MARKETING STRATEGY

Literature Review of key perspectives of marketing and a critical

evaluation of Forever’s 21 past and present.

100452260
2169 WORDS
07/01/2020
 Contents page Part 1

Literature Review……………………………………………………………………2
References of Literature Review…………………………………………………7

Past…………………………………………………………………………………….10
Brand Heritage Model……………………………………………………..10
Time Line of Key Events…………………………………………………….11
Initial Marketing Mix……………….………………………………………..12
Personas………………………………………………………………………13
Porter’s Generic Strategy…………………………………………………14
References…………………………………………………………………..15

Present………………………………………………………………………………..17
Current Marketing Strategy……………………………………………….17
Timeline of Their Present Performance…………………………………18
Main Competitors Performance…………………………………………19
Perceptual Map…………………………………………………………….20
References…………………………………………………………………...21

1
 PART 1 - Literature Review

The term strategy was first considered during the time of 400-200 B.C. when
the demand of defeating enemies raised. Sun Tzu wrote The Art of War in
400 B.C. distinguished for its military strategy (Horwarth, 2006). Through
poems and verses, his wise words of reference are translated to today’s
functional business operation. According to Henderson (1989), “strategy
is a deliberate search for a plan of action that will develop a business’s
competitive advantage and compound it”. He believed that the
competitive advantage of a business was found in the differentiator
element separating both companies.

According to Gundlach and Wilkie (2007), “marketing is the activity, set of

institutions, and processes for creating, communicating, delivering and
exchanging offering that have value for customers, clients, partners, and
society at large”. Resource-based strategy focuses on a firm’s core
competences and its overall performance is driven by the resource profile
of the it (Hooley, Piercy and Nicoulaud, 2008). 3 main alternative
approaches were identified:
• Product push marketing: organisation focuses its activities on their
existing product/service first and then seek and persuade customer
to purchase from them.
• Customer-led marketing: through market research like focus groups
and surveys, an analysis to understand the perception of customers
towards a particular product/service is practiced and the desires of
the customers are interpreted. Products are provided and
developed encompassing and satisfying customer’s needs/wants
(Slater and Narver, 1998)
• Resource-based marketing: equal consideration of the
requirements of the market and their abilities to serve it.

It has become indispensable for firms to fully understand their resources in

order to perform according to customer’s needs. To achieve this,
theoretical frameworks have become the traditional methods to assess a
firm’s strength and weaknesses as well as the internal and external factors
affecting it (Knott, 2015).

FRAMEWORKS Underneath, 4 of the most conventional and traditional

approaches and frameworks used are presented:
SWOT This tool conducts an internal examination to identify a
firm’s strengths and weaknesses for then to apply it as
external opportunities and threats. These four factors are
then developed to into a strategic plan
(Brandenburger, 2019)
PEST This framework is utilised to analyse the strategic risk of a
company as it identifies all the effects of the external
macro environment. PEST is the acronym of four sources

2
 of change: political, economical, social and
technological. These factors are variables that a firm
cannot control but require an analysis to asses the major
impact of a company’s competitive positioning
(Sammut-Bonnici and Galea, 2015).
Marketing This common approach is made up of 4 different P’s
Mix which include a deep analysis of a firm’s product
strategy, pricing strategy, distribution strategy and sales
promotion strategy (Greenley, 1983). This combination
created a solid marketing proposal. However, in order
to fully review the competitive advantages of a
business, 3 new elements were created, assessing;
people, processes and physical evidence (Hanlon,
2019).
Porter’s 5 Porter’s 5 Forces is framework which makes a company
Forces understand the industry’s structure and the way it
changes. By analysis rivalry existing competitors, threat
of new entrants, power of suppliers and buyers and
substitute products/services, a company is able to
encounter the external setting affecting opportunities
and threats (Brujil, 2018)

According to Durmaz and Efendioglu (2016), the principle of traditional

marketing is to persuade and motivate customers to purchase a certain
product. The purpose of this approach is to provide time, place and
possession utility, carving the perception of customers. Using traditional
marketing tools like tv and radio, organisations were able to put across
their message and attempt making the public aware of the available sale
of their product/service (Bhayani and Vacchani, 2018). A shift in businesses
practices was identified during the late 1980s and 1990s, were traditional
product orientation structure evolved to a market-led approach
prioritising customers (Walters, 1997). Value-based strategy focuses on
portraying promotional messages emphasizing how a company’s
product/service aligned to the ideal values of customers. Promoting trust
in a channel relationship will ultimately lead to greater commitment from
the customer, creating a greater relationship/satisfaction and enhancing
the organisations performance (Kasper, Helsdingen and Gabbott, 2006).
According to Peter F. Drucker, traditional management methods,
previously focused on financial return, did not centre their attention to the
basic goal of a business which is that in order for revenue to be generated,
superior customer value has to be created (Watson, 2002).

