Read the following scenario and give your analysis on the stated questions:

HOW TO MAKE MONEY IN COPY CAT BUSINESS

Kenneth Lai is a copycat. He makes money by aping the world's most famous fashion designers and selling this apparel to the middle class throughout Hong Kong, and he is quite successful at what he does. He comes from a poor family and dropped out of high school. He set out on his own in 1980 with $30,000 in borrowed cash. He launched the first of his retail stores that year. He has now 53 stores in Hong Kong, 9 in Singapore, 16 in Taiwan, and 2 each in Malaysia and Indonesia. About the half of firm's turnover comes from clothing business, rest from an assortment of other enterprises. About 90% of clothes are produced in China. He has currently employed nearly 30,000 workers.

Mr. Lai has found the formula of copycat success by closely following industry trends and mass producing in China. He has 3 types of stores namely, THEME, THEME PLUS & BODY GLOVE. The Theme store targets young working women and offer a value for money approach. it has become a recognizable brand name and its line is narrow but selective. Theme Plus offers party wear for the trendy women at affordable prices. Body Glove is a trendy US label that began as swim wear for women. Mr. Lai spotted the potential for Body Glove and has exclusive rights for the Far East Market.

Mr. Lai has three advantages over other manufacturers and retailers that have enabled him to thrive when others cannot: Total Vertical Integration (every activity done in-house), a skilled design team that imitates the product but save on costs, and his own gift for picking up the fashion trends. Recently he copied LA Gear Gimmick of flashing and taillights on the back of the sneakers. Now some of Body Glove's sneakers also have the lights. Mr. Lai thinks this will pay off big.

"I have a commercial eye. It's either in you or it's not. You don't learn it at school. We have a whole team of designers but we don't create original designs. We travel the world and find samples from different brand names and then we copy the designs. Everyone copies but I am the only one being honest about it", Mr. Lai concludes.

QUESTIONS:

What resources do Lai and his organization possess that give him a competitive edge? Is this advantage sustainable? How can he protect it? Which elements cannot be protected in the long run?

What other areas of business would you recommend to Lai that he might be successful in? in other words, what resources are transferable to other bsuinessess?