Sample External Analysis Essay
The retail market is a highly elastic sector and as such is affected by current economic conditions. Since Fossil Corp. is in the retail market, they will find that differing fluctuation in their gross profits are directly dependant on the current economic cycle. If the economy is weak, demand for their product will decrease and purchases of their products will decline as the …show more content…
Third-Party Manufacturers: Fossil Corp. products are produced by third party manufacturers. Unfortunately, Fossil Corp. does not have long-term contracts with these manufacturers but instead relies on the business relationships that they have developed with these companies. Although this is a common and acceptable practice in the business world, it creates an uncertainty that might turn out to be very costly for the company.
As well, Fossil Corp. cannot oversee the labor practices of these third-party manufactures. This in turn places Fossil Corp in danger of losing a supplier or even worse, possibly tarnishing the image of the company, if the manufacturer does indeed participate in illegal labor practices. Similar cases have already occurred to such well-known companies as Nike and Gap.
Fluctuation, Quality and Availability of Raw Materials: Fossil Corp. has manufactures all around the world, specifically in the Far East. The availability,