Abercrombie and Fitch’s Company: Strategic Analysis

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Apparel Industry Profile: When Art Meets Business

The realm of the apparel industry has always had an air of inconsistency in demand around it. On the one hand, customers seek the products that can satisfy their basic needs for comfort and warmth; on the other hand, they strive to meet the standards set by current fashion trends. Therefore, a company operating in the retail industry faces an array of challenges. Nonetheless, the industry has been thriving, with its market having not even reached the stage of saturation and maturity, and the recent sales rates peaking at $3,000,000,000 in the U.S. (Apparel 2018).

The market of the retail industry is represented by a range of companies that have been trying to capture the success of Abercrombie & Fitch for several decades. Since the target company provides mostly the products associated with the apparel department thereof, considering the apparel industry should also be deemed as important. In the American market, the specified niche has been taken by organizations such as Indietex, Gap, and American Eagle Outfitters (Abercrombie & Fitch competitors 2016). However, due to the recent program that has allowed the company to shape its competitive advantage concerning the recent changes in the target market, one will be able to ensure that Abercrombie & Fitch will remain the leader in the apparel sector of retail.

Organizational Purpose: Abercrombie & Fitch’s Mission and Vision

The company sees its customers as unique individuals and, therefore, strives to stress this individuality as clearly as possible. Thus, the vision of the company can be described as focusing on customers’ requirements as the needs of people with high levels of individuality (Forbes 2018). Correspondingly, the mission of the company is to meet the specified needs in a manner as satisfying and effective as possible.

Abercrombie & Fitch has recently launched a program aimed at reinventing the company’s current business model and allow the company to attract new customers. Specifically, by launching the change that has helped the company to transfer to the mobile environment and enter the digital retail setting, Abercrombie & Fitch has retained its position in the global market and even managed to increase its returns.

Abercrombie & Fitch’s Internal and External Environment: A Tour of the Firm

The company has been focusing on addressing the needs of the global public for quite some time. The specified choice has shaped the company’s internal and external approach, compelling Abercrombie & Fitch’s managers to accept the principles of digital marketing and enter the context of the digital market. As a result of the specified endeavor, Abercrombie & Fitch has maintained its relevance and managed to introduce its products to a new and younger audience.

Indeed, as the SWOT analysis proves (see Appendix A), the organization has been lacking the digital tools for a while, relying predominantly on the traditional method of marketing its products and selling it to the target audience. The marketing issue has been a particular obstacle for Abercrombie & Fitch regarding the company’s attempts at keeping its customers’ loyalty levels high. The focus on R&D processes that included the design of new mobile applications and allowed the firm to attract new audiences has also contributed to enhancing the strength of the project and restructuring the company’s approach toward catering to customers’ needs (Gardas, Raut & Narkhede 2018). Besides, the firm must restructure its current image and address some of the controversies regarding its HR strategies.

The external environment in which the company functions also posse quite a few challenges to the company’s successful operating. For instance, the levels of corruption and bureaucracy imply that the organization will most likely face huge obstacles on its way to promoting its products and attracting new clients (Almici 2015). Besides, the problems associated with the provision of legally required employee benefits may become a hindrance.

As stressed above, the recent HR approaches used by Abercrombie & Fitch have been dubious, to say the least. Therefore, expecting that the firm will deliver a surprisingly rational and employee-oriented framework of operations in the global setting is highly doubtful. Thus, the specified issue currently implies the greatest difficulties to overcome in the global market.

Similarly, some of the economic factors make the task of penetrating the global market quite difficult for Abercrombie & Fitch. For instance, the infrastructure of the apparel industry could be improved significantly by introducing more options for online retail, as well as making offline retail areas more comfortable for buyers (Rakib & Adnan 2015). The fact that the fashion business cycle is very complicated, quite convoluted, and beyond unpredictable is also worthy of mentioning as a critical factor influencing Abercrombie & Fitch’s operations.

Changes in the culture affect the organization extensively as well since they define trends in clothing. Similarly, environmental concerns reduce the amount of raw material that Abercrombie & Fitch can use to reduce costs and increase their profit margins. Finally, although implying significant expenses, technological innovations provide the company with ample opportunities for reaching out to its customers and enhancing the effects of its marketing campaign (see Appendix B).

Competition and Success Factors: Why Abercrombie & Fitch Needs the new Project

Abercrombie & Fitch presently has to face rather stiff competition despite the challenges that the modern apparel and retail industries contain. Among the key rivals with which the organization has to compete, one should list the American eagle Outfits, Inditex, and Gap.

The specified organizations have also gained quite a following over the years of their operation, including a rather large influence in the digital market, which means that Abercrombie & Fitch will need to create the competitive advantage that will detract audiences’ attention form the specified organizations and convince them to shop at Abercrombie & Fitch. Put differently, from the perspective of Porter’s Five Forces framework, Abercrombie & Fitch operates in the setting with a quite high threat of new entrants and bargaining power of suppliers (Gardas, Raut & Narkhede 2018).

Thus, the company has to spend a substantial number of its resources on negotiating with suppliers and building a competitive advantage. Besides, the threat of substitutes remains consistently high, which makes the rivalry levels within the industry skyrocket.

Abercrombie & Fitch’s Strategic Development: Future Steps to Take

Current Strategy: Strengths and Weaknesses of Abercrombie & Fitch’s Approach

The present-day approach that the organization deploys is rather flawed due to the stale brand image. The lack of diversity in its products and the absence of a focus on diverse customers should also be regarded as a missed opportunity for Abercrombie & Fitch currently. At the same time, the organization has developed a rather strong presence in the global market, which has helped it to cement its position for a certain amount of time. Unfortunately, the company currently needs a change in its branding approach and product image to keep people’s attention on its goods (Todeschini et al. 2017).

