Reebok and its merger with Adidas
Reebok, the next largest athletic shoe manufacturer, is a distant number two, both in sales and spending. Reebok moved away from athlete endorsements in the late 90's but has signed in recent years stars such as Allen Iverson and Venus Williams. Historically, it has been playing catch up with Nike. Knowing that head-to-head competition with Nike and Adidas would be difficult, Reebok looked to the aerobic-shoe market (Kahle & Riley 2004). The company's introduction of the Freestyle aerobic oxford in 1982 coincided with the increased popularity of aerobic exercise. The Freestyle became one of the best selling shoes in history, giving Reebok its first and only market share lead over Nike. Reebok sales went from .5 million in 1982 to 9 million in 1986. Although Reebok advanced athletic shoe technology, corralled a stable of superstar athletes and outfitted thousands of Olympic athletes, the company could not sustain its leadership position. Reebok's market share and profits declined after 1987, whereas Nike's rebounded and continues to soar (Kahle & Riley 2004). Reebok is a producer of athletic footwear, apparel, and accessories. Reebok surged in popularity in 1982 after the creation and market of the Freestyle athletic shoe, this shoe was designed for women and came out exactly during the time aerobics fitness craze started. Reebok slowly lost its popularity to current leader Nike. In the past, Reebok was known to have an association with outsourcing through the use of sweatshops, currently it has been committed to protecting human rights. Reebok has footwear factories in 14 countries; it has Apparel factories in 45 countries. Reebok was bought by Adidas in January 2006.
Vision statement of Reebok
To provide to all types of athlete the opportunity to achieve their goals through the use of the best kind of sports apparel. The sports apparel will inspire athletes to perform better so that they can reach their goals. To help the athletes to reach their true potential with the help of Reebok’s sports products.
Mission statement
To continue to challenge convention in the creation of sports related products. To create sports related products that show the company’s unlimited creative potential. In showing its unlimited potential, it deviates itself from competitors
Objectives
Reebok wants to maintain or improve its position in the global sports related product market. It wants to make sure that all of its products are innovative and creative. Reebok aims to give due to their personnel through various programs that uplift the dignity of the personnel. The company wants to maintain both its production standards and the rights of the personnel. Moreover Reebok makes sure that it maintains a good relationship with the society. The company has a program that makes sure that it has a good relationship with society. Finally Reebok wants to increase its popularity through newer products so that it can increase its market and gather more clients. The company wants to develop more products that will help in widening their reach.
SWOT Analysis
Strength
Strength of Reebok is the strong brand name they have. The strong brand name is what makes the company and its product popular. Furthermore strength of the company is its ability to make strategic adjustments whenever there is a need for it. The company makes sure that whenever changes in the industry happen they have alternative plans towards it. Another strength of the company is its sales personnel who provide an excellent kind of service. The sales personnel of the company are well trained and makes sure that the clients are given total satisfaction. The sales personnel have a good knowledge of the different products they sell. Lastly strength of Reebok is its website that is easy to use, attractive, and informative. Such website encourages the clients to visit and peek at the company’s products
Weakness
A weakness for Reebok is its too much reliance on retail stores. Reebok does not try to invest on actual stores instead they concentrate on retail selling. This does not help the company increase its popularity and it does not help the company show that they are unique. Another weakness for Reebok is its culture of putting much power on the top management. The top management cannot always have the information needed to make decisions on the company’s processes; some decisions may need some inputs from other members of the organization.
Opportunities
An opportunity for Reebok is to find out more ways to give a distinctive look and features to their product. By doing this the company will have competitive advantage over other firms. This will help the company have unique identity in the global market amidst their competitors. An opportunity for the company is to improve the features of the website they currently have. By doing this it can attract more markets and it will help them attract more endorsers. An opportunity for Reebok is to continue to make use of newer technologies that will provide better service to clients. Reebok can use the advancements in manufacturing facilities and technologies to make sure that the clients will achieve satisfaction
Threats
The main threat to Reebok is the competitors. The competitors like Nike, Adidas and Puma try various tactics to make it difficult for Reebok to maintain its standing in the global market. The threat to the company includes the laws in the country they operate in. For the different countries they operate in, there are different kinds of laws. This forces Reebok to change some of their strategies and techniques. Another threat to the company is the tariffs and taxes that the company has in its various markets, each countries has its own rate of taxes and tariff that creates additional expenses for the company. Lastly a threat to Reebok is the global financial crisis. The global financial crisis will reduce the client of Reebok and might force it to close some of its branches.
