Abercrombie & Fitch Strategic Management

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Table of Contents

Introduction
Environmental threats
Opportunities of A&F
Organizational strengths
Weaknesses
Future direction
References

Introduction

The global economic crisis negatively affected the current situation in the fashion industry. The primary objective that has been met was a chance to change the customer’s habits of the people. As a result of this tendency, all the consumers showed the tendency to reduce their purchasing power. Today, this tendency is true even for the wealthiest group of world population. As a result of the deep changes, many consumers are quickly adapting to the demands of the new world. Many world brands are keeping a relatively low profile of their work.

Environmental threats

The decline in Trendy Apparel industry is reasoned by the customer’s unwillingness to buy goods from the leading brands. The crisis is reasoned by the fact that cheaper items have conquered a larger chunk of the mass market. As a result of these changes, the young people with a low-income background show the tendency to spend less money on designer labels than they did during the previous times. Rising unemployment, credit squeeze and plummeting home budgets negatively affected the fashion industry. It means that the companies are not very quick to announcing their economic figures. As a result of the world crisis, many consumers decided to toughen their budget. As a result of the crisis, the customers decided to limit their spending on such goods as apparels and fashion accessories. The impending changes pushed many companies to search for new ways of solving their credit problems (Armstrong and Kotler 54).

Opportunities of A&F

During the recent times, A&F made a strategic decision to improve the all-round customer experience. The improvement of customer expertise helped the company to find a solution to the problems of quick access to delivery and collection of information. The customers were also given a chance to arrange ad hoc deliveries and collections with the drivers. The specific thing about the new methods of service delivery is that it enables the customers to arrange matters while the products remain to be in the process of delivery. Taking this measure enables the customers to handle customer requests at short notice. The main objective for which the system has been designed is meeting the needs of ‘hub and spoke’ business model. The main feature of the system is that the drivers have the ability to log delivery information on consignments. Information logging is usually accomplished with the help pf Symbol’s handheld computer (Dobson and Starkey 22).

Organizational strengths

The use of strategic approach can support the process of communications that take place within the system. As for the process of parcel barcodes, this process enables people to capture the recipient’s signature digitally confirms proof of delivery. Technological innovations and creativity in production can be regarded as business philosophy of A&F. Unique technology management employed by Pepper’s is aimed to coordinate production process with all levels of the organizational structure including their interaction and performance. The balance of authority has undoubtedly shifted to traditional management who now has more selection over how it conducts relations with their workers and process. Innovation in production technologies and computerized system of supply chain is the main opportunity for A&F. It needs innovative assembly lines in order to increase volumes of sales, and storage capacity. Internet is another toll which can help A&F to reach its potential buyers without additional spending on promotion and advertising (Drejer 87).

Weaknesses

Many big names in the Trendy Apparel industry face the need to solve their financial problems. As a result of these changes many participants of the fashion market are facing huge problems. Many of the companies are marked by the negative attitude to fashion industry. This measure is taken in order to help companies to handle their finances (Drejer 132). The case of A&F shows that whether the firm provides, visualizing how value will be provided, how this will afford the firm a competitive advantage relative to its rivals, and constantly seeking to enhance the value concept, are critical to its continued success

Future direction

Just to summarize the main points that have been covered in this paper, I would like to say that the economic downturn has made competition for businesses really deep and hot. As a result of these changes some of the better apparel lines have proved to be discounted. A specific feature of the process is the soaring of prices. The decrease in sales pushed many companies to cut down their expenditures. Cutting down the price was widely criticized by the owners of luxury business since this measure threatens to reduce a luxury brand’s reputation. The problem may bring catastrophic results in the long run. Rethinking the company’s strategy seems to be the only way out of the problem. Taking this measure can help the companies to improve their performance at the market. According to the recent research results, sales performances of the group are mixed across regions. Effective structure and technological solutions applied in value chain process allow companies to compete on the global scale and deliver superior quality of products and services. In product businesses conceptualization is indispensable to achieving high levels of value.

References

Armstrong, Gary., Kotler, Philip. Principles of Marketing. Prentice Hall; 11th edition, 2005.

Dobson, Paul., Starkey, Ken. The Strategic Management: Issues and Cases. Blackwell Publishing, 2004.

Drejer, Anders. Strategic Management and Core Competencies: Theory and Application. Quorum Books, 2002.

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