Sport Obermeyer, Ltd. - Case

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Sport Obermeyer, Ltd. presents a successful ski apparel company that is addressing logistics-related decisions that face many businesses today. Sport Obermeyer, founded in 1947 by Klaus Obermeyer, has continued to lead the ski apparel industry since that time through continuous product innovation and fashion-forward styles. Recently, the company has faced increased competition from other winter apparel makers, namely Columbia Sportswear. Exhibit 1 presents a SWOT analysis of Sport Obermeyer, and identifies core competencies and limitations of the firm. The company’s Buying Committee bases quantity-ordering decisions on average sales forecasts generated by a number of internal parties. Techniques like this, as well as using a large amount of greige material to delay product differentiation, have helped Sport Obermeyer manage its vast lead times. The nature of the apparel industry necessitates that high quality clothing makers and sellers deal with long lead times; in Sport Obermeyer’s case this is roughly two years. Routine outcomes of having such a long lead-time, however, include stockouts of popular items during peak selling periods, and leftover stock of unpopular items, which ultimately are sold at below-cost rates. Where the firm could find opportunities is in stimulating demand through an aggressive marketing campaign. While such a campaign would exacerbate the firm’s stockouts of popular items, it would aid in selling overstocked items at still-profitable prices. Another serious consideration for Sport Obermeyer is expanding abroad. Today the company sells products in the United States, Great Britain, and Canada. This limited geographic diversity is surprising, considering the large quantity of winter goods that Sport Obermeyer sells. Limitations to the firm include competition that is emerging from abroad and in Sport Obermeyer’s home markets. Low-cost manufacturing in China and elsewhere has both helped and hindered the company as its...
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