Marketing strategy of Reebok
The positioning strategy of Reebok is concentrated on comparing what they can do to what their competitors can do. Positioning happens when the company tries to create a unique identity in the minds of the target market through the sports products. The company makes use of the best positioning strategies that intends to make an identity separate from the competitors such as Nike and Puma. The positioning strategy of the company focuses on showing the clients that Reebok provides the best sports apparel. The advertising strategy of the company helps the positioning strategy of Reebok in attracting more clients and bringing back old clients. The market of Reebok is different individuals who need all kinds of products for different kinds of sports or sporting events. This market is the one that needs various sports apparel. The target market of the company involves almost all sectors of the society. They want to provide varying sports apparel and accessories to young or old, boy or girl. The company also tries to reach out to the non sporting market through the sale of non sporting shirts and apparels. The market segment of the company is divided into the adult and kid segments. There are different brands of sports apparel for the older people and the younger clients. The company makes sure that they cover all the segments in the society they are operating in. The company has specialized prices for the different market segment, this will ensure that the clients will have lesser doubts about taking a look at the company’s product and the products that they can afford. The marketing strategy of Reebok would further be explained through the use of the marketing mix.
Product
The company’s sports products are made from high quality components and materials. The sports products of Reebok are made of comfortable materials that are perfect for all types of sports related activities. The sports products have different designs and characteristics that meet the various needs of their market. The materials and components used for production came from reliable and trustworthy suppliers. The suppliers were chosen well and are known in their respective field. The sports products underwent well tested processes that ensure its durability and comfort. After production Reebok apparels undergo product testing before it is sold to the markets. The company also has consumer response team that can be contacted anytime. This response team provides assistance to clients who have issues with some of the products. The company’s products are one of the main reasons for the company’s success and it contributes to the rise of the company’s profits. The company’s products sets them self apart from the competitors in the sports apparel market.
Price
The company’s pricing are valued according to the quality of the products. The company makes sure that it maintains well made products that will have the same value as what the client pays for it. The price of the product is considered through determining the cost of making the product, the salaries of people producing the product and the other expenses made in the creation of the product. With such price the company maintains the product to be of high quality and durability. The company’s price range varies in the different countries they operate in; the company makes sure that all considerations have been made before pricing a product.
Place
There are different places of selling for the product. Aside from its branches in different countries the company allows its product to be sold in different non competitor stores. The different non competitor stores helps in making sure that the company is able to sell to various clients in different places. The different channels of distribution help in strengthening the relationship of the company with the clients. It also establishes some relationship with non competitors. Another channel of distribution for the company is the internet website. The company’s website features an online shopping function wherein transactions can be made without the buyer being physically present in the company’s store. The company’s website provides a graphical and written description of the products the company offers. The payments for the online transaction are also done online. Payments can be done through credit cards; the delivery of the product will take a few days for shipping.
Promotion
The company promotes its different sports products through various means. One is through the internet. The internet website gives different kinds of information about the sports products; it then details the price of a product and the available sizes. The internet is a good medium because most people use it. Another form of advertisement is TV commercials wherein the product is given a visual presentation. Moreover a form of advertisement is different sponsorships the company engages in. Through the sponsorships of different sporting and non sporting events the company gets to promote its products.
Information and marketing strategy
Developing a competitive strategy means developing a broad formula for how a business is going to compete, what its goals should be and what policies will be needed to attain those goals. Competitive strategy is a combination of the ends or goals for which the firm is striving and the means or policies by which it is seeking to get there. A competitive strategy requires the consideration of matters that determine the upper limits of what it can reasonably accomplish. An organization’s strengths and weaknesses are reflected in its profile of assets and skills relative to competitors. This profile includes financial resources, technological posture, brand identification and so on (Proctor 2000). Strategic market management is motivated by the assumption that the planning cycle is inadequate to deal with the rapid rate of change that can occur in a firm’s external environment. To cope with strategic surprises and fast-developing threats and opportunities, strategic decisions need to be precipitated and made outside the planning cycle. It is useful to have a real time information system rather than periodic continuous monitoring of the environment. In addition, efforts to develop strategic flexibility are likely to be helpful. The latter involves strategic options that allow quick and appropriate responses to sudden changes in the environment. An important dimension to strategic market management is to be proactive rather than simply reactive to environmental change. The firm can itself bring about change in the environment. It is possible to make a sizeable impact on governmental policies, customer needs and technological developments. The goal is to develop market-driven strategies that are sensitive to the customer (Adcock 2000). Information is important to Reebok marketing strategies because it provides the backdrop for the strategies. It serves as a blueprint for the company’s marketing strategy. Information helps Reebok determine the best marketing strategy for a certain period. Information is a consideration for Reebok before in introduces a new marketing strategy. It is also considered once there is a need to reduce the current strategies.
