SWOT Analysis: The North Face
The North Face was founded in 1966. In 2000, after facing serious financial and distribution problems,
the company was acquired by VF Corporation. (Hoovers, 2011) Today, as a subsidiary, the outdoor and
action sports company headquartered in San Leandro, California, has approximately 860 employees and
accounts for 40% of VF’s total sales. (Hoovers, 2011) The North Face offers technically advanced
products to extreme athletes and explorers throughout North and South America, Europe and Asia. (PR
Newswire) The company has specialty and outlet stores and sells its products to different sporting goods
and outdoor retailers. (PR Newswire) The market share of the company in the United States is currently
16%.
Internal Strengths
The North Face’s brand reputation, especially within the outdoor community, is definitely the most
significant strength of the company. (Slideshare) The North Face is widely recognized for the quality of
their products designed to provide high performance and comfort even under the most extreme
conditions. (Funding Universe, 2006) Its focus on product technology allows The North Face to
constantly create innovative, authentic, and technically advanced products. (Slideshare) Besides the
superiority of their products, The North Face’s commitment to sustainability and the community is
another attribute that encourages a positive attitude toward the brand. More recently, the
improvement of customers’ in-store experience attained with the creation of innovative kiosks and an
emphasis on employees’ friendliness, represents another strength of the brand. (Slideshare) The North
Face’s internal strengths have led to significant sales growth in the past two years. (Hoovers, 2011) Also,
last year’s reports show that there was a 20% higher demand for its products. (PR Newswire)
Internal Weaknesses
Even though technological innovation is one of the strengths of The North Face, sometimes it is difficult
to communicate it to consumers. The North Face’s technological innovation is also reflected in the
brand’s pricing which can become a weakness when customers perceive The North Face products to be
too expensive. (Slideshare) In relation to the labor force, The North Face itself identifies low employee
morale and a lack of high opinion of management. (Slideshare) Although the use of outsourcing has
enabled the company to establish better systems, The North Face relies on too many informal
manufacturing sources. This can cause significant distribution problems to the company. (PR Newswire)
External Opportunities
There are opportunities that The North Face can pursue in order to improve its labor force and increase
market share. The North Face can implement additional training for the senior management so that they
welcome and encourage feedback from their employees. Welcoming ideas would improve employees’
morale and would help the company attain a better internal culture. In relation to market share, there
are five opportunities that The North Face can benefit from. The first one, is the increase of community
involvement in order to improve the company’s reputation. Furthermore, expanding the brand’s
offerings to other sports and sponsoring athletes participating in such disciplines, would raise awareness
and give the brand a more professional look. The third opportunity, involves expanding the brand to the
casual apparel industry which could lead to more sales. (Funding Universe, 2006) The international
market is another opportunity, The North Face’s international sales account for 25% of their total
revenue. Creating an online presence in Asia and European countries could also result in a sales
increase. (PR Newswire) Lastly, given that The North Face has previously supplied products to the U.S.
Marines, seeking future government contracts is also an opportunity that the company should look into.
(Funding Universe, 2006)
External Threats
The main external threat to The North Face is competition. The North Face’s main competitors are
Columbia Sportswear, Jarden, and Nike. Competitors in the niche outdoor field such as Jarden have a
stronger company culture, which makes the company appear more unified. Pricing has also become a
significant aspect in regards to competition. Companies that are not as focused on quality and durability
of their products as much as The North Face, are able to offer more affordable prices. In the larger
scope, competitors with a higher market share such as Nike, have the ability to accomplish better
community outreach. (Slideshare) Another threat that the company is facing, concerns a legal restraint.
The North Face was recently involved in a lawsuit with a company created by a teenager in Missouri
called “The South Butt”. This new company is essentially a parody of The North Face. The lawsuit did
not represent a financial threat for The North Face but the parodies of the brand can potentially affect
its brand image. (Cassens Weiss)
SWOT Analysis Conclusion
According to the SWOT analysis, the brand’s reputation accounts for its most important strength. There
are multiple opportunities to extend its market share, however, The North Face needs to work on their
labor force in order to ensure a better company culture and to be able to exploit the opportunities
effectively. The North Face’s competitive environment should not be a threat if the brand found better
ways to communicate their technological innovation. With effective communication strategies The
North Face will be able to justify their pricing and make consumers value the attributes and the longterm benefits of its products.