VF Corporation's Strategic Analysis: Applied Corporate Strategy

This report provides a comprehensive strategic analysis of VF Corporation, a prominent apparel and footwear company. It begins with an external analysis using PESTLE and Porter's Five Forces to assess the industry's attractiveness and identify opportunities and threats. The internal analysis employs VRIO and value chain analysis to evaluate VF Corporation's resources, key competencies, strengths, and weaknesses. The report also evaluates the company's current strategies using tools like the TOWS matrix, assessing their acceptability and feasibility. It further explores VF Corporation's unique resources, including physical, financial, human, and intangible assets, and examines its value chain activities to identify core competencies and competitive advantages. The analysis concludes with a strategic evaluation and recommendations for future growth and development.

Applied Corporate
Strategy VF
Corporation

Table of Contents
INTRODUCTION 3
External Analysis 3
Porter’s five forces 5
Internal analysis 6
Value Chain of VF corporation 7
VRIO Analysis 8
Strategy Evaluation 9
TOWS MATRIX 9
Acceptability: 11
Feasibility 12
CONCLUSION 13
References 14
Books and Journals 14

INTRODUCTION
Corporate strategy is an unique plan which is prepare for a longer period of time for
getting an edge over competitors. It provides strategic direction by setting objectives and also
motivated employees in order to attain those goals in an efficient manner. Main aim of
corporate strategies is to determine activities & plans in such a manner that organization can
sustain in changing environment for longer period of time (Milano, 2018). The present report is
based on VF corporation which is a well known company of apparels & foot wears & was
founded in 1899. It is headquartered in United states and owns nearly 30 brands which are
organized within three categories such as Active, Outdoor & work. In 2020, VF acquired
supreme with a deal of $ 2/1 billion. Supreme sells apparels, footwear’s & accessories through
online platform which has become a wholly owned subsidiary of VF corporation after this deal.
The present report include analysis of external environment by using tools such as PESTLE &
porter’s five forces. Further, internal analysis is carried out with the use of VRIO , value chain
& SWOT analysis along with the detailed description of current strategies with the application
of tools such as TWOS matrix, power grid & more.
VF corporation background
VF corporation commence its operation in America in 1899. It deals in apperals, footwears &
accessories with more than 30 brands. Recently, VF is acquiring supreme which is a well know
online retailer of clothes & fashion accessories. It is listed in new York stock exchange & has the
value of $ 80.30 per share. As per the annual report of company, it has marked $ 9.2 Billion of
revenue of within the first quarter of 2021.
External Analysis
Fashion industry is growing rapidly due to increasing demand of fashion products. It is
analyzed that apparel market at global level is expected to reach at 545 billion in 2019. As per
the study, it will cross 600 billion in 2020. Here, US apparel marker holds share of nearly 19 %
in overall apparel industry at global level (Global Apparel Market Outlook, 2019). Here, various
external factors which significantly affect the operations of VF corporation are mentioned as
under:

Political factors: It is analyzed that political personalities are likely to put a great impact
over people. Political figures have great influence over fashion industry. It is creating an
opportunity for VF corporation as they can depict political figures as their fashion icons which
will help in gaining attention of more number of customers.
Economical factors: There are two types of countries across the world which are high
income & lower – income countries. In higher –income countries or developed countries, people
can easily buy luxury products (Andersen and Andersson, 2017) . On other side, iv lower income
countries, people strive for survival so fashion is just a luxury for them. So, there is opportunity
for VF corporation to sell fashionable clothes & accessories within developed or higher income
group countries.
Social Factor: Different people required different apparels which is based on occasion.
For instance musician, singer wants to look unique thus they demand unique clothes &
accessories. Later, such outfit becomes the symbol due to the image of public figure. Alike,
celebrities, artist wears different attire which further become fashion sense of people (Greene and
et. al., 2017). Apart from this, first lady of US, Michelle Obama, Melania Trump, & British
Prime Minister Therasa May are considered as the role model for several people. They also
affect fashion sense of people Therefore,, VF corporation has opportunity to increase current
level of sales by marketing their products through celebrities & artists which will positively
influence people.
Technological factors: Increasing use of technology has been created several
opportunities for fashion industry to sell product via online platform. Now, companies can easily
sell out products by using digital platforms (Basu and Miroshnik, 2018). In addition to this,
innovation of AI has also brought revolution within fashion industry by providing ease to
customers. This technical revolution is creating opportunity for VF corporation which will help
in order to ensure future growth & development.
Legal factors: There are several laws which have been formulated by higher authorities
& needs to follow by all players of fashion industry. There are certain rules & regulations
regarding workplace safety, data protection, import & export which need to follow by companies

