Company 's Internal And External Analysis

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Consulting Letter
Dear Mr. Jefferies, After considering the company’s internal and external analysis, it is clear that Abercrombie and Fitch need to implement a new strategy for future success. Considering consumer trends, and the company’s current outlook, changes need to be made. The strategies I recommend are to market the company as a more receptive brand in the United States as well as looking to penetrate international markets while closing down underperforming US stores. With consumer trends of online shopping being on the rise, Abercrombie and Fitch can look to close down those stores who are not meeting sales quotas. Your firm is already considered one of the first-movers in the online sphere, but now is the time to fully take
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Considering that international expansion incurs lots of capital costs, it is a strategy that you should slowly implement and keep taking note on the returns of investment. The benefits the company will receive include sustainable profit growth, increase market penetration and improvement of your brand’s reputation.
Key Issues Abercrombie and Fitch Co. is a men and women’s clothing company which is built on the philosophy of not trying to be all things of all people, meaning, not everyone is able to identify themselves and relate to the brand. Their current CEO, Mike Jefferies, is faced with the issue to decide whether the firm should expand its direct-to-consumer and international sales. By doing so, he would be looking to close down domestic stores in the United States. This issue have appeared due to the company missing Wall Street’s estimates in 2011, thus experiencing a drop in shares. Although sales have increased domestically, the company had to use price discounts in order to drive those sales, thus lower gross profit, and creating an unsustainable strategy for the future. As a result, he ponders whether to close down the lower-yielding domestic stores and concentrating on online and international expansion.
Internal Assessment
Abercrombie and Fitch is a “casual luxury” clothing band based in the United States. They have 3 distinct brands (Gilly Hicks, Hollister, abercrombie kids) that
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