RALPH LAUREN – THE AMERICAN CHIC
In 1967 a young man from the lower-class neighborhoods of Le Bronx entered the New York fashion industries with a whole new definition of style. Passionate since his young age by 1950’s cinema he spent hours projecting himself in scenes played by Carry Grant, Grace Kelly or Audrey Hepburn. He wanted to be them, at least to dress like them, but he could not find any place to suite his needs.
When creating his brand, he quickly changed his name from Ralph Lifshitz to Ralph Lauren because he didn’t like the fact that it had “shit” in it … So he took the name of the famous actress Lauren Bacall.
More than 50 years after that Polo Ralph Lauren is one of the leading fashion group in the world with $6.31 Billion in 2019 and 39.2% of the online luxury market share which makes it first worldwide in this field. But the group isn’t free of problems, quite the contrary, bad marketing strategy and positioning had led the company in difficulties a number of times in 50 years.
– The market coverage –
Ralph Lauren Group is composed by a lot of sub-brands using the name and the original style and spirit of the creator, they never go too far from the east-cost American preppy manner.
The main activity of the company, it’s market development, stays in producing formal and semi-casual clothing. It started first with men but rapidly extended to women with Ralph Lauren Collection. Then in the 90’s they began entering the sport clothing and accessories market with new brands. To offer to their client the whole Preppy experience Ralph Lauren rented the name of the company to accessory and fragrance producers which made a product development for the group. And finally they risked to enter a totally different market and create products to fit in it with Ralph Lauren home in the 2000s.
Thus we can see that the TARGETING is really wide from the newborn to the elderly in at least upper middle class western countries.
But this wilde diversification caused too much problems to the group …
– Ralph Lauren’s strategic sucesses and failures –
As we can see the famous simple polo of Ralph Lauren is still the best seller of the whole group but the diversification and research for new designs lead the company to produce too much unfashionable clothes that didn’t met clients expectations.
The 1990s/2000s style experimentation of the the company created a difficult situation for them, that’s a common problem in this kind of creator clothing companies who rapidly expended in the 90s, Tommy Hilfiger, Calvin Klein and many others had the same problem.
The BCG Matrix gives us the same conclusion uppon the products of the company. The most sold products or cash cow are still the simple timeless pieces : polos, shirts and sweaters. Their diversification into restaurants, hotels or home features is quite recent so we can’t judge yet, it corresponds to the “?” in the BCG Matrix. The Armani group did the same strategy few years ago and it seems to work.
– SWOT Analysis-
- Multi sourced revenues due to wide diversification
- Big investment capacity
- Implanted in multiple countries
- Rapidly changing environment of the fashion industry
- The wide diversification can result on losses due to non-profitable branches
- New markets with a rising middle and upper-middle class like India or China. The second one is even more interesting due to it’s cultural incline for western luxury. Word fashion companies do whatever they can to hook the Chinese market and anchor their name in the chines minds
- Easily exposed to scandals. In 2012 the company faced a wave of complains and a fall of sales in the US due to the fact that the olympic champions clothes were made in China and not in the USA.
- High competition
Ritten by : Samy DRISS – Skema Business School – M1 2Y Msc – Year 2021