Strategic Analysis of VF Corporation: Applied Corporate Management

This report provides a detailed analysis of VF Corporation's corporate strategy, starting with an external analysis using the PESTLE framework, which examines political, economic, social, technological, legal, and environmental factors affecting the company. It also employs Porter’s Five Forces model to assess the competitive intensity of the apparel industry, considering competitive rivalry, the threat of substitution, the threat of new entrants, and the bargaining power of suppliers and buyers. The report then transitions to an internal analysis, utilizing the value chain analysis to identify key resources and activities within VF Corporation, focusing on both primary activities like inbound logistics, operations, outbound logistics, marketing and sales, and services, as well as support activities such as human resource management, firm infrastructure, procurement, and technology. Furthermore, a VRIO analysis is conducted to evaluate the company's competences, assessing whether these resources are valuable, rare, inimitable, and organized to capture value, ultimately determining VF Corporation's competitive advantages and areas for improvement. The report concludes by evaluating VF Corporation's strategy, including its approach to innovation and market positioning.

Targeting applied
corporate management

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Q1. External Analysis..................................................................................................................1
Q2. Internal Analysis...................................................................................................................4
Q3. Evaluation.............................................................................................................................8
REFERENCES..............................................................................................................................12
APPENDICES...............................................................................................................................13

INTRODUCTION
Corporate strategy is delineated to a long term vision which business set, seeking to devise
value of company and motivate employees for implementing proper actions with the hope of
accomplishing customer satisfaction (Charter and Tischner, 2017). It is an ongoing process to
sustain in volatile competitive environments. It emphasises towards ways to manage resources,
returns addition to risks across the venture in opposition to seek competitive benefit within
business strategy. The report of targeting applied corporate strategy is prepared on VF
Corporation that is worldwide apparel along with footwear organisation established in 1899. Its
headquarters are situated at Denver, United States.
The report highlights external analysis with application of PESTLE framework as well as
Porter’s Five Force Model. It also discusses internal analysis to examine resources with Vales
chain analysis and VRIO model. At last, it evaluates strategy of VF Corporation-Supreme
strategy through SAFe test.
MAIN BODY
Q1. External Analysis
PESTLE Analysis
It is a tool associated to macro environmental or extrinsic factors which business
concerns apply for scanning uncontrollable environment. In case with VF Corporation, factors
which causes threats to working or generate opportunities are underneath:
Political: It defines intervention of government of a nation in any industry or market
(Caglio, Melloni and Perego, 2020). Within United States, Strong democratic setup as well as
effective legislator regulations, along with elections are seen as fair and transparent which offers
huge opportunities to businesses operating in it. For instance, government makes contractual
agreement with another nation which acts as an opportunity for VF Corporation to expand and
grow business by selling its diverse products in other countries also. However, trade barriers and
tariffs implemented by the government possess threat for VF Corporation as the company have
to invest huge in tariffs and consider barriers while diversifying at global level.
Economic: It is associated to fundamentals elements comprising wages, consumer
disposable income, business cycle and many more. Economy of United States is highly
developed mixed economy with nominal GDP, net wealth and largest purchasing power parity
1

that creates opportunities for companies to carry out operations effectively. For example, demand
for footwear across the globe are increasing. Moreover, growth is attributed to rise consumer
disposable income level within emerging nations So, it is an opportunity for VF Corporation to
offer variants of footwear to meet demand and boost organisational growth.
Social: Dimensions concerned with lifestyle, attitude, behaviour, buying habits,
population density and education level are social factors (Rehman, Shahid and Khalid, 2020).
Within United States, customers have huge preferences for footwear and clothing that is
opportunity for an entity that offers such category of commodities. For example, by
understanding customers of the market and repositioning organisational work segment portfolio
is an opportunity for VF Corporation to expand in untapped area of society.
Technological: The ways in which new practices addition to equipment influences
organisational practices are technological factors. In context to United States, there are rapid
changes in technological usage and upgradation as entities are changing operations with advance
technologies which provides opportunities to organisations. For example, when VF Corporation
works with automation in operations and advanced technologies, it creates opportunity of market
expansion with online collaboration via technological analytics. With technological advancement
in analytics that are Artificial Intelligence and Big Data Usage, companies are able to learn ways
to execute operational practices across the globe conveniently.
Legal: Legal factor pertains legal forces which illustrate what an organisation can or
cannot perform. Equality Act 1974, Data Protection Act 2021 and Occupational Safety and
Health Act 1970 are key laws which business concerns performing at United States are required
to follow. In context to VF Corporation, it is opportunity to operate at global level as it carries
out working by adhering all legislations with strong compliance as well as ethics program.
Environmental: There are huge environmental factors that provide opportunities to
business concerns (Honma, Kumano and Noriyuki, 2019). In United States, political system time
to time execute various plans and initiatives for providing protection to environment of the
country. By contributing in government plans and programs as well as carrying out operations to
reduce carbon footprints, restricting plastic use and many more, it creates opportunity for VF
Corporation to gain incentives addition to recognition from government for continuing working
on programs at global level.
Porters five force analysis
2

