VF Corporation: Strategic Analysis Report - Applied Corporate Strategy

This report provides a strategic analysis of VF Corporation, a multinational American company dealing with apparel and footwear. It includes an external analysis using PESTEL and Porter's Five Forces, identifying political, economic, social, technological, environmental, and legal factors affecting the company. The internal analysis assesses VF Corporation's strengths in manufacturing, retail outlets, finance, employees, and cash flow, alongside weaknesses in human resources, marketing, information management, asset management, and stakeholder engagement. A VRIO analysis evaluates the company's resources for competitive advantage. The report concludes by evaluating VF Corporation's overall strategic position and offering insights into its competitiveness within the apparel and footwear industry. Desklib provides this and other solved assignments to aid students in their studies.

Applied Corporate
Strategy Assessment:
Strategic Analysis
Report

Table of Contents
INTRDUCTION..............................................................................................................................3
TASK...............................................................................................................................................3
External analysis of VF corporation...........................................................................................3
Internal analysis of VF Corporation............................................................................................6
Define the strategy evaluation...................................................................................................10
CONCLUSION .............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRDUCTION
Strategic analysis is defined as an technique which is used by organization for conducting
various types of research and also for analysing macro external factors. This analysis is
conducted only when organization initiates a plan which is done for run their departmental
functions and services smoothly. The chosen company is VF Corporation for analysing the
strategy of company effectively. The company was established in 1899 and it is a multinational
American company which is located in Denver, Colorado (Ahmed, 2021). This company is
dealing with wide range of products in various countries such as apparel, footwear and others.
This report will cover the description of internal and external analysis of the organization,
justification of threat and opportunities. It also cover the strength and weakness of utilized
resources by organization and also the description of porters value chain that justifies its
competitiveness.
TASK
External analysis of VF corporation
The business environment is defined as an gathering of various drivers which impact the
business externally and internally such as operations, workers and consumers PESTEL analysis
is a tool which represents the ways where external elements are responsible for influencing the
company. It is a very effective tool for analysing the application of corporation strategy in
systematic way. PESTEL stands for political, economical, social, technological, environmental
and legal which are described below -
 Political – It is concerned with those factors which which impact the performance and
operational activities of the business activities in political manner. Those factors are trade
restrictions, tax policy, bureaucracy, tariffs and others. For example due to conducting
elections by the government changes are highly occurred in various aspects such as
policies and rules and regulations. Due to facing these type of changes threat are highly
increased for VF Corporation in their business activities and services which leads to
decrease their goodwill and financial profit for long time.
 Economical – It refer to those factors which effect the performance and overall growth of
organization in economic manner. Those factors are unemployment rates, inflation,
exchange rates, interest rates economic growth rates and others. These factors are highly

responsible for measuring the level of changes of an economy which are represents with
the help central bank of nation and government agencies. Therefore, these factors are an
opportunity for VF Corporation in the aspect of current culture but sometimes these
factors create threat for company if the trends are changed.
 Social – It is concerned with those factors which effects the performance and goodwill of
organization socially. Those factors are belief, attitude, quantity in age groups, population
growth rates, perception, health etc. (Ammenberg and Dahlgren, 2021). When
organization deals their product such as apparel and footwear are dealing in new area
then, changes in these factors some times create threat for them. Because in those areas
consumers did not have proper knowledge about these company. But in other side it is an
opportunity for company if they shows respect to various social norms of society in
effective manner.
 Technological – It refer to those factors which impact the overall performance of VF
Corporation in both aspects one is negative and other is positive. Those factors are
change in technology, automation, research and development etc. Some times these
factors enhance threat for apparels and footwear company if their requirements are not
fulfilled with technology according to their compatibilities and capabilities. For example,
VF corporation has a wonderful opportunity for digitalizing their tangible information. In

this way organization are able to access the information quickly which leads to increase
the work efficiency in their business activities.
 Environmental – It is concerned with those ecological effects on the apparels and
footwear industry (Baltina, Bolodurina and Gorbatenko, 2018). Therefore, it is mandatory
for VF Corporation that they must adopt various ways for tackling or identifying the
changes which is occurred in the environment. It includes climate change, temperate,
weather conditions, pollutions and others. In positive side favourable change in climate is
a opportunity for organization. But if the firm not made adjustment according to the
climate then definitely threat are easily enhanced for their business.
 Legal – It is refer to those factors which are responsible for generating legal rules and
laws to the VF Corporation for their product such as apparels and footwear. In positive
aspect this laws is an opportunity for business if they run their departmental functions and
services according to government guidelines. Due to this the positive relationship
between organization and government effectively sustained in long term. But in negative
aspect if firm did not follow the rules effectively then they need to face punishment in the
form of penalties.
Porters Five Force Model -
It displays the effective evaluation of external forces that effects the pricing and
competition of VF Corporation services and products. In this model basically five factors are
involved which are described below -

