 of 133
5.4. Part 2: Comprehensive analysis of other corporate strategy components
and issues
Source of
competitiv
e
advantage
NastyGals competitive advantages lies mainly in its marketing and sales competencies which
has helped them to achieve an effective reach and influence over their social media followers
for 9 years of its establishment. This has helped them to maintain a strong brand identity and
a loyal customer base.
Other competitive advantages are its strong mix of concession brands like Jeffrey Campbell,
Cheap Monday etc.
NastyGals brand is also built around a story, personality and robust knowledge of a
NastyGal values through consistent and compelling messages.
This solid foundation of marketing competencies, intangible assets like human resources,
customer-oriented culture and inter-organizational relationships can be easily leveraged upon
to expand its market reach, segment or product lines.
Developme
nt strategy
Commentaries:
Companies eager to scale receive rounds of funding. For NastyGals case, scaling
translates to opening more physical stores. (Racked.com, 2015)
NastyGal planned on taking a conservative approach to rolling out stores to maintain as

much of a stake in the business as possible. (Recode.com,2014)
As quoted from Amoruso herself, "Were using the launched stores as a laboratory, for us
to understand retail, get it right, before making a bigger splash." (Racked.com, 2015)
It is mentioned that various funding received in 2014 will be channeled for increasing
physical presence of NastyGal in US.
Amoruso cares for NastyGal and it is indeed her whole future. However, she has agreed
on leaving it to grow even further. It is still not fully baked and that success would
depend on the team much more than any skill she possesses. Hence, she recognized
that she would give up the CEO title to do better at leading the NastyGal customer
(Recode.net, 2015).
Following her belief that success is about playing to her strengths, she appointed a new
CEO Sheree Waterson to better lead and inspire the team while she stays as executive
chairwoman and focuses on being the brand connector serving as the face and soul of
the brand.
The main source of synergy in NastyGals business model lies in its valuable intangible
assets that are bundled across the firm with in-house production and sales and
marketing business unit.
Resource
allocation
Its customer oriented culture, brand and reputational assets, human resources assets
and invaluable inter-organizational relationships with popular fashion brands when
bundled with their technology capabilities in the website and mobile application have
brought in tremendous sales over the years with approximately $100million reported
sales annually (Business Insider, 2014)
Furthermore, it also allowed NastyGal to increase their business acumen in procurement

of goods and in-house design due to their deep understanding of customers preferences
and the strong brand identity that was established over the years. (Businesswire, 2013)
Vertical Integration has been the way to for NastyGal so far. It has successfully started
out and producing its own fashion line (BusinessInsider, 2015)
Sources of
synergy
Strategic
corporate
decisions
Through commentaries on various websites, it can be seen that NastyGal would want to
achieve a desired level of growth in terms of financial and brand awareness by
leveraging on its expansion of brick and mortars nationally.
The current NastyGal is a question mark as it has been growing at a high market growth
rate but with a low market share compared to competitors. This was a strategic move by
Amoruso when she said, not anyone can wear NastyGal.
In the future, NastyGal can consider converting itself into a star by planning ways to
increase their market share.

Page 102 of 133
5.6. Merits and Potential Pitfalls of the Corporate Strategy
Table 5.6. Potential Pitfalls of Unrelated Diversification

Page 103 of 133
8.3.1. STRATEGIC OPTION 1: Brick-and-Mortar Financial Calculations
Estimated Cost Calculations
#
1st Retail
Store
2nd Retail
Store
3rd Retail
Store
Date of Establishment
Location
21-Nov-14
Melrose Ave, Los

Angeles, CA, USA
Santa Monica, Los
Angeles, CA, USA
Beverly Hills, Los
Angeles,
CA, USA
27-Mar-15
25-Dec-15
Size of Retail
Store (Square
Foot)
6,500
3,500
5000
(Techcrunch, 2014 and Fashionist, 2015)
Cost Estimate
(To Opening a Shop In Los Angeles)
% of Total
Costs
Cost Per Square Foot
Cost
Other Costs
65%
US $89.45
US $447,250
Contractor Fees (GC, Overhead, Profit)
25%
US $22.36
US $111,800
Architectural Fees
10%
US $8.94
US $44,700
US $603,750
Total Cost
Estimated Revenue Calculations

