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True Religion Brand Jeans Company’s Failure Case Study


Background

Firstly, the primary trends of the jeans market have to be discussed. It remains evident that the customers tend to seek for novelties and innovation, and the management of the manufacturers such as Diesel depicts this aspect by paying high attention to the development of the lifestyle of the brand while emphasizing the essentiality of the presence of the identity (Austin, 2014). In turn, this feature leads to extensive product diversification by providing other attributes of the lifestyle including clothes and alcohol. One of the brightest examples is Harley Davidson due to its ability to create the culture around the motorcycles (Carreras, Alloza, & Carreras, 2013).

Other tendencies in the jeans industry directed the presence of tendencies such as the enhancement of the women’s silhouettes, low-cost manufacturing, acquisitions, and focus on e-commerce (Austin, 2014).

As for True Religion, the primary assets can be described as the ownership of a significant number of locations and establishment of the sports apparel. Additionally, it had a well-established network of top retailers in the country. In turn, it was able to create a lifestyle brand, and the company’s identity was related to the representation of the hippie-bohemian way of life with the mix of the traditions of the Wild West (Austin, 2014).

Consecutively, the primary issue was the lack of the ability to persuade the customers that these characteristics have a timeless value. Additionally, the company had the opportunity to set some trends such as the introduction of the destroyed look (Austin, 2014).

Nonetheless, it led to the inability of the producer to follow the tendencies in the jeans industry and the loss of the market share. Lastly, the lack of sufficient projections while operating in the international markets was a reason for the decrease in sales in Japan (Austin, 2014). It could be said that the primary resources for the evaluation of True Religion’s failure will include brand recognition and awareness, the customer’s understanding of the brand, and financial resources and assets of the company. The capabilities will be focused on product management, pricing, marketing planning, channel management, and brand creation.

The primary goal of this paper is to apply the VRIO model in the context of the presented case, as it will help understand whether the organization can use the competences and resources efficiently. Each aspect is analyzed separately to understand the VRIO components in more detail. Lastly, the conclusions are drawn, and recommendations are highlighted to enhance the strategic thinking and corporate culture in the organization.

Value

The question of value is related to the determination of whether the proficiency or resource allows the company to utilize the opportunity sufficiently. It remains evident that the product differentiation or the cost-leadership are the primary instruments, which are used for the creation of the value for the customer. In turn, the value is usually generated by taking into account the customer’s perception of the perceived quality and needs. As for True Religion, the company uses the product differentiation strategy by highlighting the interests of the consumer’s group of individuals, who prefer freedom and hippie lifestyle while assuring a high quality of the products.

It could be said that brand positioning is valuable, as it creates an inimitable perception of being a bohemian hippy lifestyle made out of high-quality materials. In turn, this aspect helps develop the right perception of the brand among customers, and the trademark was portrayed as high quality and unique products, which were standing out in front of the competitors at the beginning of the operations. The development of high brand recognition and the generation idiosyncratic company’s identity is essential to the development of a sufficient competitive advantage (Kapoor, 2012). In the context of the organization, the created brand image could be examined as a valuable asset, as it establishes an exceptional understanding of the brand among customers.

Financial resources and assets of the company could be considered as a valuable asset in the context of the evaluation of True Relation. In this case, the ownership of the locations and the maintenance of the sustainable network with the retailers could be acknowledged as being beneficial, as it focuses on the distribution of the products (Austin, 2014). Sequentially, the proprietorship of the boutiques creates an exclusive experience for the customers. In this instance, the financial and physical assets support the cultivation of the brand image, and this matter can be examined as a vehemently valuable aspect.

The product management and pricing are the essential capabilities of True Religion, which assist in the establishment of the company’s value among the customers while being able to compete with other brands. In this case, the innovation of the product lines and the introduction of sports apparel led to the development of the sustainability of the organization in the fashion industry (Austin, 2014). Another aspect is marketing planning. It could be said that it is also valuable capability, as it created the popularity around the brand at the beginning by offering the products of the celebrities.

