Oscar de la Renta Essay

The environment, competitors, and point of-difference

The global fashion industry is characterized by intense competition arising from its lucrative nature. More firms are venturing into the industry in an effort to make profit. Additionally, the established firms are increasingly incorporating strategies aimed at enhancing their competitive edge.

One of the strategies being considered entails formation of mergers and acquisition. For example, in 2006, Japan fashion industry experienced an increment in the number of mergers and acquisition (Fitzpatrick par. 1).

In its operation, Oscar de la Renta faces intense competition from 3 main firms. These include Gucci Group NV, Gianni Versace S.p.A and LVMH Mo’t Hennessy Louis Vuitto SA. Despite the intense competition, the firm has managed to attain an optimal market position.

The firm’s competitive advantage arises from the fact that it has established itself as a global brand. This has made customers to associate the firm’s products with quality and prestige. Therefore, by purchasing from the store, the customers attain value for their money. According to Kapferer (483), becoming a global brand enhances a firm’s competitive edge.

SWOT Analysis

Strengths

1. The store offers a wide variety of designers’ products such as ready-to-wear apparels, jewelry, fragrance, furs, swimwear, lingerie, luggage and home furnishing. As a result, the firm is able to sufficiently meet the customers taste and preferences.
2. The firm is also very effective with regard to new product development. For example, in November 2011, the firm introduced a new type of fragrance known as Esprit d’Oscar solid perfume.
3. The firm is very effective with regard to market targeting. The firm targets high exclusive clientele. This has played a critical role in enabling the firm to maximize its profit.
4. The firm has integrated the concept of online shopping in its marketing strategy. This has played a critical role in the firm’s effort to increase its customer base hence attaining its profit maximization objective. This arises from the fact that customers are able to shop for products through the internet.
5. The firm has also incorporated social media in its marketing strategy. As a result, the firm has significantly enhanced its competitive edge with regard to marketing.

Weaknesses

1. The firm sets the price of its merchandise at a relatively high price point compared to other firms. In 2011, the firm was rated as one of the most expensive retail stores in America (Hines par.1). This is a major weakness since customers are price conscious in their purchasing process.

Opportunities

1. The high rate of innovation with regard to social media presents an opportunity for the firm to attain effectiveness with regard to marketing. This arises from the fact that the firm will be able to market its products to a wide number of customers. Some of the social media tools that the firm can use in its marketing process include Twitter and Face book.
2. The high rate at which the younger generation is spending on luxury products such as jewelry and apparels presents an opportunity for the firm to survive in the long term by increasing its customer base and hence its profitability.

Threats

1. The firm faces a threat arising from increment in the intensity of competition within the industry. This will result into decline in industry profitability.
2. Occurrence of another global economic recession may affect the firm’s profitability. This arises from the fact that consumers will most likely reduce their consumption of luxury products.

Works Cited

Fitzpatrick, Michael. Fashion firms lead Japan’s M&A surge. 2006. Web.

Hines, Alice. Why Oscar de la Renta is America’s most expensive store. 2011. Web.

Kapferer, Jean-Noel. The new strategic brand management creating and sustaining brand equity long term. London: Kogan Page, 2008. Web.