In response to the rapid pace of development imposed by the advancements in Information Technology, Abercrombie & Fitch has launched its website as a means for customers to shop online. The website presents the user with a multitude of features and with the possibility to customize his/her shopping activities. Aside the website however, Abercrombie & Fitch is generally criticized for its low levels of innovation. Corey Lorinsky (2008) for instance goes as far as to argue that the lack of innovation, combined with the strategy of maintain prices higher than the competition, are reducing the investors' interest in the organization.
3. SWOT Analysis
Internal Strengths
The company has a vast expertise pegged to more than a century of existence in a dynamic market; this materializes in positive results, including strong financial highlights
They secured a global presence across four countries (U.S., Canada, UK and more recently, Italy), throughout 1039 stores and they employ 80,100 dedicated staff members
They sell their products in five specific brands -- Abercrombie & Fitch, AbercrombieKids, Gilly Hicks, Holliester and RUEHL (Abercrombie & Fitch Website, 2009)
The fashion retailer has recently launched online operations through which it reaches larger audience bases and sustains higher levels of sales through the removal of the geographical and temporal barriers
Internal Weaknesses
Due to the nature of the operations conducted and the products served, Abercrombie & Fitch requires the support of highly skilled staff members, which translates into increased costs with the personnel
The company has in many instances registered lower sales volumes than other companies due to its strategic decision to implement lower levels of discounts (Gnedash, Petrushin and Hanson); nevertheless, this has often materialized in higher value of revenues, meaning then that the feature can be perceived as both weakness as well as strength
2008 has revealed reductions in several of the company's financial highlights: net sales decreased from $3.75 million in 2007 to $3.54 million in 2008; the gross profit decreased from $2.51 million in 2007 to $2.36 million in 2008; the net income registered a dramatic decrease from $475.69 million in 2007 to $272.25 million in 2008 (Abercrombie & Fitch 2009 Annual Report)
The advertising strategy is often considered unsuitable; most of Abercrombie & Fitch's advertisements feature semi-dressed people who seem to enjoy life. While this may be seen as an intriguing approach to capture the attention of their young and libertine target segment, the more traditional young customers might not relate to the company's ads
External Opportunities
Since Abercrombie & Fitch only operates in the four countries, a major opportunity is constituted by the possibility to expand to other global regions. This opportunity is supported by several features, such as the growing forces of globalization, the increase in income...
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