Business proposal(reserch) Essay Example | Topics and Well Written Essays - 500 words

Business proposal(reserch) - Essay Example (Abercrombie & Fitch, 2007) A&F clothing are manufactured in different countries all over the world including El Salvador, Indonesia, Peru and Thailand among others. (Pascal, n.d.) By subcontracting the production of clothing in Asia and other third world countries, the company is able to save more money at the expense of low-paid labours. The difference between the high selling price and the cost of clothing per unit makes the high profitability of the company. Considering that the brand name A&F sells on its own, the company saves a lot of money from the need to invest on expensive external advertising. A&F products are delivered straight to the consumers via branded retail stores, catalogs, and on-line networks. (Abercrombie & Fitch, 2007) As of June 2007, the company operates 355 A&F stores, 182 Abercrombie stores, 409 Hollister Co. stores, and 17 RUEHL stores selling young adult clothing all over the United States. Six of these stores are located in Canada. (PR Newswire, 2007) A&F has recently opened stores in Savile Row, London and expanded its store outlets in North America in Edmonton, Alberta, and Canada. (Earnest, 1999) For kids clothing, the company has opened a total of 175 stores to serve customers between ages seven to 14 years old. In June 2007, as part of A&F global expansion, the company announced its plan to expand its retail store throughout Europe particularly in Italy, France, Germany, Spain, Denmark, and Sweden. An Australian retailer Harvey Norman opens a store in Ireland. (Callanan, 2005) In line with store expansion, A&F invests on Oracle system to enhance the efficiency of its supply chain network across more than 950 stores. (Friedlos, 2007) A&F outsource the manufacturing of its products offshore by entering into a contract with MAGIC. (Sourcing at MAGIC, 2007) Through MAGIC, A&F place the order by bulk in order to maximize the