Revenue Estimate
(Annual sales of NastyGal Brick and Mortar)
Average Sales Per Square

Foot of US Retail Stores
NastyGal Brick-and-Mortar
Total
US $1,936
5000 square foot
Total Revenue
1936*5000
US $9,680,000
(Referenced from Statista, 2014)

Page 104 of 133
Estimated Profitability Calculations

Remarks
Sales Revenue
9,680,000
Cost to opening brick-andmortar
US
$603,750
Annual Rental Costs
US
$600,000
Cost of Inventory
US
$1,936,000
Total Profit
6,540,25
0
See above calculations

Cost per square foot (US $10)
(CMDGroup, 2012)
Assumption that the cost has an

overall average of 20% of its
selling price
Return on Investment
Profit
Cost to open retail
Annual Rental Costs
Cost of Inventory
US $7,140,250
US $603,750
US $600,000
US
$1,936,000
US $3,139,750
227.41%

Page 105 of 133
8.3.2. STRATEGIC OPTION 2: Athleisure Wear Financial Calculations
Costs
Cost Price
Remarks
Outsource for cheaper
overseas production
Approximately US $8
(Referenced from
Alibaba.com)
Estimated
SKU to
launch in the
year
Estimated
units per
SKU
Total units
Other costs
50
US $8*50
= US $400
US $400 x 1000 =
$400,000
1000
50 different designs of
Athleisure lines
50,000
5% of total costs
5% * US $400,000 = US
$20,000
Total Costs
of
Production
administrative, sample
testing, market research
and design etc
US $420,000

Remarks
Cost Price
Average cost of US$8
See previous
Average price of US$70
Referenced to NastyGal's swimwear and

bottoms collection price point, where an
average top for swimwear is around 40
to 50 USD and bottoms are around to 60
to 80 USD
Approximately 875% markup

for every piece of Athleisure
wear
(70/8) *100% = 875%
Selling Price
Percentage of
Markup
Total Costs of
Production
Estimated
Markup of 875%
Supposing 90%
gets sold out
Total Revenue
US $420,000
= US $420000*875%
US $3,675,000
= 90%*3675000
US $3,307,500
US $3,307,500

Total Revenue
Total Costs of production
US
$3,307,500
US
$420,000
Remarks
See previous
Referenced to NastyGal's
swimwear and bottoms
collection price point, where
an average top for swimwear
is around 40 to 50 USD and

Page 106 of 133
Total Profits
US
$2,887,500
bottoms are around to 60 to

80 USD
(70/8) *100% = 875%
87.30%
8.3.3. STRATEGIC OPTION 3: Departmental Store Channel Distribution Cost

Calculations
NastyGal can start off first with Distribution in 2 Nordstrom outlets in Los
Angeles and 2 outlets in New York in the first year.
Estimation of Average Prices and Costs
Average Retail Price of NastyGals
US $80
products:
Average Cost Price of NastyGals
products:
US $16
(approximately 20% of Retail Price)
Average Wholesale Price of

NastyGals goods:
US $35
Average Wholesale Profit
US $35 - US $16
= US $19
Remarks
Cost of Goods Sold
US $19 x
144,000
= 2,736,000
US $30,000
Cost of goods wholesaled to Nordstrom
Other Costs of
Partnership
US$20,000
Renovation for the layout of the

Assigned Shop Space
A fee paid to Nordstrom annually for
special packages which includes
advertising
Total Costs incurred
US$2,786,000
Renovation Costs

Estimated Number of Units Sold Daily / Outlet
Estimated Number of Units Sold Monthly /
Outlet
Estimated Number of Units Sold Yearly /
Outlet
Estimated number of Units Sold Across all 4
outlets
Average Wholesale Price
Total Revenue
100
3000
36000
144,000
US $35
~ US $ 5,040,000

Page 107 of 133

Estimated number of Units Sold Across all 4
Outlets
144,000
Average Wholesale Profit
US $24
Total Wholesale Profit from Nordstrom

Distribution
~ US $ 3,456,000
US $ 3,456,000/ US$2,786,000
= 68.11%

Page 108 of 133
9.3. Marketing Mix Elaboration and Illustrations
(1) Product and Branding
Core Products - NastyGals Private Label Collection and Designer Labels

Page 109 of 133
Facilitating and Enhancing Services

(1) Hands free shopping
(2) Click and Collect

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(3) Scan to Order

Page 111 of 133
Fashion Consultation
A small lounge area for personal stylists to communicate with NastyGal customers and
pick out clothes according to their described style or motivation behind the
appointment.

