Abercrombie and Fitch: International expansion external and internal analysis

5112 Words Sep 8th, 2013 21 Pages
Abercrombie and Fitch:
International expansion external and internal analysis

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Executive Summary
This case study was identified to examine why international sales volume of Abercrombie and Fitch have increased over the past three years and to recommend further international expansion to increase sales volume.
The research draws attention to the fact that in 2009, the US stores generated 81.2% of Abercrombie and Fitch’s net sales. The shares of international stores and direct-to-consumer net sales were very small in comparison. Over the next two years the US stores decreased net sales percentages while net sales increased. Further investigation reveal
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In 2006 Abercrombie and Fitch launched the initial international expansion with the opening of the London, England store. From that initial launch the company has successfully launched other international locations in Milan, Italy and Tokyo, Japan as well as other locations in European union and Asia.
In addition to these brick and mortar operations, Abercrombie and Fitch have expanded its international reach with its online store capability.

External Environment - General
Political
Any organization expanding its operations internationally faces a number of political factors including: Government and tax guidelines, employment regulations, environmental regulations, trade and tariff regulations and limitations, as well as other factors.
Organizations that operate internationally need to review and ensure that free trade agreements are in place for easier transfer of materials for the purpose of manufacturing as well as the distribution of the final inventory for end sales.
The majority of clothing manufacturing resides within Asia, Central America and South America. In these regions there are risks associated with deregulation of political initiatives that could directly affect any vendors that are used for supply chain management.4 Any changes politically can cause disruptions in trade to many of these other countries. This type of risk could directly affect inventory and logistics, as

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