23-08-2014, 10:12 AM
STRATEGIC ANALYSIS OF REEBOK
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Executive Summary
The Company
The Mission at Reebok is to be on the cutting-edge of sport and lifestyle products built upon a strong heritage in sports(Reebok, 2011). Reebok strives to challenge convention and lead through creativity and have been doing so for over 100 years(Reebok, 2011). The company was founded on one important value in the 1890’s, helping athletes run faster (Reebok, 2011). Since then the main vision has been to help athletes fulfill their potential (Reebok, 2011). Reebok is an American- inspired global brand, which celebrates individuality of the athlete while also helping the athlete to obtain goals they once thought unattainable (Reebok, 2011). Reebok is a subsidiary of Adidas Sportswear.
Introduction
Reebok started its operation in INDIA in 1995. Headed by Managing Director Mr. Subhinder Singh Prem and it has dominated the India sports market with 51% market share far ahead of its competitors NIKE, PUMA etc. Reebok India has a PAN India presence with its branch offices in Mumbai, Kolkata, Bengaluru. It has always challenged and lean through creativity. It has introduced products in a wide range of sport shoe category from running, walking, aerobics, lifestyle, and newly introduced Runtone ready, Zigdynamic, Realflex etc. It celebrates individuality in sports and lifestyle. Reebok has introduced its internationally acclaimed fitness programs in India, conducted under the banner of Reebok Instructor Alliance, which is dedicated to fitness instructors, personal trainers and health club owners. Reebok has trained and certified more than 800 trainers till now.
Reebok has introduced its internationally acclaimed fitness programs in India, conducted under the banner of Reebok Instructor Alliance, which is dedicated to fitness instructors, personal trainers and health club owners. Reebok has trained and certified more then 800 trainers till now.
Reebok India commands a 54% market share in the premium sportswear industry according to the calendar year December 2008. Its revenue has touched 1400 Crores (at retail price) in 2008. It plans to increase the store count from the existing 500 to over 600 before 2007. Reebok reaches out to its target customers through its 500 exclusive Reebok Stores, 200 Shop in the shop outlets & 2500 dealer outlets. Reebok has the single largest store in Hyderabad.
Mission And Vision Analysis
Reebok’s Vision
Fulfilling Potential
"Reebok is dedicated to providing each and every athlete - from professional athletes to recreational runners to kids on the playground - with the opportunity, the products, and the inspiration to achieve what they are capable of. We all have the potential to do great things. As a brand, Reebok has the unique opportunity to help consumers, athletes and artists, partners and employees fulfill their true potential and reach heights they may have thought un-reachable "
Reebok’s Mission
Always Challenge and Lead through Creativity
“At Reebok, we see the world a little differently and throughout our history have made our mark when we’ve had the courage to challenge convention. Reebok creates products and marketing programs that reflect the brand’s unlimited creative potential.”
Nike’s Vision
“To carry on his legacy of innovative thinking, whether to develop products that help athletes of every level of ability reach their potential or to create business opportunities that set Nike apart from the competition and provide value for our shareholders.”
Nike’s Mission
” To bring inspiration and innovation to every athlete in the world"
*”If you have a body, you are an athlete.” – Bill Bower
Interpretation of mission statement
After analysis the mission statement of Reebok & Nike is: On the basis of various para-meters like customers, product or services, market, technology, growth & profitability, self-concept, concern for employees etc. We find that overall percentile/value of statement of REEBOK is much better than the NIKE. Which is clearly shown in above table that Reebok is having overall 62.5 avg. percentile and nice is having 50 avg. percentile which is 12.5% greater than nice. So, it means that reebok's mission statement is much better than the nice.
For analysis the mission statement firstly, we convert the data into numeric form for getting the output in percentage form.
