Forever 21: Strategic Analysis of Innovation and Technology (SBM4301)

This report provides a comprehensive strategic analysis of Forever 21's downfall in the Australian market. It examines the company's position using Porter's Five Forces, Value Chain, technology cycle, and the three phases of the innovation cycle. The analysis highlights the impact of competition, changing consumer preferences, and the lack of technological innovation. The report emphasizes the need for Forever 21 to adapt its strategies, survey consumer tastes, and embrace technological advancements to regain market share. Recommendations include modifying strategies according to market needs, surveying consumer preferences, and leveraging unique strategies. The report concludes that the company's failure to innovate and adapt led to its decline and offers insights for future success.

Running Head: INNOVATION AND NEW TECHNOLOGY: FOREVER 21
Innovation and Technology: Forever 21
Name of the Student:
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1INNOVATION AND NEW TECHNOLOGY: FOREVER 21
Executive Summary
The research paper focuses on Forever 21 downfall in the Australian marketplace. The paper
provides a clear idea regarding the porter’s five forces as well as the value chain model which
is necessary for the firm to look after so as to flourish in the marketplace. The paper also
focuses on the technology cycle and in which phase of the there phase of innovation cycle did
the firm falls under so that they can adopt the strategy according to the needs and wants of the
consumers and market. Lastly, the paper focuses on the recommendation regarding what are
the things that need to be done and the conclusion regarding the important factor that needs to
be the focus by the organization so that they can flourish in the domestic as well as in the
international marketplace.

2INNOVATION AND NEW TECHNOLOGY: FOREVER 21
Table of Contents
Introduction................................................................................................................................3
Porter’s Five Forces...................................................................................................................3
Porter’s Value Chain..................................................................................................................4
Technology Cycle......................................................................................................................5
3 Phases of Innovation Cycle.....................................................................................................6
Recommendations......................................................................................................................7
Conclusion..................................................................................................................................8
References..................................................................................................................................9

3INNOVATION AND NEW TECHNOLOGY: FOREVER 21
Introduction
Forever 21 is one of the fast-fashion retailers, who possesses its outlet all over the
world but its headquarter is in Los Angeles, California. The company is suffering a huge loss
in the Australian market. The company is on the verge of closing down in the Australian
marketplace and that is the main reason the firm requires to look after the market condition so
as to efficiently adopt a suitable strategy that will enable them to operate in an efficient way
possible (Bongiorno 2018). This is vital for the organization as the fashion in the Australian
market is growing and the firm can generate huge revenue if they adopt the proper strategy to
expand in the marketplace and to lure the attention of the consumers in the process.
Therefore, it is crucial for the company to look after the matter and to operate effectively so
that it can flourish in the Australian marketplace as well as the other international
marketplace (Luders, Cherbuin and Kurth 2015).
Porter’s Five Forces
As the firm operates in fast-fashion in the domestic and the international market so
there are other competitors in the market as well for the organization to look after and they
are Zara, H&M who are also operating in the Australian market as well (Kung’u 2017). There
is a high degree of rivalry that is going on between these companies. There are also threat of
the new entrant in the marketplace as the fashion is changing with the time and that is
essential for the firm to address so that they can compete with them as well (Zhao et al.
2016).
The entry of the new competitors in the market increase the bargaining power of the
suppliers are low as the buyers can easily switch from one brand to the other in the process
(Baker 2014). On the other hand, the bargaining power of the buyers is also increasing in the
process due to the availability of the option in the industry, which is also crucial for the firm

4INNOVATION AND NEW TECHNOLOGY: FOREVER 21
to look after so that they can attract the customers in the process. Lastly, there is a threat of
substitutes in the marketplace as new fast-fashion brands are entering the market and the taste
and preference of the consumers are changing drastically in the marketplace (AYDIN 2017).
The firm needs to analyze the marketing condition in Australia as per the porter’s five
forces, which will enable them to understand its standing in the marketplace. This is essential
for the Forever 21 as they are operating in the fast-fashion. So, it can be said that the fashion
or style which is popular in the market current might be out of fashion within a week (Mahat
2019). Therefore, the organization needs to continue the flow of production in the
marketplace. The organization also requires to come up with the new style or fashion which
is necessary for the company to flourish in the marketplace and to gain popularity among the
consumers in it.
Porter’s Value Chain
As per the porter’s value chain model, the primary activities that could have been
focused by Forever 21 is in inbound logistics as well as marketing, sales, service, and
outbound logistics so that they can operate the supply chain management in the Australian
market quite efficiently and help the company to achieve the goal that they have set in the
process (Von Loeper et al. 2016). This is vital for the firm to look after so that they can
expand in the marketplace. This is also very vital for the company as they are operating in the
fast-fashion industry and there is competition in the marketplace.
On the other hand, in the support activities the company could have looked into the
infrastructure, procurement as well as technological development and human resource
management, which could have motivated the employees to work hard (Naveen 2016). This
would have also motivated the employees to perform well and could have benefitted the
company to compete with the other competitors in the process. This is essential for Forever

