Perform an exhaustive External analysis for Europe and USA in an independent way. Follow the guideline below.
The external analysis is carried to assess the external effects on the company. The external factors can be the factors that are affected due to the action of external reasonsandnot internal reasons.
Industrial Sector: Use 5 Forces of Porter Tool and define the ranking of attractively of this industry in Europe and USA separately.
In porter five forces it is assessed about the industry forces that affect the performance of the company and industry as a whole.
Risk of new competitors:
The new entry into the fashion industry is very easy therefore any competitor can enter into the market with a low cost. In the current era of fashion, its relatively easy forplayers to enter into the fashion industry, therefore the entry risk of new competitors is moderate in both US and European markets.
Bargaining power of my suppliers:
Bargaining power of suppliers in US is high, but it is moderate in Europe. In the US a high competition gives suppliers power to charge higher prices to TommyHifiger, whereas the competition is a Europe in not very high.
Bargaining power of customers (all the channels)
The customershave more choices in US industry, therefore in US they have higherbargaining power because Tommy Hilfiger has somewhat lost its reputation in US therefore it has to accept a lower price in the US region.
In European region, bargaining power is moderate because of higher brand recognition and reputation of the Tommy’s brand. The customers cannot bargain on the quality of Tommy Hilfiger and its market reputation.
Substitutes
The threat to substitutes in the clothing industry is moderate because the utility nature of the clothes, but the fashion industry has also lower threat because people are willing to wear fashionableclothes in both US and Europe.
Competition
The competition is high in the US because of many reputed brands; therefore the threat from competition is high in US. The threat of competition is moderate in Europe because only few of the competitors in Europe can affect the revenues of Tommy Hilfiger.
Perform an Analysis of Rivalry: Use 4 P of marketing. (Kotler) in Europe and USA separately.
The marketing 4Ps are analyzed to access the sustainability of the company in the industry and its relative strength in the industry.
Product
In the USTommy use to offer three different products, namely Polo, children’s polo and other clothing.
In Europe Tommy use to offer two famous brands, namely Hugo Boss and Polo that are widely used in Europe.
Price
In the US it offers a discounted price of up to 30% that is demanded by the shop retailers and wholesalers.
In Europe, no discount is offered, but sometimes premium price is charged on the basis of high quality products of Tommy Hilfiger.
Place
In USthe product is sold to end consumers through the Tommy Hilfiger outlets and other retail shops that are directly selling the products to the end consumers.
In Europe the most of the sales come from selling the products to the wholesalers that sell the products to the outlets and other departmental stores.
Promotion
In US, the company is used to advertise more and give offers to the departmental stores and outlets to sell its products to the end customers through discounted offers.
In Europe the newer brands and innovative quality is the promotion of its product itself, they promote its new brands piggybacking on the previous brands whichcarrythe prestige and market reputation.
Evaluate the context in the year of the case (2005) for Europe and USA. Use PESTEL model
|
USA |
Europe | |
| Political | In US the political effects are high. | In Europe the political effects are high. |
| Economical | The economy of US is one of the strongest economy of the world. | The economy of Europe is strong, but not as it is of US economy. |
| Social | In US there is a great tendency to wear fashionable clothes. | The Europe there is also a great willingness and demand for fashionable clothes. |
| Technological | The technology has a great impact in the US; new technology is introducedafter regularperiods of time. | Like USA, the technology innovation is substantial. |
| Environmental | The American environment is ready to accept higher quality products and ignore low quality products due to the purchasing power of the US public. | The European environment is ready to accept higher quality products and ignore low quality products due to the purchasing power of the European public. |
| Legal | There are stricter rules for the reporting and other matters of the company. | The rules are there, but not strict like those in the US. |
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