American Apparel Case Analysis Essay

Key Facts of the Case (no analysis)-Who is the finding manufacturer? (Remember in analyzing a case you obligate to put yourself in the come in of the decision maker and try to figure out what YOU would do in his/her position). -maximum 5 key facts that summarize the case.Key decisiveness Maker menu of Directors (AA is a publicly traded follow)Key FactsAmeri substructure App atomic number 18l minimized their habituate of outsourced labour. They localized their manufacturing activities and were kn profess for their anti-sweatshop practices The solelyiance was also praised for their environmentally friendly practices such(prenominal) as using organic and recycled materials in several of their products, and participating in charitable performs Their advertising campaigns stirred up a lot of lean for the follow, as some consumers gestated them to be too sexual and borderline sexy Charney ( chief executive officer) took the ad pictures himself using women he found on the stree ts or his own employees. As a hiring practice, employees were required to provide full length self-portraits to him Charney brought foment to the company via sexual bedevilment lawsuits and by creating a hostile workings environment (using foul language, walking around in his underwear, flirting with employees, etc.)Problem(s) report-What is the main problem(s) or opportunity(s) that you (as decision maker) must deal with? -How urgent and how consequential is this unblock and why?Main ProblemThe main problem presented for American fit is that at that place are discrepancies between their controversial advertisements and piece of work practices and their supreme channel initiatives, which has resulted in a loss of sales for the company. They must designate how they are going to move forward and inspire a turnaround. destinyModerately urgentThe company forecast a turnaround by 2015 (3 years to the future)Problem(s) Analysis-What is the background that has led to the problem (s)?-What are the key points that the decision maker must consider when figuring out a final result? (eg. constraints that limit the possible radicals or opportunities that could arise) -If a financial analysis is required, delimitate that in this section. -Perhaps a different format for analysis is more(prenominal) curb? (eg. SWOT, PEST, Porters Five Forces).BackgroundAmerican Apparel strived to embolden raw natural beauty. To do this, they used real, non-photo-shopped, airbrush-free models in their advertising campaigns Their tactual sensation advertisements featured women in racy outfits and poses Charney took the pictures himself and either found women on the streets or used his own employees Charney said it was the companys way of merchandising to millennials, targeting contemporary adults who desired sexual freedom, and fighting against the pressures on women to achieve nonpareil Charneys strange and contrasted workplace behaviours make some employees liveliness une asySWOTStrengthsPro-labor practicesAnti-sweatshopMade in USA label collapse their employees nearly double minimum wageProvide job trade protection and legal benefits for employeesEnvironmentally friendly practicesUse of organic and recycled materialsStrong external presence 253+ retail stores in 20 different countries Reasonably priced and good quality productsWeaknessesProvocative advertisementsStore environment makes some customers feel uncomfortable reeked of sexual sin CEO Dov Charneys workplace behaviour and practices which have led to complaints and lawsuits The companys cost of production is likely high than their competitors because of their made in USA policy High labour cost$120 million in debtOpportunitiesThe company has the opportunity to tame their inflammatory advertising campaigns They can also steer the focus back onto their constructive(p)ly charged assembly line initiatives Ethical buying habits are on the rise consumers are becoming more conscious of th e environment Expand online and catalog business sectors emphasis product lines eliminate those that arent as successful and economic clear up advertising campaign focus more on AAspositive political activism and homegrown products Restructure corporate-executive-suite and construct a more positive public image Expand online and catalog business sectors Focus product lines eliminate those that arent as successful and profitable Reform advertising campaign focus more on AAspositive political activism and homegrown products Restructure corporate-executive-suite and construct a more positive public image ThreatsTheir competition who offer similar products at check or lower price points, and have cheaper production costs Threats of lawsuits against Charney which become a negative public image Threats of consumers shopping elsewhere imputable to dissatisfaction with AAs sexual advertisementsSWOT Findings The SWOT analysis shows that American Apparel needs to bring the focus back onto the strengths of the company. They need to remind consumers of the morals the company was built on and their good impart and valuable contri scarceions. Their weaknesses primarily ramble around being too overtly provocative, whether this is towards consumers or within the workplace itself. The company clearly cannot continue with this bitterness, as they risk overshadowing the positive aspects of their business.Decision Criteria for Solutions-What goals or objectives must be achieved by any potential solution to the problem? (eg. Must maximize market share) -What constraints limit the range of solutions (eg. enduret cost more than $1 Million)Goals and ObjectivesThe goal is to save the companys reputation which go out in turn stop their money-losing barConstraintsMust not incur further debt10Identification of naturalistic & Practical secondarys available to the Decision Maker In most situations there will be at least 3 alternatives, one of which can be status quo. One o r two short sentences to pick out each. Each alternative MUST be a stand unaccompanied solution to your problem(s).Alternative 1 American Apparel should fire their genuine CEO, Dov Charney,and elect a replacement.Alternative 2 American Apparel should dislodge their advertising strategy by toning down their sexual nature and focal point on their business strengths to create positive publicity.Alternative 3 American Apparel should continue with their current advertising strategies.Pros and Cons of each AlternativeAlternative 1ProsCharneys provocative vision and proneness to scandal will leave the company with him It shows that AA will not stand for sexual harassment and inappropriate workplace behaviours The company can bring in a new vision and have a fresh run shortConsThe company may nod off customers who supported Charney and his vision The replacement CEO may not be any stop than Charney at running the business Alternative 2ProsIt helps AA to fix the disconnect between their ethical and unethical practices It reminds consumers of the companys positive valuesConsCharney may not go for the new vision he may push backIt doesnt solve the issue of unethical workplace incidents The company may lose customers who support the provocative and natural ads Alternative 3ProsNo changes will need to be made, therefore employees will not need to be trained or guided through any change The controversy surrounding the company may actually bring in customersConsDiscrepancies of the companys business practices will not be solved Consumers who do not like the provocativeness of the company may continue orstart to avoid itRecommendation & Implementation Plan You must have a sentence that says, I exhort alternative Do not melt alternatives. Pick just one. Defend your choice of alternative. Explain WHY it is better than the others. If applicable, explain how the alternative will be implemented. (who, what, where, when, how)RecommendationI recommend alternative 1 fi ring Dov Charney.I do not believe alternative 3 is an option because the unethical advertisements and workplace practices would likely point up with the company and really affect their performance in the unyielding run. The reputation of American Apparel would just continue to deteriorate if nada is changed, which would deter consumers from shopping there.Alternative 1 is a better running to take than alternative 2 because it really gets at the root cause of all the issues Dov Charney. The provocative and controversial advertisements were largely inspired by the CEO himself. Simply changing the companys advertising campaigns is good and well, but there is no guarantee that Charney will even go for that. And whats to say he wouldnt go back to his old slipway in the future? Also, alternative 2 doesnt fix the issue of employee complaints and sexual harassment lawsuits that have given the company a insalubrious image. Alternative 1 has the potential to resolve both the advertisin g strategies and the inappropriate workplace incidents.ImplementationWhoBoard of DirectorsWhatFire Dov CharneyWhereAt a jury meetingWhenAs soon as possibleHowGather all documentation of Charneys inappropriate behaviours Review the termination agreement that was made at the time of hiring Charney Review the companys succession externalise for the CEO determine who may be able to take Charneys place in the interim Seek counsel from the companys lawyers on the best method to fire CharneyOverall Quality (logical unanimity & readability)