June 11, 2012
Ivonne Bates (Ivy)
Citi Trends External and Internal Environmental Analysis
Citi Trends has been in existence since 1953. They have 511 stores in both urban and rural markets in 29 states as of April 28, 2012. They sell name brand clothing, such as Apple Bottoms, Coogi, Dereon, Akademicks, Mecca, Baby Phat, Rocawear, and Ed Hardy, to name a few. They also carry name brand accessories to accent the clothing. Citi Trends is proud to sell their products for up to 60 % off other stores’ prices (cititrends.com fashion clothing store). This paper will include an external and internal environmental analysis of Citi Trends, including the most important external environmental factor in the remote, industry, and operating environments, the most important internal strengths and weaknesses, an assessment of their resources, and an assessment of their competitive position and possibilities. Most Important External Factors in the Remote Environment
Factors that Citi Trends cannot control make up the remote environment. The remote environment of Citi Trends includes economic factors, social factors, political factors, and technological factors (Frenz, 2012). Citi Trends Economic Factors
Citi Trends’ most important economic factors are a fall in customer transactions and below normal total price of customer purchases. The main reason for these factors was a defying economy for their essential customers. The downfall in the economy has had a large impact on many businesses. Customers have not been spending the money they used to spend and some have stopped shopping altogether for name brand clothing settling for heaper brands to stretch their dollar because of a low economy (Form 10-K for Citi Trends Inc., 2012).
Citi Trends Social Factors
Changes in fashion trends are a major social factor for Citi Trends. The clothing industry universally and Citi Trends essential customers are specifically exposed to quickly changing fashion trends. Citi Trends will have to expect and identify any changes in fashion trends so they can make appropriate changes in the products they carry (Citi Trends Inc. form 10-K, 2011). Citi Trends Political Factors
An increase in minimum wages is one of the main political factors that will have effects on Citi Trends. Citi Trends’ present employees and new hires will have to make at least the new federal minimum wage of $7.25 per hour. This means any employees currently working at a rate of below $7.25 per hour will have to be raised to a level of pay at or above this rate. The increase in minimum wages could have an opposing effect on Citi Trends’ financial situation and their results of operations (Citi Trends Inc. form 10-K, 2011). Citi Trends Technological Factors
Today’s technology progresses at a fast rate. Citi Trends uses many information technology systems, such as IBM computer systems, software programs to support many areas of its business, point-of-sale software to operate its cash registers, hand-held scanners to mark sown and reticket merchandise, and software from Workday to process payroll and simplify human capital management processes. They have to stay up-to-date on any upgrades and updates needed to their software to perform satisfactory business operations (Citi Trends Inc. form 10-K, 2011).
Citi Trends P.E.S.T Analysis
PoliticalEnvironmental Laws, Current Federal Minimum Wage Law, Proposed New Federal Minimum Wage Law, Antitrust Laws, Fair Trade Decisions, Tax Programs| EconomicThe current recession of the home economy in the United States, Current recession of the Global economy| SocialFashion trends, stores located in inner city locations in tough areas whose annual household income ranges from $20,000-$40,000 targeting specifically the urban African-American shopper| TechnologicalNew developments in software, Upgrades and updates in current software currently...