Abercrombie and Fitch

Abercrombie & Fitch Co. started in 1892 and has long been a standing competitor within the retail market. Their market focuses on consumers ages 21-24 and advertise a “go with the flow” way of living.

Agenda

• Executive Summary
• Current Analysis
• Recommendations
• 12 Month Forecast
• Summary
• References

EXECUTIVE SUMMARY
With the introduction of online competitors, A&F have found themselves at a difficult crossroad. If they stick with their traditional mode of operations, they may soon find themselves out of business. On the other hand, changing their marketing strategy and target audience will cost them countless dollars that will change their overall projections. Abercrombie & Fitch have deep ties within the retail industry and to see those slipping away means trouble in the days ahead.

Current Analysis

• Faced a serious downfall in sales since 2016
• Reducing their average costs still remains a large interest for the company
• One of their strengths remain operating in a competitive market

RECOMMENDATIONS

• As consumer demands change buying habits evolve
• Abercrombie has closed 450 stores since 2010 and remaining storefronts have been remodeled (Forbes, 2018)
• Abercrombie should continue to modify storefront leases and expand online presense

RECOMMENDATIONS

• Continue overseas expansion open to new customer base
• Help to expand productions and cust marginal costs
• Maximize revenue by taking advantage of falling barriers in regulation, transportation costs and infrastructure (Farrell, Remes & Agrawal, 2003)

RECOMMENDATIONS

• Distribute products online at a discounted price
• Utilize price discrimination in the second degree
• Help to manage excess capacity and minimize potential loss by selling at a discounted level

12 MONTH FORECAST

• Do not have the luxury of setting price levels in competitive market
• Continue cost cutting and innovative disctribution channels as forefront of decisions
• Reasonable price levels and production adjustments to maintain market share

12 MONTH FORECAST

• Trade war with China can lead to imposed tariffs
• Plan to cut production of goods sourced in China from 25% to 20% for the fisical year (Abercrombie & Fitch cuts full year, 2019)
• Tariffs impacting entire market creates an oppertunity to increase market share

12 MONTH FORECAST

• Focus on expanding online presence
• Online expansion to help Abercrombie create a broader reach to a global customer base

SUMMARY

• Can take advantage of competitive market structure
• International footprint will spread brand awareness and allow for new source of revenue
• Continue ease and access of features online
• Continue to distribute reasonable price points to consumers allowing for gain in market share

REFERENCES

• Abercrombie & fitch announces store launch on Alibaba group’s tmall; Abercrombie & Fitch Co. continues expansion in china; builds on Hollister’s success. (2017, Jul 20). M2 Presswire Retrieved from: https://search.proquest.com/docview/1920383922?accountid=33575
• Abercrombie & Fitch cuts full-year sales forecast on tariff impact. (2019, Aug 29). CNBC Markets. Retrieved from: https://www.cnbc.com/2019/08/29/abercrombie-fitch-anf-earnings-q2-2019.html
• Abercrombie & Fitch's momentum continues into the fourth quarter. (2018, Nov 30). Forbes. Retrieved from: https://www.forbes.com/sites/greatspeculations/2018/11/30/abercrombie-fitch...
• Abercrombie sales drop much more than expected. (2014, Nov 07). Dow Jones Institutional News Retrieved from https://search.proquest.com/docview/2073304316?accountid=33575
• Chen, M. X. (2009). Market access. Princeton: Princeton University Press. Retrieved from: https://search.proquest.com/docview/189251218?accountid=33575
• Ellickson, P. B., Lovett, M. J., & Ranjan, B. (2019). Product Launches with New Attributes: A Hybrid Conjoint–Consumer Panel Technique for Estimating Demand. Journal of Marketing Research (JMR), 56(5), 709–731. https://doi.org/10.1177/0022243719843132
• Ellickson, P. B., Lovett, M. J., & Ranjan, B. (2019). Product Launches with New Attributes: A Hybrid Conjoint–Consumer Panel Technique for Estimating Demand. Journal of Marketing Research (JMR), 56(5), 709–731. https://doi.org/10.1177/0022243719843132
• Halzack, S. (2016). Amazon gets a leg up in clothing sales. The Washington Post. Retrieved from https://search.ebscohost.com/login.aspx?direct=true&db=bwh&AN=wapo.71013066...
• Ioan, C. A., & Ioan, G. (2012). Aspects of price discrimination in the monopoly. Acta Universitatis Danubius (Economica), 8(3). Retrieve from: http://journals.univ-danubius.ro/index.php/oeconomica/article/view/1030/117...
• Ioan, C. A., & Ioan, G. (2012). Aspects of price discrimination in the monopoly. Acta Universitatis Danubius (Economica), 8(3). Retrieve from: http://journals.univ-danubius.ro/index.php/oeconomica/article/view/1030/117...
• Kavilanz, P. (2019, Sep 04). Big companies feel the sting of trump's trade war. but small businesses are in agony. CNN Wire Service Retrieved from https://search.proquest.com/docview/2284153364?accountid=33575
• Rooney, K. (2019, Apr 3). Online shopping overtakes a major part of retail for the first time ever. CNBC. Retrieved from: https://www.cnbc.com/2019/04/02/online-shopping-officially-overtakes-brick-...