within fashion industry. For VF corporation, legal factors are threat as it includes amendements
which can further cause legal hassles to company.
Environmental factors: Fashion industry is the biggest threat for environment due to its
disastrous impact over environment. Manufacturing fashion products create includes use of
chemical & other hazardous products. Shipment of such products by using trucks, vehicles also
creates pollution (Ocasio and Radoynovska, 2016). This is a threat for VF corporation which
might put negative impact over existing image of organization.
Porter’s five forces
This model is applied for assessing the competitiveness & industry attractiveness of
fashion industry, forces of which are mentioned as under:
Threats of new entrants: In fashion industry, threats of new entrants is moderate as there
are not higher barriers within industry. A new player can easily get into the industry due to the
lower restrictions, loyalty of customers & more. However, it is capital intensive as there is
requirement to invest significant amount in machineries & other equipments. In this regard, VF
corporation has been created significant positive image which will help in facing competition
with new firms (Berning, 2017).
Threats of Substitute: Due to ever changing nature of fashion industry threat of
substitutes are really higher. There is extensive competition prevails in fashion industry. More
number of players offer different range of products to customers. Maintaining positive position
within fashion industry is not easy as the product can easily replace with the product of rival
firm.
Bargaining power of Suppliers: Bargaining power of suppliers are lower due to the fact
that, there are ample of vendors present who supply necessary raw material to organization
within industry. Apart from this fact, some organizations have tie up with their own set of
suppliers. Immense presence of suppliers, make their bargaining power low & also enables
company to receive necessary supply of material at lower price. Here, VF corporation has lower
bargaining power due to wide portfolio of suppliers (MIRZAEI, SAMADI and
LATIFIBENMARAN, 2018).

Bargaining power of customers: Here, bargaining power of customers is high due to
availability of a lot of options. They can easily switch to another brand where they find best deals
which match with their requirements. So, buyers have an upper hand due to a mass availability of
fashion products. Here, customers can easily negotiate to opt best profitable deal for them. VF
corporation is also facing the issues of higher bargaining power which will affect their sales &
profitability.
Industry rivalry: Threat of rivalry is high as it is such a industry where, entry barriers are
not too high. Also, extensive competition is present in market which provides wide options to
customers. Marks & Spencer, Zara, H & M are some well known name within fashion industry
(Dragomir, 2020). number of players within clothing industry is increasing rapidly which is
enhancing the availability of affordable clothes. Hence, VF corporation is required to face
extensive competition due to presence of large number of competitors.
After going through with above discussion, it is found that the market is really attractive
& conist tremendous opportunities of growth. By entering in the market, company can easily
record plunge into existing sales & profit ration.
Internal analysis
Internal analysis depicts information regarding capabilities, resources of VF corporation
which make it differ from other competitors & also strengthen the market position of company.
For this purpose, VRIO & value chain analysis have been applied which are mentioned as under:
Unique Resources:
Physical resources: VF corporation has physical resources in terms of 28 companies which are
operating manufacturing across US, Mexico & Canada. Apart from this, it also owns 32
distribution centers & nearly 1520 retail stores (Careers at VF Corporation, 2021). VF
corporation also has three innovation centers which are specially focused apparels, foot wears &
such items. These innovations centers has higher number of competent engineers, technical
designers who have the abilities to think out of the box in order to bring something new in
market (Haller, Link and Groß, 2017).

