Essay on Ann Taylor Case

1967 Words8 Pages
Introduction/Case Issues Ann Taylor is being affected by external and internal factors that are making the company fight for survival in the specialty retail industry. Ann Taylor is being affected by the declining economy, which is generating a wave of retail closures. The company is being threatened by slowing consumer demand due to the worsened macroeconomic conditions. Shoppers are now more careful when spending their money and as a result Ann Taylor lost $333.9 million in 2008 and the uncertainty continued for 2009. This loss also affects the company in the stock market because it makes it reluctant to give any profit forecast for the coming quarters and therefore causes lack of confidence from investors. The economic situation…show more content…
The company must be able to provide versatile, sophisticated and high quality updated classics and these characteristics could increase costs. The company’s online presence gives it the opportunity to offer online shopping (which represented 10 percent of AT sales), advertise using social networking, ads and emails. A political-legal factor that affect the company negatively are the imports taxes because most of its clothes come from other countries where it is manufactured, such ad Indonesia, Thailand and China, and the duty it has to pay increase costs for the company. On the other hand, the company can expose itself to the international market by Internet, which is a useful and effective channel for its product, but it does not have physical stores outside of the U.S. Industry Forces The intensity of competitive rivalry is high when the number of competitors is high, because the customer will have more options to use other products as substitutes in a market where people do not have to spend too much to buy clothes. Also, when storage costs are high the rivalry is high because it is more expensive for the company to produce/retain the product and this increase costs. The threat of substitutes is high when differentiation of the substitute product is high, and people could buy other similar products by the same or cheaper price. There is also a high threat of substitute when the rate of improvement in price-performance relationship with
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