Ralph Lauren Strategy Paper Essay

Module 2: Mission, Goals, and the Strategic Management Process The mission of Ralph Lauren is to provide quality product, bringing different worlds together and inviting people into their dream and vision (McAllister, 2012). They are the true innovators of lifestyle advertisements that tell a story and the first to create stores that encourage customer participation in that lifestyle (McAllister, 2012). Ralph Lauren has 3 major goals: †¢ Build and extend the brand by uniquely showcasing the world of Ralph Lauren through advertising and marketing. The Ralph Lauren Company also plans to expand and extend the Ralph Lauren lifestyle through new products, in new categories, and in new parts of the world. (Johnston, Watkins, & Wright, 2005) †¢ Keeping its specialty retail is also extremely important. Polo continues to increase the amount of exclusive or limited-distribution product in its Ralph Lauren stores. They also plan on making significant advances in how it operates its retail stores by adding experience and strength to the leadership of the specialty retail group and coupling it with the right merchandise and marketing support. (Johnston, Watkins, & Wright, 2005) †¢ Expanding its international presence so that they can broaden their reach through increasing direct brand ownership and control with new specialty retail store openings. (Johnston, Watkins, & Wright, 2005) Yes, the firm has long–term goals that might become challenging. For instance, expanding internationally especially in Europe has been challenging. Sales in Europe have shown little growth, therefore; Polo Ralph Lauren is currently finding new ways to reduce costs through changes in its infrastructure. (Johnston, Watkins, & Wright, 2005) Polo Ralph Lauren’s main strategic plan to grow the company is creating new stores because it makes up for almost one-third of its revenues. Creating new stores is a part of intended strategies because the company carefully plans where they want their store according to the amount of business the company plan on acquiring in a particular area. (Johnston, Watkins, & Wright, 2005) Module 3: External Analysis In the macro environment, Ralph Lauren Corporation has and will be impacted by all the changes that will occur. In the macro environment the company is impacted by the political, economical, sociocultural, technological, ecological and legal factors. Political factors are the actions of government that can influence the behavior and decisions of firms. These factors can have a direct impact on the way businesses operate. In the United States business firms face more regulations then other nations (Viking, 2009). According to (Viking, 2009), employee rights in the United States have a large effect on business, and with the apparel industry requiring much labor and work employee laws are significant. Employee laws are minimum wage, over time, benefits and health and safety regulations. This means Ralph Lauren has to pay employees at least minimum wage and for overtime worked. The company has to offer benefits to full time employees and follow OSHA regulations when it comes to safety. Also the company has to adhere to trade regulations when importing and exporting goods overseas. Economic factors impact the economy. Some ways Ralph Lauren can be impacted economically are through growth rates, interest rates, and levels of employment, price stability and currency exchange rates. (Viking, 2009) states that for the apparel industry in the United States, such as Ralph Lauren, the future does not look promising. Wage and salary employment in the apparel industry is expected to decline which leads to lost jobs over the period. The Decline in employment can be attributed to increase in imports, new automation machinery, and cost-cutting pressure from increase global competition (Viking, 2009). Along with this the economy is in a recession, which means high unemployment, hi gher taxes on every one and low incomes (Viking, 2009). With this most families cannot afford the prices that Ralph Lauren has to offer. Sociocultural factors are society’s norms, cultures and values. This may impact Ralph Lauren because the company has to learn the demographics of different areas. The demographics show the different characteristics and attributes of people so companies such as ours can understand the buying power of the people. When the company learns this information they can determine whether or not products will appeal to customers and how many potential customers for these products might arise. Also with the growing trends of people and different styles Ralph Lauren has to make various pieces to fit all their needs. Technological factors capture the application of knowledge to create new processes and products. With new technology the apparel industry’s productivity has been given a boost. There has been an increase in automated machinery that has improved production and manufacturing facilities such as Ralph Lauren Corporation (Viking, 2009). Now they have new faster computerized sewing machines in order to make production go faster. Also