Business Problem Solving Steps
Business Problem Solving Steps
Problem-solving is an essential part of running a business. Solving a problem calls for a complete understanding of the cause so that a valid decision that will tackle the problem can be formulated. Decisions are made to adopt measures that will mitigate the effects of the problem and eliminate its cause. A comprehensive decision-making process constitutes five steps: problem definition, determining the cause, identifying workable solutions, narrowing down on the best solution, and lastly decides on the best course of action. This paper focuses on problem-solving process at Abercrombie and Fitch.
Abercrombie and Fitch is a major clothes retailer in the United States. In the 90s, Abercrombie was the leading clothes brand for teens. By January 2014, sales had plummeted by 12% (Lutz, 2014). Abercrombie’s woes have been attributed to several factors. First, a string of bad decisions by its management have contributed to its decline as the leading teen clothing retailer. Competition from other brands such as HM and Under 21 who are offering cheaper and trendier clothing is edging Abercrombie out of business. Teens’ values have changed over the years, and they no longer subscribe to a hyped brand. The teens of today thrive in uniqueness and standing out as opposed to youngsters in the latter days who hogged popular brands in order to fit in.
In a bid to recover sales and attract new customers, Abercrombie has launched an aggressive sales promotion in their store. The company hopes this will net in new customers and retain the old ones.
Since Abercrombie’s problem was primarily low sales as compared to latter years, an increase in sales will solve the company’s problems. Data collected in mid-2014 indicates positive outcomes for the sales promotion strategy. The clothes retailer surpassed expectations by recording a 16% increase in sales (Gurufocus, 2014). The company has even outperformed close competitors like Aeropostale and American Eagle. The results for 2014 after adopting the sales promotion strategy indicates a turnaround in the company’s future that seemed uncertain just a year ago
References
Gurufocus. (2014, July 22). Is Abercrombie & Fitch The Best Teen Retail Stock? n.p. Retrieved from http://www.gurufocus.com/news/269305/is-abercrombie--fitch-the-best-teen-retail- stock
Lutz, A. (2014, Jan 28). Abercrombie & Fitch's New Board Desperately Needs To Fix 3 Problems. Business Insider. Retrieved from http://www.businessinsider.com/new-goals- for-abercrombies-board-2014-1
