Written Assignment 2: True Religion

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Written Assignment 2: True Religion
If the company successfully completes the shift from being a distributor, selling its jeans wholesale to other retailers to having its own stores across the globe with a diverse line up off products and becoming the apparel brand it desires; then yes, its success would be redefined. However, where continued viability is of concern, the strategy True Religion employed is a dangerous one, and especially so in the era of internet shopping. Barney & Hesterly state that by the end of 2012 the company had over 120 stores stateside and another 30 internationally (p. PC 1-27). Taking control of its own destiny by product diversification was a great idea; however, its expansion introduces overhead the organization hasn’t had before (payroll, rent/mortgage, utility, insurance… etc.), and these cost cuts into profit.
The organization had advantage such as using only cotton that is considered superior to make it products, having an array of designed for both males and females, having 5 washes …show more content…
When the company decided to open its own stores, it had to sell a pair of its jean at the going retail price of about $310 per pair which is an additional 200% markup (Barney & Hesterly, 2015, p. PC 1-19). But all things must come to an end and these prices were not exempt. The economic downturn of 2009 caused consumers to prioritize their finances, and a $310 pair of jeans didn’t make many individuals list. The false scarcity that was place on cotton as a way to increase the price went away, emergent trend took market share, and the stores’ reach wasn’t far enough to make up for lost customer. Therefore, True Religion had no choice but to reduce its price if it was going to survive the hard financial times that societies was

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