Ralph Lauren Corporation

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Ralph Lauren Corporation :

Ralph Lauren Corporation By: Angela Green

Company Information:

Ralph Lauren (NYSE: RL) Ralph Lauren began almost half a century ago simply making ties Opened first store in 1971 Grown to a global company with presence in thousands of stores worldwide. Products- apparel , home, fragrances, and accessories High quality with classic elegance. Brands- Polo , Polo Sport, Lauren, Polo Jeans, Chaps, American Living, Black Label, and Club Monaco. Business model includes wholesale, retail and licensing . Produced 175 million products last year Shipped these products to over 9,500 different places Remains successful through the years Company Information

Vision and Mission:

Mission- to ‘redefine American style, provide quality products, create worlds and invite people to take part in our dreams’. Vision- ‘to represent American style with a dash of British elegance and the comfort of natural fibers’. Vision and Mission

Strategy:

Continuing to grow and expand markets Expanding their exclusive specialty retail products Expanding internationally Strategy

Internal Environment:

Strengths- brand image, history, and financial strength. Highly well known brands. This keeps profits afloat during times of recession. Several distribution centers in Europe have been combined due to their slight growth, in order to raise effectiveness and expansion. Will use internet sales in the future for growth. Internal Environment

Resources & Capabilities:

Resources $671,000 in cash, $841,000 in inventory, $884,000 in property, plant, and equipment, and 997 stores with a total of 269,410 square meters of selling space. Ralph Lauren’s joint venture with NBC and Value Vision brought about- Branded website, New e-commerce sites, design your own polo online, first television campaigns, Virtual Window Shop ( touchscreen monitor outside New York stores allowing customers to purchase items) Smart phone app enables customers to scan barcode in ads and make purchases Resources & Capabilities

Internal Environment:

Weaknesses Global sales which means buying and selling in different currencies can affect cost margins Dependent on department store sales for 1/3 of overall sales, and this can be low during times of recession . Economic decline in Europe may affect sales American Living brand ended in JC Penney stores Internal Environment

Internal Environment:

Return on assets  are 13.09% according to ycharts.com. Ralph Lauren ranks 4 out of 28 in the textile clothing industry.  This shows they are very efficient at using their assets to yield a return. Ralph Lauren differentiates its products based on image and quality over price. Internal Environment

External Environment:

Opportunities- “Extending the brand and specialty retail”. Globally well known brand known for its status and value . Retail stores Continually debuting new products New extensions of the brand. Offers some elite products that are only distributed to stores in limited amounts keeping the demand high. Expanding their global presence by opening over 20 new stores in Europe over the next five years. External Environment

External Environment:

Competitors- Tommy Hilfiger, Jones New York, Liz Claiborne, The Gap, Lacoste , and Express. “Jones New York filed a law suit against the company worth $550 million for a breach of a licensing agreement”. Polo Ralph Lauren has been able to keep a competitive advantage by continually coming out with new fashions as well as new products such as home décor. Ralph Lauren has many different suppliers of packaging and fabrics competing to provide their goods for the best price. Ralph Lauren has many loyal customers and they are willing to pay a slightly higher price knowing they are getting the quality and affluence that the name Ralph Lauren emulates. External Environment

External Environment:

Threats- threat of substitutes because competitors are making clothing which imitate Ralph Lauren’s designs as well as bringing out new fashions that Ralph Lauren must compete with. There will always be new designers, but the threat of new entrants to the level that Ralph Lauren has sustained is low. External Environment

Business Strategies:

Solid loyal customer base and well know elite status Customers will pay more to wear label Concentrates on growth strategies. Has a 10 year plan for 1/3 of profits to come from Asia. Trying to transition from “Americanized” look to an “ Aspirational ” look to encourage growth in Europe and Asia. Expanding their markets into Europe as well and introducing new products into current markets. Focus on differentiation over low cost leadership . Drivers for Differentiation- Premium brand image, their ability to allow customers to customize their product (you can choose the color of your shirt as well as the color of the pony logo on their website when you purchase), unique styling, and convenient access (they are continually increasing the number of Ralph Lauren stand alone stores and outlets stores). Business Strategies

Business Strategies:

Threats to Ralph Laurens competitive advantage- competitive interaction, and technological change . Always new entrants into the market creating a competitive interaction. Increased its technological advancements to keep up with the ever increasing technological world. Customers to purchase clothing directly online. This can define them as a first mover. Business Strategies

Diversification:

Appeals to customers of all different levels of income. Customers can purchase higher priced clothing on the website or in the Ralph Lauren stores Outlet stores carry lower priced, previous season clothing. Stores such as T.J.Maxx and Marshalls get overstock for an even lower price for consumers. Extended brand to accommodate customers. Their brands range from the more expensive Black Label, Blue Label, and Lauren, to Polo and Ralph Lauren Childrenswear , to the less expensive Chaps, American Living and Club Monaco lines. Utilizing this strategy helps them to keep a larger more diverse customer base with different income levels without giving up the prestige of the Ralph Lauren label. Diversification

Women’s Brand Chart:

Women’s Brand Chart

International Strategies:

Products can be purchased in over 9000 stores globally Stand alone stores Outlets, Stores within stores Expanded e-commerce into Europe totaling over 30 different country websites Expanded stores in Asia and Oceania recently Opened many stand alone “Rugby” label stores internationally as well Successfully sustain stores in cities such as London, Milan, Tokyo, Moscow, and Paris. International Strategies

Alliances:

Alliances include- Macy’s , Belk, Saks , Bloomingdale’s, Bergdorf, T.J.Maxx , and Marshalls S Schwab Company Licensing agreement with the company offers them the “entire children’s wear license for boys’ and girls’ apparel… in the United States and some other countries as well” Dickson Concepts. Paid the company $20 million to control its Polo brand  clothing in “the Southeast Asia region, which is comprised of China, Hong Kong, Indonesia, Malaysia, the Philippines, Singapore, Taiwan and Thailand” (seekingalpha.com ) Naigai co, Ltd. Regarding its Polo brand children wear and golf apparel as well as a 5 year agreement for “Polo and Chaps brand hosiery”(seekingalpha.com ). NBC and Value Vision Multi media joint venture Alliances

Mergers and Aquisitions:

Acquisitions include- Shanghai Jin Jiang Dickson Center Co Ltd in China Doosan Corp $ 40 million in exchange for control of inventory and employees of the company in South Korea (tickerpot.com). Club Monaco brand in 1999 which it sells in stores such as J.C. Penney. Club Monaco has a lower price scale which helps Ralph Lauren to appeal to a broader customer base. Poloco , Fashions of Europe, Polo Brussels, Impact 21 Co., and Seibu Department Stores. Mergers and Aquisitions

Company Culture:

Open and friendly Loyal employees that stay long term Can be long hours and high stress Compensate with rewards: Bonuses, employee discount, promote from within, 3 month parental leave, stock options, travel opportunities, long vacations. Company Culture

Communicating with key Stakeholders:

Separate website dedicated to stakeholders Investors.ralphlauren.com All financial information available Updated information and news every quarter Conference call every quarter open to all Communicating with key Stakeholders

New Ventures:

Ex. Ralph’s daughter Dylan opened Dylan’s Candy Bar Largest candy store in the world (15,000 s.f .) Ralph helped her with business plan and financial start-up. Greatest challenge is to successfully expand into Asian markets New Ventures

IPO:

Ralph Lauren IPO was offered in 1997 $767 million $26 per share $5 million in expenses Ralph Lauren still retained 90% of his voting rights, allowing him to maintain control of the company IPO

References:

Alacrastore . Reftrieved from http://www.alacrastore.com/mergers-acquisitions/Ralph_Lauren_Corp-1013395 Alumna profile. Retrieved from http://www.vtmagazine.vt.edu/fall02/feature1.html Doosan Coorporation . Retrieved from http://tickerpot.com/symbol/rl/1037038/topic/doosan-corporation/2012 http://articles.businessinsider.com/2012-04-19/news/31365535_1_dylan-lauren-dylan-s-candy-bar-ralph-lauren Investor.ralphlauren.com Johnston, S., Watkins, T., Wright, C. Business valuation of Ralph Lauren Corporation. Retrieved from http://mmoore.ba.ttu.edu/ValuationReports/PoloRalphLauren.pdf . References

References:

Johnston, S., Watkins, T., Wright, C. Business valuation of Ralph Lauren Corporation. Retrieved from http://mmoore.ba.ttu.edu/ValuationReports/PoloRalphLauren.pdf Nasdaq.com. Retrieved from http://www.nasdaq.com/markets/ipos/company/ralph-lauren-corp-11816-8646 Polo Ralph Lauren Coorporation . Retrieved from http://seekingalpha.com/symbol/rl/description Rabon , L. S Schwab Company the plan, brand and the brains behind it. Retrieved from http://findarticles.com/p/articles/mi_m3638/is_1_41/ai_59512040/ Ralphlauren.com Vault.com Ycharts.com References

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