Executive Summary
• Footwear Market Situation
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Recommendation
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Basketball, cross-training and running are the three largest categories of athletic footwear
While more women’s footwear is sold, the average sales price is higher for men’s footwear
Price per pair has increased across all four market segments from 2008 – 2012
The international footwear market is about equally divided between U.S.(45%) and non-U.S. sales(46%)
(total $18,223 in 2012)
Reebok is 2nd largest footwear supplier with a mix of U.S. and non-U.S. sales: total sales $2,635; market
share 14% in 2012 (behind Nike: $6,437; 35%)
Reebok sales in the U.S. fell behind (CAGR 2011-2012: 3% vs. industry average: 12%)
Reebok oversea sales growth was at average (market share: 16% in 2012), but still behind Nike and
Adidas
Reebok experienced the lower return on sales (4.5%) than its competitors such as Nike (6%) Adidas and
New Balance
Nike is in the strongest competitive position; Reebok is in the 2nd position, better than New Balance and
Converse
Reebok need to increase its return on sales from 4.5% to 9.0% by reducing its inbound cost ($0.8 / pair)
and optimizing manufacturing and outbound logistics ($0.5 saving/pair), as well as increasing the volume
($0.3 saving/pair) in the U.S. to increase growth rate from 3% to 30% in 2013 and to increase US market
share from 15% to 18% in 2013 (assuming global and US growth rate are both 12% in 2013)
Recommended Plan and Rationale
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Retain current customers by increasing loyalty and selling more new products to them
Acquire new customers by new products (especially the running shoes) and better communicating current
products, since Reebok has strong R&D team and strong marketing and relationships with various
professional sports and teams
Advancing manufacturing technologies
Exerting its competitive advantage (good relationship with suppliers) to reduce inbound cost
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Green
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Next Steps
1. Working with suppliers to reduce the inbound cost and increase efficiency. In the long
term, implementing supplier quality program
2. Optimizing manufacturing process and improving quality
3. Identifying new lower cost out-sourced factories and control outbound logistic costs
4. Innovating and developing running shoes to get more US market from ASICS, Nike
and Fila
5. Developing innovative products for athletes to attract serious athletes
6. Exerting competitive advantages in women’s footwear segment to retain its loyal
women consumers and acquire new women consumers by innovating tailored
products
7. Focusing on both functional and fashionable
8. Customizing services to better fit target customers’ needs.
9. Improving communication and relationship with consumers by different campaigns
and marketing via social media
10. Building cooperative relationships with retailers; Improve retail presence
11. Continuing sport sponsor
12. Designing and implementing retention and acquisition program
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