American Apparel Case Analysis Essay

Key Facts of the Case (no abbreviation)-Who is the termination maker? (Remember in analyzing a gaucherie you pick up to put yourself in the range of the last maker and try to general anatomy out what YOU would do in his/her position). -maximum 5 key facts that summarize the case.Key end MakerBoard of Directors (AA is a popularally traded friendship)Key FactsAmerican robe minify their use of outsourced boil. They localized their manufacturing activities and were kn experience for their anti-sweatshop practices The party was also praised for their environmentally friendly practices such(prenominal) as using fundamental and recyclight-emitting diode materials in several of their products, and participating in gentle causes Their de none campaigns stirred up a lot of controversy for the follow, as roughly consumers believed them to be too knowledge up to(p) and moulding pornographic Charney ( chief executive officer) took the ad pictures himself using women he found on the streets or his own employees. As a hiring practice, employees were required to post full length self-portraits to him Charney brought heat to the community via sexual harassment lawsuits and by creating a hostile working environment (using unsporting language, walking around in his underwear, just nowterfly with employees, etc.) conundrum(s) Statement-What is the main problem(s) or opportunity(s) that you (as decision maker) essential deal with? -How urgent and how definitive is this issue and why?Main ProblemThe main problem presented for American Appargonl is that there are discrepancies between their moot advertisements and piece of work practices and their exacting argument initiatives, which has resulted in a loss of sales for the fellowship. They must(prenominal) determine how they are going to bear upon forward and inspire a numberaround.importunityModerately urgentThe society bespeak a turnaround by 2015 (3 days to the upcoming)Problem(s) Analysis -What is the maskingground that has led to the problem(s)?-What are the key points that the decision maker must consider when figuring out a solution? (eg. constraints that limit the possible solutions or opportunities that could arise) -If a financial analysis is required, specify that in this section. -Perhaps a different coiffure for analysis is more(prenominal)(prenominal) appropriate? (eg. SWOT, PEST, ushers Five Forces).BackgroundAmerican dress out strived to promote raw congenital beauty. To do this, they used real, non-photo-shopped, airbrush-free models in their advertize campaigns Their signature advertisements featured women in drear 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 gilds way of marketing to millennials, targeting contemporary adults who desired sexual freedom, and fighting against the pressures on women to achieve perfection Charneys other and opposed employment behaviours make near employees feel self-consciousSWOTStrengthsPro-labor practicesAnti-sweatshop do in USA label dedicate their employees nearly double minimum remunerationProvide job security and commodity benefits for employeesEnvironmentally friendly practicesUse of organic and recycled materialsStrong international presence 253+ sell stores in 20 different countries somewhat equipment casualtyd and good quality productsWeaknessesProvocative advertisements depot environment makes some customers feel uncomfortable reeked of sexual sin CEO Dov Charneys workplace behaviour and practices which hurt led to complaints and lawsuits The connections cost of payoff is likely higher than their competitors because of their made in USA policy High labour costs$120 million in debtOpportunitiesThe guild has the opportunity to tame their incendiary advertising campaigns They can also flatus the localise back onto their validatory crease initiatives Ethical buying ha bits are on the rise consumers are becoming more conscious of the environment Expand online and catalog pipeline sectors Focus product lines come about those that arent as successful and fat advance advertising campaign focus more on AAspositive governmental activism and homegrown products Restructure corporate-executive-suite and perform a more positive public video Expand online and catalog crease 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 chassis ThreatsTheir competition who offer similar products at equal or lower price points, and have cheaper production costs Threats of lawsuits against Charney which lay down a negative public image Threats of consumers shopping elsewhere due to dissatisfaction with AAs sexual advertisementsSWOT Findings The SWOT analysi s shows that American Apparel needs to go the focus back onto the strengths of the ac social club. They need to move consumers of the ethics the company was built on and their good get out and valuable contributions. Their weaknesses primarily orbit around being too overtly incendiary, whether this is towards consumers or within the workplace itself. The company clearly can non continue with this controversy, as they jeopardy overshadowing the positive aspects of their business. conclusiveness Criteria for Solutions-What goals or objectives must be achieved by any electric potential solution to the problem? (eg. Must increase market share) -What constraints limit the range of solutions (eg. lowlifet cost more than $1 Million)Goals and ObjectivesThe goal is to save the companys reputation which allow in turn stop their money-losing streakConstraintsMust not incur further debt10 realization of Realistic & Practical picks available to the Decision Maker In most situations t here will be at to the lowest degree 3 substitute(a)s, one of which can be status quo. One or cardinal short disapprobations to describe each. Each ersatz MUST be a subscribe alone solution to your problem(s).Alternative 1 American Apparel should fire their electric live CEO, Dov Charney,and elect a replacement.Alternative 2 American Apparel should change their advertising strategy by toning down their sexual nature and focusing 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 challenging good deal and proneness to scandal will present the company with him It shows that AA will not give birth for sexual harassment and inappropriate workplace behaviours The company can go in a new hatful and have a fresh latch onConsThe company whitethorn lose customers who supported Charney and his vision The replacement CEO may n ot be any better than Charney at running the business Alternative 2ProsIt helps AA to plug the disconnect between their respectable and unethical practices It reminds consumers of the companys positive valuesConsCharney may not go for the new vision he may push backIt doesnt work out 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, thus employees will not need to be trained or guided finished any change The controversy environ the company may actually bring in customersConsDiscrepancies of the companys business practices will not be puzzle out Consumers who do not like the provocativeness of the company may continue orstart to avoid itRecommendation & Implementation image You must have a sentence that offers, I commend alternative Do not combine alternatives. Pick fitting 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 firing Dov Charney.I do not believe alternative 3 is an option because the unethical advertisements and workplace practices would likely catch up with the company and really affect their performance in the long run. The reputation of American Apparel would just continue to deteriorate if goose egg is changed, which would deter consumers from shopping there.Alternative 1 is a better path to channelise 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 ways in the future? Also, alternative 2 doesnt fix the issue of employee complaints and sexual harassment lawsuits that have given the company a shitty image. Alternative 1 has the potential to resolve both the advertising strategies and the inappropriate workplace incidents.ImplementationWhoBoard of DirectorsWhatFire Dov CharneyWhereAt a board meetingWhenAs soon as possibleHow forgather all documentation of Charneys inappropriate behaviours Review the termination agreement that was made at the time of hiring Charney Review the companys succession plan 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 amity & readability)