Ann Taylor External Analysis

How is the application structured? The assiduity could be defined a lastingness retailer chain computing machine memory which concentrates to a certain part of customer or carries certain type of goods. Sectors Discounted mass productionrs big duress , Multitier sectionalization live falls claiming a large variety of goods, including clothing. distinguishing characteristic store chains those catering to a certain type of customer or carrying a certain type of good.Market Size and Growth The National sell Federation reported that the retail niches showing the greater ripening were department stores, stores catering to the teenage children of baby boomers, and app atomic number 18l chains aimed to women over 35. The patience retail industry is big simply the distinctive feature retailer is niggling. $45. 9 billion of total $108. 7 billion womens clothing purchases in 2009. Major firms atomic number 18 reporting down sales during the past draw offs. sparing of Scal e Fouth firms dominated the industry, which indicate that large firms have an favor and scotch of scales atomic number 18 present.To enjoy economic of scales specialty retail stores create subprogram fool extension to appeal to contrastive segments (production) ad brand intricacy (marketing) Vertical Integration Some of the bigger fashion companies are plumbly integrated with their line of production so as to be satisfactory to shorten production cycle and be able to adapt to the latest demand as well as customer satisfaction. Integrated manufacturing, dissemination and retail together, with every step of the process hold oute in-house and not replying on outsourcing. From designing and marketing, fabric storage to warehouse distribution and retail,Degree of Product specialism Unlike department stores that sell m any(prenominal) different types of products for many types of customers, specialty retailers focus on one type of product item and offer many varieties of th at item. Always looking for rising segments which can create a branding problem. The product note is low because the product can be produce by other firms. Companies need to compete in price. These dominant solelyele economic traits indicate that the structure of this industry is difficult to earn a positive income because is a small industry segment and is dominated by large firms.What kinds of warlike forces are at work? Threat of new entrants low * Is easy to enter in the retail industry but hard in specialty retail. Majority of stores are chain stores. Their vertical structure and centralized buying gives chain stores a competitive advantage over independent retailers. If a company has a patent for a product is difficult to enter to the industry. Bargaining power of buyers moderate * The industry sells directly to customers, consumes are free to shop anywhere but there a few alternatives. This unsexs the industry more attractive.Bargaining power of suppliers low * Speci alty retail stores are segmented and suppliers can influence price, quality, and terms. Is a small part of a whole industry, if supplies decided that the segment does not gift a significant fraction of its sales they can exert power. array stores are known to have a higher quality standard, if suppliers dont meet this standard they could get dropped from their line. Threat of substitutes low * vestments is common known as the basic need for human life. It is a kind of necessity and is hard to find substitutes to replace the function.Basically, apparel products are no major different in nature, but the main differentiation may come from the brands. So, the treat of substitutes seems not an important factor. Intensity of contestation high * There are a lot of brands existing in the market. They try to differentiate themselves in order to find their niche and go down competition, but nonetheless in every niche there are 3-5 direct competitors of different sizing, but in some loc ations there are only 1-2 firms and so these locations are quite attractive to the new entrants.Competition in the beginning based on the customer image that firm created and quality, price is the instant thing. E-commerce also forces competition because it seriously increases availability of the product in any location. Value-Net * Target a celebrity that is known to ware specialty products. ally with a magazine who station women over 35 but they were extravagance clothes. Partner with other high quality products like cars and phones. Is an extreme competitive industry and there are few complements that would provide options to expand the size of the market. What forces are driving change? Luxury fashion spending was up 35 % in 2010, while mainstream fashion gained 8 % overall. +, Great growth of department stores+, 2009 worse holiday season generate a jar of retail closures among many well- known brands. -, 2008 womens clothes retailer had mat downturn and lost customers an d cause shoppers to cut back on purchases. -, node had shown a clear preference for select high-end apparel willing to devote a premium on something that delivers luxury+ Spending in valued-oriented stores has been stable- mainland China wages increase were causing inflation in merchandise manufacturing. all over the next few days is going to be rare for specialty apparel retailer to return to its historical level of profitability. Over all the trends seem to be negative making the industry more comperative. 4. Which rivals are strongly positioned and which are not? What strategic moves are rivals likely to make next? Ann Taylor ANN History Since 1954, Ann Taylor has been the wardrobe source for busy, socially upscale women, and the undefiled basic black dress. , Contained two division segments AT and LOFT, In 1998 Ann Taylor created the Ann Taylor Factory, 2000 online store was launched.Goals improving profitability while enhancing both brands. Restoring performance at the Ann Taylor division and. Restoring the momentum at LOFT. Performance the stock responded with new highs, moving to a peak of over $40 in late 2006, but the stock price retreated in 2007 and 2008. At the end of 2010 the 4th quarter results indicated sales had jumped 10 % from 2009 and although gross margins fell to 51. 7 % from 52. 5 a year early earning per share had nearly quadrupled.Has suffer manager overthrow Next Move increase traffic to the Ann Taylor brand and future enhancing the brand experience. Improving the LOFT brand stores channel and continue to capitalize on the potencial o the online and outlet channels. Investing in the growth of ecommerce channel. Renovating stores to increase productivity. go for engine room for inventory Talbot TLB History Acquired J. Jill group in 2006 specialty retailer offering casual fashion through multichannel targeting women age 35 to 55 and Talbot targeting women age 45 to 65.Decided to sell J. Jill in 2009 in the wake of sells abysmal holiday season They have problems integrating both firms They we suffering with inventory that was too mature Goals Brand s target high-income, college educated professional over 35. Performance Sales dropped in 2010 by 1. 6 percent, but online and direct sales had increase 9. 8 to 6. 7. chief executive officer was expending that the web channels would spark growth. Inventory turnover 4. 87 and operating margin -1. 31 Next Move Implement technology for inventory.Open new channels for distribution. Target a different niche 6. What are the key factors for future success? The critical requirements to compete in this industry are * Maintain quality in merchandise mix Requires aright product mix, And also increase the inventory turnover ratio, Requires to stay up with fashion trends * Remarkable customer service Quick response to customers, And net income extra attention to customers needs * Control inventory Keep merchandise in 3 price lines budget, off price and moderate.Create a c omputer system to maintain control of inventory and improve productivity * trade Established a recognized brand. Explore different niches markets Create different distribution channels 7. Is the industry attractive? In conclusion the retail industry is lack of substitutes, easy to entry, the bargain power of buyers is high and for suppliers relatively low. Overall, the attractiveness of the industry is quite favorable. Local/regional National/ orbiculate New entrant yes yes Established firm yes yes