Diversification Strategies

Topics: Hollister Co., Abercrombie & Fitch, Gilly Hicks Pages: 5 (1901 words) Published: November 5, 2011
IBM a Fortune 500 company celebrated its 100th birthday this past June. IBM employs over 400,000 employees and is considered to be a $100 billion dollar or more giant in e-business global marketing technology. With the inception of the computer, IBM’s core business was mainframe computers, which almost bought the company to its knees in bankruptcy. IBM looked at the PC as just a gadget and with any gadget over time would fade into oblivion. IBM would find out the hard way that the PC would rapidly transform the world into the Information Age in the business arena and in that of our personal lives. IBM quickly moved into software, hardware and other services. IBM has been a Fortune 500 company since the 1970’s, and has survived, whereas over a-third of those in the Fortune 500 during that era have either merged, been acquired, sold in pieces, or just completely disappeared off the face of the earth. IBM launched an extensive e-business marketing campaign using its own initials Internet Business Machines during the 1990’s. IBM informed businesses that the Internet would be the new way to conduct business. By 1997 IBM had well over 10,000 e-business customers. IBM’s global e-business has expanded to Russia, China, Brazil and India. (Savov, 2011) Abercrombie and Fitch were incorporated in 1904; has an employee base of 9,500 personnel and has a sales estimate of over $1 billion in year 2000. Abercrombie & Fitch was calling itself "The Greatest Sporting Goods Store in the World." It boasted the world's largest and most valuable collection of firearms and the widest assortment of fishing flies obtainable anywhere (15,000 in all) to accompany its array of rods, reels, and other fishing tackle. Riders, dog fanciers, skiers, and archers all found every conceivable type of gear. ("Abercrombie & Fitch Co.”) Not willing to adapt and change with the ever changing times, Diversification

Abercrombie &Fitch filed for Chapter 11bankruptcy. That was the old Abercrombie and Fitch. The new Abercrombie and Fitch, affectionately called A&F, but still retains the original Abercrombie and Fitch name, sells it own private label clothing line to those 30 and under. The majority of A&F stores are under assumed names such as Gilly Hicks, Abercrombie, and Hollister are located in America’s upscale malls and caters to a variety of age groups. Last year A&F generated over $3.5 billion in sales a much better outlook than what was seen in 2009. A&F introduced itself to the Asian markets of Japan in 2009. Asia had been on A&F’s radar for many years and it now has stores in China and India; A&F also has 1000 stores in Canada, and the UK. A&F clothing line from each of its affiliates can be purchased via e-commerce and through its catalogues. (Carando, 2007) The diversification strategy has worked for IBM. This is October 2011 and there will be a new sheriff in town for IBM by the name of Virginia Rometty in January 2012. (Bradt, 2011) Why has diversification worked for IBM? Former IBM CEO Lou Gerstner established a diversity initiative that embraces differences instead of ignoring them. IBM worked hard to avoid and eliminate discrimination within it its workforce. IBM truly values and respects diversity among its employees and their business partners. With the implementation of diversity task force IBM created a diverse working environment where those who work for IBM can feel comfortable, perform well and be awarded for their successes. IBM wanted diversity in its workplace to mirror the communities that their employees came from. IBM has been recognized as being one of the best companies to work with for women of color. How does IBM make this work? IBM has an employee diversity survey that addresses workplace issues, symposiums, conferences and a formal compensation policy for managers all designed with women of color in Diversification

mind. IBM’s diversity strategy is not limited to...
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