The Swot Analysis of the North Face Essay Example

business.

Weakness

Although the North Face establish almost 50 years, it started very late in China. In 2008, the first flagship store settled in Beijing. Compare with other famous outdoor product brand (see in chart 4), the North Face is the last company entry Chinese market. This weakness may lead some decision-making error in China and pressed by the competitors because it knows less about Chinese market. Chart 4 Data from Baidu. com Different from Converse, CAMEL or other brands, the North Face focus only on study its professional products in China.

This decision strongly limits its product market and lead the North Face unable to find an advantage in competition. The North Face may face single target market. In addition, this kind of target market just holds a little part of consumer in China. Hence, a single product company could face more challenges nowadays in this changing world. Though the North Face’s high product quality bring it a well corporate reputation, however, high product quality means expensive price. In 2010, the outdoor average consumption per year reached 5 billion RMB in China, consumption per person is 3. 8 RMB. (Chinanews. com 2011)

This means quite a little of consumer in China can adopt the North Face’s products. It is not a good trend for the company. Another weakness of the North Face is its marketing in China. As previous said the number of exclusive shop of the North Face focus only on first-tier cities and in addition, the awareness is not known intimately by consumer in second and third-tier cities. The channel manager should be blamed for this. The weakness of

marketing skill slows down the company development.

Opportunity From chart 4, it is easy to find out that, although the outdoor product industry just started in China, the development tendency shows substantial. The total volume of domestic retail sales of outdoor products in 2011 achieved 10. 76 billion and keep develop rapidly. (Xiaokun X & Qingye Z, 2012) The market gives huge opportunity when it develops at top speed. Therefore, it is a good chance for the North Face. Since the reform and open in 1997, Chinese purchasing power increasing rapidly. From a behindhand country to a powerful state which can compete with America and EU, China became an economic giant.

When the economy growth, people will more and more focus on improve their life quality. Hence, the purchase of professional outdoor products will also greatly increase. The North Face can use this opportunity to enlarge its industry in China. Treats The report shows that the number of outdoor product brands reached more than 700 in China in 2011. (Xiaokun X & Qingye Z, 2012) Though the North Face is an internationally renowned company, compare with the local companies, it also faces the challenge of close down.

This is because the low product price from local companies. Chinese people have the characteristic of covet little advantages, compare with the different price on a seemingly same products, they may prefer buy the cheap one. Therefore, it’s a real big treats for the North Face which has the high-end and expensive products strategy. For the North Face in China, it has another great challenge, the counterfeit and inferior goods. As research mentioned, during 2011, the

CQCA (China Quality Control Association) totally captured the counterfeit and inferior goods which worth 5. 53 billion. (Xinhuanet. com, 2012)

Obviously, the industry will be influenced easily by the counterfeit and inferior goods. In China, there is a distinctive treats, the cost of public relations. It is Chinese culture. For the North Face which just started business in China for 5 years, public relations may be a real problem. The high cost on public relations may cause the process of governing and decision-making become messy. Hence, for the North Face, public relations are still kind of knowledge worth learning.