new computer software has been a big plus for Ralph Lauren because now that can create and design new garments with no problem (Viking, 2009). Along with this technology allows them to be able to market their clothes online through their website which ralphlauren.com. This way people can get what they want through technology. Ecological factors concern broad environmental issues such as the natural environment, global warming and sustainable economic growth. Ralph Lauren can be impacted by these factors because the company manufactures cotton clothing. With cotton it comes from various vendors, but in order for it to grow it has to have a good environment to grow in. If farmers don’t get good weather then crops may be lost and there will be no clothes for Ralph Lauren. Lastly, Legal factors capture the outcomes of the political processes and court decisions. Because Ralph Lauren is a highly noted fashion designer he is hit with lawsuits and legal issues all the time. They had to sue US Polo Association for infringement on their brand (Polo Ralph Lauren Corporation, 2010). Another popular brand, Levi Strauss sued Ralph Lauren because they had similar stitching in their jeans. Also Ralph Lauren along with twenty one other major companies was sued over having sweatshops and knowing of their wrongdoings (Polo Ralph Lauren Corporation, 2010). With the five forces model we can learn about the nature of completion for our company. To begin Ralph Lauren is faced with the threat of new entrants into the industry. With the rise of different trends there will always be a threat of new entrants into fashion retail. This task will be difficult and expensive because of the degree of Ralph Lauren. The company has overpowered the fashion industry by selling popular designs and creating the best styles (Johnston, Watkins, & Wright, 2005 p. 12-13). The threat of substitute products plays a big role in Ralph Lauren’s marketing strategy. Some of the company’s competitors try to market and sell new and different styles in order to increase demand, while other companies try to copy the designs of Ralph Lauren (Johnston, Watkins, & Wright, 2005 p. 12-13). So the company remains a well-known fashion designer of quality clothes and expands into other markets in order to compete. Ralph Lauren is a brand name that appeals to consumers and is very profitable. Then the bargaining power of buyers also tells the nature of competition for Ralph Lauren. The customers of the company know that when buying the company products they are buying quality. Although these brands are quite expensive, they are sold at a cheaper price at retail outlets. This bargaining power is good for consumers who have a smaller spending power than others. The bargaining power of suppliers is a bit vast for Ralph Lauren (Johnston, Watkins, & Wright, 2005 p. 12-13). Reason being they require a lot of supplies for operating the business, and get lots of bids from sellers of fabric and packaging. Also providers of cotton and other fabrics lead to a result of competition with suppliers and the company chooses the vendors with the best reasonable price (Johnston, Watkins, & Wright, 2005 p. 12-13). Lastly in the five forces model rivalry among existing firms shows the nature of competition in Ralph Lauren. According to (Johnston, Watkins, & Wright, 2005 p. 12-13) the company has several competitors, but has managed to keep a large portion of the market by introducing new designs and going into new markets. Ralph Lauren is growing and gaining more overseas retail stores. And with new technology and online retail sales, the company has gained more sales opportunities and increased development of online marketing (Johnston, Watkins, & Wright, 2005 p. 12-13). Competing with a company such as Ralph Lauren can be a difficult task. Companies in the fashion industry have noticed that this competition is hard to do. In the apparel industry along with Ralph Lauren there are other strategic groups that exist. These groups are Liz Claiborne, Jones Apparel Group, and Tommy Hilfiger. The Liz Claiborne Company is the leading competitor of Ralph Lauren. They manufacture name brands such as Juicy Couture, Lucky Brand Jeans, and Kate Spade. They have expensive brands like Ralph Lauren. Liz Claiborne is so close in competition to our company that they had revenues of $3.984 which is $1 billion less then Ralph Lauren (â€Å"Ralph Lauren’s Rivalry,† 2010). Jones Apparel owns brands such as Nine West and Easy Spirit. Their revenue was $3.6 billion which is $3 billion less than Ralph Lauren (â€Å"Ralph Lauren’s Rivalry,† 2010). Tommy Hilfiger has been Ralph Lauren’s biggest competition for twenty years. Sales began to decline because the brand wasn’t becoming as popular as the leading competitor. They had revenue sales of $3.4 billion which is $5 billion less than Ralph Lauren (â€Å"Ralph Lauren’s Rivalry,† 2010). Most of these products now are in retail stores and in private boutiques. According to (â€Å"Ralph Lauren’s Rivalry,† 2010), Tommy Hilfiger wants to try and compete with other high end fashion designers by moving away from the mainstream.