Abercrombie and Fitch - Paper

1073 words 5 pages
As the current face of preppy America, widely known for its obsession with beautiful people, Abercrombie and Fitch is a long way from its roots as an elite retailer of sporting and excursion goods, aimed at adult shoppers at the time of it’s founding in 1892. Abercrombie and Fitch has experienced significant growth through sell of premium priced apparel and accessories to the 30 and under demographic through its independent brands. An assessment of the company’s strategies, key opportunities and threats as well as industry strategies and competitive dynamics shows a company that is poised to be a long-term leader both in the US and international retailing.

Abercrombie and Fitch, headquartered in New Albany, Ohio, operates
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Abercrombie and Fitch does not own any manufacturing facilities of their own and rely solely on the environmental sustainability initiatives of their suppliers (Drissen 2012).
Although Abercrombie is able to charge premium prices for its merchandise, its pricing power over the customer is limited. During good economic times, customers are willing to pay for the products, but as the economy declines, the marginal customers are shopping for value. This is evident in the graph in Appendix 1. At the heart of recession in 2009, because Abercrombie continued to charge premium prices, its has a greater reduction in operating revenue than its competitors that resorted to price promotions. To increase revenue Abercrombie has gone against its no price promotions policy to make its products more affordable to its customers. However, this is a price promotions are just a short-term solution to boost sales during the recession (Smith, 2011). Abercrombie also maintains borrowing power over suppliers by sourcing from multiple suppliers. According to the Form 10-K, Abercrombie sourced from 170 suppliers during 2011 from around the world. Not more than 10% of its merchandise came from a single supplier (Form 10-K, 2011).

Wall street journal, style and substance anf tries to be less haughty more nice. Kang Stephen june 17 2005

* Target market, America’s middle class which is disappearing really fast * Overprisced collegiate wear, does not

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