ENVIRONMENTAL ANALYSIS OF REEBOK
Basically, it means those aspects of the surroundings of business which affect its operation and determine its effectiveness. It is mixture of complex, dynamic and uncontrollable factors within which a business is to be operated. And these are those factors which affect the business for taking the managerial decision by the top-level management of the company. These are divided in two part internal and external environment of company.
Internal environmental Factors:-
These are those factors which are controllable by the company. . Some factors are given below:
1) Company objective:
For the core board initiative included:
• Maximize the incremental footwear and apparel sell in and sell through opportunity with key Reebok retail partners.
• Re-energize the fitness and sports industry enabling Reebok to recapture its leadership position.
• Successfully integrate the Reebok core business into the overall strategic goals of Reebok International (Be Reebok) and interactive marketing strategies.
• Achieve Reebok EPS should be higher than the EPS during 2011 is 4.29$.
• Generate a Reebok positive ROI in 24 months.
• Capture maximal mass market sales volume of core boards and videos
2) Marketing strategies:
• Create, produce and deliver a breakthrough Reebok core training video series that generated excitement around the Reebok core training phenomena.
• Reebok merge with aides.
• Execute an integrated Reebok marketing asset strategy to launch and deliver Reebok core training to the fitness and sport training market.
• Maximize the penetration of Reebok core training into the US and key international markets by tapping the global Reebok University human infrastructure (master trainers, alliance members etc.
3) Reebok’s Fitness Culture and Positioning:
Reebok created Reebok core training and the Reebok core board based on a breakthrough training technology and consumer market research. By synthesizing the intrinsic human need for self improvement and feeling good with the functional needs of improved strength and performance for an active lifestyle, Reebok endeavored to redefine sports and fitness. Reebok’s goal was to communicate the key benefits to consumers globally. This targeted approach would ensure deep penetration and allow Reebok to create the necessary “forest fires” to successfully drive Reebok core training nationally and globally.
4) Reebok Core Board Product Development Strategy:
Reebok decided to externalize most of the product development, manufacturing and
Distribution value chain activities. Reebok would utilize the strength of strategic alliance
Partners to develop product and support club and retail distribution as well as the sales
And some trade marketing for the Reebok core boards and programming. Reebok would
Focus internal resources on the marketing activities related to health clubs and consumer
Retail that would allow it to strategically align with footwear and apparel marketing goals
And enable it to leverage existing fitness assets.
5) Core Training Program:
• Build program to emphasize strength training as key element for a total body workout
• Offer short (15 -30 minute) executions of Core Training classes to induce trial and
Appeal to men
• Train instructors to incorporate strength training into Core Board use
These are the above mention some internal factors which are controllable by the company.
Internal Environmental Factors
SWOT ANALYSIS OF REEBOK
A SWOT analysis is a critical portion of every marketing plan. It outlines the company’s Strengths and Weaknesses, and the market’s Opportunities and Threats that pertain to the product. The SWOT analysis is an important step in planning as it outlines whether the information will assist the company in completing its objectives or if there will be an obstacle that must be moved first.
NEW ENTRANTS
There are many barriers to entry preventing new entrants from capturing significant market share. Today’s athletic shoes are highly technical. An extremely large capital investment is required for new firms to open athletic shoe factories and conduct research and design to create a popular athletic shoe. The aggressive marketing campaigns turn their products into household names making it arduous for new firms to compete. Athletic shoe manufacturers greatly attempt to differentiate their products from all shoe manufacturers.
If they are a startup firm, it is extremely difficult to get shelf space at major shoe retailers. If the firm is currently in the dress shoe industry, and is entering the athletic shoe industry, they may use their existing connections to easily access athletic shoe distribution channels. Switching costs are very low for the athletic shoe industry.
RIVALRY AMONGST EXISTING FIRMS
In the athletic shoe industry, corporations are mutually dependent. A competitive move by one firm directly effects competitors, forcing retaliation or counter efforts. For example, Reebok’s expansion of the women’s walking shoe, inspired other firms to follow.
