Ext Analysis

In the external organizational analysis, two concepts are to be discussed and applied to True Religions’ chain of operation and its implication on its outcomes from a broader macroeconomic scope:

PORTER’S 5 FORCES ANALYSIS:

Supplier Power

* Supplier power is medium, currently prices of cotton are high therefore the apparel industry will be affected

Barriers to Entry

* Barriers of entry are relatively low, with the right business plan and support the apparel industry is easily penetrated

Buyer Power

* Buyer power is high because the amount of disposable income allocated to premium denim goods is going to be lower than it has been in the past.

Threat of Substitutes

* Threat of substitutes is very high because there are countless designer companies that are all after the same target market as True Religion. Other premium denim companies are not only substitutes, but less expensive pairs of denim as well, since consumers are not able to spend as much disposable income on fashion denim.

Degree of Rivalry

* The degree of rivalry is quite competitive for this company; they constantly need to stay with the latest trends and other competitors.

Pestel:

Conducting business in international markets according to Pestel describes an analysis that is used for determining the opportunities and risks of global expansion, which are currently affected by legal, regulatory, political and economic major risks not to mention their impact on the technological and social arena. It was expected that international operations increase and consequently face a great possibility of losses due to a number of risks inherent in doing business in international markets and from a number of factors beyond control. Evidently, these factors include among others:

* Political instability or acts of terrorism, which disrupt trade with the countries in which True Religion’s contractors, suppliers or customers are located.

* Difficulties in...