Financial resources: Income of VF corporation increased by 12 % in 2019. It increased with
$13.8 billion which shows the efficiency of organization of using resources in an effective
manner (VF Corporation Reports Fourth Quarter and Full Year Fiscal 2019 Results; Provides
Outlook for Full Year Fiscal 2020). Company earned net income of $679449 billion in 2020. It
depicts the weakness of VF corporation which needs to address properly for further growth.
63232
Human resources: VF corporation is a well known company which has efficient team of
designers, scientist, marketers. They have competent team of managing directors who posses rich
experience within respective field. For instance, Steve Rendle is presdent & chief operating
officer who owns a B. S. degree & has been previously worked with several companies. In
addition to this, Scott, Roe is CFO of VF corporation who holds a degree in Bachelor of
Accounting & has been worked at several leadership roles within organization. Competent
mangers, leaders, engineers, designers are associated with company which shows their strength
to make the most of the future opportunities ( Executive leadership team, 2017)
Intangible: Goodwill of VF corporation is the major intangible asset of company which
differentiate it from other competitors. Due to its, positive image, customers are likely to prefer
the brand. Here, VF corporation earned 10.5 billion USD dollars across the globe. It is the
biggest strength of organization which allowed it to maintain an edge over competitors such as
Polo Ralph, Capri Holding etc.
Value Chain of VF corporation
Infrastructure Finance, Planning, Investors relations
HRM Recruitment, training & compensation system
Technology
Development
Product design, process design & market research
Procurement Service, Machinery & Advertising data
Primary
activities ->
Inbound
logistics
Operations Outbound Marketing and
sales
Services

Customer
Accesss,
data
collection,
incoming
material,
storage,
services
Branch Operations
Assembly
Component
Fabrication
logistics
Order
processing
Warehousing
report
preparation
Sales force
Promotion
Advertising
Proposal writing
Websites
Installation
Customer
Support
Complaint
resolution
Repair
It is analyzed that infrastructure of VF corporation is attaractive which helps company in
order to provide distinct value to customers. Apart from this, they have efficient team of nearly
50000 employees which includes designers, scientists, competent managers & leaders. In
addition to this, VF corporation also focuses over technical development. For this purpose, they
have expended a significant amount of nearly 75542 $ for purchasing different softwares & tools
so that business can be operated in best possible way.
VRIO Analysis
VRIO Matrix
Activity Valuable Rare Inimitable Organization
Technology Yes No Yes Yes
Professional
Human
resources
Yes Yes No Yes
Quality
standards
Yes Yes Yes Yes
Goodwill Yes No No Yes
With above table, it is analyzed that quality standards VF Corporation is its core
competence. It is stated that, they have done expense of 608.1 billion USD $ over marketing &

selling activities which are crucial for building strong brand image. In addition to this, 756.3
million USD $ were expanded by organization over advertisement & promotion in 2020. Hence
the expenses over marketing & advertisement activities are being increased by company for
maintaining the core competence for longer period of time (Annual Report FISCAL YEAR, 2020)
Strategy Evaluation
VF corporation is a renowned company which is using efficient tools & techniques for
the purpose of getting growth & development in future period of time. In this regards, a
framework called SAF ( Suitability- Acceptablity- Feasiblity) is applied which is given as under:
TOWS MATRIX
INTERNAL FACTORS
Strengths (S)
S1Higher market reputation
S2Competent Workforce
S3 Strong financial
performance
S4 VF corporation is known
for the innovation for which it
has employed highly
competent scientist &
technical individuals for
providing better services to
customers.
S5 Strong brand awareness
S6Intellectual property
S7 Presence across 150
countries worldwide
Weaknesses (W)
W1 Due to strong competition
growth scope is really limited