5INNOVATION AND NEW TECHNOLOGY: FOREVER 21
21 to look after so that could have generated a huge market share in the process. Therefore, it
can be said that the company is suffering from bankruptcy due to a lack of management in the
organization (Porter 2013).
This will assist the organization with the management which will enable them to
flourish in the marketplace and help them to achieve success in the process. This needs to be
understood by the organization so that they could have adopted the strategy which will be
beneficial for them to sustain in the Australian marketplace (Dobele et al. 2014). It is always
advisable for the company to get strong management so that they can compete in the
marketplace of the fast-fashion as the taste and preferences of the company changes in the
process. So, the firm needs to keep them updated with the changing trend and the preferences
of the consumers in the market where they are operating in the process (Chang et al. 2016).
Technology Cycle
As per the technology cycle, Forever 21 falls under the era of incremental changes
and that is so as the firm does not showcase any sort of innovation in its website or
application or the production process. This is one of the main reasons for the downfall of the
organization in the Australian market. As the company operates in the fast-fashion so they
need to upgrade themselves from fashion to the overview of the website or application. This
was absent and marked to be a disadvantage for the organization. This ultimately guides the
company to become bankrupt and they need to close its outlet in the Australian market.
This is a vital aspect that requires to be addressed by the company so that it can
operate efficiently in the marketplace and can re-emerge in the Australian market. This will
assist them to lure the customers from the marketplace and also enable them to generate
revenue in the process. Innovation is an integral part of the firm to gain success in the
marketplace. This is due to the technological advancement all over the world and the

6INNOVATION AND NEW TECHNOLOGY: FOREVER 21
organization requires to cope up with the advancement in the process. Therefore, it can be
said that this is also a reason for the company to close down in the Australian marketplace. If
the comp[any have done the research and adopted the technological advancement accordingly
then they could have achieved the target what they are intended to obtain from the
marketplace.
This is the crucial factor that the organization requires to look after so that they do not
repeat the same mistakes that they have done in the marketplace and can achieve the goals
that they have set in the fast-fashion industry. Hence, the company needs to look after the
matter and need to address it in an effective way possible in the international and also in the
domestic marketplace.
3 Phases of Innovation Cycle
As per the three phases of the innovation cycle, Forever 21 initially was in the fluid
phase where the firm was providing new and unique designs to the consumers in the fast-
fashion industry but due to the lack of innovation, the organization moved to the transitional
phase in the industry (Cooper 2014). This marked to be the downfall of the organization in
the Australian market and currently, the company is in a specific phase as the innovation of
the organization becomes stagnant in the marketplace and that the sole reason for the firm to
attend the bankruptcy in the Australian marketplace. This is an essential factor for the
organization to look after so that it can flourish in the marketplace by attending the fluid
phase again in the Australian marketplace (Overall and Wise 2015).
This is considered to be the vital step that requires to be taken up by the company so
that they can contribute to the fast-fashion industry and that will assist the company to attend
the success in the marketplace (Bernard et al. 2014). The taste and preference of the
consumers are changing constantly and that is the main aim of the company to fulfill the

7INNOVATION AND NEW TECHNOLOGY: FOREVER 21
demand of the consumers in the marketplace. This will enable the organization to become
popular in the process and assist them to attend the achievement of what they are intending to
obtain in the process. Therefore, it can be said that the company mainly suffer a loss as they
were lacking behind to cope up with the innovation as well as designs in the market as per the
consumer's choice (Dewulf 2013).
This can be marked as the downfall of the company and they have reached the
specific phase in the innovation phases which need to be understood by the firm and requires
to look after so as to flourish in the marketplace and can attend the success in the process.
Recommendations
Few recommendations need to look after by the organization so that they can expand
in the marketplace and can achieve success in the process. This is important for the firm to
become successful in the marketplace and to generate revenue in the process. The
recommendations are as follows:
 The firm requires to cope up with the technological advancement and to modify
the strategy as per the market need and wants. This is vital for the company to
flourish in the marketplace and to generate revenue in the process. The firm
requires to look after the matter so that they can become successful in the
marketplace and can lure the consumers in the process.
 The organization needs to survey the taste and preference of the consumers in the
marketplace. This is crucial for the company as this will enable the organization to
flourish in the marketplace and to attend the success in the process. The taste and
preference of the consumers change drastically and the company needs to
understand so that they can flourish in the marketplace and can achieve success in
the process. Hence, it is critical for the growth of the company in the marketplace

8INNOVATION AND NEW TECHNOLOGY: FOREVER 21
and to attend the success in the process so that they can generate a huge amount of
profit with the new design in the marketplace.
 Lastly, the firm requires to look after the strategy that they are using in the
operation process in the marketplace so as to become popular in the process and
can attend the success in the marketplace. The organization needs to take up its
unique strategy and help the company to grow in the process. This needs to be
understood by the firm so that they can become popular in the process and can
attend the success in it.
Conclusion
In the end, it can be seen that the company has done greatly in the Australian
marketplace but lacks in many aspects which brings the firm in the state of bankruptcy in the
marketplace. This is critical for the firm to understand so that it can flourish in the
marketplace and can obtain success in the process. Therefore, the firm needs to look after the
matter so that it can flourish in the marketplace and can attract the consumers in an effective
way possible and help them to attend the success in the process and can generate revenue in
the process.

9INNOVATION AND NEW TECHNOLOGY: FOREVER 21
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