Urban Outfitters Continuing Case Study

Starting a business involves coming up with an idea of a venture that can be beneficial to parties involved. It is taking a well-calculated risk. After having the business idea, the next stage is establishing an appropriate location, finally taking the bold step of starting up.

It is not dependent to the level of education that one has, however it is a subject of one’s business mind (Mintzberg, Ghoshal, Lampel & Quinn, 2003). This paper discuses different aspect of a “niche” product development; it will use Urban Outfitters Case Study for the analysis.

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Challenges of start-ups

After having an idea, finances to meet various costs of the business are required; they are a major problem for start-ups. Sometimes an entrepreneur only has money to buy stocks and have an establishment but lacks finances to meet its operating expenses. Lack of such finances to cover the costs can lead to failure and limited growth of the business. Financial lenders are also hesitant to offer loans to start-ups.

The second problem affecting start-ups is getting an appropriate location for ones goods; location can be a deal maker or a deal breaker. An entrepreneur might have a good idea; however, failures to get an appropriate location may lead to failure of the noble course business. Urban Outfitters were favoured by the proximity to their target market, college students.

Another problem that affects entrepreneurs is lack of Patents and trademarks registration for their innovation and inventions. They end up as investors but the idea is taken by large companies who use it for their benefit without the regard of the developer. In the case of Urban Outfitters, they had come up with unique business but getting Patents and trademarks was an issue (Pearce & Robinson, 2011).

“Niche” product is a unique product or service offered in the market as a sub-segment of the larger product market; it targets a micro-market within the larger group. The numbers of customers are usually not big since its potion in the larger market segment. The limited customers limit the production of the products by large corporation. Customers of “niche” product are willing to pay an extra coin for the uniqueness.

Some of the world examples of “niche” products include I-Phone and I-pads which target a small group within the phone industry, Ben and Jerry’s premium ice cream; where tastes disintegrate the market for ice-cream further and Hewlett Packard calculators, which are calculators with some special attributes like memory cards.

“Niche” products providers have some advantages over other players in the same industry; they enjoy the power of quasi-monopoly. Quasi-monopoly means that they have an advantage that customers have no option other than buy from them, which may be at relatively high price but since they have no alternatives.

The commodities of a “niche” market are in most cases relatively high however, this cannot be seen as a full advantage if other elements building it are not looked into. Despite that, niche commodities are higher in prices because of their uniqueness.

They attract a large population of customers relative to the number of outlets available. The slightly higher price assists a company or the entrepreneurs get a higher profit margin (Pearce & Robinson, 2011).

Customers have different tastes and preferences; this difference in tastes and preferences makes them pay more for exclusivity. Other factors make a customer be willing to pay higher for exclusivity they include: the quality of product bought at a higher cost is in most cases of a better quality than those bought at an ordinary price. In the case of niche products, customer believes that they are likely to remain longer than the standard life of other commodities.

Living standards and need to be respected for what ones have also results to willingness by customers to pay more for exclusivity. Come customers are willing to buy brand not because it is superior to substitutes but because it has status. For example, buying a BMW car instead of Toyota car and giving the reason as the notion that BMW are superior and for special people of a higher class.

One way that a niche player can chip away a larger population of the market is by undertaking an excessive market survey and recognising some products and/or services that are not offered by the larger producer then producing such products. Generally, the larger the market share, the higher the revenue from products targeting the market so the idea is to look for ways to enlarge and win more customers in the market.

An example of a company that has adopted the niche- chip-away system is Starbucks, the company has come with various products to enlarge and fragments markets an example is Frappuchino drinks and superior setting outlets (Barney, 2007).

Another example is Emirates Airline; it has invested in quality customer care services and embraced the low cost airline industry. Through various innovations, they are chipping-away the market. A third example of a successful “niche” product provider is Best Buy; it maintains a computerised customer service, where customers are entertained as they seek for assistance.


Barney, J. B. (2007). Gaining and sustaining competitive advantage (3rd ed.). Upper Saddle River, NJ: Pearson Prentice Hall.

Mintzberg, H., Ghoshal, S., Lampel, J., & Quinn, J. B. (2003). The strategy process: Concepts, contexts, cases (4th ed.). Upper Saddle River, NJ: Prentice Hall.

Pearce, J. A., & Robinson, R. B. (2011). Strategic management: Formulation, implementation, and control (12th ed.). Boston, MA: McGraw-Hill/Irwin.


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