Page 112 of 133
(2) Promotion and Education
Instagram Marketing campaign
2 Marketing Campaigns will be launch through Instagram platform.
Education on the new service concepts

Page 113 of 133

Page 114 of 133
Social Media Marketing
Notably, instagram profile for NastyGal Beverly Blvd will be created and updated with
attractive images of the store. Facebook, Snapchat, Amorusos and NastyGals twitter
will serve to create hype and buzz by notifying followers about the upcoming launch of
the new retail outlet with the abovementioned unique service concepts.
Instagram
YouTube

Page 115 of 133
Snapchat
Twitter

Page 116 of 133

Page 117 of 133
Beverly Hills Opening Party
NastyGal Beverly Hills Cupcakes

Page 118 of 133

Page 119 of 133
NastyGal Instabooth

Page 120 of 133
(3) Physical Evidence
NastyGal Beverly Blvd. outlet should adopt an open and glass door concept to provide tangible clues as to
what the shop is selling to reach out to new potential customers because the first time customers might have
wrong thoughts about their brand name.
Glass Door Concept

Page 121 of 133
NastyGal will also display their website URL to let the first-time shoppers gain
awareness of the fact that they are an ecommerce business.

Page 122 of 133

Page 123 of 133
9.4. Timeline of Implementation
This graph showcases the schedule to implement the various marketing promotional activities abovementioned
that will seek to increase awareness, trigger interest, desire and eventually purchase action among the target
audience. The launch is planned to take place in December, while the 3 months prior to the launch will be used
to create buzz and awareness. During the launch, different videos on YouTube would be launch to introduce
the new service concepts and opening part would be used to draw media attention and interest in NastyGals
new store. The post launch period will be used to increase desire and trigger purchase action through an instore opening sales promotion instagram marketing campaigns.

Page 124 of 133
9.5. Financial Supporting Documentation
Estimated Cost of marketing campaigns
Estimated Cost of opening brick and mortar from Section 8.2.1.
Estimated Total Cost of launch NastyGal New Beverly Blvd. Retail Outlet

Revenue Estimate
(Annual sales of NastyGal Brick and Mortar)
Average Sales Per Square

Foot of US Retail Stores
NastyGal Brick-and-Mortar
Total
US $1,936
5000 square foot
Total Revenue
1936*5000
US $9,680,000
(Referenced from Statista, 2014)

Page 125 of 133
Estimated Profitability of NastyGals Beverly Blvd. Retail Outlet for Year 1

(2016)
Remarks
Sales Revenue
9,680,000
Cost to opening brick-andmortar
US
$603,750
See above calculations
Annual Rental Costs
US
$600,000
Cost per square foot (US $10)
Cost of Inventory
US
$1,936,000
Total Profit
US$6,540,
250
(CMDGroup, 2012)
Assumption that the cost has an

overall average of 20% of its
selling price
Profit
Cost to open retail
Annual Rental Costs
Cost of Inventory
US $7,140,250
US $603,750
US $600,000
US
$1,936,000
US $3,139,750
227.41%

Page 126 of 133
Estimated Percentage of Total Revenue in 2016
The percentage of total revenue in the coming year after the launch of NastyGals new
brick-and-mortar outlet is based on the assumption that NastyGals revenue remains at
100million if all other activities are kept at status quo.
Nasty Gal's Estimated Sales for 2016

Other Revenue Streams
Nasty Gal's New Brick-and-Mortar Channel
9%
91%

Page 127 of 133
10. Future Phase Recommendation for Brick and Mortar Expansion
Using Pop-up Store to test receptivity before expanding into other

states
In the future below NastyGal expand its brick and mortar beyond Los Angeles, they should first adopt a popup store concept. These stores would be temporary physical retail spaces that pop up for a brief period of
time in different cities or states across US to expose the brands to more customers. NastyGal can launch them
in a systematic fashion in different populous cities across various states. For e.g. launching for 2 weeks in New
York City to test out the receptivity.
This is a good way for NastyGal to experiment with various physical locations without committing to long
term lease, while increasing their brand awareness and driving more sales to their existing channels.
Furthermore, in the recent years, more ecommerce companies have jumped onto the trend on pop-up stores
and use it as a way to increase physical touchpoints with their customers to showcase their product quality and
communicate brand value (CNBC, 2015).
Advantages of Using Pop-up Store

