BUSINESS-LEVEL STRATEGY

The greatest risk that Polo RL posses right now is the law suit that they are currently involved in with Jones New York concerning a breach of licensing agreement. If Jones New York does potentially win this lawsuit then it could cost Polo RL $343 million in cash, which would potentially hurt the net income of next years earnings, but could be financed with the two revolving lines of credit that they have available. Also they have the seasonal department store challenges, with both competitors Tommy Hilfiger and Liz Clabourne introducing new styles and lines of clothes.