Tommy Hilfiger
Tommy Hilfiger Case Study: EC 2102
This essay it will examine the economic, social and political issues that shaped Tommy Hilfiger on a global environment. First it will investigate why Hilfiger decided to sell internationally rather than concentrating on the domestic market and secondly it will analyse if operating globally affected the prices for Hilfiger’s merchandise. Analysing the prices will lead to a conclusion which will reveal if it has created any problems for the Hilfiger’s organisation.
‘In the United States clothing sales in general have been growing less than 5 percent per year, much slower than in foreign markets’ (Daniels et al, 683:2009). This is evident if you look at the clothing industry figures from 2011 to 2012. In the United States growth was 1.1 % in the men’s clothing industry (Barnes, 2013) and compared to a European country, for instance, Sweden, the growth percentage was 3.9% in same industry and year. However, according to the Tommy Hilfiger group (2012:6), ‘Sales of luxury goods in emerging markets have increased rapidly, even as the sales in the U.S and Europe slowed’. This highlights that the demand for luxury items in the United States and the developed countries in Europe are reducing therefore, emerging markets with growing economies are more likely to consume luxury goods. To support this, the growth in China increased in which, ‘retail sales rose 9.1% in 2003, while disposable income rose 9.3% in urban areas and 4.3% in the county side’ (BBC, 2004). In addition, the men’s clothing industry in China had a growth rate of 8.6% in 2011 to 2012, which illustrates again the high demand for luxury goods. Furthermore, ‘Hilfiger began only with a men’s line, but its men and women’s clothing each account for about half its sales’ (Daniels et al, 683:2009). Therefore, for woman’s clothing, the estimated growth figures in an emerging market, in this example, Brazil, are set to grow 6.2% from 2013 to 2014 (Barnes, 2013). It is clear
This essay it will examine the economic, social and political issues that shaped Tommy Hilfiger on a global environment. First it will investigate why Hilfiger decided to sell internationally rather than concentrating on the domestic market and secondly it will analyse if operating globally affected the prices for Hilfiger’s merchandise. Analysing the prices will lead to a conclusion which will reveal if it has created any problems for the Hilfiger’s organisation.
‘In the United States clothing sales in general have been growing less than 5 percent per year, much slower than in foreign markets’ (Daniels et al, 683:2009). This is evident if you look at the clothing industry figures from 2011 to 2012. In the United States growth was 1.1 % in the men’s clothing industry (Barnes, 2013) and compared to a European country, for instance, Sweden, the growth percentage was 3.9% in same industry and year. However, according to the Tommy Hilfiger group (2012:6), ‘Sales of luxury goods in emerging markets have increased rapidly, even as the sales in the U.S and Europe slowed’. This highlights that the demand for luxury items in the United States and the developed countries in Europe are reducing therefore, emerging markets with growing economies are more likely to consume luxury goods. To support this, the growth in China increased in which, ‘retail sales rose 9.1% in 2003, while disposable income rose 9.3% in urban areas and 4.3% in the county side’ (BBC, 2004). In addition, the men’s clothing industry in China had a growth rate of 8.6% in 2011 to 2012, which illustrates again the high demand for luxury goods. Furthermore, ‘Hilfiger began only with a men’s line, but its men and women’s clothing each account for about half its sales’ (Daniels et al, 683:2009). Therefore, for woman’s clothing, the estimated growth figures in an emerging market, in this example, Brazil, are set to grow 6.2% from 2013 to 2014 (Barnes, 2013). It is clear
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