 Threats of new entrants (Low) – The new entry in the market of apparel and footwear
products easily disrupt the environment of business for long time. The maximum level of
brand development will impact the organization in the form of weak force. The large
economy of scale also comes under the category of weak force for the firm and average
cost of working in this organization will applied to modern force.
 Threats of substitutes (Moderate) – In threat of substitute some factors are involved
like VF Corporation performs moderately in aspect of price of substitute that provides
moderate force, moderate availability of company and others. In aspect of footwear
company applied a low cost which leads to increase their productivity and work
efficiency at large scale.
 Bargaining power of suppliers (Low) – In the areas of high population density apparels
and footwear products of VF Corporation have a high power for bargaining and this will
be converted into weak force. The overall demand and supply of footwear products is
very high which easily converted into weak force (Feldman, 2020). In aspect of modern
size the number of suppliers are contributing to a modern force.
 Bargaining powers of buyers (Moderate) – Buyer is one of the factor which directly
impact the productivity of organization as they have less switching price due to strong
workforce. The quantity of customers are very less which reflects that they workforce are
highly weak. Due to this chances are easily increased for customer switch to other brands.
 Competition between rivalries (High) – The apparel and footwear industry has to
sustain their market share in bad situation also which applies a strong force. There is a
high aggression of organization that helps to utilizing a strong workforce and there are
few moderate firms who applied a moderate force.
Internal analysis of VF Corporation
According to above mentioned details VF Corporation is mainly dealing with apparels
and footwear. In this business they have some strength in terms of their resources which is
utilized in their operational activities which are described below -
 Manufacturing – In aspect of organization they are good in diversifying their services
and products. Due to diversifying their product VF Corporation are able to increasing
their revenue at higher rate. It is the strength of the company in the form of having high
work efficiency and goodwill in market and between customers.

 Retail outlets and stores – The company deals their product in more than two thousand
stores globally which helps them to provide their users to a large area. This is a benefit
for VI Corporation for capturing more consumers and also help to increasing the brand
awareness at large scale in various locations. In this way firm are able to expand their
business activities according to favourable situations in new market.
 Finance – This company is highly innovative and they are the only one in all over
country who invest huge fund for developing quality and unique product. This is highly
beneficial to them for their future development and it also bring changes in development
of apparel and footwear industry. For example, VF Corporation assign their different
quantity of cash for bringing an innovation.
 Employees - In this company the total number of working employees is more than
60,000 and they are the very valuable asset for them. Due to having strong workforce VF
Corporation are able to enhance their work efficiency and productivity at large scale.
Hence this helps them to hire more of them for the diversification of their products.
 Cash – It is one of the company who holds a high volume of funds in the form of asset
and due to this their cash flow is very high and fast. It helps to increase the financial
performance of the organization at maximum level (Gbolarumi, Wong and Olohunde,
2021). It is basically a benefit for VF Corporation because here company is invest more
for their future which help them for made changes in their operations and strategy. In this
way company are able to diversify their products to more regions.
The organisation is also face the challenges from their weaknesses from which some of them
discussed below: -
 Human resource :-the human resource department of the organisation is not strong
because they have lots of workers within the organisation which are of different
backgrounds and culture. The management of the VF Corporation not be able to manage
the its employees as they don't give appreciation to their employees for their excellent
work along with this they don't also offer adequate return for their high performance.
 Marketing: - the management of the respective company not making extra efforts in
marketing, which is not enough to bring the development. The changes is not done by the
VF Corporation in their marketing strategies which need to be change in the dynamic
environment.

 Information:- the adequate amount of efforts are not put by the management of the
respective firm in doing the proper research, this make their research less productive. It is
very important for the VF Corporation to recruit some experts who are specialised in
particular field.
 Assets management: - at many times the management of the company do the mistake in
accounting of their assets due to which they are not be able to record their assets in
proper manner. The chances of frauds for the VF Corporation in auditing their assets has
been increased.
 External stakeholders: - the interest level of the stakeholders has been affected because
of the less transparency of the firm (Goryunova, Goryunova and Shubin, 2020). Due to
this, the stakeholders of the VF Corporation's give more importance their personal needs
rather then interest of the organisation and due to this it lacks contribution.
VRIO analysis is basically an internal analysis which assist the organisation in
identifying all the advantages and resources which give competitive advantage to them. The
VRIO is denoted as value, rarity, limitability and organised. This framework in context to the
VF Corporation has been discussed below: -
Resources Value Rare Imitation Organisation
The presence of the
company all across the
globe.
Yes Yes Yes Yes
The trademarks and
copyrights of the firm.
Yes Yes No Yes
Talented and skilful
workforce.
Yes No Yes Yes
Track record of leadership
team
Yes Yes No Yes
Different pricing strategies
of the company
Yes No Yes Yes