There has been various topics identified for value-based marketing

strategy like; branding, sustainability, internal marketing, market sensing
and digital which create value to customers in the long-term.

3
Sustainability
As the public witnessed the human impact on the natural environment,
the market has been transformed putting a higher pressure into businesses
to not only focusing on their CSR but also by improving their competitive
positioning through sustainable practices. Sustainability has become a
mainstream topic for the public and problems like “change, water
scarcity and species extinction” are being aired (Hoffman, 2018). This
change in the market forced business to integrate sustainability to
manage their reputation or pursue their ultimate ethical goal. According
to Haanaes (2016), “62% executives consider sustainability strategy
necessary to be competitive today.” Transparency is escalating in
popularity in order to create long-term value to customers. The goal of a
sustainable business strategy is to make a positive impact in either of the
two different categories addressed: the effect business has on the
environment and on society. The ethical impact and sustainable practices
have become a focal point for investors which evaluate the “carbon
footprint produced, water usage, community development effort and the
board diversity” (Spiliakos, 2018). Nowadays, sustainability drive businesses
success as a positive corporate sustainability increases in the long-term
shareholders’ value (Reed, 2013).

From a linear to a circular economy

Figure 1 From a linear to a circular economy.

The world population is affecting negatively to the environment; however,

the public are more aware of their impact to the environment and a shift
from a linear economy to a circular economy is being preferred. The
model of the linear economy follows a take-make-use-dispose structure
which covers natural resources into waste via production. Production
waste leads to the deterioration of the environment through the removal
of natural capital and the pollution caused from the waste (Murray, Skene
and Haynes, 2015). The circular economy “turns goods that are at the end
of their service life into resources for others” (Stahel, 2016). This model
follows a structure of; reuse what you can, recycle what can’t be used
and repair what’s broken. This design restores the damage done in the
production of the product making no net effect on the environment.

4
Branding
Brand management has emerged in importance due to international
brands competing in diverse geographical markets. It is believed that the
power of a brand lies in the mind of consumers. (Buil, Martinez and de
Chernatony, 2013). Branding is the process of creating awareness through
a unique name and image, building the reputation of a product, service,
person, place or organisation. It is a long-term strategy that includes a set
of activities extending from product innovation to marketing
communications. Branding aims to establish a differentiator presence in
the consumers mind (Bonnici, 2015). This strategy started off by being a
form of naming an entity. The symbol was created by a distinguished logo
which detonated a particular product and essence of the brand.
However, this strategy evolved from being a symbol of ownership marked
in the object or label to a more emotional level. Logos have raised in value
being approached with a less-is-more character. Branding sets the tone
of expectation and are now being associated to particular personalities
in the perception of the market.

“The overall value created by a brand has been conceptualised as brand

equity” (Hsu, Oh and Assaf, 2011). Brand is a set of assets and liabilities
linked to a brand which can add or subtract value. Several sources have
been identified to measure the value of a brand like; “brand awareness,
perceived quality, brand association and brand loyalty” (Buil, Martinez, de
Chernatony, 2013). Brand equity has been described by Feldwick (1996)
as the measure of strength of consumers attachment to a brand (Wood,
2000). This relationship between customer and brand increases the
probability of brand choice leading then to brand loyalty.

5
In this literature review, the origins of strategy have been explored,
exposing the relevancy of battle strategies with today’s modern
businesses. From the early beginnings, strategy has evolved from a
traditional product-oriented strategy to a customer-led strategy where
the perspective and values of customers are prioritised. Several aspects
have been identified which in the long-term provide superior value to
customers. From these elements, two have been further explained
referencing its importance. Customer behaviours are changing and the
market is becoming more aware of the environmental impact of
businesses. In addition, brand management has emerged in importance
due to international brands competing in diverse geographical markets
(Buil, Martinez, de Chernatony, 2013).

