Reebok Case Study Sample for CIPS
Questions to: Stephen Ibaraki, email@example.com
Reebok, ranked second in revenues, is a profitable global company selling products such as footwear, apparel, and accessories.
Performing a careful analysis ensures Reebok’s continued growth and profitability in an environment with strong competitive forces, weak economies, and nine years of flat growth. The analysis summary appears below with the conclusion.
EFE: External Factor Evaluation Matrix
The EFE indicates there are significant revenue opportunities in meeting the needs of aging leisure-oriented Baby-boomers (BBs), and the young Generation-Y (GY), who desire fashionable sportswear and are Internet savvy. Two significant threats to the industry are the disruption in product supply from foreign manufacturers such as Indonesia where there is political unrest and not keeping pace with rapid changes in consumer preferences.
CPM: Competitive Profile Matrix
Nike is a stronger competitor overall. Reebok is weaker in R&D, product breadth, and production location. The critical success factors of R&D for product innovation, and marketing research to keep pace with consumer preferences, need Reebok’s attention.
IFE: Internal Factor Evaluation Matrix
Reebok receives great value from their brand image. Their contracts with the NBA/NFL increase brand visibility, promote sales, and provide licensing revenues. In the short term, there is risk from Reebok’s global restructuring activities which could negatively affect their internal operations and financial position. Reebok declining R&D expenditures is a weakness since they must keep pace or stay ahead of innovations from competitors.
During 2002 to 2004, Reebok must decrease their dependency upon potentially unreliable suppliers, develop successfully marketed product innovations, and anticipate changes in consumer preference creating promotional success. In addition, Reebok must further capitalize on the large GY and BB groups by increasing sales to these groups, and promote sales by leveraging their brand value and NBA/NFL sponsorship/licensing arrangements.
TOWS: Threats, Opportunities, Weaknesses, Strengths Matrix
TOWS analysis generated alternative intensive, integration, diversification, and defensive strategies. However, matching to objectives refined the list. Increased revenues are driven by product development and marketing penetration (advertising) of: leisure products to BBs; fashionable sportswear/footwear to GY; and licensed NFL/NBA performance/lifestyle products. Concentric diversification through new accessories adds revenues to the NFL/NBA sports licensing business. Forward integration through new online direct sales expands distribution. A backward integration strategy of using production from alternative reliable suppliers satisfies the problem with Indonesia. Increasing R&D expenditures will support the product development strategy of continuing product innovation and staying ahead of competitors. Using marketing research teams focused on target market segments will allow Reebok to keep pace with consumer preference changes, matching product design/promotions to changing tastes. SPACE: Strategic Position and Action Evaluation Matrix
SPACE analysis reveals Reebok’s financial strength is good, competitive advantage is very good, industry strength is slightly above average, and the environment strength is slightly below average, giving them a “mildly” aggressive strategic position of (2.4, .75). This allows Reebok to pursue any intensive, integration, or diversification strategy though they need to be sensitive to risky acquisition strategies. Aligning with objectives would produce similar strategies to those listed with TOWS. Additional strategies include market development through European expansion, horizontal integration by acquiring a youth-oriented...