JHT2 – Strategic Management
Competitive Shoes
Simulation Game
Generic Competitive Strategy
There are many strategies that organizations can incorporate in today’s business environment. An organization can decide to take on a low-cost provider strategy, a focused low-cost strategy, broad differentiation strategy, focused differentiation strategy, and/or a best-cost provider strategy. While all of them have their own unique features and can offer a competitive advantage over its rivals, Competitive Shoes, Inc. decided to incorporate the best-cost strategy into its organization in order to compete against it rivals. By incorporating the best-cost strategy into its organization, Competitive Shoes Inc. felt that they could stay
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However, Competitive Shoes knew that the factors and forces that would have the biggest impact for them and change their strategic thinking were going to come from their own immediate industry and competitive environment. In analyzing the market/industry, the company was able to see some things that helped shape their plan. The first was rivalry among competing sellers. Our analyses indicated that there were 9 companies in the shoe industry that Competitive Shoes considered rivals. These companies were relatively new in the industry and produced the same types of shoes as Competitive Shoes. Due to this fact, they knew that the rivalry would be fierce since Competitive Shoes was going to produce a product that was like theirs, and the difference between the products would diminish as the products of industry rivals became strongly differentiated. This indicated to Competitive Shoes that brand loyalty would be minimal and buyers could easily switch brands at will. Competitive Shoes felt that they could produce the same quality shoes as the high-end producers, while at the same time lowering its production cost and offering the product at a lower price. This would make it easy for buyers to switch brands at will. Another factor that Competitive Shoes took into consideration was the existence of barriers to entry. Competitive Shoes knew that barriers to new entry were very strong. For one thing the high capital
The concept of market structures and competitive strategies are important when attempting to compete in any market. Understanding what market structure your product falls under can help companies develop better competitive strategies and identify potential for loss and gains. The athletic footwear industry in the United States is highly profitable and continuously growing. In this paper I will identify market structure of the athletic footwear industry, the major retailers, and competitive strategies that can be used to maximize profits.
Threat of substitute product is any company can make an athletic shoe. Puma, Adidas, and Reebok all produce athletic shoes and apparel. These companies are Nike’s top competitors. They try to develop alternative brands to eliminate Nike from the market. Nikes utilizes trademarks on nearly all of their products and believe having distinctive marks that are readily identifiable is an important factor in creating a market for their goods. Nike identifies their brands and the company distinguishes their goods from the goods of others. Nike considers NIKE® and Swoosh Design® trademarks to be among their most valuable
origination of a potential shoe line targeted to diffrent market portion to maintain leadership by
Obviously, there is a big number of driving forces in the athletic footwear industry. Each of these driving forces has different impacts—some of them can have a more considerable effect than others on figuring out how much cross-company differences influence market shares and a number of units sold. The first line of most influential factors includes comparative prices, S/Q ratings, and a number of models offered among the footwear competitors. These three most important competitive forces affect customer decisions of which athletic footwear brand to choose. Furthermore, the decisions of customers whether to purchase one brand or another are also influenced by such forces as advertising, celebrity endorsements, the number of independent retail
With revenue from Crocs shoe sales reaching to $680 million in 2007, it is clear that the company has developed a successful strategy. Not all of the success can be contributed to the design of the product. Although their products were in high demand, there are more underlying factors that have paved the way for Crocs to be competitive in the shoe market. Crocs’ supply chain design and use of vertical integration revolutionized speed and quality of order fulfillment.
Customers make purchasing decisions based on the information they have among products and the values of goods a company offers. For that reason, companies have to promote their products to increase products awareness. In order to achieve organizational goals, companies must understand the market’s needs to ensure the success of their businesses. Such information can be gained through research. The industry that will form the basis of this paper is Western Canadian Shoe Association. The three brands under study are Reebok, Adidas, and Nike.