Abercrombie & Fitch’s Strategic Options: Paths to Choose

So far, the company has been demonstrating surprisingly high levels of resilience in the setting that can be described as excruciatingly hostile. Nonetheless, Abercrombie & Fitch must change its existing business model and shift toward digital marketing by creating a set of applications that its users can utilize to improve their shopping experience. Also, digital applications should be used to obtain feedback from buyers.

Similarly, Abercrombie & Fitch will have to diversify its products and enhance brand awareness among target audiences. The specified task will become easier once the company integrates digital marketing tools into its frameworks fully and starts using respective analytical tools for determining changes in buyers’ attitudes (Gardas, Raut & Narkhede 2018). Moreover, it is strongly advised that Abercrombie & Fitch should introduce a new framework of customer segmentation, simultaneously updating its brand image to meet the demands of diverse populations.

Evaluation of Options: Selecting the Best Possible Solution

Among the available scenarios of development that Abercrombie & Fitch can use, the one involving the integration into other markets and attracting new customers based on an improved segmentation model and a changed brand image seems to be the most effective ones. By deploying the specified techniques, Abercrombie & Fitch will raise brand awareness, at the same time creating a competitive advantage based on product diversity.

Furthermore, the company will need to introduce a tool for forecasting changes in the target market since the specified setting can be regarded as highly competitive and, therefore, demanding very close supervision. By predicting the moves of its rivals with the help of the Game Theory, Abercrombie & Fitch will handle the challenges of the apparel and retail markets (Todeschini et al. 2017). Besides, it is highly recommended that the company should reconsider its current set of values and focus on fair treatment of its staff members since Abercrombie & Fitch cannot afford any blemishes on its reputation as a fair and friendly company.

Abercrombie & Fitch’s Innovative Strategy: Implementation and Monitoring

Recommendations: Strategies to Consider

Abercrombie & Fitch should consider shaping its strategies at both business and corporate levels. The application of interactive strategies as opposed to genetic ones seems to be the most sensible decision in the current situation given the necessity for the company to build customer loyalty and target new audiences (Hatfield 2016). The focus on creating a hypercompetitive framework that will allow Abercrombie & Fitch to not only survive but also strive in the selected set that is defined by incredibly high competition levels justifies the selection of the strategy under analysis.

Indeed, according to the existing description, the chosen approach leads to the design of an elaborate plan that will help Abercrombie & Fitch to predict the moves of its competitors and design the tool to counteract them. Specifically, the Game Theory, on which the proposed approach is based, implies that the company should explore the available opportunities for turning a seeming disadvantage into its strength (Hatfield 2016).

For Abercrombie & Fitch, the specified frameworks may imply the need to focus on the current brand image and shape time at the same time retaining the elements of an old-fashioned approach to creating a unique and unforgettable image.

Maintaining the Success Streak: Abercrombie & Fitch’s Future Choices

Sustaining the economic growth within the company is likely to become a significant challenge. However, with the incorporation of innovative technologies and especially the digital tools for monitoring changes within the customers’ attitudes, Abercrombie & Fitch will be able to survive and even strive in the selected environment. By building its quality and, at the same time, introducing diversity into its products, simultaneously working on issues such as poor HR strategies, the company will eventually take its place at the top of the apparel and retail markets.

Reference List

2016. Web.

Almici, A 2015, ‘Does EU anti-corruption regulation work? The case of pharmaceutical industry’, Journal of Business and Economic Policy, vol. 2, no. 4, pp. 126-140.

2018. Web.

Forbes 2018, ‘’ 2018. Web.

Gardas, BB, Raut, RD & Narkhede, B 2018, ‘Modelling the challenges to sustainability in the textile and apparel (T&A) sector: a Delphi-DEMATEL approach’, Sustainable Production and Consumption, vol. 15, no. 1, pp. 96-108.

Hatfield, M 2016, Game theory in management: modelling business decisions and their consequences, Routledge, New York, NY.

Rakib, MA & Adnan, ATM 2015, ‘Challenges of Ready-Made Garments sector in Bangladesh: ways to overcome’, BUFT Journal, vol. 3, no. 1, pp. 77-90.

Todeschini, BV, Cortimiglia, MN, Callegaro-de-Menezes, D & Ghezzi, A 2017, ‘Innovative and sustainable business models in the fashion industry: Entrepreneurial drivers, opportunities, and challenges’, Business Horizons, vol. 60, no. 6, pp. 759-770.

Appendix A: Abercrombie & Fitch – SWOT

Strengths Weaknesses Opportunities Threats
  • High-quality products;
  • Well-established presence in the global market;
  • Easily recognizable brand image;
  • Recent successful transfer to the digital setting
  • Lack of experience in digital marketing;
  • Controversies in the HR area;
  • Absence of updates on the brand image to meet new requirements.
  • Expansion to the developing countries;
  • Appeal to new types of audiences;
  • Redesign of the brand image
  • Failure to address the current controversies;
  • Inability to shape the company’s policy to meet the digital market standards;
  • Problems with product differentiation.

Appendix B: Abercrombie & Fitch – PESTEL

Political Economic Social Technological Environmental Legal
  • Political stability;
  • Corruption rates and bureaucracy levels
  • Economy systems of the target market;
  • Trade regulations and similar issues
  • Power structures in the society;
  • Cross-cultural communication
  • Introduction of disruptive technology and innovations;
  • Transfer of economic relationships to the digital setting;
  • Enhancing the dialogue with the customer
  • Regulations concerning the green economy;
  • Climate change
  • Regulations affecting the standards of trade;
  • International laws defining the company’s
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