to test receptivity before expanding into other states
NastyGal can ask its customers to decide the location of its next pop-up shops by
choosing from a list of possibilities
Able to test the retail outlook and situation out of Los Angeles without committing
to long term lease.
Serves as an experience rather than a place to buy clothes and drive revenue
creating a dynamic shopping experience that can be incrementally improved

overtime
lower fixed costs and higher exposure to different groups of customers
Strategic fit with the target market as Millennials are creative and like the idea of
pop-up shops
Benefit of being able to touch and try on a product like shoes, apparel or glasses.
Physical presence through pop-up stores can give consumers a much stronger
introduction to your brand. give us insight into how buyers select products.

Page 128 of 133
11. REFERENCES
Academic References Note from Course Coordinator: The yellow
highlighted reference areas below are considered by some experts to be
respected journals, such as SSCI or ABDC journal articles. BEFORE MIDTERM
PERIOD, students must complete and present their completed research paper
in a basic format with at least 5 high level articles referenced, such as SSCI or
ABDC journal articles. BEFORE FINAL EXAM REVIEW WEEK, students must
present a developed version of these same midterm papers with at least 10
high level articles referenced, such as SSCI or ABDC journal articles. Note
there are more than 10 weeks of term and 10 high level references required.
Students should find and discuss in class each week, one of the articles that
will be used in the final research paper. Minor modifications can be made to
the final paper, but students are expected to present some aspect of research
paper developments weekly.
Andersn, J. (2010). Resourcebased competitiveness: managerial implications

resourcebased
<of
-- the
Week
5 research
paper
to
be referenced &
view. Strategic Direction, 26(5), pp.3-5.
Bennett, R. and Cooper, R. (1984). The product life cycle trap. Business Horizons, 27(5), pp.7-16.
<-Week
Bowman, C. and Ambrosini, V. (2003). How the Resource-based and the Dynamic Capability Views of the
Firm Inform Corporate-level Strategy. British Journal of Management, 14(4), pp.289-303.
<--
Chatterjee, S. and Wernerfelt, B. (1988). Related or Unrelated Diversification: A Resource Based

<-- Week 2 research
Approach. Academy of Management Proceedings, 1988(1), pp.7-11.
paper to be referenced &
discussed in class (eg)
DeSarbo, W., Anthony Di Benedetto, C., Michael Song, and Sinha, I. (2004). Revisiting the Miles and Snow
strategic framework: uncovering interrelationships between strategic types, capabilities, environmental
uncertainty, and firm performance. Strat. Mgmt. J., 26(1), pp.47-74.
<--
Hefferon, K. (2013). Positive psychology and the body. Maidenhead: Open University Press/McGraw-Hill
Education.
Horvath, M., Schivardi, F. and Woywode, M. (2001). On industry life-cycles: delay, entry, and shakeout in
beer brewing. International Journal of Industrial Organization, 19(7), pp.1023-1052.
<--
Ivy, J. (2008). A new higher education marketing mix: the 7Ps for MBA marketing. Intl Jnl of Educational
Mgt, 22(4), pp.288-299.
Ryall, M. (n.d.). Causal Ambiguity, Operating Complexity and Strong Capability-Based Advantages.SSRN
Electronic Journal.

