Swot for American Apparel

Strengths: Their profitable idea is the plain T-shirt which never goes out of style and is something everyone has or wants. This makes their store have a wide range for many different demographics making it appeal to a huge amount of customers.

They also have a very creative mission statement and are a very loyal brand.Weaknesses: They have a very young CEO who has already been accused of sexual-harassment within the company numerous amount of times. And although the brand is of great quality, just selling the same plain shirts in different solid colors can get tedious and boring.Opportunities: They have very many opportunities to expand their stores and their locations. They have many offers in different states to open up stores and that is a huge opportunity for their company. They also have so many opportunities to expand their demographics even more than they already are.

Threats: They are known for being a very edgy company and there has been controversy in the past regarding their overly sexualized ads using young models. They have also gone the political route and advertised their political views on different topics. Some of this controversy has lead them to lose some of their customers and talked bad through the press. All of these things raise attention to their company, but it isn’t the type of attention a company wants to be known for.

External Environment Factors:1. Competition: Opportunities: -They have options to expand their stores in various other locations where there competition are currently selling. -Since American Apparel is well known for basic solid attire, it can venture into having more complex designs for more variety.Threats: -Their prices are higher as compared to other brands selling similar products. -Their target customer base is narrower as compared to their competitors.

2. Economics: Opportunities:Threats: -The cost of production is significantly higher than their competitors because of their “made only in USA” policy. It would be difficult to lower prices to for consumers’ economic needs3. Technology: Opportunities: -Broaden its customer base through advertisements and public relations as most of their ads are currently through print and Internet only.Threats: -Their provocative ads4.

Society (Social): Opportunities: -Increase male customer ship -Sweatshop free (vertically integrated) – one of the only stores that pushes the fact that they do not outsource and everything is American made. They can use this as leverage against other companies saying that they care about certain topics such as unfair labor conditions in outsourced countries and gain more market share among people who care about the cause, unlike other stores that do not address the topic at all.Threats: -A large amount of public does not dress as they portray in their ads -Advertisements are too weird or overly sexualInternal Factors:1. Customer: Demographics- American Apparel’s current target customer is young female in their early twenties. Strengths: -Maintains their target audience well -Their customer base knows they can depend on American Apparel for their kind of look and need for solid colored basic attire. Weakness: -It’s hard to diversify customers because everything they sell is too focused on certain people (White and Asian females).

Geographic- AA’s customer lives in the city. -They do not show much diversity with people in their advertisements, which may cause a negative impression to certain people that they would not fit into the American Apparel brandBehavioral buying traits -The associates often let the customer know if something they are looking at pairs well with another item in hopes to increase their purchase amount. There is often a well labeled sale rack towards the back of the store, and the chance for impulse buying here is huge. During check out, there are many more chances for impulse buying as there are always lots of accessories to browse through including headbands, socks and fashionable glasses.

American Apparel is very knowledgeable about their customer and their impulse habits, and we believe they have set up their stores and merchandise for the best ability to reach both the customer and the customer’s wallet. -People stay away from American Apparel when looking for complex attire because of its mostly solid attire inventory2. Product Mix -They have variety of products in young, vibrant colors. They have a range of basic T-shirts, leggings, bathing suits, jeans, accessories.3.

Pricing Strategies -American Apparel’s prices are slightly more expensive than would initially be expected for such simple garments. However, the quality of these goods is very high. T-shirt’s generally run between 15-30 dollars. Their very popular leggings run about 30-40 dollars; bathing suits run around 50 dollars and jeans about 70. American Apparel provides sweatshop-free production and incredibly high quality bathing suits, sweatshirts, t-shirts, tank tops, undergarments, and hosiery. So, while some may feel the clothing is overpriced or too expensive, it is worth it to many to know that these clothes are going to last for a long time and were made here in America by well paid, workers receiving benefits.

4. Promotion -American Apparel uses minimalist style advertising, meaning in the actual ad there is usually one make-up free model with a white background sporting only the garment to be sold, perhaps a hoodie, and photographed in a contorted position. On occasion, American Apparel also uses edgy political statements across ads to draw attention. They distribute these ads in various fashion magazines such as Nylon, a magazine targeted toward young, trendy women and men (Nylon Guys). Along with magazine ads, these photos line the walls of the stores. American Apparel has various ads on the internet, usually seen on websites such as Myspace or Facebook, two websites mostly high school and college-age people visit frequently.

AA is definitely a believer in the saying “sex sells” as is evident with their promiscuous ad photos, but they also know who to target this mentality toward. These ads that AA is producing are definitely more edgy than any of their competitors, such as Urban Outfitters. They take a much blunter approach to their clothing, models, and expressed views, which separates them from any and all competition. We do think that this style of advertising is and will continue to be successful as it’s an avant-garde approach to sales, and AA’s target market loves fresh ideas.

One way we think improvement could be made to advertising is possibly putting up billboards in cities artistic districts of cities that might not have an American Apparel store and stressing the online shopping. Also, we think the continued reinvention of typical advertising is the best way for AA to continue in their success.5. Distribution -American Apparel place their stores in very trendy, fashion forward, art districts or artsy sections of larger cities such as Carytown in Richmond, Virginia, and Lincoln Square in Washington DC. The closest American Apparel retail store is located in Charlotte, North Carolina, in South End on Camden Road.

This is a very trendy part of Uptown Charlotte. Along this road there are several boutiques; such as Niche, an upscale clothing and sneaker store also targeted towards a younger hipster crowd, and a Skate shop called Black Sheep.This AA store is located walking distance to the Charlotte Bobcats stadium, and many trendy night clubs, restaurants, and bars. American Apparel stores are carefully made to fit in perfectly with its surrounding area.By placing their stores in artsy districts located close to other hangout spots, American Apparel’s targeted customer can easily access the store conveniently. American Apparel takes a lot into consideration when choosing store locations, and their website as well as allowing the opportunity to shop, gives a detailed list of every “bricks and mortar” store there is in the world.

Putting them into the perfect locations, and giving customers those addresses and phone numbers via the Internet, allows them to bring in their target consumer without confusion, and not confuse the public on who their target customer is.6. Employees/ management Structure -American Apparel has a huge variety of employees of all different backgrounds and cultural upbringings. These employees are usually in their twenties, just like the customer, and because of this level plain they seem fairly approachable. The average American Apparel worker is very helpful, and seems to immensely enjoy their job.

AA prides itself on paying their employees high wages and giving them great benefits for their labor, and the performance of these workers seems to directly correlate to the good treatment they receive from their employer. As for the competition, the age range of employees tends to be about the same, but the helpfulness and approachable factor seems to be diminished, perhaps because the competition isn’t compensated in the same way as employees of AA are.