Business Strategy

Hollister Co. Has become a useful asset for their parent company, Abercrombie & Fitch.  The significant performance of Hollister has been a result of the organization’s business strategy.  Hollister advertises high quality products at such low prices during clearance and Holiday sales.  Profits have continued to increase for the Hollister company consistently throughout the past decade.  Despite threats from competition, Hollister has seen a great deal of success & innovative marketing ideas.  Hollister has created a reward points system to draw in more customers both in-store and online.  Customers do not have much bargaining power against the company, a familiar pattern since the retail clothing store first emerged.  Without the strong relations with vendors consumers would not be provided products made from better quality materials while Hollister increases profits and keep material costs at a minimum.  However, the company is required to purchase materials and produce clothing in much larger quantities in order to reserve such prices from their suppliers.  Hollister pays close attention to detail more so in their physical locations all while constantly updating the clothing stores online website and more recently their mobile application.  Hollister has sought out the assistance of an application developer in order to create a very easy to use layout for both new and returning customers.

Competitive Strategy:  Hollister Co. Operates competitively through a differentiation focus stand point.  The primary objective for the organization from the beginning has been to stand out amongst their competitors as well as their parent company.  From storefront renovations to installing highly effective and efficient registers and POS systems, Hollister is always looking to be one step ahead of their competitors.  The image behind this company is targeted for a specific “Southern California” audience with consumers of a similar taste in mind.

Hollister Company through the 5 Forces Model:

BARGAINING POWER, BUYERS (LOW)	BARGAINING POWER, SUPPLIERS (MODERATE)	THREAT OF SUBSTITUTIONS(HIGH)	THREAT OF RIVALRY (MODERATE)	THREAT OF NEW ENTRIES (LOW)
PROMOTIONS, SALES, CLEARANCE ENTICE CUSTOMERS. STRICT AND REASONABLE ENFORCED RETURN POLICY	STRONG RELATIONS WITH FREQUENTLY USED SUPPLIERS. HIGH QUALITY PRODUCTS MUST BE BOUGHT IN HIGHER QUANTITY	LARGE NUMBER OF SLIGHTLY SIMILAR BRANDS MUST STAY ON TRACK WITH COMPETITORS PRICE POINTS	RIVALS ARE USUALLY IN SAME SHOPPING CENTERS PRICE MARGINS BETWEEN COUNTRIES STRUGGLES MORE THAN RIVALS	GLOBALLY RECOGNIZED BRAND/LOGO MARKET TO SATURATED FOR UP & COMING ENTRIES