7-2 Final Project Milestone Three: Strategy and Key Performance Indicators OL-501-X3076 Business Foundations

7-2 Final Project Milestone Three: Strategy and Key Performance Indicators OL-501-X3076 Business Foundations A basic strategy for American Apparel to get out of the drowning debt and get the company moving in the right direction is to analyze its current inventory and operations system and focus on realignment with the mission and vision of the company. When we analyzed the finances, we saw that sales were increasing but profit was still decreasing. In 2009 American Apparel achieved $558,775 in sales and $1,112 in profit. In 2013 American Apparel was able to increase sales up to $633,941 however, profit was negative $106,298. American Apparel needs to make some quick adjustments and focus on profitable activities, increasing sales is great however, when the sales do not turn into profit that becomes a problem. American Apparel needs to analyze its current inventory system with an emphasis on the cost of goods sold. It can focus on which items have the highest profit and create marketing campaigns to push those items. American Apparel can also re negotiate with current suppliers of raw materials to ensure they are getting the best deal possible. They should also run cost analysis on all their stores to find out profit margins, considering closing down stores that are not profitable.