Question 1

Keeping in view the flexibility and focus strategies which factors / basic questions did the
management of Forever-21 ignored while planning their expansion. Briefly explain.

Answer:
Following are the questions which Forever-21 ignored or did not defined correctly.

FOCUS
Forever-21 wanted their brand to be “For anyone who wants to be
trendy, fresh and young.”
But a single company cannot serve all the customers/ people on earth.
There must be some sort of segmentation either demographic or
WHO do we
psychographic, which Forever-21 did not address. It targeted each
serve?
individual including millennials and middle class, both genders and
every age individual. This brought their focus down towards other
activities. And they end up with opening new stores where it was not
actually necessary.
Although Forever-21 was aware about the difference their product
provides which is , “Selling Trendy Clothing for Low Prices”. But they
WHAT
lose their focus on this and began to work on opening new stores. As the
differentiate us
article explained that when the company focused on growing bigger, the
from our
styles became more cookie-cutter, which means their products began to
competitors?
have same styles and looks. And their customers were definitely not
looking for this in their products.
After opening several new stores, they again set a goal for further
WHY are we
expansion. As mentioned in article that they wanted to become $8 billion
pursuing a
company and opened 600 stores in three years. But doing this, they
particular
neglected their actual vision and value. They were already the market
marketing
leader till March 2015, and it was not essential to focus more towards
strategy?
expansion. Due to which they end up with downfall in 2017.
FLEXIBILITY
HOW will our
Forever-21 ignored how their competitors will respond when planning
competitor react
for expansion. As it loses their focus on their core competencies,
to our marketing
competitors such as Internet brands like Fashion Nova took advantage of
strategy decisions
it. And as the company did not has a plan on how respond to their
and HOW should
competitors, they end up with losing customers.
we respond?
Which
The e-commerce era was on its peak and Forever-21 struggled to adapt
technology will be
to changing customer needs. It was investing heavily on opening new
used to meet
stores but did not plan to invest in new ways like online selling to sell its
changing
product.
customer needs?
When to Enter It was time to begin ecommerce business but Forever-21 continued
 opening new stores and introduced home-goods section as well. But it
was not the right time to introduce new products, it was the time to enter
into new business – Ecommerce business.
and When to Exit
Also, after downfall, the company considered it too late to file
from market?
bankruptcy , which is after losing more than $4 Billion from their
personal net worth. The exit should have been done earlier when they
realized that they are not able to meet changing customer needs.

Question 2
In your opinion how they could have avoided bankruptcy? provide 2 unique suggestions
based on your understanding.

Suggestion 1:
At the time when they realized the changing market needs, such as e-commerce boom, they
should have moved towards chaos stage, and could began to spend on new experiments and
innovations instead of still focusing on opening of new stores. They were the market leaders;
they had all the resources available which they could invest easily. Also, the environment was
volatile, which means more flexibility was required. Simultaneously, with E-commerce business,
they could have closed those stores only which were constructed on those places which do not
come under targeted market.

Suggestion 2:
As the company was introducing 400 designs a day, it is obvious that this was its core
competency. And this should not have been neglected any-how. If the company did not want to
move towards flexibility, then it should have focused highly on its product, to be in a stable
position as market leader. Expansion of their business should not have been affected their unique
and trendy styles for which the customer considered visiting Forever-21.