American Apparel Swot Anaysis

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American Apparel
SWOT Analysis
Marketing 304 Section 12382

Group# 5
Nancy Alonzo
Yavon Irving
Salvador Bustos
Cory Lashinsky

American Apparel is a vertically integrated clothing manufacturer, wholesaler, and retailer. AAI is best known for making basic, solid color T-shirts and undergarments. They have expanded into dresses, denim, bedding, pants, and accessories for men, women, children, babies, and dogs. Their long-term goal it to become the #1 destination for basic apparel – the first name that consumers think of for t-shirts, sweatpants, underwear, socks, etc. What sets American Apparel apart from other clothing companies is that every aspect of their production takes place in the center of Los Angeles, California, making it the largest manufacturer in the United States that is sweat-shop free and does not outsource. American Apparel has the highest paid factory workers in the United States and they currently employ approximately 10,000 people globally (about 5,000 are employed in Los Angeles).

Overall, American Apparel is striving to become the biggest apparel operation in human history, “one t-shirt at a time.” Their mission statement says it all: Committed to leveraging art, design, and technology to produce garments of the highest quality, while pioneering industry standards of social responsibility in the workplace. American Apparel’s goal is to make basic garments that people actually enjoy wearing without having to rely on cheap labor. Since the opening of their first store in Los Angeles, CA, in 2003, American Apparel has been successful at leveraging their core competencies of design and merchandising, making it a recognized name in quality clothing. American Apparel is a unique brand with its own unique target-market of young adults who prefer the quality of a good piece of a basic garment. Their racy ads have captured the young generation of fan base that are loyal to the brand. However, as in any other business, American Apparel has direct competitors that could affect the profitability of the company. A direct competitor of American Apparel is The Gap. While they offer a broader clothing line, their basic garments are comparable to the ones in American Apparel. The prices are also comparable; in fact, The Gap has multiple outlet stores worldwide in which they sell their products at a much discounted price. This is a direct advantage over American Apparel who does not own any discounted or outlet locations. A perfect example of their direct competition became obvious when an ad for The Gap’s new 1969 jeans was introduced in 2009. Not only was the advertisement similar to those of American Apparel, it seemed to be an intentional effort to co-opt the hipster style and perceived affordability (Starting at $59.50, Gap’s new jeans will rival or even beat American Apparel’s pricing of $74-plus.) The Gap, who also owns Old Navy, is part of what has become the largest specialty retailer in the U.S, and a close second globally. They own more than 3,200 company owned stores which has giving them better position to service their customers. Urban Outfitters who sells “hipster” clothing is also in correlation with American Apparel, however the controversies that surround Urban Outfitters has to do with what they choose to print on their clothing whereas American Apparels are how they advertise theirs. However, Urban Outfitters’ clothes have a similar edgy appeal, and it seems that their product line has all the alternative sub-styles covered. What makes Urban Outfitters different from American Apparel however is that their product line has a very broad scope, unlike American Apparel’s which is seemingly targeted toward a narrower market base. Nevertheless the value of saving money is too good for consumers to pass on which brings other competitors in the basic apparel business to light, such as Fruit of the Loom, Hanes, and Gildan. These companies offer products that satisfy similar needs and...
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