Strategic & Innovation Management

ASSIGNMENT - 1

2018 -2020

Submitted by - Abdul Quadir, Nayanika Hazarika, Purvai Nehru, Rushil Rastogi, Sachipreet Kaur
Case Study Overview
• Internal:
• Analysis
– History, PVH overview, Key Facts, Our Brands and Stock
Information – SWOT Matrix

– PVH Actual & Proposed Vision and Mission – SPACE

– BCG
– Economic Performance
– IE matrix
– Evolution of Financial Ratios
– Grand Strategy Matrix
– Strengths and weaknesses
– QSPM
• Analysis: IFE
•
• Possible strategies: Matrix Analysis
• External:
– Industry overview and comparison of financial ratios • Decisions
– Manufacturing – Why our decision?

– Opportunities and threats – Strategic implementation

• Analysis: EFE – Actions

– Competitors
• Evaluation Procedure
• Market Share
• Analysis: CPM
• Current Update
•
Company Overview
History
History
Vision, Priorities, Values
a) VISION
To be the most admired fashion and Lifestyle Company in the world.

b) PRIORITIES
• Drive consumer engagement through innovative designs and personalized brand and shopping experiences that
capture the heart of the consumer.
• Expand the worldwide reach through organic growth and acquisitions.
• Invest in and evolve how the company operates by leveraging technology and data to be dynamic and
forward-thinking.
• Develop a talented and skilled workforce that embodies values and an entrepreneurial spirit while empowering
associates to design the future.
• Deliver sustainable, profitable growth and create long-term stockholder value
c) VALUES

• Individuality - be you.
• Partnership - work together.
• Passion - inspire and innovate.
• Integrity - do the right thing.
• Accountability – own it.
Brands
CALVIN KLEIN

● Calvin Klein is an international lifestyle brand that showcases bold,

progressive ideals and a seductive aesthetic.
● Founded in 1968.
● PVH acquired Calvin Klein in 2003 and has used a focused approach
to developing the brand's presence further worldwide, as well as its
prestige, recognition and relevance.
● Global retail sales of products under the Calvin Klein brands were
approximately $6.2 billion in 2020.
TOMMY HILFIGER
● TH is one of the world's leading designer lifestyle brands and is internationally known for the
sense of classic American cool style with a preppy twist.
● Founded in 1985.
● Offering quality apparel, accessories and lifestyle products at accessible price points.
● Licensed for a range of products, including fragrances, eyewear, wallets, bags, watches and
home furnishings.
● Acquired by PVH Corp. in 2010, and its Global retail sales of the TOMMY HILFIGER brand
were US $6.9 billion in 2020.
Warner’s, Olga, True & Co.
● Warner’s products are sold online, at wholesale, through department
chain and specialty stores, off-price and independent retailers, as well
as through e-commerce retailers. It’s global retail sales of
approximately $1.8 billion in 2020.
● Olga by Warner’s is a leading intimate apparel shapewear brand in
North America, focused on curvy women.
● True & Co’s brand mission has been to listen to the voices of women.
The motto is “When we dare to be true – especially when it comes to
our bodies – thoughts, people, culture and ultimately the world we
live in changes”. Contributed to $1.8 billion in global retail sales.
Stock Price Performance
Historical Stock Price Information
Economic Performance in 2020
Financial Ratio Analysis
DEEPER ANALYSIS OF THE IMPORTANT RATIOS
Current Ratio
In the case of PVH, we can see that the current ratio has increased slightly since 2020 with a value of 1.4 in
this first year, reaching its maximum level in 2021 with a value of 1.5. These values are very positive because
they reflect that PVH is able to cope with its short-term obligations.

Inventory Turnover Ratio

The inventory turnover ratio reduces from 2.9 in 2017 to 2.3 in 2021 indicating that the company is taking a longer
time to replace it’s stock entirely. An ideal turnover ratio would keep on increasing to measure growth but it is not
the case with PVH. It’s ratio has declined considerably over the years indicating decline in sales.
Return on Asset

The higher the economic profitability, the greater the profitability of the company's assets and therefore the situation of the
company will be better. If it is negative, it indicates that the company does not obtain returns from its activity, so it must
be restructured, reduce expenses or quit the activity.

The values of ROA of PVH are between 3 and -8 in the year 2020 and 2021. It has been decreasing progressively. This
reflects a bad stability of the assets of the company and therefore also a bad stability of the company as a whole.

