plunged after it missed the projected sales. It chose to drive
             domestic sales through high markdowns, which has led to yet another issue
             of annually decreasing gross profit rate. In addition, it has announced a
             20% reduction in its domestic stores due to underperformance.
             Internationally, it has experienced deceleration in growth as it has
             attempted to drive sales via non-promotional activities in the face of
             difficult macroeconomic conditions. Another key issue affecting A&F is the
             weak home brand equity of its products, which has translated into softened
             consumer demand thus, forcing it to change its premium pricing strategy.
             Although these temporary changes to its business model have been somewhat
             competent, A&F cannot continue to apply these methods as it is drifting
             away its very founding business philosophy of offering "high-end goods at a
             high price-point." It must make difficult decisions involving sustaining
             domestic market share and international growth, which raises another
             underlying issue: the capability of its business model that it has applied
             The relevant industry in this case is the apparel industry. The
             apparel industry is characterized by shorter product cycles (seasonal
             fashion), outsourcing, keeping up with the demographics, heavy marketing
             and promotion, price deflation and continuous product innovation
             Companies in the apparel industry have an opportunity to take
             advantage of the proliferation of the Ecommerce market (direct-to-consumer
             operations). The growth rate of this market is unparalleled since companies
             can realize increasing revenues while incurring low operating costs. This
             opportunity is relevant to all strategic groups within the industry. Key
             success factors for this opportunity require investing in efficient
             ecommerce platform technologies to create user-friendly websites,
             promotional tools to increase brand awareness and offering discounted
             An...