Essay on Tommy Hilfiger

2260 Words Feb 28th, 2014 10 Pages
Tommy Hilfiger Case Study: EC 2102
This essay it will examine the economic, social and political issues that shaped Tommy Hilfiger on a global environment. First it will investigate why Hilfiger decided to sell internationally rather than concentrating on the domestic market and secondly it will analyse if operating globally affected the prices for Hilfiger’s merchandise. Analysing the prices will lead to a conclusion which will reveal if it has created any problems for the Hilfiger’s organisation.
‘In the United States clothing sales in general have been growing less than 5 percent per year, much slower than in foreign markets’ (Daniels et al, 683:2009). This is evident if you look at the clothing industry figures from 2011 to 2012. In
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For example, Western Europe is expensive for the clothing industry to operate in’. Therefore, another motive why Hilfiger may of wanted to sell abroad to take advantage of the cheaper labour costs. ‘Due to lower labour and production costs, many companies also cite BRIC as a source of foreign expansion opportunity following the end of the cold war’ (Vikas,S, 2011: 135). This clearly advocates that many firms invested in cheap labour offered by the BRIC countries, in which Tommy Hilfiger may have utilized when investing into international market.
‘One of the motives for FDI by service MNEs is to protect or strengthen an international market position vis-à-vis one’s major competition’, (Jiatao, L & Guisinger, S, 1992: 10). This is evident in Europe, as Hilfiger chose a number of celebrities, such as Kate Moss, Thierry Henry and David Bowie to try and appeal to European markets to strength his European image. However, according to, ‘Hilfiger’s CEO, Fred Gehring, worries that so many changes for Europe create both a nonuniform image and an addition to costs’, (Daniels et al, 2009: 685). According to, Ferrel, O & Hartline, M, (2011: 246), ‘price changes may result in minor modifications to the product, distribution, or promotion strategies’. This is evident when analysing the changes Tommy Hilfiger has created in order to fit culturally into the European

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