Ralph Lauren Corporation SWOT and PESTLE Analysis

Strengths

1) Wide Range of Products: Ralph Lauren has a wide product line showcased at its stores. The customers who are loyal to the brand can find multiple combinations of accessories and apparels at the same store. This eliminates the need to visit different stores for different needs.

2) High brand equity: The brand equity associated with Ralph Lauren is very high. It is perceived as premium product by its customers. This is in tune with the target segment of Ralph Lauren i.e. urban upper and upper middle class families. It is a fashionable brand known for its new and evertranforming designs. This is the reason its customers are also willing to pay premium price for its products.

3) Widespread retail chain: Ralph Lauren is operating 493 retail stores through out the world. Apart from that Ralph Lauren also retails its product through ecommerce websites and its own websites. Most of the physical stores are located in urban city centres where their target segment is most likely to shop. Such presence of premium stores is a big advantage for the corporation.

4) Strong Financial Growth: The last quarter figures for revenue of the company as USD 1.9 billion. The net profit and are revenues both show an upward trend which is good sign for the company given its assets of USD 7.5 billion.

5) International presence: The competition of Ralph Lauren are international player. Therefore its sales are not just confined to one place as every new product is launched. It has already penetrated to Chinese, Japanese and other Asian market other than European and American markets.

Weaknesses

1) Cyclical nature of business: The business of apparel and accessories is cyclical. While one period may observe high sales, the other might have substantially low sales. This makes it difficult for the stores to keep inventory and also there is extra cost associated with inventory management.

2) High cost of operations: Ralph Lauren operates so many stores across the world. The stores are located at city centres with high land prices and rent. Moreover supplying products to the stores also is a costly affair.

3) Design imitations: Ralph Lauren excels in bringing new to its customers but once these designs are out, they can easily be replicated. There already is an existing market for products with Ralph Lauren’s designs which eats into its market.

Opportunities

1) Increased presence on ecommerce: Ralph Lauren can leverage its business by having more presence of etailing websites. Right now they are present only on few ecommerce websites apart from their own website.

2) Venturing into emerging markets: Ralph Lauren can venture into emerging markets of Asia, Africa and South America. They can enter countries like India through Foreign Direct Investment passage. Such strategic presence in 2 or 3 of the emerging market will reduce many of their recurring cost of operations.

3) Partnership with other stores: The company can have partnership with other stores to sell its products. It can also deal with them for development of Private label brands etc.

4) Diversification: Ralph Lauren can diversify into other class of apparels and accessories other than only premium brand. They might target the middle income group as well with a different brand under their banner.

Threats

1) Fluctuating Exchange rates: Ralph Lauren suffered a loss of USD 6.4 million due to depreciation of currency during the 2008 downturn. Due to presence in many international markets its revenue becomes susceptible to currency fluctuations.

2) Threat of competitors:.Competitors like Armani, Louis Vuitton use maximum of their souces for designing new products which makes the market really volatile in relation to the everchanging styles and designs. Moreover the licence manufacturers are also a threat to become a competitor in long run.

References

1. Investor Ralph Lauren: https://investor.ralphlauren.com/phoenix.zhtml?c=65933&p=irol-fundsnapshot

2. Investor Ralph Lauren: https://investor.ralphlauren.com/External.File?t=2&item=g7rqBLVLuv81UAmrh20Mp+p/XQ+0vy3Ddj0fR3vLonvNeanOhJHk/7QkBytMGCCdfzw0fh/neWwO3hWHus476A==&cb=636220317444385061

3. Investor Ralph Lauren: https://investor.ralphlauren.com/External.File?t=2&item=g7rqBLVLuv81UAmrh20Mp/E2sVH+9UzOLwsMigGV7ho0orK9Klg6o9iUPm2m5qOMja3mLtGvvQcSGu4KptQllw==&cb=636220317444385061