ihrm presetation ppoint

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



Company Overview

As a clothingcompany, Abercrombie & Fitchemphasizes a hip, funfeeling and a healthy,

outdoor lifestyle.



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



SW OT ANALY SIS



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



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



E-Commerce in

China



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



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)



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)



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.



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)



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.



PE S T ANALY SIS



China is moving towards a marketeconomy

Rules regulations and laws

Relatively high political stability

Political Factors



Economical factors Economic boom in china

Growth in GDP

Growing middle class

Low employment rate

High FDI

Abercrombie sales increase



Social Factors

Attraction to Western style

Large target market under 25

Social status



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



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.



Bibliography

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