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Ralph Lauren Hofstede

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successful through the years however, being that the company is in the clothing industry there is and will always be some strict competition. Three competitors to the Ralph Lauren, Polo company that I intend to incorporate into this research are:
1.) Lacoste- A retail clothing company that was founded in 1933 by the legendary tennis player Rene Lacoste.
2.) Abercrombie and Fitch- An All-American retail clothing company that was founded David T. Abercrombie in 1892.
3.) Calvin Klein- A retail clothing company that was founded in 1968 by Calvin Klein.
All three companies are publicly traded and have been in competition with Ralph Lauren Polo for quite some time now. History:
Ralph Lifshitz was born on October 14, 1939 to a middle class Jewish family living in the Bronx. Throughout some point in Ralph’s life he changed his last name to Lauren for personal reasons. His mother had always envisioned Ralph to become a rabbi when he was of age however; Ralph chose not to pursue that life. Ralph’s father also was a part of his life and was an artist and a housepainter.
The company that Ralph Lauren started was titled “Polo”. This began approximately around the late 1960’s. Lauren started out as a clothing salesman selling clothes for other people’s clothing stores and clothing lines. Mainly he sold men’s gloves, suits, and ties. Ralph got tired of selling other people’s clothing and wanted to get in the business his self and begin creating his own clothes that he could sell. At the time he had no experience in fashion design, but he grew up in one of the biggest fashion capitals in the universe, New York. Ralph went to his employer Abe Rivetz and proposed a design of ties for men and was denied. Ralph was still confident in his design that he went to another clothier Beau Brummel to accept his design for ties and manufacture his Polo line of neckwear. Later on Lauren acknowledged that he had no idea how to even make a tie or know anything about measurements and particular fabrics needed to produce the product. The tie’s that Lauren created were a lot brighter and more vibrant than those tie’s that were established on the market already and shortly after began to get some popularity and soon after found a home at Bloomingdale’s department store.
A year later Lauren decided to try and form his own company with some help from his brother and Norman Hilton who was another clothing manufacturer living in Manhattan at the time that was willing to give Lauren $50,000 to get started. They initially named the company Polo Fashions, Inc. and then later to Polo/Ralph Lauren Corporation in 1987. In this collection Lauren diversified his company by adding shirts, suits, sportswear, and keeping the original tie’s that he had created. Then in 1970 Ralph Lauren had won his first Coty award for menswear. Once Polo Fashions, Inc. had established itself Ralph Lauren made the jump to design women’s clothing. He introduced the first designs for men’s dress shirts cut for women and that also found great success topping and excess of $10 million.
Polo then took off rapidly in growth and became too much for Ralph Lauren to handle by himself. He was successful in creating the brand that was Polo Fashion’s, Inc. but was terrible at managing the business. By 1972 Lauren’s business was almost bankrupt due to poor financial management and the costs for expansion and future expansion. Customers and department stores became frustrated when Lauren’s items could never make it to them on time. Certain situations like this were driving some customers away from Polo and Lauren admits himself that this was one of the darkest periods of his life. To keep Polo Fashions, Inc. afloat Lauren invested approximately $100,000 of his own savings into the company and then convinced Peter Strom, a business associate of Norman Hilton, to leave his job and become partners with him. Lauren and Strom struck a deal leaving Lauren with 90% ownership and in charge of advertising, public relations, and designs and Strom with 10% ownership and in charge of everything else mostly financials. This relationship was the beginning of company structure that has seen great success for decades now. During the company’s first four years, Polo fashion, Inc. had control over all 4 stages of the cloths making process including designing, manufacturing, to distribution. The first step in the reconstruction