We Love You, Chucks!|
Converse was founded in 1908 and by 1917 the All Star shoes were introduced on the market as an American made product. In 1923 the shoes were renamed the Chuck Taylor, after the semiprofessional basketball player. By 1970, eighty percent of basketball players wore Converse shoes out on the court. In 1983 their revenue was $209 million. Converse faced a lot of competition, and in 1989 they only held five percent of the market share. In 2001 their revenue had dropped to $185 million. Nike bought Converse out in 2003 for $305 million and put more than four million dollars into advertising. Today, Converse has over 1,000 different types of Chucks, a men’s clothing line and a women’s clothing line. Converse is continuing to bring in some revenue for Nike, and below is a SWOT analysis showing Converse’s strengths, weaknesses, opportunities in where they could grow and the threats to the company. SWOT Analysis|
* Global Brand Recognition * Recognized Basketball shoe * Advertising and Marketing Strategies * Affordable| * Too many products * Hard to navigate website * Switching the production from American to India * Decreasing revenues | Opportunities| Threats|
* Reorganize Converse * Further develop it’s existing Market * Develop new Products * Product Line extensions | * Competition * Cannibalization of Converse Products * Cannibalization of Nike Products |
Converse was able to create a brand name that is still recognized globally; it has been in existence for over nine years. The shoes were, for many years, made in America giving them the ability to promote their merchandise as an American made product. Once the shoes became well known and were being used more and more by basketball players, they were able to convert the “All Star” name to “Chucks.” Chucks became the official shoe from the NBA, giving them the great marketing strategy of using the NBA logo on its advertisements. When Charles Taylor ended his basket ball career, he became a member of the Converse sales force, another great promotion. Another strength for Converse is the affordability of their products. In stores like Journey’s or Foot Locker, the average price is between $50 and $70, which compared to other sneakers, is not very expensive. Although they have fairly priced and popular merchandise, the problem is that the company has too many products. They offer over 1,000 different types of chucks, fashion shoes, and a clothing line. The production is all over the place. Because they do not have a common product their cost of operations is higher because each product requires different materials. In order to cut their costs, Converse switched production from America to India, causing them to loose their “Made in the U.S.A” label. Because of doing this they fired 594 jobs in America, which is not good for the American economy. People in America appreciate production made in their own country. Since the 1980s, Converses revenues have been decreasing, they were at their worst when Nike bought the company and they have been on a decline in sales compared to sales back in the 1970s. Today the Converse website is very confusing to use, they layout and navigation system is too involved and complex for a site that is trying to sell merchandise online.
Although Converse sales have declined, the company is still making a small profit for Nike. They have some opportunities available that may increase sales and create a larger profit. They can reorganize Converse as a whole, reducing the amount of variation in the products and cutting the products that are not producing a profit. Or they can try and offer new products to people they have not yet made products for. The existing product lines can create new products for their brand or line, or they can also take the...