After reading the below retail controvery discuss how Ralph Lauren differentiati
ID: 422526 • Letter: A
Question
After reading the below retail controvery discuss how Ralph Lauren differentiation strategy may have put its brand image at risk.
Ralph Lauren, purveyor of classic American chic, has promised to manufacture the uniforms for the U.S. Olympics team in America come the 2014 Games in Russia. The decision hasn't always been a given - the brand sparked a firestorm of criticism when it produced the uniforms for the 2012 London event in China. Some legislators even suggested that the Asia-made outfits be burned and Ralph Lauren be stripped of the contract. (AP)
Explanation / Answer
Ralph Laurens differentiation strategy was a low-cost strategy. The low-cost strategy requires manufacturing costs to be reduced by using the best quality manufacturing facility offering the best value for money. Ralph Lauren used Chinese manufacturing facility to get low-cost benefits in manufacturing.
Ralph Lauren, the high profile design company known for its high quality, clean design cuts for past 45 years. Further, they also represent the quality and design rooted in the US culture. They faced backlash as they used Chinese manufacturing facilities to manufacture the USA Olympic team uniforms for the 2012 London Olympics in China.
The low-cost strategy backfired when they manufactured from China. The angst in the US public is due to massive job cuts (Unemployment rates are 8%), manufacturing facilities in the country are shutting down and major economic downtrends which were being blamed on manufacturing outsourcing in third world countries especially Asia.
This low-cost differentiation strategy and the subsequent controversy resulted in a negative brand publicity for Ralph Lauren which was being seen as anti-America and put the organization on a back foot.
Ralph Lauren handled the controversy by stating they would ensure the Olympic uniform for 2014 Games would be manufactured in America and they would also take the lead in the industry in the US to find ways to restructure the domestic manufacturing facilities.