6
 References of Literature Review
Bastos, Wilson & Levy, Sidney. (2012). A history of the concept of branding:
Practice and theory. Journal of Historical Research in Marketing. 4. 347-368.
DOI: 10.1108/17557501211252934.

Bhayani, S and Vacchani, N. V. (2018) “Internet marketing vs traditional

marketing: a comparative analysis.” Available at:
https://www.researchgate.net/publication/327645389_Internet_Marketing_vs_Tr
aditional_Marketing_A_Comparative_Analysis (Accessed: 13/12/2019)

Brandenburger, A. (2019) “Are your company’s strengths really weaknesses?”

Available at: https://hbr.org/2019/08/are-your-companys-strengths-really-
weaknesses
(Accessed: 12/12/2019)

Brujil, G. (2018) “The relevance of Porter’s Five Forces in today’s innovative and
changing business environment” Available at:
https://www.researchgate.net/publication/326026986_The_Relevance_of_Porte
r's_Five_Forces_in_Today's_Innovative_and_Changing_Business_Environment
(Accessed: 12/12/2019)

Buil, I., Martínez, E. and de Chernatony, L. (2013), "The influence of brand equity
on consumer responses", Journal of Consumer Marketing, Vol. 30 No. 1, pp. 62-
74. https://doi.org/10.1108/07363761311290849

Durmaz, Y. and Efendioglu, I. H. (2016) “Travel from traditional marketing to

digital marketing.” Global Journal of Management and Business Research: E
Marketing. Volume 16 Issue 2 Version 1.0 Available at:
https://www.researchgate.net/publication/303940843_Travel_from_Traditional_
Marketing_to_Digital_Marketing (Accessed: 13/12/2019)

Greenley, G. (1984), "An Understanding of Marketing Strategy", European

Journal of Marketing, Vol. 18 No. 6/7, pp. 90-
103. https://doi.org/10.1108/EUM0000000004794

Gundlach, G. T. and Wilkie, W. L. (2007). “The American Marketing Association’s

New Definition of Marketing: Perspective and Commentary on the 2007
Revision” Available at: https://www.unf.edu/~ggundlac/pdfs/pub_07.pdf
(Accessed: 12/12/2019)

Haanaes, K. (2016) “Why all business should embrace sustainability” Available

at: https://www.imd.org/research-knowledge/articles/why-all-businesses-
should-embrace-sustainability/ (Accessed: 22/12/2019)

Hanlon, A. (2019). “How to use the 7Ps Marketing Mix” Available at:
https://www.smartinsights.com/marketing-planning/marketing-models/how-to-
use-the-7ps-marketing-mix/ (Accessed: 23/12/2019)

Henderson, B. (1989) “Origins of strategy” Available at:

https://hbr.org/1989/11/the-origin-of-strategy (Accessed: 20/11/2019)

7
Hoffman, A. J (2018) “The next phase of business sustainability” Available at:
https://ssir.org/articles/entry/the_next_phase_of_business_sustainability
(Accessed: 22/12/2019)

Hooley, G. J. Piercy, N. F. and Nicoulaud, B. (2008) Marketing Strategy and

Competitive positioning. Essex: Pearson Educated Limited. 4th Edition

Horwath, R. (2006) “The origin of strategy” Available at:

https://www.strategyskills.com/Articles_Samples/origin_strategy.pdf (Accessed:
20/11/2019)

Kasper, H. Helsdingen, P and Gabbott, M. (2006) Services Marketing

Management. A strategic perspective. West Sussex: Jonh Wiley and Sons Ltd.
2nd Edition

Knott, P. (2015), "Does VRIO help managers evaluate a firm’s

resources?", Management Decision, Vol. 53 No. 8, pp. 1806-
1822. https://doi.org/10.1108/MD-08-2014-0525

Murray, A., Skene, K. & Haynes, K. J Bus Ethics (2017) 140: 369.
https://doi.org/10.1007/s10551-015-2693-2

Reed, R. (2013), "Sustainability: a business phenomenon", American Journal of

Business, Vol. 28 No. 2. https://doi.org/10.1108/AJB-07-2013-0052

Sammut-Bonnici, T. and Galea, D. “Pest Analysis” Available at:

https://www.researchgate.net/publication/257303449_PEST_analysis (Accessed:
12/12/2019)

Sammut-Bonnici, Tanya. (2015). Brand and Branding. DOI:

10.1002/9781118785317.weom120161.

