5SP

American Apparel

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TOWS Analysis

SWOT analysis of American apparel is significant in making critical strategic decisions that help accomplish business decisions. The primary strength of the organization is its geographic presence in different regions, which helps for easy accessibility by the target market. The organization can expand its customer base through its broad product portfolio and strong financial position, allowing it to make further investments. A solid online presence helps develop strong customer relationships (Wang & Kim, 2017). Accessing the suppliers helps offer raw materials at a lower cost and can help improve the overall efficiency of the business.

American apparel's high product quality helps improve its performance in the competitive market, and also workplace diversity can help the company mainly when it operates internationally. Intellectual property can help the organization make unique products that competitors cannot imitate. The company's weakness can be drawn from its poor waste management and inability to integrate sustainability into business operations. The business performance and efficiency of the company can fail due to poor management of inventory practices. The organization has opportunities that it can take, including the exponential population growth and the changing needs of the customers, if the business has good market knowledge.

Integrating advanced technology can help improve many business operations and introduce innovative products. The rising interconnectedness globally allows the business to grow internationally. The threats to the company include the increased competition that makes the organization not expand its business. The rise of inflation also increases production costs, affecting the business's profitability.

Strategic Areas for Improvement

The company needs to improve its existing inventory system. The company also needs to improve its product portfolio to help it survive in the market. For instance, many companies during the pandemic started their product line of making masks. Companies need to create various product lines like trousers, T-shirts, and trousers and specialize in manufacturing with different departments that work towards a specific task. Also, the company can consider vertical integration as it helps improve the business's supply chain, hence cost benefits. Improving the business's customer service helps maintain its profitability (Cook, 2017). Improving the employees' morale helps improve their productivity, which helps the company in the long run.

Areas to Address

The company's management needs to be honest with their employees about the business's operations. This helps create an environment of trust between the employees and the management. As stated in the company’s mission, treating everyone equally means being honest should be a top priority. The company needs to be flexible with the vertically integrated system. If it causes increased costs, the company must outsource some work until they are financially stable. The company should promote diversity and equality as its principal value. Failing to adopt workplace diversity negatively affects the company (Nadarajah & Gull, 2021)

References

Cook, S. (2017).  Measuring customer service effectiveness. Routledge. https://doi.org/10.4324/9781315249421

Nadarajah, S., Atif, M., & Gull, A. A. (2021). State-level culture and workplace diversity policies: Evidence from US firms.  Journal of Business Ethics, 1-20. https://doi.org/10.1007/s10551-021-04742-2

Wang, Z., & Kim, H. G. (2017). Can social media marketing improve customer relationship capabilities and firm performance? Dynamic capability perspective.  Journal of Interactive Marketing,  39(1), 15-26. https://doi.org/10.1016/j.intmar.2017.02.004