It is model for assessing industry attractiveness and competitiveness. It entails five forces
which elaborates intensity and attractiveness of a particular industry. Apparel industry comprises
of cutting fabrics or other materials as well as sewing together for producing apparel or
accessories such as footwear, clothes and many more. Five forces are discussed in relevance to
apparel industry in which VF Corporation operates are below:
Competitive rivalry: It shows number of companies which gives tough competition to
others in an industry. Within apparel industry, key players having huge market share are Nautica,
Maidenform, Quiksilver, Levi Strauss, Lee Enterprises, PVH and Kenneth Cole. All these
creates high competitive rivalry for VF Corporation as their products such as accessories,
footwear and clothing are similar. Moreover, the entity faces fierce competition from various
discount clothing and footwear stores which widely impacts its market share. This led managers
of VF Corporation to plan for a merger with renowned business.
Threat of substitution: Goods or services that are used in place or another or which
provides similar benefits are termed to substitutes (Abbosh, McConkey and Plimack, 2015).
Within apparel industry, there are various substitutes of clothing and footwear which creates high
substitute threat for companies in it. In case with VF Corporation, cheaper substitute
commodities are available from other industry which leads to high substitute threat for the entity.
Also, switching cost of people towards substitute is high due to cheaper products satisfying their
requirements.
Threat of new entrant: It reflects the ways new players in an industry poses threats to
current players. In context to apparel industry, when it is profitable and pertains low entry
barriers, it grabs attention of more companies that creates high threat of new entrant. In case with
VF Corporation, current regulatory framework has imposed huge challenges and barriers for new
companies to enter in the industry that creates low entrant threat for the establishment. It is
because new players are required to meet time consuming addition to strict regulatory
requirements that often discourages them to enter in apparel industry.
Bargaining power of suppliers: Suppliers are group of individual or corporations which
arranges ad provide resources, material and other production factor to a company (Nishiyama,
Matsumura and Kataoka, 2016). Within apparel industry, there are huge number of suppliers
which deliver resources to company and products to end users. This results in low bargaining
power to suppliers of VF Corporation. It is because the entity is able to replace non-compliant
3

suppliers easily with other suppliers that provides materials at lowest possible rates and high
quality.
Bargaining power of buyers: The force indicates pressure which buyers exert on
company for getting high quality commodities at affordable rates with customer services at
excellence level. In relevance to VF Corporation, buyers have high bargaining powers as they
have potentials for influencing ability or decision making towards accomplishing corporate
objectives. It is analysed that high bargaining power of buyers lowers down profitability and
makes industry more competitive.
According to above external analysis, it is determined that focusing on macro
environmental factors and industrial competitiveness, VF Corporation is able to grab mentioned
below opportunities and faces certain threats:
Opportunity Threat
 Meet demand and boost organisational growth.
 Repositioning organisational work segment portfolio.
 Market expansion with online collaboration via technological
analytics
 Strong compliance as well as ethics program.
 Gain incentives addition to recognition
 Trade barriers
and tariffs.
Q2. Internal Analysis
Resources:
Resource is termed to any type of factor which is essential for accomplishing goal
addition to carry out activity (Feng, Wang and Kreuze, 2017). In relevance to VF Corporation,
application of value chain analysis to look towards resources is as follows:
Value Chain Analysis: A framework that helps businesses to look at activities which go
into changes in input commodity into an output which customers value more is value chain
analysis. Mentioned below are resources in form of activities of VF Corporation:
Primary activities
Inbound logistics Operations Outbound
logistics
Service Marketing and
sales
4