In turn, the essentiality of the channel management cannot be underestimated, as it tends to build a reliable network of retailers and customers on national and international levels (Austin, 2014). In this case, it contributes to the delivery of the brands to the customers while selecting the relevant marketing channels. Lastly, the competency to create a brand is also highly valuable, as it assisted in the establishment of a particular lifestyle among consumers. In the end, all of the aspects and assets, which are mentioned above have a high influence on the development of the distinct competitive advantage of True Religion.

Rarity

The rarity of the resource represents the idea of whether the resource is exploited by other organizations. In this instance, rarity is one of the essential attributes for the formation of a distinctive competitive advantage due to the assessment of the presence of a particular capability or resource in other organizations (Peng, 2008). In the context of True Religion, rarity is determined by the ability to focus on the exclusive customer’s niche, which cherishes a unique and free lifestyle and emphasizes the essence of high quality.

In this case, the precise creation of brand recognition in terms of the exceptional trademark can be determined as being unique since other companies tend to focus on other perceptions of the lifestyle. It could be said that the image of the bohemian hippie lifestyle could be recognized as being rare, as other brands do not support this perception (Austin, 2014. Nonetheless, the positioning of the brand as a premium and high-quality product cannot be regarded as being unusual, as other jeans manufacturers such as Rock & Republic, Lee, and Wrangler highly focus on this feature along with other benefits (Austin, 2014).

In turn, the ownership of locations and generation of the resources cannot be recognized as being exceptional, as other producers pay remarkable attention to these matters by opening boutiques and proving incomparable services in the locations. Nonetheless, the majority of companies tend to operate through retailers due to the cost-efficiency and cultivation of trusting relationships. In this case, opening individual stores and location ownership can be contemplated as the infrequent competencies of True Religion.

In this case, the product development in compliance with the current brand image could be described as being rare, as it supports the exceptionality of the brand by highlighting the destructive and hippie styles (Austin, 2014). In turn, the marketing planning techniques, which imply utilizing the celebrities to pay higher attention to the new brand could also be underlined as exceptional, as these aspects contribute to the generation of the exclusive attention to the company. Nonetheless, the following marketing actions of the corporation do not diversify the product from the competitors, as the similar marketing campaigns and offers are applied in the industry.

As for channel management, True Religion actively employs the retailers, and this approach is common. Lastly, despite all of the adverse consequences and negative economic fluctuations, the company was able to pay significant attention to the trademark formation and establish a coherent image, which can be considered as a rare asset of the corporation. In the end, it remains evident that the company’s recognition and the formation of the ownership of the locations can be discovered as the most vital attributes of the realization of the company’s distinct competitive advantage.

Imitability

Additionally, the imitability states whether the organization has benefited from the ownership of this capability creates a distinct competitive and cost advantage. It is another aspect of the VRIO framework, which will discuss whether the resources or proficiencies are costly to imitate (Afuah, 2014). The inimitability of True Religion is represented by the ownership of locations and well-established brands due to the requirement of financial resources.

The existing brand image is expensive to reduplicate, as it requires a lot of time for the maintenance and establishment. In turn, the customer’s perception of the brand corresponds to similar characteristics such as brand recognition. Consequently, it is also expensive to imitate, and it is the easiest approach to differentiate True Religion from the competitors. As for the physical and financial assets of the company, the ownership of the locations can also be considered as being highly expensive to reproduce due to the high prices of property.

Speaking of capabilities the product management, marketing planning, and pricing strategies can be copied by the competitors due to the lack of unique components regarding these matters. True Religion tried remaining irreplaceable while introducing the maintenance of the prices at the same levels while the competitors tended to adapt to the customers’ needs (Austin, 2014). Nonetheless, the absence of expertise and the lack of knowledge of the functioning of the fashion industry can be portrayed as the primary causes of the company’s failure in terms of reaching popularity in the future.

Nonetheless, the attitude and methods of the brand creations are hard to imitate due to the presence of the sports apparel and well-established exclusive brand image. It could be said that the view of the brand as being highly fashionable by the management assisted True Religion in being competitive and leading the market for some time (Austin, 2014). Nevertheless, the inability to adapt to alterations in the environment was a cause of the company’s loss of market share. However, the inimitability of this know-how is the milestone in regaining the position among the leaders of the current jeans market.

