Review of Abercrombie and Fitch Company - Essay Example

Abercrombie & Fitch: An Upscale Sporting Goods Retailer Becomes a Leader in Trendy Apparel Table of contents Question 3 Question-2 3 Question-3 4Question-4 5 Question-5 6 Question-6 7 Reference 8 Question-1 1. Identify and describe the greatest environmental threats that have immediate implications on A&F. At present the company A&F has a large number of retailers. In the year 2008 it maintained around 210 vendors, located throughout the world. Almost all of the vendors are non US countries, mostly belonging to Asia and Central & Southern America. Hence the company follows a global sourcing strategy because it collects the materials from vendors who are distributed in 37 countries apart from US (Abercrombie & Fitch Co /DE/ -ANF, 2009, p.5). The vendors of developing nations are yet not certified as sustainable suppliers. Therefore the products supplied by the vendors are deteriorating the environmental conditions. Growing concerns about environment issue have impelled many developed countries to set environmental laws. Thus possibilities are strong that such countries will not allow those goods to be sold in their local markets that do not fulfill the environmental standards. This is one of the major threats faced by the company related to environment. Question-2 2. Identify and describe the greatest opportunities available in the marketplace for A&F to pursue. As per the company’s strategy, A&F targets consumers belonging to the age group 18-22 years who are mostly attracted to casual clothes. The product range offered by A&F reflects the American lifestyle (Hitt, et al., 2008, p.37). Economic advancement in the third world countries has raised the living standards of the consumers and has put more money in their hands. The wind of change is clearly visible in their life style which is slowly getting inclined towards the western culture which stands as a stark difference to the traditional culture. These youngsters in the developing nations are making high investments on fashionable clothes and accessories to acquire the contemporary look. The market of A&F in US is almost saturated; the company must thereby enter different international markets to acquire customers. The population growth rate in developing nations is higher as compared to the developed nations (Srivastava, 2005, p297). In the coming years the number of youngsters (18-22 years) will be less in developed nations whereas in developing nations the number of youngster will be quite high. Therefore the growing trend of western culture in the developing countries is one of the greatest opportunities that A&F should bank on. Question-3 3. Identify and describe A&Fs greatest organizational strengths. The company has survived and has gained popularity due to its unique marketing policies. However the marketing tactics adopted by A&F are often considered too provoking for the youngsters. The catalogue presents pictures of male and female models whose boldness sometimes defy the aesthetic appeal. The bold slogans embossed on the products are often criticized. However all these negative marketing made by the opponents hardly affects the sales and popularity of the company. The management of A&F is so confident regarding its brand popularity that they hardly care about these negative censures (Helium, 2010). The company has several shops in US mostly located in the shopping malls, which are favorite hangouts for the youngster. The company is well aware of the likes and dislikes of the young generation and the marketing department uses it in the most effective manner to attract and to retain the customers. Therefore it can be concluded that the strong brand image of the company is one of its most powerful organizational strength. Question-4 4. Identify and describe the companys greatest weaknesses. According to the company’s policy, it prefers to take young people as their staff, both males and females who are neat and well dressed. All their staff members are attractive young males and females. The shops have posters of white models in their trademark A&F clothes. The company policy demands its employees to be a representative of American males and females and thus the recruitment and selection policy of the company often leads to discrimination among candidates. There are many legal suits against the company filed for discrimination against the minority. A Muslim employee (a young female girl called Elauf) lodged a complaint because she came to the workplace in black ‘hija’ and lost her job (The Freethinker, 2009). Such stringent policy of the company is one of its major drawbacks which are hindering its growth in the international market. US is a country where the government strictly prohibits discrimination among different religions or minority groups. The policy of A&F is against the legal framework of many countries and such policies can inhibit the entry of the company in other potential markets. Question-5 5. Describe how A&Fs strengths can be used to deflect environmental threats to further the companys success in the industry. The present major environmental threat for the company is that its current vendor portfolio is highly diversified. Since many vendors are not certified as sustainable suppliers, the company might face major environmental threat in near future. This is a high time for the company to take this matter seriously otherwise A&F will counter multifaceted problems while entering different markets. The company has a strong brand presence in special retail industry and its popularity is increasing day by day. Undoubtedly A&F is an international brand name; the company should use its popularity to revive its supply chain. The company should contract only those suppliers who have already acquired the certificate of a sustainable supplier. The company’s financials are quite strong; hence it can assist few of its existing vendors to fulfill the environment standards and become a sustainable supplier. In this way A&F will succeed in utilizing its strength to overcome the environmental threat. Question-6 6. Describe how A&Fs strengths can be used to take advantage of opportunities to further the companys success in the industry. The greatest opportunity of the company is the growing potential markets in developing countries where the American culture is gaining popularity day by day. In future A&F can develop a large customer base in the international market if it uses its strengths i.e. the strong brand image in a more planned and organized manner. At present A&F is a symbol of style that provides youngsters with a unique identity. This strong brand image will assist the company to enter new unexplored markets. The company’s brand reflects the inner desire of a youngster and this image creates a strong attraction for the product range offered by A&F. The level of competition is high in the retail industry as many new entrants are gradually making their presence felt. Therefore A&F should use its brand name as its core competency which will assist it to gain higher market share despite the high degree of competition. Reference Abercrombie & Fitch Co /DE/ -ANF. (2009) Form 10-K. United States Securities And Exchange Commission. Helium. (2010). Company profile: Abercrombie & Fitch. Retrieved April 29, 2010 from: http://www.helium.com/items/925138-company-profile-abercrombie-fitch. Hitt, M. A., Ireland, R. D., Hoskisson, R. E. (2008). Strategic management: competitiveness and globalization : concepts & cases. 8th ed. Cengage Learning. Srivastava, S. (2005). Studies in Demography. Anmol Publications PVT. LTD. The Freethinker. (September 24, 2009). Abercrombie & Fitch faces religious discrimination lawsuit over hijab ban. Retrieved April 29, 2010 from: http://freethinker.co.uk/2009/09/24/abercrombie-and-fitch-faces-religious-discrimination-lawsuit-over-hijab-ban/. Read More