and reorganization was to try and focus on what they did good and leave the rest for other companies. Shortly after they designated all womenswear to Stuart Kreisler who was a experienced manufacturer who was eager to help build the reputation of Lauren’s company. Under the licensing agreement that they reached whomever the designer was would receive a pay cut between 5%-8% of wholesale revenues. This idea of business then took off and is the basis for how Polo operates as a distinctive brand image in America. By the 1980’s the company had created such a clear brand image that most people were familiar with the clothing by Polo or Ralph Lauren. Thus creating the change from Polo Fashion’s Inc. to just Polo by Ralph Lauren. In this era Polo became big into advertising and trying harder to express their brand image to consumers. Polo’s first advertisements could be found in New York City newspapers. The company tried to portray the company and its products as a complete lifestyle. Polo then created a multi-page advertisement that could be found in a number of major magazines. The ads presented a “world lifted out of time” where it displayed wealthy attractive couples enjoying vacation time in Africa all obviously wearing Polo products. Vogue magazine described the ads as a “home movie”. Polo spent as much as $15-$20 million a year just on advertisements at this time period. Lauren’s next move was to expand the image even more by creating products. First there was Ralph Lauren’s menswear then Ralph Lauren’s womenswear and then Lauren introduced Polo by Ralph Lauren cologne, boys clothing in 1978, girls clothing in 1981, luggage and eyeglasses in 1982, and home furnishings in 1983. Shoes, furs, and underwear all shortly followed. By 1994 the company was producing a collection of apparel for newborns, infants, and toddlers. Along with all of the success that Polo was seeing there were some licensing agreements that actually were disasters. In 1983 Polo launched its “Home Collection” which was a line of products that were designed for home furnishings. The name of the collection was “Home and Garden” and featured over 2,500 products. Problems started occur when the licensee company J.P. Stevens company couldn’t ship out the items to retail stores on time. They also ran into trouble when they asked each retail store that was planning to feature the home collection to construct a $250,000 boutique to display the items. The retail stores declined. This set back took years for Polo to get maintain control of the home collection again. In 1971 Polo started offering franchises as well. They franchised over 100 Polo, Ralph Lauren stores and instead of charging a franchising fee they simply made money as the wholesaler by selling them the clothes. Then in 1982, Polo opened its first of 50 outlet stores in Lawrence, Kansas. Once these stores had been established successfully in the U.S stores began to open up in London, Paris, and Tokyo as well. The flagship or headquarters for Polo opened up in 1986 on Madison Avenue in Manhattan, New York. The store was the refurbished Rhinelander mansion and featured mahogany woodwork, hand-carved balustrades lining marble staircases, and sumptuous carpeting. By being able to create retail outlets it cut out the middle man and Polo’s revenue increased dramatically. Since Polo’s decision to create this retail giant stores there competitors have followed in their footsteps such as: Calvin Klein, Liz Claiborne, Adrienne Vittadini, and Anne Klein. Once the 1990’s had rolled around there was a lot of speculation about Polo and whether or not the company was going to be able to adjust to radical changes in the market. People were reporting that other clothing manufacturers were stealing Polo’s designs and creating their own clothing and selling it for less under a different brand name. However, with even more fragrances and sportswear products to come out the company still was able to keep thriving. In 1994 Goldman Sachs & Co. bought 28% of the company for approximately $135 million. Then three years later on June 13, 1997 the company went public on the New York Stock Exchange. Founder, Chairman and CEO Ralph Lauren sold 18 million of his own shares for approximately $465.4 million. He still was able to retain 90% of the voting rights. Analysts felt that there was still an extreme upside because of the world markets that Polo hadn’t step foot into yet. They also had an underdeveloped women’s line that was still successful. (Funding Universe)

