Reebok
Reebok
.
M
A
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T
A
H
M
A
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Team Members
Qaisar S. Khokher
2541
M. Afzal Hashmi
2517
Tehmina Hafeez
1760
Nike
2003
Case-Study Overview
Internal:
Reebok overview, History,
Brands
Reebok Actual & Proposed
Vision and Mission
Economic Performance
Financial History
Strengths and weaknesses
Analysis: IFE
External:
Industry overview
Opportunities and threats
Analysis: EFE
Competitors
Analysis: CPM
Market Share
Analysis
SWOT Matrix
BCG matrix
IE matrix
Grand Strategy Matrix
Space Matrix
QSPM
General Analysis
Recommendations
Decisions
Why our decision?
Strategic implementation
Current Update
References
Questions
Reeboks Overview
History
1890-1930's
History
1950-1980
History
1980's
By 1981, Reebok's sales exceeded $1.5 million,
History
1990's
Logo Development
Products
Products
Brands
Reebok International
Rock Port
RBK CCM Hockey
(Worlds largest)
Greg Norman
Apparel
Ralph Lauren Brand
The Hockey
Company
Avia
Onfield Apparel
Athletic footwear
DMX2000
3D Ultralite
Ralph Lauren Apparel
line
Vision Statement
Proposed Vision
Statement
Mission Statement
Proposed Mission
Statement
To continue to offer quality products with increasing
growth in the industry and expanding globally. Our
mission has always been to provide a competitive edge
by developing the most technological products. Keeping
in mind fair labor practices in all our suppliers factories,
while maintaining a competitive advantage, with the
shareholders interests, and company profits in mind. We
also believe our employees are one of our most
important assets. To increase the responsibility towards
the environment by evaluating the impact of day to day
operation and attempts to change operations that have a
negative impact.
Economic Performance:
1998
1997
USA
1,609 M
1,858 M
2,000 M
UK
545 M
522 M
661 M
Europe
476 M
585 M
510 M
Other
countries
267 M
258 M
47 M
Economic
Performance(1997-99)
1997
1998
1999
Net Sales**
Net Income
$ 3,641 M
$ 3,223 M
$ 2,897 M
$ 135.12
$ 23.92
$ 11.04
72%
*Sales (Apparals)
28%
$743M
$124.08M
Internal
strengths and weaknesses
STRENGTHS:
WEAKNESSES:
Rely on retail stores to sell
Profits increasing
products
Paul B. Fireman, CEO
Issues with foot lockers
Carl J.Yankowski, EVP
Teams more connected to the Poor employment practices
at
their
international
consumer
manufacturing sites
Multi-brand strategy
Dedication to employees
Hydro mover moisture technology
DMX technology.
4 major divisions & 6 SBUs
Advertisement campaign
Heavy
dependency
footwear sales
on
IFE Matrix
Internal strength
Weight
0.0-1.0
Rating
1-4
Weighted Score
(WxR)
Profits increasing
0.05
0.15
0.10
0.40
0.10
0.40
0.05
0.20
Multi-brand strategy
0.05
0.20
Dedication to employees
0.05
0.15
0.10
0.40
DMX technology
0.10
0.40
0.05
0.15
Advertisement campaign
0.05
0.15
Internal Weakness
Weight
Rating
Weighted Score
0.05
0.05
0.05
0.05
0.10
0.20
0.10
0.20
1.00
3.20
Industry Overview
Athletic footwear manufactures captured nearly one-third of the
total footwear market in the early 1970s.
Over a span of more than 25 years, American consumers spent
$300 billion on 7.5 billion pairs of athletic shoes.
Reebok international Ltd. and Adidas became $ 3.5 Billion
companies, while Nike Inc. became the first ever $ 9.5 Billion
company.
By 1996 the number of establishments had dropped to about 52,
with 12 factories closing since 1995.
China's imports increase by 6 percent to 1.26 billion pairs .
Brazil's share increased 2.3 percent to 83.5 million pairs .
Vietnam's share jumped 91.9 percent to 23.5 million pairs.
The US markets continue to be dominated by imports from
countries with low-cost labor.
From 1997 to 2001, the value of industry shipments declined from $
219.6 million to $106.5 million.
U.S. shoe manufacturing plants declined by 775 between 1967 and
2001.
Business Structure
Operating Segments:
Footwear
Apparel
Equipment
Operating Regions:
US
Europe, Middle
East and Africa
(EMEA)
Asia Pacific
Americas
Manufacturing:
Nationality of Contract Suppliers
OPPORTUNITIES:
Established objectives
Result-oriented culture
Strengthen management team
Contemporize products
Relevant advertising and marketing
campaigns
Grow quality market share
Restructured production creation
teams
Its a Womans World young
women
The Sounds and Rhythm of Sport.