Return on Equity
The bigger the ROE the better as this means that the wealth of the shareholders will be maximized. Positive ROE means
that shareholders get returns while negative ROE indicates that shareholders are losing funds in the company.

Since the ROE has declined to -24 in the year 2021, it means that the shareholders are losing funds in the company. This
further means that shareholders will start pulling out of the company if PVH doesn’t start getting a positive ROE
Internal - Strengths and Weaknesses
External - Opportunities and Threats
SWOT ANALYSIS
Updates 2018-2020
2018 Highlights
WINTER
● Momentum continued around the Kardashian/Jenner sisters campaign for CALVIN KLEIN JEANS and CALVIN KLEIN
UNDERWEAR
● Formula One™ World Champion Lewis Hamilton announced as global brand ambassador for TOMMY HILFIGER men’s
● PVH entered three-year partnership with World Wildlife Fund
● PVH named the #1 apparel company on CR Magazine’s list of “100 Best Corporate Citizens”

SPRING/SUMMER
● PVH supported LGBTQ rights through worldwide Pride celebrations
● PVH joined the Global Fashion Agenda, Fashion for Good and the Ellen MacArthur Foundation Make Fashion Circular
Initiative
● PVH ranked one of Forbes’ “Best Employers for Women”
● Van Heusen launched partnership with UFC® for its Flex Collection
FALL
● PVH certified as a Great Place to Work in the U.S.
● TOMMY HILFIGER held its TOMMY NOW runway event in Shanghai and hosted a TOKYO ICONS event
in Japan
● CALVIN KLEIN partnered with Zalando for its 10th anniversary with a capsule collection
● Launch of IZOD advertising campaign featuring Colin Jost and Aaron Rogers
● PVH received 2018 U.S. Secretary of State’s Award for Corporate Excellence • Launch of CALVIN KLEIN
“Together in Denim” campaign, with immersive brand activations

WINTER
● Made decision to close CALVIN KLEIN’s high-end collection business
● Launched TOMMY HILFIGER and CALVIN KLEIN Chinese New Year capsule collections
2019 Highlights
WINTER
● PVH announces support for the Global Fashion Agenda’s CEO Agenda 2019 • PVH enters a licensing agreement
with NIKE, Inc. for the design, sourcing, marketing and worldwide distribution of NIKE-branded men’s underwear
beginning Fall 2020
● TOMMY HILFIGER begins partnership with Zendaya as global brand ambassador for Spring and Fall 2019

SPRING/SUMMER
● PVH announces Forward Fashion, a new CR strategy along with 15 key targets
● Stefan Larsson appointed into the newly created role of President, PVH Corp.
● Cheryl Abel-Hodges appointed CEO of Calvin Klein
● PVH supports LGBTQ rights through worldwide Pride celebrations
● PVH closes on two acquisitions: – Acquires the Tommy Hilfiger retail business in Central and Southeast Asia –
Acquires Gazal, our joint venture partner for CALVIN KLEIN, TOMMY HILFIGER and Van Heusen in Australia
and New Zealand
● Calvin Klein and G-III enter into a license agreement for CALVIN KLEIN JEANS women’s assortments in North
America
FALL
● CALVIN KLEIN marks 50-year anniversary with a CK50 capsule collection and marketing campaign featuring
Justin Bieber and his wife Hailey Bieber, among others
● PVH signs The Fashion Pact, a coalition of fashion and textile companies pledging to reduce the environmental
impact of the fashion industry
● PVH re-certified as Great Place to Work in the U.S. for the second year
● PVH announces a $3 million, three-year grant extension with Save the Children

WINTER
● Tommy Hilfiger commits for all global design teams at its Amsterdam headquarters to achieve 100% 3D apparel
design by its Spring 2022 collections
● CALVIN KLEIN and TOMMY HILFIGER launch Lunar New Year capsule collections
● Tom Chu appointed as President, PVH Asia Pacific
● Received approval of our absolute greenhouse gas emission reduction targets by the Science Based Targets initiative
● PVH ranked #16 on Newsweek magazine’s “America’s Most Responsible Companies” list
● PVH listed on Fortune magazine’s “100 Best Workplaces for Diversity” list
● PVH announces sale of Speedo North America business
2020 Highlights
● PVH marked its 100-year anniversary listed on the New York Stock Exchange, one of 28 companies and the only
apparel company to do so
● The TOMMY HILFIGER brand celebrated its 35th anniversary
● Calvin Klein and Tommy Hilfiger evolved their brand direction with key hires across design, merchandising and
marketing
● The CK One brand platform launched to amplify youth voices •One Future, the first dedicated CK One brand
campaign, drove a highly engaged conversation amongst global social communities
● Calvin Klein’s Pride 2020 campaign, #PROUDINMYCALVINS, launched in over 20 markets, garnering strong
sell-throughs and high social engagement.
● Calvin Klein Underwear debuted a global collaboration with Kith, tapping into the power of the brand’s millennial
and Gen Z audience
● TOMMY JEANS X AAPE BY *A BATHING APE® Collection sold out within 30 minutes of launch in Japan
● TOMMY HILFIGER ranked #17 in the Vogue Business Index Top 50 Luxury Brands 2020 in the digital brands
category
Strategy, Position, Action, and Evaluation Matrix (SPACE)
BCG Matrix