Page 129 of 133
Santos, J. and Boote, J. (2003). A theoretical exploration and model of consumer expectations, post-purchase
affective states and affective behaviour. Journal of Consumer Behaviour, 3(2), pp.142-156.
Spies, K., Hesse, F. and Loesch, K. (1997). Store atmosphere, mood and purchasing behavior.International
Journal of Research in Marketing, 14(1), pp.1-17.
Svatosova, V. (2013). Motivation of Online Buyer Behavior. JOC, 5(3), pp.14-30.
The Business Journals, (2015). Why Rent the Runway and NastyGal are moving from online-only to brick-andmortar - Bizwomen. [online] Available at: http://www.bizjournals.com/bizwomen/news/profilesstrategies/2015/04/why-goingbrick-and-mortar-could-be-a-very-smart.html?page=all [Accessed 22 Sep.
2015].
Westbrook, R. (1987). Product/Consumption-Based Affective Responses and Postpurchase Processes.Journal
of Marketing Research, 24(3), p.258.
Wyckham, R., Fitzroy, P. and Mandry, G. (1975). Marketing of Services An Evaluation of the
Theory.European Journal of Marketing, 9(1), pp.59-67.
Websites
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Amoruso, S. (2015). "The Older I Get the Less Confident I Become": Sophia Amoruso Gets Real About What
It's Like to Be the Boss. [online] Marie Claire. Available at: http://www.marieclaire.com/careeradvice/news/a15511/nasty-gal-sophia-amoruso-succ [Accessed 19 Sep. 2015].
Amoruso, S. (2015). "The Older I Get the Less Confident I Become": Sophia Amoruso Gets Real About What
It's Like to Be the Boss. [online] Marie Claire. Available at: http://www.marieclaire.com/careeradvice/news/a15511/nasty-gal-sophia-amoruso-succ [Accessed 25 Sep. 2015].
Andersn, J. (2010). Resourcebased competitiveness: managerial implications of the resourcebased
view. Strategic Direction, 26(5), pp.3-5.
Appcard.com, (2015). AppCard. [online] Available at: https://appcard.com/biz/case-studies/gypsy-warrior/
[Accessed 27 Aug. 2015].
Bennett, R. and Cooper, R. (1984). The product life cycle trap. Business Horizons, 27(5), pp.7-16.

Page 130 of 133
Bowman, C. and Ambrosini, V. (2003). How the Resource-based and the Dynamic Capability Views of the
Firm Inform Corporate-level Strategy. British Journal of Management, 14(4), pp.289-303.
Breitbart, (2014). CA Millennial Reports: 35% Live With Mom or Dad, Income Plummets Below 1990 Level Breitbart. [online] Available at: http://www.breitbart.com/california/2014/12/06/california-millennials-introuble-pair-of-reports-confirm-the-obvious/ [Accessed 20 Sep. 2015].
Bureau, U. (2015). Millennials Outnumber Baby Boomers and Are Far More Diverse. [online] Census.gov.
Available at: https://www.census.gov/newsroom/press-releases/2015/cb15-113.html [Accessed 24 Sep.
2015].
Chapman, L. (2015). Ron Johnson Leads $16M Funding for Fashion Company NastyGal. [online] WSJ.
Available at: http://blogs.wsj.com/venturecapital/2015/02/27/ron-johnson-leads-16m-funding-forfashion-company-nasty-gal/ [Accessed 20 Sep. 2015].
Chatterjee, S. and Wernerfelt, B. (1988). Related or Unrelated Diversification: A Resource Based
Approach. Academy of Management Proceedings, 1988(1), pp.7-11.
Cmdgroup.com, (2015). RSMeans dollar-per-square-foot construction costs for four industrial-type buildings.
[online] Available at: http://www.cmdgroup.com/market-intelligence/articles/rsmeans-dollar-per-squarefoot-construction-costs-for-four-industrial-type/ [Accessed 18 Sep. 2015].
Communications, E. (2015). Can Brick-and-Mortar Compete with Click-and-Brick?. [online]
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DeSarbo, W., Anthony Di Benedetto, C., Michael Song, and Sinha, I. (2004). Revisiting the Miles and Snow
strategic framework: uncovering interrelationships between strategic types, capabilities, environmental
uncertainty, and firm performance. Strat. Mgmt. J., 26(1), pp.47-74.
Emarketer.com, (2015). Retail Sales Worldwide Will Top $22 Trillion This Year - eMarketer. [online] Available
at: http://www.emarketer.com/Article/Retail-Sales-Worldwide-Will-Top-22-Trillion-This-Year/1011765
[Accessed 25 Aug. 2015].
Fashionista.com, (2015). Missguided Nitin Passi Interview. [online] Available at:
http://fashionista.com/2014/09/missguided-nitin-passi [Accessed 25 Sep. 2015].
Feiereisen, S., Feiereisen, S. and articles..., R. (2015). 8 Stores Like NastyGal to Shop Now - theFashionSpot.
[online] theFashionSpot. Available at: http://www.thefashionspot.com/style-trends/626973-8-stores-likenasty-gal/ [Accessed 16 Sep. 2015].
Forbes.com, (2015). Forbes Millennials Boomtown. [online] Available at:
http://www.forbes.com/sites/joelkotkin/2014/08/04/millennial-boomtowns-where-the-generation-isclustering-its-not-downtown/ [Accessed 25 Sep. 2015].