Slater, S.F. and Narver, J. C. (1998) “Customer-Led and Market-Oriented: Let's

Not Confuse the Two” Available at:
https://www.researchgate.net/publication/229966463_Customer-
Led_and_Market-Oriented_Let's_Not_Confuse_the_Two (Accessed: 12/12/2019)

Spiliakos, A (2018) “What does “sustainability” mean in business?” Available at:

https://online.hbs.edu/blog/post/what-is-sustainability-in-business (Accessed:
22/12/2019)

Stahel, W. R (2016) “The circular economy”. Available at:

https://www.nature.com/articles/531435a (Accessed: 22/12/2019)

Walters, D. (1997), "Developing and implementing value-based

strategy", Management Decision, Vol. 35 No. 10, pp. 709-720. https://doi-
org.ezproxy.derby.ac.uk/10.1108/00251749710192020

8
Watson, G. (2002) “Peter F. Drucker: Delivering value to customers” Available
at: http://gregoryhwatson.eu/images/5-QP_Watson_-_May2002_-_Drucker_-
_Delivering_Value_to_Customers.pdf (Accessed: 04/12/2019)

Wood, L. (2000), "Brands and brand equity: definition and

management", Management Decision, Vol. 38 No. 9, pp. 662-
669. https://doi.org/10.1108/00251740010379100

9
 PART 1 – Past of Forever 21

Brand Heritage Model

About Forever 21 became one of the largest iconic fast-fashion

the retail brands, competing against other major industry players
brand like Zara and H&M for cheap price points and on-trend
merchandising. The founding philosophy accompanying
the company since their first opening was the realization that
“old people want to be 21 again and young people want
to be 21 forever” (Roll, 2018).

History The beginnings of Forever 21 initiated in 1981, when husband

important and wife Jin Sook Chang and Do Won Chang emigrate from
to South Korea to Los Angeles. Pursuing the ideals of ‘the
identity American Dream’ and following their ambitious dreams, in
1984 they invested all their saving to open their first store,
back then known as Fashion 21 (Biron, 2019).

Core One of the core values that was meaningful for the couple
values was to include a biblical reference to display their Christian
values. Do Won wanted to show how much God loved
them, therefore he decided to include a reference of the
Bible (3:16) in his bags (Taylor, 2017). The brand intended to
sell teenagers fashionable clothing styles at reasonable
prices and allow them to express themselves freely with
similar looks offered by their favorite celebrities.

Longevity Since the brand open its doors for the first time back in 1984,
and they followed an aggressive expansion. By 2010 Forever 21
Track opened 500 stores in the US alone, however in 2018 they
Record. began downsizing (Krause, 2019). In their first year they
pulled in $700,000 worth of sales, incentivizing them to
continue their expansion of fast-fashion across the world
(Ciment, 2019).
Use of Forever 21 uses a simple and straight forward logo, with clear
symbols font and with a color panel of black and yellow to make a
deeper and eye-catching contrast.

10
Timeline of key events

Forever 21 pursued a fast fashion business model where they introduced

to the public new designs frequently which were then mass produced.
These designs were popular amongst young customers that seek on-trend
looks with a low budget. This was when customers were only interested in
purchasing fast, disposable fashion and were not worried about quality of
the clothes (Schlossberg, 2015). Forever 21 continued opening stores until
2016 which was a tactical mistake as e-commerce started to threaten
retail shops. Instead of downsizing, they continued to build physical space
until 2018 when they realized it was too late (Wharthon University of
Pennsylvania, 2019). Due to the high results of sales from their first years,
Forever 21 decided to open their inventory up and produce several sub-
categories. However, their greediness distant them from their focal and
established target market, losing its uniqueness and identity. New
categories like 21Men, Love 21 Contemporary (aimed for women over 21),
Forever 21 Red (children clothing) and Riley Rose (home decoration) were
introduce over the years (Roll, 2018). The inclusion of these many sub-
categories under the same brand forced the department stores to be
oversized, making the shopping experience overwhelming. Forever 21
was for many years a success entrepreneurial story and made the
founders hit number 222/400 in list of wealthiest Americans (Chung, 2016).

