Abercrombie & Fitch - Abercrombie Fitch An Upscale...

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Abercrombie & Fitch: An Upscale Sporting Goods Retailer Becomes a Leader in Trendy Apparel CASE ASSIGNMENT You are scheduled to interview with Michael Jeffries for the open Chief Operating Officer position at Abercrombie & Fitch. To fill such a key executive role at the company, you know Jeffries will expect you to be completely familiar with the specialty retail industry environment and to have fully researched the internal conditions at A&F. In addition, to really stand out, you will need to offer solutions to the most pressing competitive and strategic issues facing the company. With the meeting just days ahead, you decide to sit down and review your notes on the following key discussion points: 1. What are the greatest environmental threats that have immediate implications for A&F? 2. 3. 4. Define the company's greatest weaknesses. 5. How can A&F's strengths be used to deflect environmental threats and take advantage of opportunities to further the company's success in the industry? 6. What can be done to overcome the company's weaknesses? 36
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Abercrombie & Fitch: An Upscale Sporting Goods Retailer Becomes a Leader in Trendy Apparel STRATEGIC MANAGEMENT INPUTS 1. What are the greatest environmental threats that have immediate implications for A&F? The biggest threats to A&F are the competitiveness of the industry and the changing nature of fashion trends. Any successful retailer faces competitors who will try to follow its successful strategy, capture the attention of its target market, and provide a more appealing proposition. Numerous and changing competitors serve fragmented markets like the trendy apparel industry, and new retailers arrive on the scene continually, including niche, local, regional, domestic and overseas competitors. Both merchandise imitators (offering similar styles at lower prices) and counterfeiters seek to draw business away from A&F. Department stores are a particularly invasive threat in the specialties apparel market with the ability to offer high quality, fashionable, and exclusive brands at reasonable prices. Strong competitors, such as American Eagle Outfitters (which is both profitable and the number one retailer in its category), will also continue to challenge A&F for its primary customer base. Trendy apparel quickly becomes outdated, and A&F needs to be ever-vigilant to the needs and preferences of its target market. Due to changes in preferences, lifestyles, and demographics, the failure of new items and the loss of customer loyalty are real threats to its maturing brand. Teenagers are fickle, and their values are undergoing a macro shift toward ethical, fair, and socially responsible practices. Particularly at risk during a time of tightening consumer spending, any negative reaction to controversial behaviors or to A&F's public image can have a serious impact on the company's performance. In addition, there is
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Abercrombie & Fitch - Abercrombie Fitch An Upscale...

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