SWOT analysis of Ralph Lauren

Strengths


Ralph Lauren's retail stores focus on showcasing the "World of Ralph Lauren" by offering a wide selection of luxury products to customers.

Polo Ralph Lauren is a premier global player in the design, distribution and marketing of lifestyle products such as men’s, women’s and children’s apparel, accessories, fragrances and home furnishing.

The largest part of its revenues come from its wholesale division, which sells Ralph Lauren products to department stores Ralph Lauren has taken complete control of its own brand in Asia providing more control over the company.

The company has managed to beat analyst estimates in an especially poor season for consumer spending through controlling costs and increased sales in Europe.

Ralph Lauren's operations fall under three primary categories: Wholesale, Retail, and Licensing.

The company can target a large range of customers through its relationship with large department stores from Europe to Asia and America.

Ralph Lauren's retail segment operates through the chain of 326 retail and factory outlet stores, as well as the company's online store.

Ralph Lauren sponsors Wimbledon and dresses all of the line and ball girls and boys in their brand clothing, clearly showing the iconic and memorable horse design

Opportunities


The retail presence serves as a platform for Ralph Lauren to launch new lines and maintain brand strength.

Ralph Lauren views internet sales as a prime source of future growth

One key area of growth in Wholesale could be the development of private labels with department stores, like the American Living brand Polo has launched in partnership with J.C. Penney (JCP).

As a part of Ralph Lauren's expansion plans, Polo Ralph Lauren's American Living line for J.C Penney debuted in 600 stores in February 2008 with plans to expand to all 1,048 J.C. Penney stores. With 50 merchandise categories ranging from apparel to home furnishings and a broad influence, the brand potentially allows Ralph Lauren to target large demographic seeking high quality merchandise at lower prices.

The private label partnership represents a significant opportunity for growth in the Wholesale segment for Polo, as the company could enter more partnerships with new brands with J.C. Penney (JCP) or other department stores

Ralph Lauren already supports Cancer campaigns and eco friendly tote campaign. However, there is opportunity to develop these campaigns.


Weaknesses


Due to exchange rates, in fiscal 2008, those fluctuations led to a loss of $6.4 million

Though having stores throughout the world exposes the company to multiple different markets; it also exposes the company to the whims of changing exchange rates.

Although there is a diverse range of products within the Ralph Lauren brand, it is largely dependant on its Ralph Lauren polo tops and “Create you own” polo which enables you to choose the colour of the polo and horse and the fit of the top that you would like.

Although there are stores all over the world, this results in the buying and selling in different currencies which leaves cost margins unstable

There are many head offices and buildings to maintain which costs more money that having no factories

Ralph Lauren is highly dependant on large retail stores for generating revenue and profits

Threats


Fluctuating exchange rates have had a substantial impact on sales: a gain of $1.6 million in Fiscal 2009 and a net loss of $6.4 million in Fiscal 2008.

Changes in exchange rates will affect prices as well as foot traffic in stores where Ralph Lauren goods are sold.

Although Ralph Lauren is a premier global brand, there is huge competition within their target market such as Hugo Boss, Abercrombie and Fitch, Armani and Calvin Klein for men’s wear and Michal Kors, DKNY and Armani Exchange for women’s wear.

The degree of supplier power is significant since a large portion of Ralph Lauren revenue comes from licenses over which the company has no operational control. Therefore, Ralph Lauren depends on the financial viability and operational ability of licensees.