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Business Strategy

Polo Ralph Lauren (PRL). Illustrate your essay with specific examples.

Introduction

The garment and the wider lifestyle goods industry has long been one of the most complex and globally dispersed industries of the world. Added to that, the complicacies of lifestyle goods retailing makes the business of lifestyle retailing an intricate skill (Tanabe, M. et. al, 2003). Companies exist at various levels of the lifestyle goods supply chain, performing one or more functions. Retails element sits at the outer most end of the supply chain and it is here that marketing and elements of marketing such as branding and the famous 4 Ps of marketing - product, price, place and promotion have to be carefully designed (A.T.Kearney, 2002). Consequently, the strategy has to be extended all the way down the supply chain to adequately support the company's retail strategy. PRL is today recognised as one of the premium lifestyle brands not only in the US but also in various other key consumer nations such as Japan and the European countries (Birchall, J., 2008). This article aims to highlight the business environment within which PRL exists, analyse its strengths and weaknesses and assess its business strategy.

Porter's five forces model

Supplier Power: Suppliers for the range of products labeled as lifestyle products are sourced from different countries of the world such as China and India (Tanabe, M. et. al., 2003). This widespread of manufacturing skill base across the world reduces the supplier power and enhances buyer power. Increased mechanisation has also led to considerable reduction in supplier power because mechanisation leads to standardisation and inability to differentiate products of one supplier from other. The lifestyle retail industry, therefore, currently has very less supplier power.

Expand international presence and tap new markets- The company is planning for continued expansion of its business in Europe, Asia and other international areas (Polo Ralph Lauren Annual Report, 2008). It has recently set itself a strategic target of doubling its sales in both Europe and Asia through new store openings in order to partly offset the falling consumer demand in its core US market. As part of its Japanese expansion plan, the company has recently bought the remaining 50% interest from PRL Japan, whereas in Europe, the company plans to open two stores in Paris, including a new flagship store on Boulevard St Germain in Paris. However, this international expansion strategy does come with its own inherent risks. In the past, companies have had incredible difficulties matching its retailing style to a totally different culture (HBR case). Further, in any expansion management, customising the entire supply chain is a big challenge (Polo Ralph Lauren Annual Report, 2008). The company itself admits that it may have difficulty integrating acquired businesses into its operations, hiring and retaining qualified key employees, or otherwise successfully managing expansion. The current economic downturn and reducing consumer demand is set to severely affect consumer spending on premium products.

 

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