Key Dates:
1968: Polo Fashions is created by tie salesman Ralph Lauren
1974: The first ads appear in NYC newspapers
1978: Polo cologne is introduced
1983: An extensive, licensed home furnishings line debuts
1986: The flagship store opens on Madison Avenue.
1997: Polo/Ralph Lauren goes public on New York Stock Exchange
2003: The European headquarters moves from Paris to Geneva. Leadership and Governance- Ralph Lauren-
The first and most important leader that I would like to talk about is Ralph Lauren. Ralph Lauren is the founder, CEO and Chairman of Polo, Ralph Lauren. As stated earlier he was born in 1939 in the southern New York City borough of the Bronx to a Jewish family.
Ralph Lauren’s family was lower middle class and found themselves struggling often. Lauren had three older brothers and grew up sharing a bedroom with the both of them for his entire childhood. Since an early age he had always wished that he didn’t live in the conditions that he did and wanted something better for himself so he began to work extra jobs to be able to buy himself expensive clothing to give him a better reputation at school and around his neighborhood. At the age of 16 Ralph and his older brother Jerry made the decision to change their last names to something more modern. They agreed on Lauren. The reason was because the both of them were constantly ridiculed around the neighborhood and school about their last name and the way it sounded. When grade school was over Ralph did not do any formal design or anything of that nature instead he chose to go to school and study business science. However, he dropped out before he could finish the degree. Slowly he began to learn more and more about his trade and this is when he began to create men’s ties and when the story of Ralph Lauren, Polo took off. When you think of Ralph Lauren you think of a great charismatic leader that built an empire of upscale American clothing being publicly traded on the NYSE from its earliest beginnings as sample neckties. The reason why Ralph Lauren is considered a charismatic leader is because not only did he put his life into the creation of the business but also because of his drive and his motivation to keep this company growing it sold other business associates that worked for other companies to either leave the company they were at and come work for Ralph. In one crisis situation the company was losing a tremendous amount of money and in order to keep it afloat ralph put $100,000 of his own money into the business. (Funding Universe)
The next leader that has a big impact in this company that I would like to talk about is Roger N. Farah. Farah is currently the President and Chief Operating Officer of the Ralph Lauren Corporation and has been since April 2000. Prior to obtaining this position with the Ralph Lauren Corporation he has been employed at a number of other large corporations where he did similar work including:
1.) Chief Executive Officer at Foot Locker, Inc, which was formerly known as Venator Group Inc., from December 1994 to August 1999.
2.) President Chief Executive Officer and Chief Operating Officer of Macy’s Central
3.) President and Chief Operating Officer of R.H. Macy & Co. Inc. from July 1994-October 1994
4.) Chairman of Federated Merchandising Services, the central buying and product development arm of Federated Executive officer of Rich’s/Goldsmith’s Department Stores and President of Rich’s/Goldsmith’s Department stores from 1987-1988.
5.) Multiple promotions as an employee of Saks Fifth Avenue from 1975-1987.
6.) Chairman of the Board of Foot Locker, Inc., from December 1994-April 2000.
7.) Independent director of Progressive Corporation, June 2008-Current.
8.) Ralph Lauren Corporation, April 2000-Current.
9.) Aetna Inc., June 28, 2007-Current.
10.) Director of National Retail Federation Inc. and Macy’s Central.
11.) Director of Toys “R” Us Inc. September 2001-Current.
12.) He received a BS Degree in Economics from the University of Pennsylvania in 1974.
(Business Week) Based on the information that I’ve gathered on Roger Farah I would say he fits under the Transformational category. The reason being is that the image of Ralph Lauren Polo is Ralph Lauren so it’s hard to see him operating as a charismatic leader. Ralph Lauren is responsible for how the Polo Corporation is viewed today. However, with that being said Mr. Farah has been an intricate part in every big corporation that he has been a part of which shows a high level of employee focus. It also shows that he has the mental capacity to handle such a tremendous amount of responsibility and has been successful in just about every single high management position he has held. His resume and job success’s also show us that the growth and development of the corporation has been consistent in that each of the companies he was worked for has either progressed or stayed at an equilibrium. There are no currently no companies that Farah has worked for that have gone bankrupt or have seriously liquidated.
Another key leader that is crucial to the success of the Ralph Lauren Corporation is Mitchell A. Kosh. Mitchell A. Kosh has been Senior Vice President of Human Resources at Ralph Lauren Corporation since 2000. Since taking this job he has upheld responsibilities including all human resources and legal functions dating from 2003-2009. His other responsibilities include organization development, executive recruitment, training, employee benefits, and compensation programs. Before joining the Ralph Lauren team Kosh was the Senior Vice President and Chief Human Resources Officer of the insurance and financial service company, Conseco. Before either of these positions were held, like Farah, Kosh too has had a resume prior to Polo, though not as long, it’s still impressive.
1.) From 1996-2000 he held positions with Venator Group, where he held positions including Senior Vice President of Human Resources for both Footlocker Worldwide an F.W. Woolworth co., along with Vice President of Organizational and Leadership Development.
2.) From 1988-1996 Kosh was employed with the Federated Department stores where he held various positions including Senior Vice President of Human Resources.
3.) Mitchell A. Kosh is still an active member of the Human Resources Policy Association.
4.) Currently a Trustee and President of the William Alanson White institute of Psychiatry Psychoanalysis and Psychology.
5.) Mitchell A. Kosh also beholds a Ph.D. in counseling psychology from the University of Massachusetts.

