Clarks Shoe Case Study Essay Example

Pages: 13 (3914 words) Published: May 6, 2011

C&J Clark

C&J Clark
C&J Clark (‘Clarks’) is a long-established family company, based in the UK but well-known in the shoe industry around the world. By the late 1980s the company was in decline but has since been turned around with new strategic leadership. Both marketing and operational issues have been addressed. This case contains sufficient information for analysing and evaluating the relevant strategic issues, but readers are also encouraged to visit Clarks and rival shoe retailers to check out the latest designs and marketing strategies. This case is copyright John L Thompson, 2000. It is for classroom discussion and should not be taken to reflect either effective or ineffective management.

Introduction–the footwear market in the UK
At the end of the s Clarks was UK market leader for shoes. Well-known as both a manufacturer and a retailer, the name Clarks is typically associated with children’s shoes, especially among the older generations who ‘grew up in Clark’s sandals’. Now, of course, children are more keen to wear designername trainers. Over many years the company had become associated with sturdy and sensible shoes for adults as well as children, rather than high fashion shoes, although these are also included in the range. Sturdy, sensible shoes are still manufactured, but they have been relaunched with a different image and appeal. Clarks shoes are sold widely overseas, and increasingly they are made overseas. The company wants to be recognized as an ‘international casual shoe company’. The footwear market in the UK exceeded £ billion annual sales for the first time in . During the mid-late s the growth rate had exceeded the prevailing rate of inflation. The highest growth was in children’s shoes of all types, although these account for less than one-fifth of the market overall. Women’s shoes account for % of sales revenue but % of the number of pairs bought. However, % of the shoes involved had been manufactured outside the UK, in both the Far East and other countries with relatively low labour costs. In  C&J Clark was  years old and still controlled by descendants of the founding family. A Clark has been strategic leader for most of the company’s history, although this situation has

changed in recent years. Eighty per cent of the shares are owned by  family members and descendants, some of whom have a direct involvement with the company. Staff own a further % and institutional shareholders the remainder. Table  shows market shares by manufacturer in  and Table  provides details of retail distribution. Small, sometimes independent, businesses play a major role, as evidenced by the fact that the leading seven retailers account for just one-third of the market. Specialist manufacturers vary from those making high-quality shoes for adults (such as Charles Church) to those making rugged, waterproof outdoor footwear (Timberland) and children’s wear (Start-rite). Most towns have at least one local independent store, often with a loyal customer trade. During the s the popularity of trainers and other sports shoes, backed by heavy brand advertising, has grown dramatically, as has the popularity of shoes associated with designer names. Taste and fashion changes have meant that the relative fortunes of different shoe retailers have changed.

Table 1 Shoe sales by type of outlet, 1999
Outlet Specialist stores (both chains and independents) Sports shops Home shopping Clothing stores (e.g. Next) General stores Department stores (including concessions) % 44 20 11 8 7 5

C&J Clark


Table 2 Market shares, 1999 (Source: Euromonitor)
Manufacturer C&J Clark Nike Reebok Marks and Spencer Stylo British Shoe Corporation Adidas % 10.0 6.0 5.0 5.0 4.5 2.0 2.0

Some have improved, while others have declined markedly. However, at the same time, shoe manufacture in the UK has declined sharply. Some companies, like Clarks, have reduced their dependency on...
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