Internet Strategy - Essay Example

Internet Strategy Analysis The introduction of the internet into commerce has been uneventful because many commercial applications are computer related. The amount of information and resources that firms can access through the internet has revolutionized the sector. The firms can now reach the consumers without much hustle because most of them use the internet to interact and search for channels, companies or products and services that can help satisfy their needs. This is the reason most companies have resorted to the internet to sell and advertise their products because of the ease of meeting them and the reduction of costs related to distribution and marketing (Delaney 1). However, not all companies use the internet to advertise or sell their products; some use many channels to market their products in a bid to reach a large base of consumers. This is where multichannel marketing comes in; as the name implies, it is the use of several channels to reach the consumer, through advertising and even selling the product. These channels include mobile phones, the internet, through marketing and social sites such as Facebook. Use of multichannel marketing enables the firm to reach consumers with diverse purchasing behaviors. This paper will study the marketing strategy of Pacific Sun Wear clothing firm, and analyze its strengths, weaknesses, opportunities and threats. Moreover, the analysis of Pac-Sun’s competitors will be done in this paper. Pacific Sun Wear (Pac-Sun) is a clothing firm that designs, produces, and distributes its products over a range of channels. The firm also deals with footwear and accessories. The business is based in California, USA and its main consumers are the youth because the company produces clothing, accessories and footwear synonymous with the youth. Pac-Sun is a large company with over eight hundred stores in the whole of USA and even Puerto Rico. Although it is based in Anaheim, its main distribution center is in Kansas while the stores and its managers are located throughout the US. The company was established in 1984, and it boasts a workforce of over 10000 employees. The firm has incorporated mobile, the internet, and in-store terminals to reach and interact with its clientele. The firm has gone further to develop an iPhone application used for scanning QR codes. The firm uses these platforms to advertise and sell these products. Moreover, the feedback is used to design the outfits that interest its client base. This company thrives on internet marketing because its target consumers are also huge fans of the internet. Its main competitors include Gap and Urban Outfitters Inc. (Pacsun 1) SWOT Analysis Strengths Pac-Sun has an advantage over the other companies in that its customer base is the youth and the young adults who frequent the internet. Studies show that on average, this generation spends a minimum of an hour on the internet every day. This enables Pac-Sun to reach them easily and in proper times. Moreover, its internet sites offer a platform for the clientele to order for the products that they want easing the selling and distribution process for the firm. Another strength that this company has over its competitors is its growth rate. Over the years, the firm has been on the rise occupying more markets and expanding its volume of production. The reason behind the growth is the increase in the number of people who find Pac-sun’s products fashionable. Moreover, there is a growth in the number of fashion-conscious youths in the globe. The firm has a huge share of the domestic market reducing the cost of distribution hence raising the profit margins. This company is synonymous with most American, perhaps because of its strategy to rich the young who comprise a large percentage of the US population. Moreover, the company enjoys low cost of production because of reduced cost of labor. Weaknesses The company is in an industry with a lot of competition. Firms like Gap and Urban Outfitters Inc., including other several firms in the industry give Pac-Sun a lot of competition. Others like Gap provide services all over the globe as opposed to local markets only. This means that Pac-Sun has to work extra hard to see the fulfillment of its objectives in this market. In addition, its small business structures mean that the firm cannot enjoy the economies of scale that other larger firms like Gap are enjoying. Pac-Sun is unknown because most of its presence is in the US and its neighbors. This means that the company depends only on the local customer base, which is already flooded by small-to-medium companies. Therefore, the company does not enjoy the profits from other countries the way multinationals like Gap does (Pacsun 1). The competition in the market forces the companies to revise the pricing of their products. Increasing the cost of production coupled with increasing taxation is bound to affect the operations and hence the profitability of the firm in the near future. The company has to devise a proper way of handling competition in order to achieve its key objective in the future. Opportunities The growth of the internet presents perhaps the most lucrative opportunity for this firm to be known worldwide. The fact that more and more people are accessing the internet means that the firm can make itself known all over the globe. Moreover, an increase in the number of fashion-conscious people means that there is an opportunity to design new products and services. Threats Perhaps the most threatening factors to Pac-Sun are the increase in labor cost and government regulations. However, there are other factors such as tax changes and increasing competition that may harm the business in the long run (Delaney1). Strengths Increased online presence High growth rate Huge share of domestic market Weaknesses Local presence only Competitive market Small business units Opportunities Increased internet use New goods and services Threats Competition Government regulations Uncertainties Competitive analysis Pac-sun has several competitors in its line of business with Gap and Urban Outfitters Inc. being the main rivals. However, the company has dealt well with the competition by diversifying its sales to include the internet. The company gets most of its internet revenue from online sales of its products, which are then shipped or availed to the customer’s location. Part II The company target is the youth, and it uses its website as well as the social sites to reach this cluster of clients. The main aim of the company using the internet is to attract either customer to buy its products at its stores or order them online through its website www.pacsun.com. The firm posts frequent updates on its timeline and sometimes provides discounts and prizes for its internet customer base. This is its main strategy of sustaining its consumer base while trying to woo new consumers (Delaney 1). Pac-sun has made the internet its main center for marketing because of its location. The only way a firm can reach global consumers is by the internet. It was easy integrating the internet into the marketing strategy of the firm. Pac-Sun uses its websites to gather information that they use to design new products and present them to the clients. They also use as a platform for the clientele to sound their disappointments and approval for the company (Pacsun 1). Conclusion The basis of the internet as the main tool for advertising and selling for the company was an informed move because there is an increased use of internet in the world. Pac-Sun reports that the sales from the internet are increasing each and every day, and they are planning to expand their portal to accommodate more clients. Works Cited Dulaney, Chelsey. "PacSun Swings to a Profit." The Wall Street Journal. Dow Jones & Company, 28 Aug. 2014. Web. 3 Nov. 2014. . "PacSun." California Lifestyle Clothing, Mens Clothing, Womens Clothing, Jeans, Tees, Hoodies, Boardshorts, Sneakers and Accessories at .com. Pacsun. Web. 3 Nov. 2014. . Read More