External Environment

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Company’s External Environment (External)

Key economic and industry variables: Industry analysis (provide data to support):

a. Industry size:

b. Segmentation – geographic and product:

Abercrombie and Fitch Co. started their business at West Cost of United State, because of the West Cost Mountains, camping gears and sporting goods were main products. However, under new management, A&F Co. opened a store on Beverly Hills, California. A&F Co. to aim rich, fitted, attractive, provocative, and sexually explicit customers. Because of hot weather in California, it was easier for A&F Co. to appeal the sexiness and provocative products toward customers.

c. Industry concentration-

This industry is very fragmented because there are few big players on this industry. Since A&F Co. has subsidiaries, different subsidiaries and brand A&F faces different competitors. Even though A&F Co. has unique competitive advantages and marketing skills, competitors have their own competitive advantages and marketing skills, which can turn the table. Also, most of competitors have already expanded to international market.

d. Industry Lifecycle –

A&F Co. has different Lifecycles according to geographic regions. For domestic stores, in case of A&F CO, U.S.A, A&F Co. is in “Decline” stage. A&F Co. is planning to close 20%, 180 U.S based stores by 2015. The reason A&F Co. planning to close U.S based stores is many of A&F’s stores in US are under-performing. Closure of domestic stores will let company get out of low-end locations that causes markdowns and low volumes were prevalent. Also it was A&F Co.’s goal to maintain their image rather then keeping profitability. However, A&F Co. is expanding internationally with positioning itself at beginning of “Mature” stages in industry lifecycle. By May 2012, A&F Co. is planning to open more than 84 international stores in different region such as Europe and Asian countries. The expanding to European countries such as

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