Organization

Lastly, the critical matter is the organizational structure, as the corporate culture of the company has to support the development of the cost-efficiency and utilization of the rare resources while creating a distinct competitive advantage (Sengupta, 2005). In the context of True Religion, the customer’s value creation is supported by the company’s corporate culture by providing a unique experience. The presence of this aspect is emphasized by the ownership of the locations and emphasis on brand development.

In this case, it could be said that the brand recognition is supported by the corporate culture of the company, as the CEOs of True Religion portrayed the essentiality of these matters during their managerial functions at the enterprise (Austin, 2014). It remains apparent that the company cherishes the relationships with the customers and highlights the essentiality of delivering the message of the brand to the customers according to the case study.

The company creates sufficient networks of retailers and establishes new locations for the distribution of its product lines. This approach supports the delivery of the merchandise and provides the users with an exceptional experience by offering unique service at the locations. In this instance, the organizational structure and corporate culture pay high attention to the cost-efficiency and ability to maintain a beneficial position at a high level while using the locations and retailers to support the brand image.

A combination of these matters emphasizes the ownership of boutiques and exclusive image can be defined as distinct competitive advantages of True Religion. The ability to cherish innovation, support of the brand and product improvement can be considered as the primary ways to cultivate the idea of being a top brand in the jeans industry.

Nonetheless, the organization has particular attitudes towards pricing and product development. Consequently, the organizational structure is not able to provide favorable conditions for the monitoring of the trends and prices sufficiently. It remains apparent that the rationality in these matters is essential to the functioning of any business due to the crucial correlation to the company’s profitability (Scott & Davis, 2015). These aspects have to be assessed from the managerial perspective while reestablishing the strategy for the company’s market return. The evaluation of these principles will help build a competitive brand while considering the price formation and the necessity of investments by using a top-down strategy (Lee & Zhong, 2014).

In turn, the attributes of the channel management are actively supported by True Religion due to the international presence and availability of the investment in the individual locations of the stores. The enterprise actively supported the role of the supply chain management while delivering the products to the customers, as it was of the ways to maintain customer’s interest in the brand. It could be concluded that the channel management can be regarded as a capability, which contributes to the generation of True Religion’s distinct competitive advantage.

Lastly, the creation and support of the brand are present in the corporate culture of the company and can be regarded as a competitive advantage. According to the case, True Religion highly respected the brand image and devoted a significant amount of time to its maintenance (Austin, 2014). In the end, the support of the brand and generation of the desired perception among the customers could be considered as being the definers of the company’s ability to stay the market leader for an extensive period.

Conclusion

In the end, the conclusions have to be drawn to summarize the findings and the key aspects of the VRIO model while applying it to the case study. In this case, this analysis contributes to the formation of the relevant image of the reasons for True Religion’s failure and the company’s abilities to regain the share of the market. In turn, the recommendations for future actions are proposed following the analysis.

The application of this instrument revealed that the brand image is an essential attribute of the formation of the company’s competitive advantage due to the support of the inimitable hippy bohemian lifestyle. In turn, the ownership of the locations can be recognized as valuable, rare, and expensive to imitate, and supported by the organizational structure due to the difficulties in applications in terms of costs and time consumption. Nonetheless, other resources and capabilities of True Religion could be portrayed as the beneficial attributes, which assist in the formation of the right perceptions of the brand but do not tend to comply with all of the characteristics of the VRIO model. Consequently, all of the findings of the analysis will contribute to the sufficient list of recommendations as they depict the company’s ability to utilize the resources efficiently.

Firstly, the organization has to pay vehement attention to the development and support of the company’s brand, as True Religion has a solid image and awareness among the customers of the jeans’ segment. In this case, the exclusive lifestyle and personality of the products will drive higher attention to the brand while maintaining sufficient relationships with the users (Sengupta, 2005). Furthermore, the company has to emphasize the essentiality of product improvement while paying high attention to the trends in the jeans industry. Monitoring of the tendencies will help understand the image of the clothing market and define the potential ways of product development (Hines & Bruce, 2012).