fashion consumers
National Football League campaign
Changed leadership for difficult
brands
Ability to create synergy between
brands
Special Technology
THREATS:
Strong US dollar
Weak department store channel
Foreign market is suffering
Economic decline in key markets
Chinese products
Strong Competition
EFE Matrix
Opportunities
Weight
0.0-1.0
Rating
1-4
Weighted Score
(WxR)
Established objectives
0.15
0.60
0.05
0.10
0.10
0.30
0.05
0.10
0.05
0.10
0.05
0.05
0.03
0.03
Special Technology
0.10
0.40
Threats
Weight
Rating
Weighted Score
Strong US dollar
0.10
0.20
0.03
0.03
0.05
0.10
0.05
0.10
Chinese products
0.09
0.18
Strong Competition
0.10
0.10
1.00
2.38
Competitive Profile
Matrix (CPM)
SWOT Analysis
S-O Strategies
Use the expertise and experience of Fireman
and Yankowski to carryout objectives (S2, S3,
O1)
Further increase profits by utilizing the
restructures production creation teams (S1, O7)
Further strengthen the multi-brand strategy with
planned campaigns (S5, O3, O4, O5)
Further strengthen the multi-brand strategy with
changed leadership and synergy to grow quality
market share (S5, O6, O11, O12)
W-O Strategies
Strengthen objectives to curb the effect on heavy
dependent brands (O1, W4)
Utilize the changed leadership to correct difficult
brands (O11, W4)
Strengthen campaigns to correct difficult brands
and lessen the need to rely on department stores
(O3, W1, W4)
S-T strategies
Utilize the teams connection to the consumer to
counteract sales lost because of the strong US
dollar, weak department store channels, and
suffering foreign market (S4, T1, T2, T3)
Utilize multi-brand strategy to find a connection
to foreign markets (S5, T3)
Use the increased profits to research other
profitable markets to strengthen the foreign
market and avoid the negative effects of declining
key markets (S1, T3, T4)
W-T Strategies
Maintain brands to lessen the effect of the US
dollar and foreign markets (W4, T1, T3)
Strengthen brands to be less dependent on
department store channels (W4,W1, T2)
Lessen the reliance on retail stores to avoid the
effects of weak department store channels (W2,
T2)
Promote brands in different markets to lessen
the reliance on suffering key markets (W4, T4)
BCG Matrix
Market Growth Rate
High
Greg Norman
Reebok intl
Rock Port
Athletic footwear
DMX2000
3D Ultralite
Ralph Lauren Apparel
line
Avia
Low
High
Low
IE Matrix
IFE 3.20
EFE 2.38
SPACE Matrix
SPACE Matrix
Y-Axis
Financial Strength
Environment Stability
X-Axis
Competitive Advantage
Industry Strength
+4
-1==Y Coordinate
-5==X Coordinate
+2
+3
-3
QSPM
Internal strength
US Market
Weight
0.0-1.0
Rating
1-4
Foreign Market
W. Score
(WxR)
Rating
W. Score
(WxR)
Profits increasing
0.03
0.06
0.12
0.05
0.15
0.20
0.05
0.15
0.20
0.02
0.06
0.06
Multi-brand strategy
0.03
0.09
0.12
Dedication to employees
0.03
0.06
0.09
0.05
0.20
0.20
DMX technology
0.05
0.20
0.15
0.02
0.04
0.08
Advertisement campaign
0.03
0.06
0.09
Internal Weakness
Weight
Rating
0.02
0.02
0.02
0.02
0.02
0.02
0.05
0.10
0.10
0.05
0.10
0.10
Opportunities
Weight
Rating
W. Score
W. Score
Rating
Rating
W. Score
W. Score
QSPM(cont)
Opportunities
US Market
Weight
Rating
W. Score
Foreign Market
Rating
W. Score
Established objectives
0.06
0.24
0.24
0.03
0.06
0.03
0.05
0.15
0.15
0.03
0.06
0.09
0.03
0.06
0.03
0.02
0.02
0.04
0.02
0.02
0.06
Special Technology
0.05
0.20
0.20
Threats
Weight
Rating
W. Score
Rating
W. Score
Strong US dollar
0.05
0.10
0.10
0.02
0.02
0.02
0.03
0.06
0.06
0.02
0.04
0.04
Chinese products
0.04
0.08
0.08
Strong Competition
0.05
0.10
0.10
Total
1.00
2.52
2.79
Conclusions
weakness of Reebok is located in their top
management
Reebok changed advertising agencies
eight times and they earned a reputation
as a difficult client
Never listen the foot lockers
Recommendations
Reebok is basically internally strong organization with lazy
management team However
Decisions
Alternative:
Implementation
Actions:
Women:
Open specific stores specialized only for women
Increase R&D expenses in women products
Increase Marketing expenses by designing a specific campaign
for women using female endorsements
Create a new logo for women market which would be associated
with fashion trends and introduce new products
Kids:
Increase R&D expenses in kids products
Increase Marketing expenses by designing a specific campaign
for kids
Introduce more soccer and basketball products targeting potential
youth market
Update: 2006-2007
In 2006 Reebok become a subsidiary of German giant
Addidas (AW)
Fireman become separate from management
President and CEO
Paul Harrington
SVP and Chief Communications Officer
Denise Kaigler
SVP; President and CEO, Onfield Apparel Group
David Baxter
References
http://finance.yahoo.com
Reebok Annual Reports
Reebok Quarterly Reports
Annual ranking of America's largest corporations
www.reebok.com
www.bigcharts.com
www.businessweek.com
www.wikkipedia.org
Strategic Management Concepts and Cases; Fred R. David,
10th Ed.
Thank you!
Questions?
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