Symptoms of the Problems
Abercrombie and Fitch previously popular as Abercrombie Co, founded in the year 1898 by David T. The company was engaged in making outdoor gear but after partnership with Ezra Fitch, Abercrombie and Fitch came into apparel business and was bought by The Limited Inc in 1988 and made Michael Jeffries its CEO (Abercrombie.com, 2018). In this report, there is detailed description about the symptoms and problems of the company along with alternatives and recommendation to retrieve the company from them. A prompt implementation plan have also been presented in the report.
Abercrombie and Fitch, also known as A&F, being one of the famous apparel company started to show many of the symptoms that may lead to potential problems, in the starting year and mid of the 2000. The first symptom was that the company under the leadership of Michael Jeffries as CEO, decided to target only youths that are in the age limit of 19 to 35 years (Hirsch, 2015). The next symptom which came into view was unavailability of the pant sizes of more than 10 for women. The sales feed that the production team received have been faulty. One of the most important symptom was that the company made stringent regulations for the staffs working under the company at their different branches. Last symptom is underestimating the market by targeting only the youths with a fixed body shape and contributing negatively to the gender stereotypes.
The potential problems faced by the company were mainly those, which arose out of the symptoms that came into view in the early and mid-2000s. The first problem was that people got offended against the brand for providing extra-large size (XL) and double extra-large (XXL) for the men and not for female along with providing size not more than 10 for pants only for female. Second problem was that the company only targeted the youths with perfect body image which created negative impact on the issue of gender stereotypes. Due to this, people got very angry. Last major problem faced by the company is for the application of stringent rules for the workers and staffs working for the company. The company could easily tackle these problems by seeing the symptoms in the previous years but ignored them.
General analysis
The first problem which arose was due to discrimination in the sizes of the apparels. A&F provided the maximum size of Large (L) to the women, but most of the market demands were for extra-large (XL) and double extra-large (XXL). The company failed to recognise that the average waist size that was common in the apparel purchases were 12 to 14. The range of the consumer’s outburst and the second problem arose when the company CEO, Mr Michael Jeffries said to the media that “A lot of people don’t belong (in our cloths) and they can’t belong”. The comment did the job of oil in fire, where fire can be considered as making of apparel for only the youths who are in their middle school, high school and colleges having a masculine body structure for men and tall and beautiful for women. This created a huge negative impact on the consumers.
Problem Statement
Some of the famous celebrities like Ellen DeGeneres and Kirstie Alley also spoke against this matter even they mocked the company for sizing issue and told not to buy Abercrombie products. Due to this, people started making memes about the size issue on internet and the company’s sales began to fall around 30 percent. And only in the year 2013, the company got more than 200 thousand mentions on their social media handles and around 80% of them were negative. Even people started to boycott the products of the brand. The third and the last problem was stringent regulations for the workers working under the company. The company forced its employees to get their hair proper cut and colour along with doing makeup during the job hours to look good and bold before the customers. Till 2014, this was a symptom for the upcoming problem. However, McCarty, Dalkilic and Surgevil (2015), informs that this evolved into further aggravation when a Muslim female employee was fired for wearing hijab during the job hours and she filed a lawsuit against the company and got supported by majority of people.
Figure 1: Declination in market sales due to controversy and discrimination
(Source: McAdams, 2016)
Strength
This is the point by which the company gets advantage over the other companies in the same field in the market. The main strengths of the company are –
- Firstly, there is almost 1100 stores owned by the company at 300 locations in United States (Ray, 2016).
- Secondly, top quality product with good prices and superior craftsmanship.
- Thirdly, it is the brand known by almost everyone living in United States with a desire to own at least one of its products.
Weakness
This is the point whose advantage is taken by most of the rival company to beat them. The main weakness points of the company are –
- Firstly, discrimination regarding the outfit sizes and body shapes of the customer (Ray, 2016).
- Secondly, forcing employees to follow stringent rules regarding outlook and beauty.
- Thirdly, no online store in the market or tie ups with the online retailers to sell products online.
Opportunity
This is the point which shows the areas where the company can work to expand their business empire. The opportunities of the company are –
- Firstly, they can use online retailing to boost up their sales and can reach different unexplored parts of United States.
- Secondly, as Walters (2016), opines, the company like the other companies can expand their business to the global markets which are still unexplored by them.
- Thirdly, the company can go in franchising to sell more products.
Threats
This is the point which can guide the company to an end if not taken care. The threats to the company are –
- Firstly, the consumers are switching to other brands due to poor branding and packaging by the company.
- Secondly, nowadays online retailing is done more than offline purchasing (Friedman, Friedman & Leverton, 2016). The online retail sales channels of the company are very weak.
- Thirdly, competitors like Urban Outfitters, Tommy Hilfiger and so on are providing the same quality products at prices lower than A&F.