Companies like Under Armour, Nike and Adidas/Reebok have high threats of substitute´s products. These companies share the sport apparel industry and are vulnerable to competitive pressure from the actions of buyers whenever they view that their products can be substituted for others. The availability of substitutes invites the costumer to compare performance, features, and ease of use as well as price. Under Armour’s major competitors are Nike and Adidas/Reebok because they have a similar or competing product offerings. The top sport apparel brands offer similar products and that is why each one of them needs to keep a high standard and produce good quality products in order for customers to keep buying their product.
Brand competitors and the diversity of choice that is available to consumers, puts brands under pressure to offer high quality products and service, excellent value and a wide availability (Clifton et al., 2009). Brands must differentiate themselves from the competition and create an unforgettable impression.
In 1985 Michael Porter surmised that a market can be subjected into different strategies, thus, three variations of competitive advantage were born. The differentiation strategy is the focus for the purpose of this paper. Furthermore, the differentiation strategy in its most exposed form is a strategy that places prominence toward the brand name and advantage is the prestige that follows. This type of angle draws in a specific high-end consumers which in turn sets its corner of the market apart from its competition. Additionally, in this advantage there is a uniqueness perceived by the consumer, industry wide. The differentiation strategy is distinct in attributes indescribable by price but all the same customers are more than willing to pay a premium for the product or service. Firms that are successful in this advantage are fully equipped with a product development team high in creativity and innovation. Additionally, this strategy is only able to be an advantage if a firm is able to access an unlimited amount of research.
There are two schools of thought pertaining to how firms should choose the competitive strategy that best suits them. One is of the opinion that firms should choose one of the generic strategies and commit all resources to making it work. Porter belongs to this category. They believe that the value chain necessary for cost leadership is quite different from that of differentiation strategy and that while differentiation deals with better quality, cost leadership deals with lowering costs wherever possible.(DESS and DAVIES 1984) What porter articulated here is that there is need for strategic clarity.
There are many barriers to entry preventing new entrants from capturing market share. A large capital investment is required for new firms to open shoe factories and conduct research and design to create a popular brand or image.
Competition is very fierce due to the number of companies competing for sales. Lots of money goes to marketing and promotions using various channels to reach the young demographic group of consumers who spend the most money on Nike’s products. Growth is slowing down in the athletic footwear industry. But new markets are emerging with high growth rates. These markets include extreme sports market and the corporate merchandise market.
Market analysis C & J Clarks LtdCONTENTSEXECUTIVE SUMMARY1.INTRODUCTION2.COMPANY HISTORY AND PROFILE2.1C&J Clark2.2History2.3Manufacturing2.4Range of Shoes2.5 K Shoes3.MARKET ANALYSISA. MICRO ENVIRONMENT3.1 Market Data3.2Competition3.3Consumer demandB. MACRO ENVIRONMENT3.4Political3.5Social3.6Technological3.7Economic4.SWOT ANALYSIS5.IDENTIFICATIONS OF STRATEGIC ALTERNATIVES6.RECOMMENDATIONS6.1Short Term6.2Medium Term6.3Long TermEXECUTIVE SUMMARYI have been asked by C & J Clark Limited (Clarks) to prepare a report which would include a market analysis of the UK footwear industry and to propose a number of strategic recommendations which would ensure that Clarks secures its short, medium and long term future as the market leader in the shoe
Successful companies do not all pursue the same strategies. This is evident with both Amazon and Wal-Mart, both are direct competitors but each focuses on a different market channels and provide different customer value proposition. A business strategy characterizes a company’s unique position in the market and distinguishes the firm ’s value proposition from that of its competitors. Qupte Simci levi Such a unique market position drives and depends on operations and supply chain strategies. Unfortunately due to the effiency curve, no company can be both highly efficient and extremely responsive. This is where companies need to make trade-offs decisions. Of course, trade-offs need to be made not only between efficiency and responsiveness
One of the disadvantage associated with the monopolistic competition is consumer spend more money due to the perceived prestige of the shoe brands. This means the importance of the name associated with the