ihrm presetation ppoint
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8/3/2019 IHRM PRESETATION ppoint
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AGENDA
1.Company Overview2.History
3.Swot analysis4.Growth of E-Commerce in
China5.Pestel
5.Conclusion6.Bibliography
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Company Overview
As a clothingcompany, Abercrombie & Fitchemphasizes a hip, funfeeling and a healthy,
outdoor lifestyle.
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Abercrombie & Fitch is a retailer of casual clothing and accessoriesincluding cologne and perfume for men and women targeting thecollegiate demographic (18-24). The company operates over 300stores including "abercrombie" stores for children and teenagers; andalso publishes a quarterly combination magazine/catalog.
Abercrombie & Fitch is a hip and trendy casual style clothing brandthat does not hide the fact it is aimed at the young and beautiful.
Most appealing to students able to live full time in jeans and trendyaccessories, Abercrombie & Fitch became best known for what themodels weren¶t wearing in its A&F Quarterly catalogue.
³A lot of people don't belong [in our clothes], and they can't belong. Are we exclusionary? Absolutely. Those companies that are in troubleare trying to target everybody: young, old, fat, skinny. But then youbecome totally vanilla. You don't alienate anybody, but you don'texcite anybody, either." - CEO Mike Jeffries
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SW OT ANALY SIS
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STRENGHTS
Solid financial position
Loyal customer base
Strong brand image
solid financial position
Strong market position
Effective marketing strategy Stores are trendy
Website
WEAKNESSES
Expensive
young target market
provocative marketing
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OPPORTUNITIES
E-Commerce in China (emerging market)
Chinese like µWestern look¶
Economies of scale
Growing middle class
Expand products
THREATS
Cost of raw materials may rise
Local competition
Lompetition from similar companies
Counterfeit products
M
ay not catch on
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E-Commerce in
China
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In the second quarter of 2011, China¶s luxury brande-commerce market had a value of $541 milliondollars.
This is expected to grow annually by 20% reaching$3.1 billion annually within 2 years
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In 2010, China¶s online shoppingindustry had a turnover of $80 billion
and grew 87% year on year.
China has 420 million internet userswith 185 million of these making at leastone online purchase during 2010.(BBC)
Turnover from online shopping reached$75 billion in 2010, up 75.3% from 2009(iResearch)
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According to the Boston consulting group there is a
99% internet penetration among our target audienceof young middle class professionals and universitystudents. Spending on average 3.6 hours online aday.(BCG)
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Reasons for choosing
China For years China has been supplying products to western markets so it
has the necessary experience and education in delivering productsthat adhere to the rigorous standards that are required by WesternLegislation and consumers
64% average annual growth in Business to consumer e-commercesales in China from 2006-2010, vs. 17% growth in Japan.
$18 Billion Business to consumers e-commerce sales in China in2010 which is a huge increase from $2.5 Billion in 2006.
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E-Commerce
Markets
Japan and South Korea are also viable options for establishing asubsidiary. Luxury products are in demand in both of these countries.
However China is a huge marketplace with over 485 million internetusers who spend a billion hours each day online. In 2010, 185 millionof those made at least 1 online purchase.
Online shopping accounts for more than 5% of China¶s retail sales.
Buying online is now being viewed as more reliable and trustworthy
than buying in the street markets. (Increased social interaction withchat rooms available online to talk with supplier)
³It is argued that companies need to maintain Ex-Pats as 5-10% of their workforce because global experience is important´ (Jan Selmer
2004)
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CHINA
China is the worlds leading cotton supplier. Therefore resources can
be sourced locally thus reducing importing costs.
China¶s rapidly growing middle class is a great attraction for Abercrombie.
With only 36% of the population using the internet there is scope for expansion and growth by establishing an Abercrombie store in China.
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PE S T ANALY SIS
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China is moving towards a marketeconomy
Rules regulations and laws
Relatively high political stability
Political Factors
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Economical factors Economic boom in china
Growth in GDP
Growing middle class
Low employment rate
High FDI
Abercrombie sales increase
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Social Factors
Attraction to Western style
Large target market under 25
Social status
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Technological
Factors
Online shopping is 5% of China¶s retail
E-Commerce growing at a maximumrate
A
bercrombie has E-commerce sales of almost $1 billion
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Conclusion This is a very solid business decision for Abercrombie & Fitchbecause of the potential for economies of scope and the expandingmarket in a developing country with a huge potential client base.
The role of the Ex-Pat manager is crucial in this case as Abercrombie
& Fitch¶s ethos and style are significantly different from normalChinese fashion retail stores.
µIn your face¶ marketing campaigns must be handled by Ex-Patmanager who has experience of working in store as it is potentially adifficult µexperience¶ to transfer to the chinese public as well as
replicating the stores lifestyle and atmosphere on the web.
The Ex-Pat manager will be crucial for the successful transfer of HRM policies and we do not feel that a local Chinese manager would beable to communicate and integrate the unique Abercrombie businessplan.
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Bibliography
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