The number of competitors is stable, partially due to high entry barriers. This adds to the rivalry among existing firms. Manufacturers watch each other carefully and make appropriate countermoves to match a competitor’s move.
The rate of industry growth is stable, but the quest for global market share is eminent. This increases global rivalry. Product characteristics are related to market share. Name recognition alone sells athletic shoes. The larger the market share, the greater advertising capabilities and hence increased name recognition.
Capacity has minimal impact on rivalry, because most firms have means to manufacture the demanded amount of athletic shoes. This ability to meet demand reduces market because most firms overproduce and drive down the selling price.
Low exit barriers and diversity among competitors has minimal impact on profit potential. If the athletic shoe industry becomes too unprofitable, firms could switch to other shoe markets. Additionally, diversity among firms is small because every firm follows one another. The rivalry among existing firms is high where weak firms are easily acquired by fierce competitors. This may have a high impact on profit potential.
BARGAINING POWER OF BUYERS
Buyers have high switching costs in regards to opportunity cost. If an athletic shoe retailer decided to drop one of the popular athletic shoe brands, their sales would fall due to high consumer brand loyalty. Most buyers have a medium profit margin so price sensitivity of buyers is moderate. In the athletic shoe industry, price increases pass to the consumers.The overall impact from buyer’s bargaining power to profit potential is moderate.
BARGAINING POWER OF SUPPLIERS
Athletic shoes are manufactured primarily from raw materials including rubber, leather and nylon. These materials could be classified as commodities, where the manufacturing process adds to their value. For this reason, the suppliers have limited bargaining power, and little impact on profit potential
THREAT OF SUBSTITUTES
Athletic shoes are designed to improve comfort and personal safety during periods of increased movement. Substitutes for athletic shoes are using other forms of shoes, or going barefoot(rural areas). A large population of athletic shoe consumers wear athletic shoes strictly because they are comfortable. Comfortable dress shoes or sandals are equally interchangeable with minimal switching costs. If the athletic shoe is used for sports, then there are relatively few substitutes. Given these reasons, the threat of substitute products is moderate and the impact to profit potential is moderate to high.
INTERPRETATION
After competitive analysis of Reebok & nike, we conclude that the reebok faces fierce competition from all sides. The athletic shoe industry is quite large and very competitive. Reebok receives most of its competition from Nike. Which is clearly shown in above table, that reebok is having better market then nike & other competitors in the shoes industries. And Reebok has been capturing 4.5% market more than that of nike. The EPS of reebok in FY2011 is $ 4.26, which is higher than the FY2010, that is $ 3.5.
CONCLUSION
From the above-study, we were able to conclude that people buy Reebok products mostly because of comfort and they mostly go for the quality & brand value of the product. And the Reebok is positioning to be a high-endathletic footwear brand and a leader in its industry. The ‘after-sales’ service provided also acts as a factor for the purchase decision. The product quality & comfort along with style & promotional strategies of using sports celebrities as their endorser has helped Reebok gain the significant market share.and according to the above study reebok is the leading company in compare to nike in the shoe industry due to its product durability.
2.2 Preprocessing
Preprocessing is used to align different palmprint
images and to segment the centre for feature extraction.
Most of the preprocessing algorithms employ the key
points between fingers to set up a coordinate system.
Preprocessing involves five common steps, 1) binarizing
the palm images, 2) extracting the contour of hand
and/or fingers, 3) detecting the key points, 4)
establishing a coordination system and 5) extracting the
central parts. Fig. 6(a) illustrates the key points and Fig.
6(b) shows a preprocessed image. The first and second
steps in all the preprocessing algorithms are similar.
However, the third step has several different
implementations including tangent-based [7], bisector
based [16, 28] and finger-based [9, 10] to detect the key
points between fingers. The tangent-based approach
considers the two boundaries ― one from point finger
and middle finger and the other from ring finger and last
finger ― as two convex curves and computes the
tangent of these two curves.