The problems discussed above also comes as a weakness of the brands as per the process of SWOT analysis. For these reasons these points can be depicted as problems as well as weakness of the company and these are also responsible for leading the company towards downfall.
Figure 2: Chart showing principle strength, weakness, opportunity and threat of the company.
(Source: Abercrombie.com, 2018).
There are many problems in the company which are leading the company to an end. Firstly, the discrimination between sizes of men and women. The company can make the plus sizes and can make their prizes high so that the customer cannot blame them for not having sizes or promoting slim figure. Another thing the company do to deal with the problem is to promote their plus size products with normal size products with the limited amount of plus size to retain name, fame as well as demand. Secondly, there is issue of the stringent rules for the workers. The company can deal with this by clearing the rules during the time of recruitment, so that the workers who are agree with rules can choose to work. Another solution to deal this is, making use of their own online retail store to sell products and reduce the number of staffs by selecting the only preferred ones. Thirdly, not listening to the customers. A company is nothing without customers. The company should listen to customers and make products according to their demands. Another thing the company should do is to prevent discrimination between buyers for a better future.
Analysis of the Problem
The Company is nothing with customers. The company can price their products high or can make limited number of products to hype the products among the customers but should not have done the process of discrimination. The company can tie up with online retailers or can make their own portal to sell things online. Lastly, the company can provide better environment for the workers with minimal rules for worker satisfaction and increment in customer base.
The main stakeholder behind all these problems is the CEO, Michael Jeffries himself. It is his personal decision to reduce the production of “plus size” garments and imply the stringent rules and regulations for the company workers. At this moment, the company have to create advertisements that focus on the potential and uniqueness of the products and indicate their prices in detail. Michael Jeffries himself must make arrangements for the transcending budgetary adjustments required for the advertising of the product. He should hire professionals to make an online retail division to manage online sales along with introducing one strategic online retail partner.
The policy of producing limited stocks of every batch of products have to change and sufficient units have to be manufactured based on the individual strength of the retailers. In order to achieve that a market research strategy have to be framed. The company needs to employ a research and analytics from who would conduct an undercover market research of the major retail chains having contract with the company. Brand promotions is also urgently required for enhancing the share equity of the company. As an impact, the demand of products and fame of the company in luxury segment of target customers would increase. The CFO of the company should have to prepare a quarter based Operating budget that would make a micro analysis of the sale and production parity, labour costs and invested and surplus capital parity as well as the administration expenses.
After 3 years of the implementation plan, depending on the progress rate, the company have to shift to a static budget. This would help the company to standardise the expense and as such a forecast balance sheet can be prepared by the company. This process would be repeated every 5 years. After 15 years, the authentic and projected budget should be compared t assess the actual growth of the company.
Reference List and Bibliography
Hirsch, J. M. (2015). EEOC v. Abercrombie & Fitch Stores, Inc.: Mistakes, Same-Sex Marriage, and Unintended Consequences. Tex. L. Rev. See Also, 94, 95.
McCarty, C. L., Dalkilic, A. F., & Surgevil, O. (2015). A Hijab: Not Quite” The Look”. Journal of Critical Incidents, 8, 42.
McAdams, R. H. (2016). The Need for a General Theory of Discrimination: A Comment on Katharine T. Bartlett & Mitu Gulati, Discrimination by Customers. Iowa L. Rev. Bull., 102, 335.
Ray, J. K. (2016). Abercrombie & Fitch: A Strategic Position.
Walters, K. (2016). Mall models: how Abercrombie & Fitch sexualizes its retail workers. Sexualization, Media, & Society, 2(2), 2374623816643283.
Friedman, H. H., Friedman, L. W., & Leverton, C. (2016). Increase diversity to boost creativity and enhance problem solving. Psychosociological Issues in Human Resource Management, 4(2), 7.
Monahan, L., Espinosa, J. A., & Ortinau, D. J. (2017). Hate Does Not Have to Hurt: The Influence of Hate-Acknowledging Advertising on Positive Word of Mouth. In Creating Marketing Magic and Innovative Future Marketing Trends (pp. 477-481). Springer, Cham.
Richards, K. (2016). EEOC v. Abercrombie & Fitch Stores, Inc.: Religious Discrimination. Okla. City UL Rev., 41, 53.
Cortez, M. A., Tu, N. T., Van Anh, D., Ng, B. Z., & Vegafria, E. (2014). Fast fashion quadrangle: An analysis. Academy of Marketing Studies Journal, 18(1), 1.
Simon, H. (2015). What the CEO Needs to Do. In Confessions of the Pricing Man (pp. 193-210). Copernicus, Cham.
Abercrombie.com, (2018). About Us. Retrieved on 30th September 2018. Retrieved from https://www.abercrombie.com/shop/wd
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