Toms Shoes

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(1) Choose a favorite company and think carefully about how to define its strategy: TOMS a. Defining the industry in which your firm competes. Establish the average economic performance for the industry, and comparative performance for your firm.

The US footwear industry is consisted of four basic product categories in the market: casual (52%), athletic (31%), dress and rugged shoes. There is an increased competition, due to larger mergers and acquisitions. The demand for the shoe industry is driven by fashion and demographics. The profits are mostly depending on the design, especially small companies in the industry use more differentiated and superior designs, along with superior marketing. 95 percent of all footwear sold in the U.S is imported. The logistics and the delivery of the products are the most important things for the footwear industry. China has been he main source for imported footwear.

The domestic players in the industry are facing a great competition with imported footwear from China and other outsourced countries. However, Toms is one of the companies that completely manufacture the shoes in other countries, so that they are not experiencing any negativity in terms of tariffs.

b. Identify key competitors in your firms industry (minimum 2 competitors), and assess the competitive position of your firm and their competition.

Key competitors for Toms are Converse and Keds. Both companies are privately owned just like Toms Shoes. The companies’ main revenues are coming from their cloth shoe sales. Toms are vastly compared to Keds, which is also another shoe producer. Toms started the business by selling 10,00 units in its first year, and by year 2010, it is expected to distribute around 1 million pairs. They also expect to make $66 million by selling cloth shoes, which a higher Return on Sale compared to Converse and Keds. Toms’ competitive position is a broad and a differentiated market with a value added...
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