The mission of Reebok Company is to outdo other competitors especially Nike Inc, Company. Its visionary goals are to be the world’s top company in sports apparels manufacturing and other sport wears. Its core benefit is the ability to attract many customers from both within the country and internationally. Its core purpose is to increase its market share by 32 % in the year 2012. The primary stakeholders for Reebok Company are Clean Tech, Digital CRS, Reebok Starbucks, and Timberland (India Info Line Ltd, 2011).
Identify the five forces of competition and how it impacts the company
Reebok Company faces stiff forces of competition from many companies in the same line of footwear. The five forces of competition for the company are: the potential to develop substitute products and services; rivalry among competing companies; entry of new competitors into the footwear market; the suppliers’ bargaining power; and consumers’ bargaining power. The five forces impact Reebok in ways it carries out its businesses thus enables the management determine the best strategy to use in order to achieve best returns at minimum cost (Lussier & Kimball, 2012).
The Reebok Shoes Company has the following strengths. To start with, it produces barefoot shoes that offer cushioning that reduces the bounce as the runner hits the ground therefore, strengthening the muscles. Barefoot shoes also reduce the risk of foot injury since they are made of strong materials that resist distortion by weather and sharp objects. On the other hand, Reebok Realflex allows the foot to spread and flex which assists in equal distribution of weight. The company forms one of the top athletic shoe companies in US in terms of market share with a range of 21.03% to 16.5 % and due to its maturity, it has become more efficient in US through good corporate operations strategies aimed at restructuring and improved quality in manufacturing. In addition, Reebok produces the outfits with varying colors to match the customers’ needs, bearing the name of the company therefore encouraging many people to buy those products (Landrum & Boje, 2001).
On of the weaknesses of the company is that it owns few official stores and depends mostly on retail stores making ordering and delivery of products therefore, retailers sells all the products and wait for long before the delivery of other products. Secondly, there are few sponsors associated with the Reebok shoes as compared to other industries like Nike, which makes it less famous. Another weakness of the company is that they have no factories depends on other producing industries for production. This poses a risk since the contracted industries may end up stealing their designs and making profits with them. Lastly, the company suffers from the previous reputations in the release of faulty products, which puts it in a condition whereby buyers lack total trust on the products and opts for the industries (Nickson, 2010).
There are some significant opportunities in the Reebok footwear industry as explained below. First is the ready shoe market available in the sports industry. The company has an opportunity of contracting different clubs and providing them with sport shoes and accessories. On the other hand, the company has the capability of holding sports competitions for the young generation and organizing promotion events in order to increase advertize themselves. Through these promotions and activities, the children will grow up loving the Reeboks Shoes Company products therefore, creating market for the future days. Moreover, the company can increase its market segment by offering free samples to people in the developing countries like Africa, and in so doing the company will gain fame and people have good taste for their products (Khanna, Palepu, and Sinha, 2005).
The Barefoot Shoes products offer many threats in the industry. To start with, there are many competitors offering the same product in the same industry giving the company an opportunity to improve on its products in order to lead the market. This is a big threat since the competing companies, like Nike, is already established and globally recognized. Secondly, the high rate change in technology allows new shoe brands introduction in the footwear industry. The fast change in technology goes hand in hand with the people’s change in mind, which possesses a great threat since the low company’s rate of technological advancement compared to the prevailing situations (Bangs and David, 2001).
Recommendations on how the company may capitalize on its strengths and opportunities, and minimize its weaknesses and threats
In order to capitalize on strengths, Reebok should come up with unique shoe varieties that offer more comfort to consumers as compared to other competing companies. In so doing, the company will attract more customers into their market following the advertisements and promotions they give. On the other hand, in capitalizing its opportunities, the company should put up a good advertising plan and collaborate with different clubs through sponsoring them in order to ensure their products reach every corner of the world. The processes range from communicating to the prospective markets about the services offered and getting the target customer interested, approaching them and presenting on what the business offers, answering questions and handling customer objections, making sales, and giving the necessary service (Brassington, & Pettitt, 2007).
In order to minimize its weaknesses, Reebok Company should come up with different shoe varieties apart from those already in market. This ensures that once one brand fails to achieve the set goals, the company can rely on the other brands for profits. Moreover, the company could reduce threats by ensuring all its products are of good quality and pass all the performance tests to prevent the competing firms from discouraging people to use their products.
Discuss the various levels and types of strategies the firm may use to maximize its
Competitiveness and profitability
The first strategy to undertake to increase competitiveness is through adopting a marketing structure that segments the potential market of the company’s products for clear analysis of the consumer needs, and formulating measures that the firm should adopt. In addition, to increase its profitability, the company should have stakeholders in all corners of the world that assists in marketing their products in different countries and states.
Determine the recent corporate governance issues that are currently affecting the company’s decisions and report how the company is or should be handling the issues
The most serious corporate issue affecting Reebok involves other companies producing copyright of their products. This is against the law since Reebok shoes have the original design thus the other competing companies make small changes and take their products to the market. Some companies also have trademarks similar to that of Reebok-Adidas and this confuses customers who are not keen to look at these trademarks. In handling this issue, the firm should take legal actions against such companies. Alternatively, the company can come up with complicated designs that are hard to duplicate and advertise their trademark through the media so that every person knows how it looks like (Easterbrook & Fischel, 1991).
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