Page 131 of 133
Grant, R. (2012). At last, being a Nasty Girl is paying off. [online] VentureBeat. Available at:
http://venturebeat.com/2012/08/29/at-last-being-a-nasty-girl-is-paying-off/ [Accessed 24 Sep. 2015].
Hefferon, K. (2013). Positive psychology and the body. Maidenhead: Open University Press/McGraw-Hill
Education.
Horvath, M., Schivardi, F. and Woywode, M. (2001). On industry life-cycles: delay, entry, and shakeout in
beer brewing. International Journal of Industrial Organization, 19(7), pp.1023-1052.
Ivy, J. (2008). A new higher education marketing mix: the 7Ps for MBA marketing. Intl Jnl of Educational
Mgt, 22(4), pp.288-299.
Kwateng, D. (2014). NastyGal Denim Debuts. [online] StyleBlazer. Available at:
http://styleblazer.com/315727/nasty-gal-denim-debut/ [Accessed 15 Sep. 2015].
latimes, (2013). NastyGal clothing company as red-hot as its founder's lipstick. [online] Available at:
http://articles.latimes.com/2012/aug/26/business/la-fi-nasty-gal-20120826 [Accessed 23 Sep. 2015].
M.drapersonline.com, (2015). Missguided continues growth strategy but founder rules out float. [online]
Available at: http://m.drapersonline.com/5073674.article [Accessed 25 Sep. 2015].
MacMillan, D. (2015). NastyGal Founder Plans Brick-and-Mortar Expansion This Year. [online] WSJ.
Available at: http://blogs.wsj.com/digits/2014/03/08/nasty-gal-founder-plans-brick-and-mortarexpansion-this-year/ [Accessed 19 Sep. 2015].
MarketingCharts, (2015). So How Many Millennials Are There in the US, Anyway? (Updated). [online]
Available at: http://www.marketingcharts.com/traditional/so-how-many-millennials-are-there-in-the-usanyway-30401/ [Accessed 24 Sep. 2015].
Medina, M. (2014). First Look at the NastyGal Store. [online] WWD. Available at: http://wwd.com/globenews/specialty-stores/first-look-at-the-nasty-gal-store-8039780/ [Accessed 22 Sep. 2015].
Medium, (2013). How Millennials are Shopping: 20 Interesting Statistics & Figures Brian Honigman.
[online] Available at: https://medium.com/brian-honigman/how-millennials-are-shopping-20-interestingstatistics-figures-c76fb1231fbb [Accessed 18 Sep. 2015].
NastyGalaxy, (2014). MAC x NastyGal - NastyGalaxy. [online] Available at:
http://blog.nastygal.com/culture/ng-hq/2014/10/nasty-gal-x-mac/ [Accessed 21 Sep. 2015].
Pando, (2012). The Science of Badass: How NastyGal Avoided Ecommerce Gimmicks and Silicon Beach to
Bank $40m and a New Line. [online] Available at: https://pando.com/2012/08/27/the-science-of-badasshow-nasty-gal-avoided-ecommerce-gimmicks-and-silicon-beach-to-bank-40m-and-a-new-line/
[Accessed 22 Sep. 2015].