As far the leadership quality that Kosh exhibits I would have to say he also is transformational. The reason why I can’t say that his leadership quality isn’t charismatic is because he doesn’t have enough hands on experience with the Ralph Lauren Corporation and there brand image. Kosh’s work is more closely related with helping other employee’s within the corporation in particular the younger newer employees of the corporation. The reason why I don’t believe he falls under the transactional type of leadership is because he’s not just sold on outcome. He believes in educating the younger people who will eventually be running the business one day and giving them advice based on his own experiences with passion and understanding. That is the main reason why I believe he is transformational. Kosh exhibits and emotional employee focus to strive towards a growing business that has the youth to help the development for the future.

Governance- The Board of directors for The Ralph Lauren Polo Company are:
1.) John r. Alchin
2.) Arnold H. Aronson
3.) Frank A. Bennack
4.) Joyce F. Brown
5.) Joel L. Fleishman
6.) Hubert Joly
7.) Judith McHale
8.) Steven P. Murhpy
9.) Jackwyn L Nemerov
10.) Robert C. Wright

The Chairman to the Board of Directors to the corporation is Ralph Lauren and right below is the Vice Chairman to the Board of Directors, Frank Bennack Jr. Within the Ralph Lauren Corporation is the select committee’s and Board of Directors who operate each. They are:
Audit committee- Consists of:
1.) Frank Bennack Jr.
2.) Joyce Brown Ph.D.
3.) Arnold Aronson
4.) John Alchin

Compensation Committee- Consists of:
1.) Frank Bennack Jr.
2.) Joel Fleishman
3.) Hubert Joly
4.) Steven Murphy

Nominating Committee- Consists of:
1.) Joel Fleishman
2.) Joyce Brown Ph.D.
3.) Judith McHale J.D.
4.) Arnold Aronson
5.) Robert Wright

Corporate Governance Committee- Consists of:
1.) Frank Bennack Jr.
2.) Joel Fleishman
3.) Hubert Joly
4.) Steven Murphy

Management/Organization Development Committee- Consists of:
1.) Frank Bennack Jr.
2.) Joel Fleishman
3.) Hubert Joly
4.) Steven Murphy

Culture- The heartbeat of the Ralph Lauren Polo Corporation is very strong and brand identity oriented. The image the company portraits is one that Ralph Lauren is 100% responsible and his fellow employees will all agree with. The question they pose is what the company will shape out to be once the departure of Ralph from the company. For now there are no negatives or information to suggest the Ralph Lauren, Polo Corporation is in any danger. According to the historical revenue found since the year 1997 there shows no need for any change or any serious actions.
Historical Revenue (Sales):
$6,859,500,000 (2011)
$5,660,300,000 (2010)
$4,823,700,000 (2009)
$4,295,400,000 (2008)
$4,880,100,000 (2007)
$4,295,400,000 (2006)
$3,746,300,000 (2005)
$3,305,400,000 (2004)
$2,380,800,000 (2003)
$2,439,300,000 (2002)
$2,363,700,000 (2001)
$2,225,700,000 (2000)
$1,948,700,000 (1999)
$1,470,900,000 (1998)
$1,180,400,000 (1997)

The Ralph Lauren Polo Corporation is concerned with the well-being and advancement of not only their company but their employee’s. Having a brand of employee’s is very important not only to the brand image but also has direct ties in the revenue because of the identity it is able to create. The Ralph Lauren Corporation states: “As our company grows and evolves, we remain dedicated to maintaining a dynamic and inclusive work environment. We value the individual talent that comprises this company and are committed to equal opportunities for each employee’s advancement. Our company believes in and supports policies and practices that prohibit discrimination against any person because of race, color, religion, gender, gender identity, age national origin, marital staues, disability, sexual orientation or nay other characteristic protected by applicable law.” “We believe wholeheartedly that people hold the key to achieving our business objectives and our overall success. People constitute our most important asset. We offer many exciting career opportunities and are always searching for the most talented people to join our team.” Adaptive vs. Inert I believe the Ralph Lauren Corporation can sway back and forth based on the category that is being discussed but for the most part I believe this company is adaptive. The company suggests that they hold themselves to a certain standard that starts from top management and trickles down to the employees at retail stores. For instance, at a retail location the hiring of personnel do have some requirements that consist of the “look” of the candidate. Employee’s also has to follow the dress code while on the clock that consists of wearing all Ralph Lauren, Polo attire. I believe that decisions like this all translate in creating the excellent brand image that the corporation has been able to maintain and grow upon. I believe that the Corporation invests in their employees to deliver the message the company is trying to convey to the public. By having a standard that is set by retail personnel it allows the average consumer to get a visual just by entering a store. The Polo Ralph Lauren Corporation Code of Business Conduct and Ethics also encourages employees to ask questions and to elaborate on any suggestions that might help the company and take part in growth. The company does merit rewards based on sales. Each employee is granted a certain percentage of commission to customers whom they help and complete a sale for. This in turn increases the motivation of the employee and in turn has proven successful in both an employee satisfaction level and growth standpoint. These culture items are all along the adaptive side. The company isn’t stern and strict in the sense of treatment of their employee’s however; the Business Code of Ethics like in any company will seem inert in the sense that it cannot be changed. Some rules & regulations stated in the Code of Business Conduct and Ethics are as follows:
1.) It is your responsibility to know and understand the laws applicable to your job responsibilities and to comply with both the letter and the spirit of these laws.
2.) Assume that any action you take ultimately could be publicized, and consider how you and the Company would be perceived.
3.) This Company seeks to further its success as a global leader in the Fashion industry fairly and honestly through superior design and performance.
4.) Every employee must therefore always keep the best interests of the Company’s clients paramount and endeavor to deal fairly with suppliers, competitors, the public and one another.
5.) You should avoid any activity, interest, or association outside the Company that could impair your ability to perform your work objectively and effectively or that could give the appearance of interfering with your responsibilities on behalf of the Company or its clients. (PRLC Business Code of Ethics)

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