A&F would have a hard time adjusting to this type of external competitive threat because it would be increasingly difficult to make A&F appear viable to a virtual marketplace who has shifted away from the organic in favor of the technological. They must be adaptable and continue to understand the trends of their current demographic.
Their design is all synonymous with youth and beauty and lifestyle attitudes. From their flagship mural to their in-store displays, everything is done to elicit this sensation in-store. It appears they’ve positioned their brand well, but on a more adaptable positioning map, I would suggest that A&F be prepared to shift a little more to the right and a little more to the left when necessary in order to draw in a different demographic (with only minor adjustments to the brand) when sales volumes decline.
I think all brands have pressures and stresses. A&F faces the real possibility that they could be outperformed by up-and-comers if they don’t consider contingency plans for their current marketing efforts. Though short-term they are finding considerable profitability through their new expansion efforts, they must realize (and it appears they do) that they must be flexible. They have obviously invested a lot of funds into new technologies which improve both their in-store operations and their international merchandising campaigns. This means they are growing and meeting the demand of a global marketplace. So, an initial assessment it would seem that A&F is doing very well in this area.
From Porter’s Five Forces viewpoint, they don’t currently face a great deal of rivalry, as nobody has been able to establish a brand identity as strong as A&F in this type of fashion marketing arena. Many of the barriers to entry have been completed and changed by the efforts of other retailers who have spread into European nations. A&F obviously maintains the capital necessary to expand if they wanted a more rapid market entry across Europe, so they seem reasonably secure in being more aggressive.