11
Initial marketing mix

Product Forever 21 is constantly diversifying with their products to

stay seasonable and trendy. They previously focused on
producing clothing for female teenagers and now a large
number of sub-categories were introduced including men’s
wear, children, plus size women, women over 21 and home
decoration. As the price range is so low, the quality of the
materials used is poor.
Price The fast fashion clothing brand is well-known for their
acquirable pricing strategy. They keep their prices lower
than their competitors to stay competitive and encourage
customers to purchase.
Place Forever 21 began with one shop in Los Angeles, but
continued their aggressive expansion making a total of 549
US stores and 251in other countries (Nedlund, 2019). They
also launched their website in 2005 were customers were
able to purchase the products from the commodity of their
homes.
Promotion Apart from traditional print and moving adverts, Forever 21
keep upgrading their official website in order to make
customers shopping experience pleasant providing all
necessary information. They use promotional policies
alongside incentivizing offers. With the rise of social media,
Forever 21 uses its platforms to reach customers and
increase its brand awareness.

As seen, Instagram followers keep increasing through the

years as well as their commitment to post.

12
Past persona
A persona was created referencing all the characteristics of the past
target market of Forever 21.

13
Porter’s Generic Strategy
This strategic typography has been accepted and widely used to discuss,
categorize and select a company’s strategy and obtaining a competitive
advantage. This method is divided into different generic types including
differentiation, cost leadership, focus or combination (Akan, Allen, Helms
and Spralls, 2006). Applying it to Forever 21, the strategy they approach is
cost leadership as the market the business competes is broad and they
increase their market share by low costs while still making a significant
profit (Allen, Helms, Tadeka and White, 2007). Forever 21 was considered
a leader in their industry as it offered the lowest prices for fashionable
clothes. This made the founders financially successful for many years.

14
 References - Past

Akan, O., Allen, R., Helms, M. and Spralls, S. (2006), "Critical tactics for
implementing Porter's generic strategies", Journal of Business Strategy, Vol. 27
No. 1, pp. 43-53. https://doi.org/10.1108/02756660610640173

Allen, Richard & Helms, Marilyn & Takeda, M.B. & White, C.S.. (2007). Porter's
generic strategies: An exploratory study of their use in Japan. Journal of Business
Strategies. Available at:
https://www.researchgate.net/publication/303505395_Porter's_generic_strategi
es_An_exploratory_study_of_their_use_in_Japan (Accessed: 19/12/2019)

Biron, B. (2019) ‘Photos show the glory days of Forever 21, which thrived with
cheap styles in the wake of the recession but has now fallen into bankruptcy’
Available at: https://www.businessinsider.com/forever-21-glory-days-2000s-
photos-2019-10?r=US&IR=T (Accessed: 13/11/2019)

Chung, G. (2016) “Exclusive Interview With One Of America's Most Successful

Immigrants: Forever 21's Do Won Chang” Available at:
https://www.forbes.com/sites/gracechung/2016/10/05/exclusive-interview-with-
one-of-americas-most-successful-immigrants-forever-21s-do-won-
chang/#62a95a9f42ab
(Accessed: 13/11/2019)

Ciment, S. (2019) ‘How Forever 21 went from a fast-fashion powerhouse to

bankruptcy and a troublesome future’. Available at:
https://www.businessinsider.com/forever-21-history-success-to-bankruptcy-
reports-2019-9?r=US&IR=T (Accessed: 11/11/2019)

Krause, A. (2019) “I used to shop for clothes exclusively at Forever 21. Here's why
I stopped going over time, and why I'm not surprised the store has filed for
bankruptcy.” Available at: https://www.insider.com/forever-21-files-for-
bankruptcy-why-i-stopped-shopping-there-2019-9 (Accessed: 13/11/2019)

Lenhart, A. and Madden, M. (2005) “Teens and Technology”. Available at:

https://www.pewresearch.org/internet/2005/07/27/teens-and-technology/
(Accessed: 14/11/2019)

Martin Roll. (2018) Forever 21 – Fast Fashion Retail Brand With An Edge.
Available at: https://martinroll.com/resources/articles/branding/forever21-fast-
fashion-with-an-edge/ (Accessed: 11/11/2019)