Page 132 of 133
PERLROTH, N. (2013). NastyGal, an Online Start-Up, Is a Fast-Growing Retailer. [online] Nytimes.com.
Available at: http://www.nytimes.com/2013/03/25/technology/nasty-gal-an-online-start-up-is-a-fastgrowing-retailer.html?_r=0 [Accessed 22 Sep. 2015].
Pragmatist, T. (2015). NastyGal: The Name Says It All. [online] The Style Pragmatist. Available at:
http://thestylepragmatist.com/nasty-gal-name-says/ [Accessed 24 Sep. 2015].
Racked, (2015). NastyGal's Uncertain Future: Does It Have What It Takes to Stay on Top?. [online] Available
at: http://www.racked.com/2015/4/7/8341089/nasty-gal-funding [Accessed 19 Sep. 2015].
Recode Net, (2015). Amoruso Steps Down As CEO of NastyGal. [online] Available at:
http://recode.net/2015/01/12/nasty-gal-founder-sophia-amoruso-steps-down-as-ceo-of-fashion-retaileress/
Rsmeans.com, (2015). models. [online] Available at: http://www.rsmeans.com/models/retailstore/california/los-angeles/ [Accessed 22 Sep. 2015].
Ryall, M. (n.d.). Causal Ambiguity, Operating Complexity and Strong Capability-Based Advantages.SSRN
Electronic Journal.
Saiidi, U. (2015). Online retailers flirt with brick and mortar. [online] CNBC. Available at:
http://www.cnbc.com/2015/04/02/why-is-e-commerce-eyeing-brick-and-mortar.html [Accessed 18 Sep.
2015].
Santos, J. and Boote, J. (2003). A theoretical exploration and model of consumer expectations, post-purchase
affective states and affective behaviour. Journal of Consumer Behaviour, 3(2), pp.142-156.
Spies, K., Hesse, F. and Loesch, K. (1997). Store atmosphere, mood and purchasing behavior.International
Journal of Research in Marketing, 14(1), pp.1-17.
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Page 133 of 133
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Theory.European Journal of Marketing, 9(1), pp.59-67.
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NastyGal Strategic Marketing Plan

3 (summarize & dont write title or case

8 (-6 digits (yr, month, day, eg.

160222)) date, due date

BY WEEK 3, STUDENTS MUST PRESENT A PROPOSAL FOR THEIR

C).PAPERS MUST FOLLOW THIS FORMAT, or REPLICATE (Format, style and

NastyGal Strategic Marketing Plan

NastyGal Strategic Marketing Plan

EXECUTIVE SUMMARY (Teach something new to the world)...........................................................4

3.3. CUSTOMERS (positioning)...............................................................................21

3.3.1. Target Market.............................................................................21

3.4. List of Opportunities and Threats.......................................................................................... 30

4.1. ACTIVE SWOT TABLE........................................................................................ 31

5. CORPORATE LEVEL STRATEGY.................................................................................................. 33

6.1 Product Lifecycle Shakeout Stage.......................................................................35

Formulating Strategic Options..................................................................................... 39

NastyGal Strategic Marketing Plan

9.1. Chosen Strategic Alternative................................................................................ 48

10. CONCLUSION (Teach something new to the world)................................................................59

2.1.1. Resource-Based View Analysis.......................................................................61

11. REFERENCES........................................................................................................................ 113

Academic References............................................................................................ 113

NastyGal Strategic Marketing Plan

NastyGal Strategic Marketing Plan

NastyGal Strategic Marketing Plan

NastyGal Strategic Marketing Plan

NastyGal Strategic Marketing Plan

NastyGal Strategic Marketing Plan

2.1.3. Porters Value Chain Analysis

NastyGal Strategic Marketing Plan

NastyGal Strategic Marketing Plan

NastyGal Strategic Marketing Plan

NastyGal Strategic Marketing Plan

NastyGal Strategic Marketing Plan

NastyGal Strategic Marketing Plan

Gains from Relationships Synergy

2.3. List of Strengths and Weakness

NastyGal Strategic Marketing Plan

NastyGal Strategic Marketing Plan

Overall Impact of Environment

NastyGal Strategic Marketing Plan

3.2. Competitive Environment

3.2.2. Direct and Indirect Competitors

NastyGal Strategic Marketing Plan

NastyGal Strategic Marketing Plan

3.2.4. Strategic Group Mapping

NastyGal Strategic Marketing Plan

NastyGal Strategic Marketing Plan

3.2.6. Key Success Factors

3.2.7. Michael Porters Framework for Competitive Analysis

NastyGal Strategic Marketing Plan

NastyGal Strategic Marketing Plan

NastyGal Strategic Marketing Plan

Purchasing Power of Millennials

NastyGal Strategic Marketing Plan

NastyGal Strategic Marketing Plan

NastyGal Strategic Marketing Plan

NastyGal Strategic Marketing Plan

NastyGal Strategic Marketing Plan

NastyGal Strategic Marketing Plan

NastyGal Strategic Marketing Plan

3.4. List of Opportunities and Threats

NastyGal Strategic Marketing Plan