Profit
Firm infrastructure Human resource management
Procurement Technology
Support Activities
Primary activities: Key primary activities of VF Corporation are as analysed:
 Inbound logistics: It is receiving, warehousing addition to inventory control of raw
material of company. In VF Corporation, departmental heads pay attentions on all aspects
to transforming raw resources into end useful product that includes apparel and footwear.
 Operations: It refers to procedure of translating factor of materials into finished good or
service. In case with VF Corporation, operations comprise of changing all inputs for
making them as outputs.
 Outbound logistics: It is involvement of activities for distributing valuable product to end
user. Within VF Corporation, outbound logistics is strength as the entity have strong
distribution system to deliver footwear, apparels and other products as per customer
convenience.
 Marketing and sales: It is to enhance visibility of entity addition to target appropriate
customers (Tammi, Reijonen and Saastamoinen, 2017). In, marketing and sales lack
investment because of which it is unable to build brand image resulting as weakness.
 Services: Activities that are key to maintain commodities as well as enhance consumer
experiences in form of customer services, refund, maintenance and exchange. In case
with VF Corporation, customer service is key and the team of the entity makes all efforts
for the purpose of providing excellence customer experiences that determines that
services are strength of the establishment.
Support activities: Activities that supports and improve primary activities are support
activities of a company. Analysis of support activities of VF Corporation are underneath:
 Human resource management: These are employees of company which are essential for
functioning. In VF Corporation, human resources are strength as it is not possible for the
firm to carry out activities without human resources. They provide services with
creativity and knowledge.
5

 Firm infrastructure: It covers support system addition to functions of the entity which
permits firm infrastructure to maintain operations (Valavanis and Vachtsevanos, 2015).
VF Corporation have solid infrastructure that is essential for functioning of al primary
activities.
 Procurement: It refers to acquiring inputs and other production factors for the company.
VF Corporation procures raw material by finding and negotiating rates with suppliers
together with vendors.
 Technology: These are resources required for getting things done without humans. In VF
Corporation, technological resources are strength as they come from requirements of
people and eliminate errors.
Competences:
Competence is ability of an organisation to achieve competitive advantage in dynamic
business environment (Fan, Radhakrishnan and Zhang, 2021). In case with VF Corporation,
competences are analysed through VRIO Analysis that is as follows:
VRIO Analysis: The model was propounded by Jay Barney to assist organisation in
uncovering as well as protecting competences which provides competitive advantage in long
term. Within VF Corporation, VRIO analysis is applied as it is analytical technique for
evaluating resources of a company and competitive advantage. Key competences of VF
Corporation are as follows:
Competences Valuable Rare Inimitable Organised
Local offerings ✔ X X X
Employees ✔ ✔ X X
Patents ✔ ✔ ✔ X
Financial resources ✔ X ✔ ✔
Distribution Network ✔ ✔ ✔ ✔
Valuable: Competences that contribute in achieving competitive advantage in dynamic
scenario are valuable resources (Nurmohamed, Dallinga–Thie and Stroes, 2020). Some
competences that are categorise as valuable in VF Corporation are below:
6

Local offerings: Products that are offered at local level by VF Corporation are valuable as
all products including footwear and clothing are highly differentiated and perceives high
customer values.
Patents: Within VF Corporation, patents are valuable because they permit to sell
offerings without any competitive interference and makes huge revenue for the company.
Financial resources: In VF Corporation, financial resources are categorised as valuable
because that they assist in making investment towards external opportunities which arise and
combat with extrinsic threats.
Distribution network: VF Corporation have strong distribution system with the help of
which the establishment reaches to far located customers which ensures greater revenues and
higher market share.
Employees: Employees of VF Corporation are valuable as they contribute significant part
in business objectives. The entity has highly trained employees that makes huge productive
output.
Rare: Competences of VF Corporation that are rare are as analysed:
Employees: All employees at VF Corporation are rare as that are highly skilled as well as
trained that is not easy for other companies.
Patents: Patents that VF Corporation have are rare because these are not possessed
addition to available by its competitors.
Distribution system: VF Corporation have invested huge efforts, time and money to come
with better system of distribution which only few business setting in the industry possesses.
Inimitable: Competences that are not substituted or copy out are inimitable competences
(Yunis, El-Kassar and Tarhini, 2017). In case with VF Corporation, inimitable competences are
as analysed:
Financial resources: Financial resources available with VF Corporation are inimitable
because the company have acquired them with prolonged profits over great number of years
which competitors will need long time period to accumulate.
Patents: VF Corporation have patents that others companies are not allowed to imitate.
The entity has developed patents by following a costly process.
7

