Case Stud Geox

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Situation Analysis
Company
* Manufacturing “Breathing Shoes” under brand name GEOX since 1995. * In 2002, company extended its breathability technology to enter apparel market. * 90% of its revenue is generated by sales of shoes and remaining 10% from apparel sales. * By 2009, Geox has become a global brand and is ranked the world’s 2nd largest casual lifestyle footwear sector operator. * It is doing business in 68 countries over 10,000 multi-brand points of sale and about 997 single brand GEOX shops. * Geox entered sports shoe segment in 2008.

* As of 31 December 2008, net sales for the year reached 892.5 million euros, with the net income of 118.2 million euro. * It has outsourced its production to Factories in China, Vietnam, Indonesia and Brazil. * Company puts a heavy reliance on marketing and R&D. * Company takes its distribution network as of its key success factors. * Polegato’s goal for the company is to become the world’s largest shoe maker. * Due to global downturn, the company’s sales have started flattening out. Collaborators

* Universities for research and development
* Aokang Group of China is the major producer for GEOX.
* Strategic alliance with Belle which is the largest women’s shoe retailer in China. Customers
* GEOX caters to footwear needs of the entire family, its three product categories are based on the target consumer (men, women & children), and products are priced in medium to medium-high price range. * US consumers are high-end, which are ready to pay high prices for shoes, while affordability is a major factor in India and China. *

Competitors
* Clarks Shoes is presently the market leader in casual footwear segment, followed by GEOX. Other significant players are ECCO, Birkenstock, Hush puppies and Rockport. * In sports footwear segment Nike and Adidas are big players controlling 60% of the market, other smaller players are Brown Shoes, Fila and Timberland. * Following 2008 Olympics, Nike and Adidas have strengthened their position in China. * Rivalry among competing firms is increasing

Climate
* Europe is the largest market in terms of value, which has matured and is expected to be eclipsed by US and emerging Asian Markets i.e. India and China. * India and China with their growing affluent middle classes are becoming attractive markets. * Quickening pace of change due to infusion of technology and globalization * Worst economic recession in world

Internal Strengths & Weaknesses
Strengths
1. Focus on technology and innovation (High)
2. Product differentiation-Unique product based on patented technology (High) 3. Heavy investment in R & D (High)
4. Largest brown shoes manufacturer in the world(High)
5. Strong distribution network (Moderate)
6. Solid financial position(Moderate)
7. Wide footwear product range (High)
8. Unique selling point-“Breathing Shoes” (High)
9. Patent extended and applied to apparel (Low)
10. Large and loyal customer base in Europe (Moderate)
11. Low cost-Manufacturing outsourced to third parties in Asia (Moderate) 12. High profitability (Moderate)
13. Collaboration with Italian and International Universities and research centers (Moderate) 14. Young entrepreneurial company (Moderate)
Weaknesses
1. Weak presence in emerging markets of India and China (High) 2. Weak position in sports footwear segment (High)
3. Dependence on third party manufacturers-control and quality risks (Moderate) 4. Competitive position based on a single innovation (High) 5. Flattening sales growth (High)
6. Low capital investment (Moderate)
7. Weak presence in high end North American market (Low)
8. Low diversification into peripheral product and sports equipment segment (Moderate)

External Opportunities & Threats
Opportunities
1. Emerging markets in India and China for affordable, mid price range...
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