Morisi, T. L (2010) “The early 200’s: a period of declining teen summer

employment rates”. Available at:
https://www.bls.gov/opub/mlr/2010/05/art2full.pdf (Accessed: 14/11/2019)
Nedlund, E. (2019) “Bankrupt Forever 21 is closing 200 stores.” Available at:
https://edition.cnn.com/2019/10/29/business/forever-21-bankruptcy-store-
closings/index.html (Accessed: 13/11/2019)

15
Screws, N. (2011) ‘Need last-minute pool basics? Consider Forever 21’ Available
at: https://www.esquire.com/style/mens-accessories/a10439/forever-21-mens-
clothing-summer-062411/ (Accessed: 13/11/2019)

Stetka, B. (2017) “Extended adolescence: when 25 is the new 18” Available at:
https://www.scientificamerican.com/article/extended-adolescence-when-25-
is-the-new-181/ (Accessed: 14/11/2019)

Schlossberg, M. (2015) ‘The one reason Forever 21 is dominating millennial

fashion’ Available at: https://www.businessinsider.com/forever-21-business-and-
customers?r=US&IR=T (Accessed: 13/11/2019)

Taylor, K. (2017) “These 5 companies are subtly spreading religious messages –

and many customers have no idea.” Available at:
https://www.businessinsider.com/religious-messages-bible-verses-hidden-on-
company-packaging-2017-9 (Accessed: 13/11/2019)

Warthon University of Pensilvania. (2019) ‘Fashion fail: where did Forever 21 go

wrong?’ Available at: https://knowledge.wharton.upenn.edu/article/where-
did-forever-21-go-wrong/ (Accessed: 13/11/2019)

16
 PART 1 – Present of Forever 21
Current Marketing Strategy
As briefly mentioned in the past strategy, Forever 21 continues leaning on
digital marketing to create brand awareness and value to its customers.
As last resource, attempting to revive their business, Forever 21 tried hiring
singer Ariana Grande for a collaborative social media campaign,
however she declined as the company refused to pay the amount of
capital demanded. Despite this, Forever 21 used instead a look alike
model for their digital campaign resulting a lawsuit for trademark
infringement (Jacobs, 2019).

Figure 2. Arianna Grande and Forever 21's model. (O'kane, 2019)

Unfortunately for Forever 21, they have several lawsuits for workers
exploitation, child labor association, copyright infringement and its
unsustainable impact with the environment (Hicken, 2012). Even though
their website includes a detail list of the positive activities according to
CSR, the chain has been publicly exposed so many times, the sustainable
strategy they aim to represent is hidden behind an actual financial
strategy.

17
Timeline of their present performance

Forever 21 began strong and made a great impact amongst its target
market. The quick success of the brand encouraged the owners to rush
aggressively into expansion, opening stores in 47 countries within a time
frame of 6 years (Maheshwari, 2019). Their negligence with technology
played an unfavorable role for them as they didn’t predict the shift of
consumers attitudes towards e-commerce. In addition, they lost its unique
identity when their excessive desire for a larger audience pushed them to
focus on men, home section and older women, losing the trust and loyalty
of their original target market. This subsequently forced the shop to
oversize its stores, making an average Forever 21 shop 38,000 square foot
according to the company’s website. The large number of subcategories
within the same department store causes the customer experience to be
negative and overwhelming. With e-commerce challenging their tactics,
and the purchasing of expensive and massive overseas stores without the
consultancy of local expertise, most international locations were
unprofitable losing average $10 million per month (Maheshwari, 2019).
Furthermore, Forever 21 is currently dealing with legal processes with singer
Arianna Grande. After declining the company’s promotional
arrangement due to unwillingness to pay, Arianna seeks $10 million in
damages (Saad, 2019). This didn’t contribute the fact that Forever 21 has
official reached bankruptcy and filed for Chapter 11 Bankruptcy
Protection. In financial terms, the combine net worth of owners Jin Sook
and Do Won Chang at Forever 21’s peak reached $5.9 billions. However,
change in customer behavior wasn’t only evident with their perception of
preference of quality over price, but also about their overall view into a
business ethicality. The net worth of the couple has fallen to $1.6 billion
(Rogers, 2019).