The competitiveness in the premium jeans market is high due to the ability of the competitors to differentiate their products with the assistance of the generation of the lifestyles. It remains evident that this aspect will contribute to the minimization of the gap between True Religion and other brands to the ability of the company to comply with the rest of the market. Consequently, it will create similarities with other brands, but it will also assist the company in maintaining and gaining market share.

Pricing policy and marketing campaigns should be based on the development of sufficient analysis of the existing trends and consumer behavior. These aspects are critical for True Religion, as their current prices do not comply with the competitors and increase the risks of the loss of the market share. Additionally, the lack of marketing campaigns underestimates the quality of the brand of True Religion and contributes to the absence of recognition of the company in the market.

The analysis of the consumer actions and perceptions will enhance the understanding of the usage of the relevant marketing channels and determine the interdependence between the price’s alterations and consumer’s attitude (Wright, 2006). For instance, the company can focus on the formation of the persona of the brand by communicating with the customer via social networks. Paying high attention to social media will help the organization generate attention around the brand due to the popularity of this marketing channel among the consumers in the modern world (Zarrella, 2009). Additionally, the assessment of the market will help determine the necessity of the acquisition and the analysis of the firms to acquire for the minimization of the production costs.

Lastly, True Religion’s actions in marketing and brand development have to be supported by the corporate culture of the company, as it will contribute to the cultivation of particular ideas as the core aspects of the organization. The recommendations have to be applied simultaneously, as it will enhance the productivity and efficiency of the organization due to the reduction of costs and strengthening of the key competitive advantage. Nonetheless, it will cultivate the values of the necessity of the formation of a new strategy, which tends to support all of the essential elements of the VRIO model.

References

Afuah, A. (2014). Business model innovation: Concepts, analysis, and cases. New York, NY: Routledge. Web.

Austin, B. (2014). Case study: True Religion jeans: Will going private help it regain its congregation? In J. Barney & W. Hesterly (Eds.), Strategic management and competitive advantage (pp. 1-30). New York, NY: Pearson Education. Web.

Carreras, E., Alloza, A., & Carreras, A. (2013). Corporate reputation. London, UK: LID Publishing Ltd. Web.

Hines, T., & Bruce, M. (2012). Fashion marketing: Contemporary issues. Oxford, UK: Butterworth-Heinemann. Web.

Kapoor, A. (2012). Branding and sustainable competitive advantage: Building virtual presence. Hershey, PA: Business Science Reference. Web.

Lee, C., & Zhong, J. (2014). Top down strategy for renewable energy investment: Conceptual network and implementation. Renewable Energy, 68, 761-773. Web.

Peng, M. (2008). Global strategy. Mason, OH: South-Western Cengage Learning. Web.

Scott, R., & Davis, G. (2015). Organizations and organizing: Rational, natural, and open system perspective. New York, NY: Routledge. Web.

Sengupta, S. (2005). Brand positioning: Strategies for competitive advantage. New York, NY: McGraw-Hill Education, Inc. Web.

Wright, R. (2006). Consumer behavior. London, UK: Thompson Learning. Web.

Zarrella, D. (2009). The social media marketing book. Sebastopol, CA: O’Reilly Media. Web.

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IvyPanda. (2020, July 15). True Religion Brand Jeans Company's Failure. Retrieved from https://ivypanda.com/essays/true-religion-brand-jeans-companys-failure/

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"True Religion Brand Jeans Company's Failure." IvyPanda, 15 July 2020, ivypanda.com/essays/true-religion-brand-jeans-companys-failure/.

1. IvyPanda. "True Religion Brand Jeans Company's Failure." July 15, 2020. https://ivypanda.com/essays/true-religion-brand-jeans-companys-failure/.


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IvyPanda. "True Religion Brand Jeans Company's Failure." July 15, 2020. https://ivypanda.com/essays/true-religion-brand-jeans-companys-failure/.

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IvyPanda. 2020. "True Religion Brand Jeans Company's Failure." July 15, 2020. https://ivypanda.com/essays/true-religion-brand-jeans-companys-failure/.

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IvyPanda. (2020) 'True Religion Brand Jeans Company's Failure'. 15 July.

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