Case1

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Date Submitted: 09/10/2016 07:39 PM

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CASE 1

Abercrombie & Fitch Early 2005

Introduction

Abercrombie and Fitch compete in the clothing apparel industry. It’s an industry characterized by intense competition as there is high commoditization of the products being sold. As a focused differentiator, how the company is perceived by its consumer base is critical to their success and therefore A&F allocates a lot of time and resources into the construction of their brand image. The perception of belonging to a social group that portrays status and values consistent with the brand is what allows A&F to charge a premium price for their high quality products. Declining levels of sales and increases to product mark-downs in the domestic market of the United States has forced A&F to look elsewhere for business opportunities

COMPANY HISTORY

Abercrombie & Fitch Company was founded in 1892 by David Abercrombie and Ezra Fitch and specialized in selling world-class outdoor gear. During the early 20th century, A & F outfitted some very famous excursions including Theodore Roosevelt’s many African safaris. The company also served Charles Lindbergh, Amelia Earhart, and John Steinbeck along with many others. Despite the company’s success, the partnership between Abercrombie and Fitch deteriorated and eventually crumbled. Fitch wanted to change the company’s business model to sell more than just professional gear to professional outdoorsman, but Abercrombie was tentative to expand. Eventually, in 1907, Fitch bought Abercrombie’s half of the business and began to pursue his dream of selling the outdoors to the general public. Fitch not only wanted to change who his company sold to, he wanted to change the entire A & F shopping experience. Determined to provide a more outdoorsy experience in his store, he decided display his stock in a novel way. Instead of keeping his inventory behind glass cases, he took...