EXECUTIVE SUMMARY

Lenzing, with its headquarters in Lenzing, Austria, is the global leader of sustainable wood based cellulosic fibers. Lenzing evaluated an opportunity of connecting garment makers with fabric suppliers through a digital fabric sourcing platform on the internet in form of a digital business model.

Even though the general demand for sustainable fabrics is high, the process of interaction between buyers and suppliers within the market for sustainable fashion is not always effective and clear. As far as sustainability is concerned, the lack of transparency within this market is sometimes perceived as a problem, which makes the search for sustainable fabrics rather time-consuming. This is where new online fabric sourcing platforms like Sqetch, Swatchon, Frontier.cool, Tengiva and Material Exchange have found a market niche and have stepped in, because they put a significant emphasis on sustainability of the fabrics they offer to customers.

Since the above-mentioned players are already operating sourcing platforms for sustainable fabrics, the project team has derived a working hypothesis, which concerns above all two possibilities. The latter assumes there is no space for Lenzing to enter the market with a new digital platform. Should it be validated, alternative strategies (and thus an alternative business model) will be formulated for the project company. However, should the working hypothesis be rejected, it is the task and objective of the underlying project to formulate and present an initial digital business model to Lenzing for the implementation of a new fabric sourcing platform within the sustainable fabrics industry.

Goal

The goal of this project is to reject or validate the above-mentioned working hypothesis. Based on this, the digital business model which will be deemed the most suitable will be developed further, its building blocks will be specified and presented to Lenzing.

Methodology

In order to achieve this goal, a solid market analysis is indispensable. For this purpose, the political, economic, social, technological, environmental as well as legal aspects (PESTEL) of the sustainable fabrics market are taken into account. Moreover, the Five Forces (as described by Porter) that are shaping this market are considered, special focus is laid on the analysis of the competitors and their strengths and weaknesses. In order to gather insider information, expert interviews were conducted with seven fashion designers, one fabric consultant and one sustainability consultant. The above-mentioned final business model is defined based on the Business Model Canvas.

Results

The result of this project is a specific recommendation regarding the development of the fabric sourcing platform for sustainable fabrics. This concerns defining the key partners with whom Lenzing should cooperate, key activities that need to be performed as well as the necessary key resources and the key value proposition that should be taken into account. Further recommendations concern customer relationships, channels, customers segments, cost structure and revenue streams that should be considered.

Cooperation Partner

• Lenzing Aktiengesellschaft
  Werkstraße 2
  4860 Lenzing
  Austria
  www.lenzing.com 

Contact Person

• Gregor Fili - g.fili@lenzing.com

Student Team

• Fabian Albert Gorbach

• Raúl Antonio Cortez Hidalgo

• Karin Krizovska

Project Manager

• Mag. Benjamin Monsorno

• Dr. Jakob Pohlisch