Distribution network: VF Corporation have developed its distribution system over the
years that competitors lacks to imitate as they require significant investment amount to imitate
similar system of distribution.
Organised: Competences that are organised for maximising potential for competitive
advantage are said to organised (Hein, Detzer and Dodig, 2016). In association to VF
Corporation, organised competences are underneath:
Financial resources: Funds available with VF Corporation are organised for the purpose
of capturing values. Managers uses strategies for making investment of financial resources in
right places, grab opportunities and combat with threats.
Distribution network: VF Corporation have effective distribution network that is
organised as the business uses it for reaching out to diverse customer base through ensuring that
its offerings are available at all retail outlets.
In accordance to the analyse of resources and competences of VF Corporation, it is
determined that some strength and weaknesses of the apparel and footwear business are as
follows:
Strength (Competences) Strength (Resources) Weakness
 Local offerings
 Patents
 Financial resources
 Distribution network
 Employees
 Human resource
 Technological resource
 Services
 Outbound logistics
 Marketing and sales
Q3. Evaluation
VF Corporation is worldwide footwear along with apparel entity which have recently
applied strategy that is VF Corporation – Supreme acquisition for US$2.1 billion in order to sell
apparel, footwear addition to other accessories by using online platform that meet competition
necessities (Zacks, 2021). Both these business setting are making hard attempts for responding
changes in market and reduce cost bases to meet demands of customers. Evaluation of VF
Corporation – Supreme acquisition strategy is done through SAFe test that is below:
8

SAFe Test: A test which companies uses for the purpose of monitoring and evaluation of
strategy on the basis of three criteria that includes suitability, acceptability addition to feasibility.
Criteria to evaluate VF Corporation – Supreme acquisition strategy are as follows:
Suitability: It defines whether adopted strategy makes sense or not. Moreover, suitability
defines that the proposed strategy is able to address key opportunities and constraints which
business faces in environment. In aspect to VF Corporation – Supreme acquisition strategy,
TOWS Matrix is as follows:
Factors Strengths:
 Strong distribution system.
 Effective technological resource.
 Highly trained employees.
 Suitable local offerings.
Weaknesses:
 Marketing
and sales.
Opportunities:
 Gain incentives
addition to
recognition.
 Repositioning
organisational work
segment portfolio.
 Meet demand and
boost organisational
growth.
 Strong compliance as
well as ethics program
S-O strategy:
VF Corporation – Supreme acquisition
strategy will combine effective
technological resources with meeting
demand and boost organisational growth
W-O strategy:
In VF Corporation –
Supreme acquisition
strategy, marketing
and sales will be
combined with
repositioning
organisational work
segment portfolio
Threats:
 Trade barriers and
tariffs.
S-T strategy:
In context to VF Corporation – Supreme
acquisition strategy, trade barriers and
tariffs will be combined with Strong
distribution system.
W-T Strategy:
In VF Corporation –
Supreme acquisition
strategy, practices of
marketing and sales
will be combined
9

with trade barriers
are tariffs.
Acceptability: The criteria defines whether proposed strategy is acceptable by involved
stakeholders or not (Kataria, Ellervik and Mandrup-Poulsen, 2019). To analyse acceptability of
VF Corporation – Supreme acquisition strategy, Stakeholders analysis is a framework that
elaborates power and influence of the strategy on proposed stakeholders. Stakeholder analysis
for VF Corporation – Supreme acquisition strategy is below:
Factors Level of Interest
Level of power
High Low
High Management Employees
Low Government Customers
Among the mentioned stakeholders, analysis of three stakeholders group involved in VF
Corporation – Supreme acquisition strategy are as follows:
High interest and high power: Management is the stakeholder group having high interest
as well as high power in VF Corporation – Supreme acquisition strategy. Proposed strategy will
enhance working of management and the strategy will be acceptable by them as it will provide
desired outcomes and meet all expectations of them.
High interest and low power: Employees are stakeholder group for VF Corporation –
Supreme acquisition strategy who have expectation for timely compensation and bonuses. When
the strategy will be implemented, huge revenues will be achieved that will be shared with
employees that determines that they accept the strategy.
Low interest and low power: In this category, customers are categorised. It is seen that
VF Corporation – Supreme acquisition strategy will meet all demands of customers about better
quality of apparel and footwear which will be acceptable by them.
Feasibility: The criteria determines whether the proposed strategy can be implemented in
real world Caglio, Melloni and Perego, 2020). For VF Corporation – Supreme acquisition
strategy, required skills are management skill, data analytical skill, communication skill,
effective delegation skill, strong marketing skill, emotional intelligence and strong leadership
skill. Moreover, financial resources for implementing VF Corporation – Supreme acquisition
10

