The of Abercrombie and Fitch Co - Case Study Example

The only negative result being a minimal decrease in the profits per square foot at the end of that fiscal period (Berman & Evans, 2011). The company should increase its effort on increasing retail space. Though the number of Hollister stores is one-third more than A & F, it is believed that the larger profits realized by the latter is due to a greater average size. The uncontrollable factors within any business environment are known as external factors or macro environmental factors. Such factors are usually beyond the control of any company or organization but rather they have to adjust for them to cope.

For A & F, the Economic turmoil of 2007-2009 affected their operations (Berman & Evans, 2011).The turmoil was caused by the significant decrease in demand for the company’s products as a result of the prevailing economic conditions. As a consequence, the company realized a dip in its revenue. The second factor has been the entry of new competitors in the apparel industry. A & F experienced a decline in sales in 2009, and this was brought about by increased competition from companies like American Eagle and Aeropostale (Berman & Evans, 2011).

It therefore, has to develop mechanisms to cope with such competitors in order to maintain or improve its profit margins the market share. A retail strategy involved developing a plan that is to be followed by a retailer in relation to the actions. They usually span a period of one year and include the following; missions, goals, consumer market, overall and specific activities and control mechanisms (Berman & Evans, 2011).