Detailed SWOT Analysis of The North Face – An American Outdoor Recreation Products Company

Quick Stats on The North Face

Founder	Douglas Tompkins, Susie Tompkins
Year Founded	1968
Origin	The United States
No. of Employees	2600+
Company Type	Subsidiary of VF
Market Cap	$22.311 Billion (2022)
Annual Revenue	$3.198 Billion (2021)
Net Income/ Profit	$433.8 Million (2021)

 

Products of The North Face

• Men’s Wear 
• Women’s Wear 
• Kid’s Wear
• Bags & Gear 

Competitors of The North Face

• Patagonia
• Canada Goose 
• Marmot 
• Spyder 
• Columbia 

After having a deep insight into the company’s core business, let’s delve into the SWOT Analysis of The North Face.

SWOT Analysis of The North Face

A SWOT analysis consists of a company’s strengths, weaknesses, opportunities and threats. It’s an excellent measure of determining a company’s growth and where it falls short thus providing insight for the company to develop and grow.

To better understand the SWOT analysis of The North Face, refer to the infographic below:

So let us first start by looking at the strengths of The North Face from the SWOT analysis of The North Face.

Strengths of The North Face

Strengths are the organisation’s unique capabilities that give it an advantage in attaining more market share, attracting more customers and maximising profits. A brand strength, closely related to brand equity is the value carried by a brand and is of utmost importance for any company to attain the heights of success.

• A Private Company: The North Face has its own privately owned business which gives it an edge over other public competitors. The company can formulate its strategies and change them according to its advantage and convenience.
• Environment Friendly: The North Face is an environment-friendly brand that devotes 1% of its revenue to environmental groups via one percent for the planet.
• Effective Marketing: The North Face has excellent marketing strategies which target its customers to buy environment-friendly products and create a sense of consciousness among the customers towards a sustainable environment.
• Strong Social Media: The North Face social media presence is fascinating with 5.1M followers on Instagram & up to 6.5M followers on Facebook. It also has a considerable presence on Twitter. With their business to save our home planet, it has grown this community and its sales with environmental connection with people.

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• High-end Quality of Products: The North Face has maintained its authenticity to its fans from a small store to a high-end company. Its products are produced with utmost quality since it is more than a brand.
• A Veteran of the Brand: The North Face was established in 1968 making it a veteran in terms of outdoor clothing wear and gear. This adds to the originality of the brand since they pioneered the style in the clothing industry.
• Fully-operating Websites: The North Face has established its website for the convenience of its customers. Customers can avoid fake supreme products when they buy from the official website of The North Face. They also have customer support for their queries and concerns. This helps them to associate virtually with their customers. 
• Technology & Innovation: The North Face’s R&D team suggestions, recommendations and new equipment ideas provide the inspiration and challenges that drive the research and development of advanced materials, innovative design and construction. 

Weaknesses of The North Face

Weaknesses are the negative aspects of a business or brand which should be improvised and improved. Working efficiently to identify the weaknesses of a brand and then taking corrective majors to improve it will lead the brand to great success. The major weaknesses of The North Face are as follows:

• Lack in E-commerce: As social media is The North Face’s strength on the other hand it lacks in the adoption of e-commerce, The North Face continues to struggle to increase its online sales on e-commerce platforms such as Amazon, Etsy, Walmart etc. The North Face is more focused on retail selling which has led to a major weakness of the company, particularly in the current pandemic-hit society where consumers prefer to shop online.
• High Dependency on Suppliers: The North Face excessively relies on suppliers from Asia. Due to overreliance on supply chains, it is exposed to an array of issues.
• Huge Dependence on the US Market: Due to the high dependence of the company on the US retail market, it is exposed to the vulnerabilities of the market.
• High Product Price: Eco-friendly production of The North Face makes The North Face products one of the most expensive products which target only rich class people as its target audience. More customers will look for budget-friendly deals while buying clothes.
• Limited Advertising Campaigns: For a good brand to gain recognition, the right marketing strategies are very important. To create an impact and to spread brand awareness every company uses advertising as its tool but The North Face’s limited advertising campaigns are a significant weakness for the brand.

Opportunities for The North Face

Opportunities are potential areas of focus for a company to improve results, increase sales, and ultimately profit. Companies can work on their weak areas to increase their opportunities and chances to lead the market. For big companies like The North Face, there are many opportunities that they can use to retain their position.

• Global Recognition: The outdoor retailer operates in the US and Canada yet there is a high demand for outdoor apparel across the world. By a global expansion, The North Face will benefit from having several regional streams of revenue.
• Utilise E-Commerce Platforms: Most outdoor apparel prefers to shop online, which serves the company an opportunity to grow. It can exploit e-commerce channels more effectively to increase online sales.
• Diverse Product Line: The North Face offers a wide range of outdoor apparel and other outdoor-related products. The retailers can extend their product line to include everyday clothes, sportswear and secondhand clothes.
• Formulating Advertisements: Allotting the budget to its promotion in terms of advertisements is an opportunity for the company to focus on. Even though they are benefitting from their current fame, there is a possibility that a time may come when they will need the power of advertising. 
• Making the Brand a Household Name: Due to its popularity, the company has the option to level its brand into a household name giving them more identity.

Threats to The North Face

Threats are harmful factors that can affect the company’s growth. The following are some of The North Face’s threats.

• Business Depend on Climate: The North Face’s products are environmentally friendly and are made from natural products like fabrics and wool which makes it more vulnerable to climate change. Hence the availability of these raw materials will become highly challenging due to prolonged droughts and flooding.
• Recession: Many businesses across the world are sliding deeper into recession. In times of financial crisis, consumers reduce their expenditures on several essential items like The North Face’s outdoor offerings.
• Declining Retail Sector: Since the past five years, the retail sector has declined and was accelerated by the pandemic. The decline threatens The North Face’s profitability and long term sustainability.
• Global Pandemic: The North Face suffered huge losses due to the pandemic and was forced to close its stores and suffered huge losses in millions. The possibility of a second wave of a virus threatens its revenue and profits once more.
• Tough Competition: Just like any sector, The North Face has several competitors like Patagonia, Marmot, Amer Sports, Columbia Sportswear, Canada Goose and so on who compete against each other for market share.

This ends our broadly covered SWOT analysis of The North Face. Let us conclude our learning below.