Internal and external expansion case study.doc -...

This preview shows page 1 - 3 out of 14 pages.

Abercrombie and Fitch: International expansion external and internal analysis By Subzero55 | Studymode.com Abercrombie and Fitch: International expansion external and internal analysis Name Here Business Mgmt Name Here Date Here Executive Summary This case study was identified to examine why international sales volume of Abercrombie and Fitch have increased over the past three years and to recommend further international expansion to increase sales volume. The research draws attention to the fact that in 2009, the US stores generated 81.2% of Abercrombie and Fitch’s net sales. The shares of international stores and direct-to-consumer net sales were very small in comparison. Over the next two years the US stores decreased net sales percentages while net sales increased. Further investigation reveal that the US market shrinkage in terms of overall company net sales percentage coincided with the increase in international sales and direct-to-consumer sales and the overall company net sales percentage over the same time period. Since the economic downturn in the US economy in 2008 the disposable income for Abercrombie and Fitch clients appeared to decrease. Additionally individuals were utilizing disposable income for other items such as technology, cell phones and other gadgets. These two items appeared to be the major causes of the decreased company percentage in net sales of Abercrombie and Fitch in the US. During the same two year period the international stores and direct-to- consumer net sales increased dramatically. This was an increase of 342% for international stores and 190% for direct-to-consumer sales over the same two year period. Abercrombie and Fitch have identified that international expansion is the key to the company’s success. The case study evaluates the economic situation within the European union and its effects on the global economy and identifies the impacts on the retail industry risks, specifically for Abercrombie and Fitch. All current financials and ratios can be found in the appendices. Results of the data show that expansion of international stores and direct-to-consumer initiatives have had a very substantial
financial impact on net sales. In particular to note is the 342% in net sales from international sales. The case study also finds that these numbers being very good the economic situation for Abercrombie and Fitch is not positive for international expansion. The major areas for international expansion will require further investigation and due diligence action by senior management. Recommendations discussed include: Increasing direct-to-consumer capabilities and increasing due diligence for potential international expansion markets. Table of Contents Introduction Abercrombie and Fitch and its brands are a group of specialized apparel stores that target a specific niche market that makes customers feel young, sexy, appealing and part of the “in crowd”. The individuals that are lured by the various Abercrombie and

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture