Polo Ralph Lauren Performance Measurement
Performance Measurement – 8343
Polo Ralph Lauren Corporation – Company analysis. Notes on the slides.
Agenda - Our agenda follows exactly the guideline that was given to us in order to carry out this assignment.
The Company – Short overview of the firm.
The Fashion Industry – It is based mainly on intangible assets, rather than capital or knowledge-intensive assets. Moreover, nowadays fashion companies are less affected by the problem of seasonality: indeed they experience sales that are pretty much stable over the year; in spite of this, PRL experiences different levels of sales in the different quarters, due mainly to wholesales shipments and in coincidence with holiday periods.
Industry Analysis – We used the Five Forces Model to assess the characteristics of the industry in which PRL competes in. The fashion industry is a very competitive one, rivalry among firms is high: some competitors are bigger than PRL, so they also have more resources, but still PRL is a pretty strong name and the company has a large customer base. The threat of new entrants is low because there are strong incumbents, brand loyalty in the high-price segment is high and access to suppliers and distributors is limited. Even though PRL has a high brand recognition which makes end customers less price sensitive, the bargaining power of the buyers is high as the direct customers of the firm are mainly large department stores (and the gist of the company’s revenues comes from the wholesale sector). The threat of substitutes is moderate as loyal customers tend to buy only from them but in general people may vary their purchases and also buy from the competitors. For what concerns the suppliers, it’s important to specify that PRL does not manufacture its products itself, but instead relies on licensees and other manufacturers to do so. Its suppliers are therefore manufacturers which supply the company with the finished goods. The bargaining power of suppliers is moderate: as the
Polo Ralph Lauren Corporation – Company analysis. Notes on the slides.
Agenda - Our agenda follows exactly the guideline that was given to us in order to carry out this assignment.
The Company – Short overview of the firm.
The Fashion Industry – It is based mainly on intangible assets, rather than capital or knowledge-intensive assets. Moreover, nowadays fashion companies are less affected by the problem of seasonality: indeed they experience sales that are pretty much stable over the year; in spite of this, PRL experiences different levels of sales in the different quarters, due mainly to wholesales shipments and in coincidence with holiday periods.
Industry Analysis – We used the Five Forces Model to assess the characteristics of the industry in which PRL competes in. The fashion industry is a very competitive one, rivalry among firms is high: some competitors are bigger than PRL, so they also have more resources, but still PRL is a pretty strong name and the company has a large customer base. The threat of new entrants is low because there are strong incumbents, brand loyalty in the high-price segment is high and access to suppliers and distributors is limited. Even though PRL has a high brand recognition which makes end customers less price sensitive, the bargaining power of the buyers is high as the direct customers of the firm are mainly large department stores (and the gist of the company’s revenues comes from the wholesale sector). The threat of substitutes is moderate as loyal customers tend to buy only from them but in general people may vary their purchases and also buy from the competitors. For what concerns the suppliers, it’s important to specify that PRL does not manufacture its products itself, but instead relies on licensees and other manufacturers to do so. Its suppliers are therefore manufacturers which supply the company with the finished goods. The bargaining power of suppliers is moderate: as the