• Abercrombie and Fitch SWOT Analysis

Strengths

Current

• Established clear, segmented target market with a loyal customer base.

• Brand image is clear, being mainly portrayed in the overall store experience.

• Established customers are willing to pay premium prices because the company has maintained their position as a luxury brand even through the recession.

• Expansion overseas in England has proven successful.

Long term

• Plans to grow and expand in Asian markets could prove successful, considering the high disposable income and positive response to luxury goods in Asian countries.

• Abercrombie and Fitch has partnered with First Insight, a technology company that aims to help Abercrombie and Fitch make faster and more accurate decisions.

• Projected sales look good, with the shares closing at a higher rate than the day before.

• Company’s commitment to luxury image will stay strong in the future, maintaining core customers.

Weaknesses

Current

• Low shares compared to four years ago in 2011. Shares are selling almost 75% lower than they were in 2011.

• Dramatic change in leadership in 2014 could have given consumers a bad image of the company.

• Brand image and positioning is staying the same, although trends and the retail game is changing dramatically.

• Luxury pricing is being maintained, although Abercrombie and Fitch’s main competitors participate in promotional strategies and maintain a higher sales per square foot average.

Long term

• Abercrombie and Fitch focuses on the in store experience over the online format, which has proven unsuccessful in recent years.

• Abercrombie and Fitch will need to rebuild some of their core customers or change strategies in order to reach sales numbers as they were in the early 2000s.

Get quality help now

Writer Lyla

Verified

Proficient in: Economics

5 (876)

“ Have been using her for a while and please believe when I tell you, she never fail. Thanks Writer Lyla you are indeed awesome ”

+84 relevant experts are online

Hire writer

Opportunities

Current

• Online formats synched with traditional brick and mortar has proven successful, A&F will need to develop apps and market via social media to compete with the changing marketplace.

• Expanding their very narrow and segmented target market will increase sales revenues along different retail channels, including online.

• Celebrity endorsements and creative marketing techniques could be utilized.

Long term

• A better online presence can reach their prospective customers overseas in Asian countries, making it a smooth transition into their local market.

• Expanding target markets will increase sales and give a fresh new wave to A&F while still maintaining their luxury brand image.

Threats

Current

• Competitors with a better online presence and seamlessness from apps to in store experience are faring better in the new retail marketplace.

• Focusing on the in store experience only will cause more mall stores to shut down.

Long term

• Store closings nationwide could pose a real threat to the company overall, despite international expansion

• Asian markets could not welcome Abercrombie and Fitch with open arms the way that Great Britain has.

After evaluating Abercrombie and Fitch’s market position, I would say that the company has an opportunity for growth, but after they make some drastic changes to the operations of the company, including marketing and promotional activities. Abercrombie’s stocks have plummeted since the early 2000s and although they have plans to expand internationally, it may not be quite enough to maintain their position in the ever-changing retail marketplace. Competitors such as American Eagle are faring better by creating an interactive online and in store experience along with multiple promotional activities. Because Abercrombie and Fitch has maintained their luxury brand position, refusing to participate in promotional activities during and after the recession, many mall stores have closed as a result. A total of sixty Abercrombie and Fitch mall locations are set to close in 2015. A re-evaluation of their extremely segmented target markets could prove fruitful for them if they expand their sizes, especially for women and learn about their new overseas customers and their culture and customs.