BCG Matrix Sales by Region

BCG Matrix by Business of PVH
Internal - External (IE) Matrix
The Grand Strategy Matrix

Potential Strategies

● Retrenchment
● Concentric diversification
● Horizontal diversification
● Conglomerate diversification
● Liquidation
Matrix Analysis
Quantitative Strategic Planning Matrix (QSPM)
Decisions
❖ Diversification can involve several elements, such as acquisition of new staff, new patents and
technologies, investment in capital assets (new machinery equipment), or copious investments in
R&D.
❖ Depending on the level of familiarity with the new product, it can involve some or all of these
steps. This is why mergers and acquisitions (integrations) are one of the most common paths
opted for by corporations looking to diversify.
❖ Since PVH is a big firm, it can look to buy out a smaller business that specialises in the product
or service they want to start selling; in the long run, it is more economical and efficient than
starting from scratch.
Why this strategy?

This strategy will benefit the organisation in the following ways:

❖ Product Line Growth
❖ Increased opportunities for promotion
❖ Ability to serve more customers
❖ Improved product quality
Implementation
Horizontal diversification will involve the extension of a production of products or service above and
beyond the industry, in which the company operates. Companies introduce into the industry,
production of new products which are based on experience and technical-economic capabilities of the
company. These products are usually based on related technologies, meet different needs of buyers or
similar needs. Such a strategy will also allow the company to use a new distribution system in a new
area of activity.

Despite all of its apparent risks and uncertainties, horizontal diversification holds the promise of
growth for a business. Staying in relative inertia can be fatal for any corporation; in a very competitive
arena, opponents are always looking for a competitive edge. The reality is that if there is a promising
avenue for diversification and PVH does not grasp it, one of their rivals will.
References
1. MBA strategy. (n.d.). MBA Strategy. Retrieved September 20, 2021, from https://www.mbaknol.com

2. Internal-External (IE) Matrix. (2020, April 28). MBA Knowledge Base. https://www.mbaknol.com/strategic-management/internal-external-ie-matrix/

3. yahoo. (n.d.). PVH Analysis. Retrieved September 20, 2021, from https://finance.yahoo.com/quote/PVH/analysis?p=PVH

4. Yahoo. (n.d.-b). Key Stats. Retrieved September 20, 2021, from https://finance.yahoo.com/quote/PVH/key-statistics/

5. PVH History - Zippia. (2021, July 28). PVH History. https://www.zippia.com/pvh-careers-9492/history/

6. Yahoo. (n.d.-c). History - PVH. Retrieved September 20, 2021, from https://finance.yahoo.com/quote/PVH/history?p=PVH

7. Internal-External (IE) Matrix. (2020b, April 28). MBA Knowledge Base.

https://www.mbaknol.com/strategic-management/internal-external-ie-matrix/#:%7E:text=The%20IE%20Matrix%20is%20a,combined%20into%20one%20suggestive%20model

8. PVH. (2019, March 11). Top of Minds EN.

https://topofminds.com/en/pvh-2/#:%7E:text=The%20Phillips%2DVan%20Heusen%20Corporation,the%20New%20York%20Stock%20Exchange

9. Wikipedia contributors. (2021g, September 8). PVH (company). Wikipedia. https://en.wikipedia.org/wiki/PVH_(company)

10. PVH Corp. Reports 2020 Fourth Quarter and Full Year Results and Provides 2021 Outlook. (n.d.). PVH Report. Retrieved September 20, 2021, from

https://www.pvh.com/news/press-releases/PVH-Corp-Reports-2020-Fourth-Quarter-and-Full-Year-Results-and-Provides-2021-Outlook