After 1990 the amount of wool taken from each goat has increased, it has doubled. This means the production of cashmere has risen. If the quantity increases the quality will decrease.  A ride in supply will cause a surplus so the prices fall rapidly. The decrease in prices affects the economy of the cashmere industry and encourages consumers to buy more so the demand increases. An alternative perspective to this is that, even though the demands were high, the quality drop can result for the market to slowly decline. This will result in annual revenues to fall rapidly. The profits of the cashmere do not increase with the rising export amount. As I mentioned before, the price of one sweater starts from 80-90 dollars in luxury markets. The reason for this was because luxury markets are very selective and they only sell the finest products. Looking back on my researches, I have found that it can take up to four goats to be able to produce enough fibers for only one fine cashmere sweater. Therefore, the customers of the luxury markets are people with high income and they are loyal consumers. However, with the quality decreasing, the luxury market will lose the loyalty of their customers if they are not very selective with what they buy. To conclude, I have evaluated three different perspectives how the market overcame this shock in business. All companies need to remember that their business relies on natural capitals and also impacts many livelihoods at the bases of their supply chains. Climate change has an effect on the natural resources which affects the global industries like cashmere. With the demand still high for cashmere, the companies should analyze their herding communities in their supply chains and view the price elasticity of demand. Moreover, many luxury markets face the risk of business disruptions and increased costs because of the changing in climate. Luxury fashion markets depend on already scarce and expensive materials. A large number of these materials arrive from environments that are especially sensitive to the shifts in climate. Therefore, as the world heats up, changes to their quality and availability is likely to decrease.  

x

Hi!
I'm Dora!

Would you like to get a custom essay? How about receiving a customized one?

Click here