The North Face
The North Face expands market in China
Table of Contents
1.0 Introduction 1
2.0 Background: Company, Industry and Competitors 1
3.0 Business Issues/Challenges 3
4.0 Conclusion 4
Appendix A: Organization Structure of the North Face 6
The North Face, founded in 1966 by Douglas Tompkins and produces equipment and apparel for outdoor activities such as mountaineering, rock climbing and hiking, action sports and performance activities (Zager, 2011). It's been over forty five years, and the company, is a leader in outdoor-lifestyle brands ( Stacy, 2012). However, after the North Face expanded into China in 2008, it was not ...view middle of the document...
The North Face initially sponsors mountain climbing expeditions throughout the year for professional and amateur climbers, now it also has a youth line including equipment for running, yoga and training.
The North Face has a excellent executive team. Eric Wiseman as the Chairman and Chief Executive Officer has 35 year of experience in the apparel industry. Steve Rendle is President and Chief Operating Officer who is responsible for global supply chain. There are ten vice presidents who administer strategy, innovation, finance, human resource, general counsel and information respectively (The North Face, 2016).
2.2 Industry Analysis and Competitor Analysis
North America and Europe is the world’s two largest outdoor market. At present, the north America and Europe outdoor brands dominate the Chinese market. These companies usually started up with family-style factory and the designers and managers are the outdoor sports enthusiasts (Han, 2010). There are five major brands in China, ARC'TERYX, Patagonia, Marmot,Mountain Hardwear and The North Face. The North Face now is as a follower in China.
The North Face is not the earliest one who expands into China. ARC'TERYX entered in 2001 in first and had many loyal consumers. However, the North Face didn’t need to cost huge capital and time to face immature outdoor market environment. Moreover, like ARC'TERYX, Patagonia and Marmot are professional and quite expensive. By comparison, the North Face covers widely, it has low-priced line and luxury product to adapt to different consumers. The North Face have more physical stores in shopping mall, but other brands prefer to cooperate with professional outdoor store.
4.0 Business Issues/Challenges
This section states business issues and challenges of company to managers. It focuses on reminding managers of the problems in the North Face’s strategy management, decision making and business communication. The issues and challenges refer to The North Face is not recognized by an overwhelming majority of professional outdoor athletes and the demand from normal consumers are low in China. It is tough to compete with other outdoor brands which have more professional products or lower price equipment.
According to Porter (2014), a good strategy starts with having the right goal. As for the North Face, a considerable market share promotion is the goal for conducting a sound strategy in China. In 2013, the North Face only makes up fourteen percent of China outdoor market. Schermerhorn (2014) states the essence of strategic management is understanding the environment and organization. The...