EXTERNAL FACTORS
Opportunities (O)
O1 Government
support and
provide significant
for growth
O2 Increasing in
customers sales
will also inflate
current profit
margin of
company.
O3 E-commerce
needs to use for
driving more
growth.
O4 Technological
innovations
SO
Strategic options
S1+O1, It will help in terms of
expanding business for further
betterment.
S2+O2 Competent work force
will help in terms of increasing
current profit margin.
S4+O3 Use of technology will
help in developing E-
commerce website for further
development.
S3+O4 with the help of strong
financial performance
organization can easily bring
technical innovations for
further growth.
WO: With the help of government
support, VF corporation can easily
face competition which will help in
future development.
Threats (T)
T1
T2 Higher rivalry
in the industry.
Strategic options WT Strategic options
TOWS matrix has been applied for the evaluating the suitability of strategy of VF
corporation related to further expansion. After analyzing above stated Matrix, it is stated that
there are suitable options as well as favorable external environment which will help in terms of
turning opportunities in strengths which will prove beneficial for organization. Growth in fashion
& apperal industry is also supported by government that is highly suitable for growth of
respective business entity.

Acceptability:
Power grid Matrix: It is a matrix which depicts the power of shareholder to affect business
decisions. There are different stakeholders such as Customers, investors, shareholder,
government etc (Oppenheimer and Tuths, 2019). Each & every stakeholder has great impact over
business entity which need to assess in order to prepare suitable strategies. For VF Corporation,
Power grid matrix is mentioned as under:
LEVEL OF ATTENTION
LOW HIGH
POWER
HIGH LOW
A Minimal effort
Media
B Keep informed
Competitors
VF’s employees
Supreme’s employees
VF’s Suppliers
Supreme’s suppliers
C Keep Satisfied
Government
D Key Players
Management of VF corporation
Management of Supreme
Shareholders of VF corporation
Shareholders of Supreme
Government regulator
It is monitored that acquisition will provide growth to VF corporation which will
generate opportunity for Supreme to get enhancement in its current business. With the

acquisition, sales of Supreme will increase which will eventually bring enhancement in divided
of share holders.
There are some less powerful stakeholders which are suppliers as well as employees of
both organizations. Although, it is important to keep them inform with the deal as they are also
going to affect with after impact of this deal.
It is analyzed that management & shareholders of VF corporation as well as Supreme are
going to directly affected with this acquisition. Due to the acquisition, there will be some major
changes rise within management of both companies. This change will also affect shareholders.
Mergers and acquisition are regulated by federal trade commission of US. They prepare
appropriate guidelines in order to regularized the process of merger & acquisition within country,
Here merger of VF corporation & supreme is also regularized by this government authotrity who
is also a crucial stakeholder of business.
Feasibility
The acquisition of Supreme & VF corporation is a significant deal which nearly worth $
2.1 billion. Due to this, Supreme has become a fully owned subsidiary of VF that will sell the
products of VF through its online platform. It is going to contribute in enhancement of
company’s performance within the fiscal year 2021. There is an estimation of synergy nearly $
500 million in revenue & also 20 % per share in adjusted earning within the year of 2022. It will
provide a complete transformation to VF corporation in terms of increasing its current number of
customers. Now, VF corporation will get benefit from the young followers of Supreme which
will enhance young followers of VF. Further, expansion in international & direct to consumer
segment will help VF corporation to attain the sales of $ 1 billion by 2024. Hence the strategy is
highly suitable for respective organization as it will improve the synergy & also the current level
of profitability.

CONCLUSION
With above discussion, it is assessed that corporate strategies are really essential for
success & growth of organization. There is discussion regarding acquisition of Supreme by VF
corporation. With PESTLE analysis, it is analyzed that there are ample of external opportunities
present within external environment in terms of favorable political, economical, social
environment for fashion industry. It is monitored that legal environment is threat for
organization. After going through with above points, it is analyzed that VF has unique resourced
in terms of financial, competent human resources etc. Apart from this, goodwill is the core
competency of organization which differentiates it from other rivals. It is examined that
acquisition is feasible, suitable as well as acceptable by key stakeholders which will drive
positive outcomes.

References
Books and Journals
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Appendices1

Appendices 2