Tommy Hilfiger Strategic Analysis

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Situation Analysis

To introduce the Tommy Hilfiger's analysis on the internal and external plan, it is obvious to use the SWOT matrix, which is a very relevant tool of analysis to get a quick overview of the health of the company.

- SWOT

Strength

Weaknesses

- Recognition

- Distribution Network (more than 1400 retails shops)

- Global awareness of the brand and worldwide presence in 90 countries.

- Original Design by Tommy Hilfiger (famous designer) that helps the brand to differentiate from the competitors

- Promotion by many famous muses

- Accessibility of the brand.

- Research & Development

- Staff turnover

- Dependence on commodities

- High production cost in comparison with competitors

- Higher production cost than competitors

Opportunities

Threats

- New product can helps the brand to expand in new countries

- New Markets: Tommy Hilfiger has not totally exploited the market of emerging countries yet.

- High demand for fashionable sportswear, especially in the Oceania region.

- Economic slowdown

- Increase in demand of suppliers

- Increasing costs of commodities

- Competition in the segment of sportswear and fashion wear: Fred Perry, Ralph Lauren.

Tommy Hilfiger can take advantage from many strengths and opportunities in its market such as its distribution network in 90 countries and its famous design.

However, the brand has to face the changing economic environment (economic slowdown) and the increase in prices of the manufacturers and the suppliers.

Furthermore, Hilfiger shows an important staff turnover. It would thus be important to remedy this problem to perfect the brand image.

Then, the internal environment will be analyzed. In order to analyze the company’s internal resources (tangible and intangible), we will conduct a VRIO analysis.

Internal Analysis

- VRIO Framework

Resources/Capabilities

Valuable

Rare

Difficult to Imitate

Exploitable by Organization

Competitive Implication

Company owned stores

Yes

No

No

Yes

Competitive Parity

Utilization of factories

Yes

No

No

Yes

Competitive Parity

Savoir-Faire/Know-How

Yes

Yes

Yes

Yes

Sustainable Competitive Advantage

Innovation - Design

Yes

Yes

Yes

Yes

Sustainable Competitive Advantage

Quality Customer Service

Yes

Yes

No

Yes

Temporary Competitive Advantage

Quick adaptation to demand changes

Yes

Yes

Yes

Yes

Sustainable Competitive Advantage

Effective marketing using famous models

Yes

Yes

No

Yes

Temporary Competitive Advantage

Internet Orders

Yes

No

No

Yes

Competitive Parity

From the VRIO Framework model, one of the biggest resources that are contributing to the success of Tommy Hilfiger is the Deign that hardly represent the brand image. The whole firm is completely organized around the Designer, Thomas Hilfiger. This resource is very rare and therefore also impossible to imitate. (Global.tommy.com, 2016)

Furthermore the most valuable core competency of Hilfiger is its capability to quick adapt to the customer demand (Market Realist, 2016). Responding so quickly to customer demand is extremely difficult but primordial because the market is always moving. There is nothing permanent except change (Heraclitus, 514 BC).

A big part of the Hilfiger’s marketing is their presence during many fashion shows. They promote the brand with very famous celebrities as Rafael Nadal or Gigi Hadid so that the consumers become identified with their idols and buy the products of the brand. The objective is to always