18
Main Competitors Performance

Inditex is one of the largest fashion retailers worldwide which is formed by

8 distinctive and dependent brands. Since 1963, Intidex has expanded
internationally, reaching 96 markets with 7,000 physical stores managed
by 174,386 employees and 202 markets via their online selling (Inditex,
2019). Similar to Forever 21, Inditex aims to sell fashion elements at
affordable prices; however, unlike them, the owner of Inditex, Amancio
Ortega, opened separate stores to reach effectively different target
markets and separate fashion styles. In one hand, Bershka is targeted to a
younger consumer aged between 13-25 years old (Álvarez, 1015) and
Uterqüe targets a more mature, sophisticated an elegant woman,
expecting and demanding higher quality products, aged between 25-30
(Castelló Llantada, 2008).

Financially speaking, from the period of 2010 to 2018, Inditex experienced

an increase of over 100% in their net sales. In their EBITDA (before interest,
taxes, depreciation and amortization), the increase was of 80%. Overall,
the future of Inditex predicts prosperity. In addition, Inditex invests more
than 2 billion Euros in new technology to customer focus innovation to
make their customer satisfaction predominant. Self-check-out, interactive
fitting rooms or automated order delivery point are some of the
advantages customers are able to experience.

19
Perceptual Map
In the perceptual map bellow, Forever 21 and its main competitors are
position depending on their price range and quality of the materials used
in their products. As represented, Forever 21 lays low when it comes to
price and quality in comparison to competitors like H&M and Zara which
are ranked higher. They share the same target market which makes it
more likely for them to choose its competitors over them due to the
positive attributes of their products.

20
 References - Present

Álvarez, P. (2015) “Bershka, la marca de los jóvenes refresca su imagen”

Available at:
https://cincodias.elpais.com/cincodias/2015/09/23/sentidos/1443032442_15095
0.html (Accessed: 23/12/2019)

Castestelló Llantada, C. “Inditex se sofistica con Uterqüe” Available at:

https://cincodias.elpais.com/cincodias/2008/07/17/empresas/1216301992_8502
15.html (Accessed: 23/12/2019)

Ciment, S. (2019) ‘How Forever 21 went from a fast-fashion powerhouse to

bankruptcy and a troublesome future’. Available at:
https://www.businessinsider.com/forever-21-history-success-to-bankruptcy-
reports-2019-9?r=US&IR=T (Accessed: 11/11/2019)

Hicken, M. (2012) “The secret behind Forever 21’s dirt cheap clothing” Available
at: https://www.businessinsider.com/the-secret-behind-forever-21s-dirt-cheap-
clothing-2012-2 (Accessed: 13/11/2019)

Inditex (2019) “Who are we” Available at: https://www.inditex.com/en/about-

us/who-we-are (Accessed: 23/12/2019)

Jacobs, J. (2019). “Ariana Grande Sues Forever 21 Over ‘Look-Alike Model’ in

Ads” Available at: https://www.nytimes.com/2019/09/03/arts/music/ariana-
grande-forever-21.html (Accessed: 23/12/2019)

Maheshwari, M. (2019) ‘Forever 21 bankruptcy signals a shift in consumer

tastes.’ Available at: https://www.nytimes.com/2019/09/29/business/forever-21-
bankruptcy.html (Accessed: 13/11/2019)

Maheshwari, S. (2019) “One family built Forever 21, and fueled its collapsed.”
Available at: https://www.nytimes.com/2019/10/23/business/forever-21-
bankruptcy-chang-family.html (Accessed: 13/11/2019)

O’kane, C. (2019) “Ariana Grande suing Forever 21 for $10 million for using look-
alike model and copying music video” Available at:
https://www.cbsnews.com/news/forever-21-sued-by-ariana-grande-over-look-
alike-model-and-copying-7-rings-music-video-2019-09-03/ (Accessed:
23/12/2019)

Rogers, T. N. (2019) “Forever 21 just filed for bankruptcy — and the husband and
wife duo who founded it have lost nearly $4 billion from their personal net
worths since 2015” Available at: https://www.businessinsider.com/forever-21-jin-
sook-do-won-chang-lost-billionaire-status-2019-7 (Accessed: 26/12/2019)

Saad, N. (2019) ‘Arianna Grande sues Forever 21 over failed deal and lookalike
model’ Available at: https://www.latimes.com/entertainment-
arts/music/story/2019-09-03/ariana-grande-forever-21-lawsuit (Accessed:
13/11/2019)

21