Strategies are quite important for every business and for a global perspective strategically managing the business is an essential part of every business. Global enterprises stress a lot on strategy implementation and management. If the strategy of an organization is framed proactively then it excels both in the short and the long run. In this paper we will discuss the company Reebok and the industry overview is presented with a perspective on globalization.
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One of the most staggering figures related to the athletic shoes industry is that over the p of more than 25 years the American consumers have spent more than $300 billion on athletic shoes. The industry of athletic and sports shoes are considered as an upcoming industry and this industry is growing day by day. The imports of most of the countries are increasing because of this industry and China’s imports increased to 6 % just because of this industry. The industry of sports and athletic shoes are wide and varied and the sports shoes are usually considered as a fashion trend. The sports and the athletic shoes include running shoes, gym boots, rubber shoes, tennis shoes and etc. The industries have different players however Nike, Addidas and Reebok are the major players of the industry and they occupy 39.2, 15.1 and 10.9 percent market shares respectively.
The competitive structure of the market is oligopolistic and stuff competition is present between the major players of the market. The recent trends of the industry depicts that increase in the price of raw materials are considered to be the major threat of this industry. Similarly, the increase in female participants and children house hold income is increasing the sales of these shoes (Skinner & Cardona, 2005). The strategic measures of the industry in the current scenario are that marketing efforts towards teenagers must be increased and females must be targeted in a proactive manner to increase the sales. The industry altogether is experiencing positive returns and it is expected to grow in the near future.
The company was founded in Canton, United States and the name of the organization actually comes from an African word rhebok. Reebok is considered as one of the leading players in the athletic and sports shoe industry. The company is a multinational and it feels quite comfortable in stepping out into any international arena. Reebok is considered as one of the leading athletic shoe producer in the United States and certain other products of Reebok like Rockport and Weebok shoes are quite famous too. There are more than 220 retail stores of this gigantic organization and this organization is moving steadily and taking viable steps in increasing its market share. The organization is presenting itself as a fashion oriented organization and they are taking strides to become more fashionable. The organization is of a global nature and it is implementing different strategies to enter into different markets where teenagers and ladies can easily to target. In the year 2006 a giant organization Addidas acquired Reebok fort about $3.8 billion. The company has more than 21 foreign subsidiaries and it has more than 6000 employees. They are one of those organizations that initiated the concept of concept stores in United States. This organization has managed 10 year licensing deals with NFL and NBA (Hoovers, 2009).
The global nature of the industry
The athletic shoes and sports industry is quite global in nature and nearly all the producers and players of this industry are termed as multinational organizations. The major players of the industry are stressing a lot on managing their production units outside their original countries and they are depicting a proactive approach in managing the issues related to globalization (Stiglitz, 2007). Athletic and sports wears are loved by everyone and people are becoming more brand conscious. Brands are affecting their lives and people all around the world consider brands as a statement of status and they have developed a mindset that those who wear branding products are fashionable and they are trendy. This connotation is cashed by these organizations and the industry is shifting into the global arena. The organizations that are present in the industry are developing promotional campaigns that are targeting the international consumers and they are developing such strategies that are meant for both local and international consumers. The demand of sports shoes and athletic shoes is increasing and customers are becoming health conscious that is the reason why these athletic shoes organizations are focusing more on the global strategy.
Industry Globalization drivers
The industry is filled in with competition and there are number of players in the local and international market and it can be said strategically that every organization in this industry must devise proper strategies. In order to overcome this phenomenon and the competition associated with it organizations must understand the industry globalization drivers.
One of the most common industrial drivers that are related with globalization can be the increasing trend of brand ambassadors. The current players in the industry are contracting sports figures that are quite famous. Famous sports figures like Tiger Woods, Rafael Nadal and etc are contracted to wear the sports shoes and in this manner they can easily target the international market. Branding through brand ambassadors is one of the most common practices that are used as a globalization driver. Developing ads for the international market can also be treated as a globalization driver. Similarly the increasing trend of health issues and health oriented awareness can be marketed on global basis and this can be treated as one of the industry globalization driver. People feel comfortable when they are associated with a certain brand and organizations on the other hand can cash on this point and they can target their brands globally.
Levers used by Reebok to access the globalization potential
Reebok uses different strategies and levers to access the globalization potential. They have developed different marketing strategies and certain codes of conducts in which they have stressed a lot on the issue of globalization. The website of Reebok is quite attractive and it targets the customers in a global manner. Users all around the world can create their profiles and they would definitely have a personalized experience. The customers can watch their products and can purchase it on line (reuters, 2008). The company is spending heavily on global marketing and they are trying to inculcate newer and modernized strategies to target customers of different countries. Reebok posses very strong code of conduct that is related to child labor, fair wages, safety and work environment and this organization uses these levers to access the globalization potential. Besides that they are focusing on the fact that newer sports are coming every year and females are more into sports therefore they are using these elements to target their customers in an effective and an efficient way.
Reebok is considered as a strong brand and they are considered as one of the powerhouse in the athletic shoe industry. There are certain recommendations on which the organization can work and they can strategies on a global basis. These recommendations are given below:
They can engage in more branding activities and can use sports figures to market their product.
Engaging in brand activation activities in different countries can help the brand and this can increase the sales of the brand.
The symbols RBK can be used effectively in their shoes and this can enhance the brand image and customers would retain the brand for longer time.
The must focus on global issues that are affecting the communities of different companies. Issues like child labor, global warming and etc can be dealt seriously by the organization.
The organization must engage in corporate social responsibility and this would attract more and more customers and the global strategy of would inculcate the element of corporate social responsibility.
Globalized and a customer centric attitude must be opted by the organization which can help the organization in both the short and the long run.
- Hoovers. (2009). Reebok International Ltd. Retrieved May 4, 2009, from www.hoovers.com: http://www.hoovers.com/reebok/--ID__11266--/free-co-profile.xhtml
- reuters. (2008, June 12). New Reebok Global Website Puts Customers in Control. Retrieved May 4, 2009, from www.reuters.com: http://www.reuters.com/article/pressRelease/idUS95898+12-Jun-2008+PRN20080612
- Skinner, T., & Cardona, M. (2005). The Sneaker Book: 50 Years Of Sports Shoe Design . Schiffer Publishing .
- Stiglitz, J. (2007). Making Globalization Work. W.W. Norton & Co.
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