strategy will be acquired through financial institutions, venture capitalist, angel investors and
organisational reserves. It can also be said that implementation of the strategy will not require
any additional resources and skills as the companies will together use current skills and resources
to complete desired business practices.
11

REFERENCES
Books and Journals:
Abbosh, P. H., McConkey, D. J. and Plimack, E. R., 2015. Targeting signaling transduction
pathways in bladder cancer. Current oncology reports, 17(12), pp.1-10.
Caglio, A., Melloni, G. and Perego, P., 2020. Informational content and assurance of textual
disclosures: Evidence on integrated reporting. European Accounting Review, 29(1),
pp.55-83.
Charter, M. and Tischner, U. eds., 2017. Sustainable solutions: developing products and services
for the future. Routledge.
Fan, Z., Radhakrishnan, S. and Zhang, Y., 2021. Corporate governance and earnings
management: evidence from shareholder proposals. Contemporary Accounting
Research, 38(2), pp.1434-1464.
Feng, M., Wang, X. and Kreuze, J. G., 2017. Corporate social responsibility and firm financial
performance: Comparison analyses across industries and CSR categories. American
Journal of Business.
Hein, E., Detzer, D. and Dodig, N. eds., 2016. Financialisation and the financial and economic
crises: country studies. Edward Elgar Publishing.
Honma, A., Kumano, N. and Noriyuki, S., 2019. Killing two bugs with one stone: a perspective
for targeting multiple pest species by incorporating reproductive interference into sterile
insect technique. Pest management science, 75(3), pp.571-577.
Kataria, Y., Ellervik, C. and Mandrup-Poulsen, T., 2019, July. Treatment of type 2 diabetes by
targeting interleukin-1: a meta-analysis of 2921 patients. In Seminars in
immunopathology (Vol. 41, No. 4, pp. 413-425). Springer Berlin Heidelberg.
Nishiyama, N., Matsumura, Y. and Kataoka, K., 2016. Development of polymeric micelles for
targeting intractable cancers. Cancer science, 107(7), pp.867-874.
Nurmohamed, N. S., Dallinga–Thie, G. M. and Stroes, E. S. G., 2020. Targeting apoC-III and
ANGPTL3 in the treatment of hypertriglyceridemia. Expert Review of Cardiovascular
Therapy, 18(6), pp.355-361.
Rehman, H. U., Shahid, A. S. A. and Khalid, L. K. L., 2020. The Interest Rate Targeting; A Way
Out to Curb Price Instability in Pakistan. AJSS, 4(4), pp.999-1012.
Schaltegger, S., Burritt, R. and Petersen, H., 2017. An introduction to corporate environmental
management: Striving for sustainability. Routledge.
Tammi, T., Reijonen, H. and Saastamoinen, J., 2017. Are entrepreneurial and market orientations
of small and medium-sized enterprises associated with targeting different tiers of public
procurement?. Environment and Planning C: Politics and Space, 35(3), pp.457-475.
Yunis, M., El-Kassar, A. N. and Tarhini, A., 2017. Impact of ICT-based innovations on
organizational performance: The role of corporate entrepreneurship. Journal of
Enterprise Information Management.
Online:
Demand for footwear in United States. 2021. [Online]. Available through:
https://www.grandviewresearch.com/industry-analysis/footwear-market
Zacks. 2021. V.F. Corp (VFC) Acquires Supreme Brand, Enhances Portfolio. [Online].
Available through: https://www.nasdaq.com/articles/v.f.-corp-vfc-acquires-supreme-
brand-enhances-portfolio-2020-12-29
12

APPENDICES
Q1.
Economic factor:
Figure 1: Demand for footwear in United States. 2021
13