Vision of the leadership for
next set of challenges
Yes No No No
Brand positioning in
comparison to the
competitors
Yes No Yes Yes
Customer of the firm Yes Yes No No
Opportunities present in
front of the managementand
new resources needed to
enter those industries
Yes No Yes No
Product Portfolio and
synergy among different
product lines
Yes No Yes Yes
the company is diversifying its revenue streams, separating its balance sheet from the business
cycle and making its global footprint valuable. Its global presence can be imitate by its rivals and
its organization is diversified around the world (Götzmann and Bainton, 2021). VF Corporation
considers intellectual property rights, copyrights and trademarks to be more valuable resources in
intensifying competition, and its intellectual property rights and other rights are rarely duplicated
in this competition. Their talent for fulfilling regulatory and legal obligations can be emulated by
competitors, but leadership team performance cannot be emulated by rivals. The respective
company has a pricing strategy that is often imitated in the shoe industry, and the company has
organized a pricing analysis engine. The value chain is a group of functions that specify products
and services that transform ideas into reality. Porter's value chain includes the following key
activities:
 Inbound logistics: - the management of the respective company handle all the activities
which is directly related to the obtaining and storing the input. They become more

competitive in the market if they outsource their work to the special agent over the
worldwide.
 Operations: -in this organisation transforms its raw material into the final goods. The
competitive advantage is enjoy by the management of the company as they serve high
quality services in comparison to their rivals.
In the company value chain there are different types of support activities which have been
discussed below: -
 Firm infrastructure: - in relation to the quality management, accounting and the finance
the management of the VF Corporation enjoys the competitive advantage because they
have to diverse themselves. In order to this they must have to manage and plan for their
structure (Hereher and El-Kenawy, 2021).
 Human Resource management: - recruiting of the employees, developing training
programme, selection of the employees and many more are some of the activities which
are conduct by this management. The respective firm are competitive advantage in
relation to the staff management.
Define the strategy evaluation
An effective strategy has been developed by the company management in the acquisition
of the firm. It is very difficult for the organisation to select an appropriate strategy according to
their strength and weakness which tells them that what is right and what is wrong. The SAF test
model is basically an application that assist the VF Corporation in the acquisition of the strategy.
The three criteria of the SAF model has been discussed below: -
 Suitability – this is being considered as the most essential element of the SAF test. It is
very important for the company management to check whether the strategy which are
acquire by them is suitable for them or not. In relation to the VF Corporation, the
management check whether environmental, expectation and capability all three suitability
are in the favour of organisation. The requirements of the company is also affect by
suitability in the various matters.
 Acceptability: - in the matter of calculating the risk and return as well as the reaction of
the stakeholders, the management of the VF Corporation should be acceptable as that will
based on the strategy which are acquire by them. The returns will be reflected by the
benefits which are get by the stakeholders form the strategy acquisition. Therefore, on the

process of cost benefit, real options analysis and shareholder value the return will be
based.
 Feasibility :-it is very important for the company management to acquire the strategy in a
very feasible way (Kumar, Stallard and Stansby, 2021). In relation to the VF corporation,
the company need to improvise their resources in order to achieve the success. The cash
flow of the company specifies the financial feasibility and various test are performed
assist in identifying whether the organisation is feasible in term money or not. Along with
this it is very important that company posses the feasibility in relation to the employees,
raw material and power of management in convenient manner.
TOWS Matrix
Internal Factors
Strengths Weaknesses
 With in the
business
organisation the
management have
large number of
experts and
professionals who
are highly
experienced.
These professional
assist the
management of the
respective
company in
acquiring the
strategies in proper
manner so that
they don't face any
complexities


 The biggest weakness
of the firm is that,
less initiative is taken
by the management in
relation to the
acquisition of the
customers. They wait
for that time when
consumer approach
them. This is the
main reason behind
the weak relationship
of the company with
the customer.

which are
predicted by them
earlier.
Opportunity Strength/ Opportunity Strength/Threat
 The management of the
respective company have
desire to obtain the
another business that
assist them in connecting
with the new consumer
which are connect with
other firm.
 The management
have the internal
capabilities that
are beneficial as
compared to
external
opportunities
(Mobius, and Ali,
2021). The
respective
management have
global term of
opportunity by
which their
advisor and
expertise manages
their operation and
functions.

 An organisation have
to eliminate the
challenges by
increasing their skills
and abilities in order
to develop the firm in
the competitive
market.
Threat Weaknesses/ Opportunity Weaknesses/Threat
 Due to immense
competition in the
footwear and apparel
industry. There is a very
tough competition in the
marketplace, it becomes a
hurdle for expanding its
 VF organisation is
not taking
initiative in future
it will decrease
their opportunities.
It will also affects
on expanding new
 Their biggest
weakness is they does
not take initiative in
growth and
innovation. They
make their
competitors more

business of the company. business. powerful as they
lacking best
opportunity.
CONCLUSION
This report concludes the strategic analysis explained by an external environment with
political, legally and politically explained industry threats and possibilities. In the five power
models of the porter, there were power from the rivalry, weak strength from supplier power, and
the threat of new participants. On the other hand, internal analysis of a company that declared
cash, finance and employee profits was very weak in asset management, marketing, and
stakeholders. VRIO made the conclusion that the company had a valuable, unusual, imitable
and organized resource that the company was a regional existence, so other resources should be
improved. Value chain showed the main activities of companies that are incoming logistics and
business, and support functions were fixed infrastructure and HRM. The company has
successfully passed SAF tests with earning strategies. This report also concluded the Tows
Matrix which concluded that the company has improved competition with other companies in the
same industry.

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