Business Feasibility Towards Clothing Convection: A Case Study of Raiment

  • Nurfaiz Firdauzi Ilyas School of Business and Management, Bandung Institute of Technology, Indonesia
  • Atika Irawan School of Business and Management, Bandung Institute of Technology, Indonesia
Keywords: clothing convection, financial feasibility, capital budgeting

Abstract

Raiment is an MSME company engaged in clothing convection which aims to provide convenience through online sales and ordering. However, currently it still does not have its own production house and is still outsourcing by collaborating with other companies in its production, as Raiment's business is considered not to meet expectations from stagnant growth and unstable revenue. Raiment wants to open its own production house so that it does not depend on other companies in its production and can maximize profits. The purpose of this study was to determine the financial feasibility of Raiment to open its own production house. This study uses a qualitative approach through interviews and company historical data as primary data, as well as secondary data from literature reviews, journals, and books. In this study, an analysis of the industry was also carried out through PESTEL analysis and porter's five forces, as well as about the company through SWOT and financial reports. To analyse the problems that exist in the company, a fishbone diagram is used. And to analyse the financial feasibility of the company's strategy to open its own production house using the payback period, net present value, and internal rate of return. The investment in opening a production house will be financed by equity of Rp66,500,000. The results show that Raiment is feasible to open its own production house, with a payback period of 1.4 years, a positive NPV of IDR 235,260,441, and an IRR of 36.08% which is more than the cost of capital of 4.18%. 

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Published
2021-09-10
How to Cite
Ilyas, N. and Irawan, A. (2021) “Business Feasibility Towards Clothing Convection: A Case Study of Raiment”, Malaysian Journal of Social Sciences and Humanities (MJSSH), 6(9), pp. 545 - 560. doi: https://doi.org/10.47405/mjssh.v6i9.1018.
Section
Articles