Ann Taylor External Analysis

How is the fabrication structured? The industry could be defined a specialty seller fibril store which concentrates to a certain fiber of customer or carries certain type of goods. Sectors Discounted mass merchandisers larger imprisonment , Multitier department stores offer a large variety of goods, including clothing. Specialty store chains those catering to a certain type of customer or carrying a certain type of good.Market Size and Growth The National Retail Federation report that the retail niches showing the greater growth were department stores, stores catering to the teenage children of baby boomers, and app atomic number 18l chains aimed to women oer 35. The industry retail industry is big simply the specialty retailer is small. $45. 9 billion of total $108. 7 billion womens clothing purchases in 2009. Major firms ar reporting great deal sales during the past quarters. Economic of Scale Fouth firms dominated the industry, which indicate that large firms surr inter cepter an advantage and economic of scales ar present.To enjoy economic of scales specialty retail stores create use brand extension to appeal to varied segments (production) ad brand expansion (marketing) Vertical Integration Some of the bigger fashion companies are vertically integrated with their line of production so as to be able to shorten production cycle and be able to adapt to the up-to-date demand as well as customer satisfaction. Integrated manufacturing, distribution and retail together, with every step of the process done in-house and not replying on outsourcing. From aim and marketing, fabric storage to warehouse distribution and retail,Degree of Product Differentiation Unlike department stores that sell many different types of products for many types of customers, specialty retailers focus on one type of product item and offer many varieties of that item. Always looking for new segments which can create a branding problem. The product speciality is low because th e product can be produce by other firms. Companies need to compete in price. These dominant 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 competitive forces are at tempt? 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 makes the industry more attractive.Bargaining power of suppliers low * Specialty retail stores are segmented and suppliers can influence price, quality, and terms. Is a small part of a whole industry, i f supplies decided that the segment does not represent a significant fraction of its sales they can exert power. Apparel stores are known to have a melloweder quality standard, if suppliers dont meet this standard they could get dropped from their line. Threat of substitutes low * Clothing is common known as the elemental need for human life. It is a kind of necessity and is hard to find substitutes to replace the function.Basically, outfit 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 rivalry high * There are a lot of brands quick in the market. They try to differentiate themselves in order to find their niche and decrease competition, but nonetheless in every niche there are 3-5 direct competitors of different size, but in some locations there are only 1-2 firms and so these locations are preferably attractive to the new entrants.Competition primarily ground on the customer image that firm created and quality, price is the second 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. Partner with a magazine who target women over 35 but they were luxury 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? opulence fashion spending was up 35 % in 2010, while mainstream fashion gained 8 % overall. +, Great growth of department stores+, 2009 worse holiday season bring back a wave of retail closures among many well- known brands. -, 2008 womens clothes retailer had felt downturn and lost customers and cause shoppers to cut back on purchases. -, Customer had shown a clear preference for select high-end apparel willing to ne t a premium on something that delivers luxury+ Spending in valued-oriented stores has been stable- china wages increase were causing inflation in merchandise manufacturing. 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 classic basic black dress. , Contained devil 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 stocktaking responded with new highs, moving to a peak of over $40 i n 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 four-in-hand turnover 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 impart. Investing in the growth of ecommerce channel. Renovating stores to increase productivity. Implement technology 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 retailings unfathomable holiday season They have problems integrating both firms They we suffering with inventory that was too mature Goals Bran d 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. CEO was expending that the web channels would light 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 immix Requires right product mix, And also increase the inventory turnover ratio, Requires to stay up with fashion trends * Remarkable customer service Quick response to customers, And pay extra attention to customers needs * Control inventory Keep merchandise in 3 price lines budget, off price and moderate.Create a computer dodging to maintain control of inventory and improve productivity * Marketing Established a recognized brand. Explore different niches mark ets 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/global New entrant yes yes Established firm yes yes