Management strategy of Reebok
Business management theories of stakeholder approaches and the knowledge-based firm are connected to the organizational questions of sustainable entrepreneurship; resource-based theories deal with the strategic management of resources and capabilities. Safeguarding the company's short-term reputation is a matter of regular business management aimed at avoiding economic damage to the business. Such routines must at least ensure the company's ability to avoid or adequately manage incidents close to the core business on, for instance, safety, health, labor conditions, environment and issues of company integrity (Keijzers 2004). To this end, a company can proactively build and maintain stakeholder relationships with core interest groups to understand the evolving interests of a growing number of stakeholders. It also requires that companies stay visibly in tune with peer companies. Companies can work to implement organizational structures to determine and handle issues in order to enable them to balance potentially conflicting stakeholder interests while guaranteeing that certain stakeholder demands can be met at certain acceptable minimal levels. Handling long-term interests of stakeholders and the company requires lasting relationships between the two (Keijzers 2004).
Engaging in such deep and robust relationships with the aim of collaborating in the development of business strategies for continuity is an intensive and committed process. The issues of sustainability that increasingly dominate the business agenda all relate to very complicated long-term cross-sectoral interests that require equally complex organizational change processes. These processes must allow time for trust-building between company representatives and the related stakeholder groups to engage stakeholders and must be aimed at building mutual respect and developing shared values between the stakeholders and the company (Milgate 2004). Senior management can enhance the change process by actively showing their commitment to issues, demonstrating respect for the values of the company's stakeholders, and by being explicit about the importance of collaborative stakeholder processes for the development of policies and for the business strategy in general. The processes for a stakeholder approach need to be guided by internal staff and should aim at installing adequate business routines to safeguard short-term reputation issues, and achieve processes for interactive stakeholder engagement determining long-term business strategies. Plotting of new business directions requires interactive shifting of company limitations expressed in the expectations and demands of stakeholders. The complex business challenge is the ability to understand present and potential stakeholder demands, and the willingness to overcome such obstacles in creative and open change processes of joint learning (Milgate 2004). Reebok uses various decision making skills and information from the internal and external environment to manage the company and its different branches or subsidiaries. Reebok makes sure that the company will make use of management strategies that are acceptable to the environment. It makes sure that the management strategies will help the firm achieve its goals, objectives, visions and missions.
HRM strategy of Reebok
The past decade has produced research evidence supporting the critical role human resource management (HRM) plays in the success of an organization. This evidence has been generated in a variety of different types of organizations including manufacturing, professional services, and health care (Burke & Cooper 2004). The human resources function has, for a number of reasons, been typically viewed by executives as peripheral to the successful performance of their organizations. Human resource management, as a course in most MBA programs, is often not seen as useful as offerings in finance, marketing, or information technology. Yet, managers with full-time work experiences report that their major challenges involve people. Those who must practice human resource management in an organization not only perform tasks but also occupy roles defined by the expectations of others inside and outside the organization. With the changes occurring in organizations, these roles have changed markedly and in ways that depart from the traditional role of a functional expert in which an individual performs specific activities (Burke & Cooper 2004).
The performance of this role requires expertise in specific HR functional areas such as wage and salary administration, interviewing, and the like. Sweeping economic, technological, and social changes during the last two decades have begun to transform how work is organized in modern society. The shift from an industrial to a knowledge economy, the globalization of markets, and the rapid proliferation of new technologies have dramatically increased the pace and unpredictability of change. In response, firms dismantled rigid hierarchies to enhance their responsiveness to new environmental demands. Through downsizing and restructuring, organizations eliminated layers of management and expanded the responsibilities of remaining employees. These societal changes had direct consequences for employment structures and practices in organizations. Gone are stability, vertical advancement, and employment security that defined industrial era careers (Brewster, Harris & Sparrow 2004). Greater flexibility, performance demands, and inter-firm mobility characterize twenty-first-century employment. For the latter part of the twentieth century, long-term employment relationships tied careers and career rewards to employees' physical and psychological attachment to organizations. Advancement, compensation, and benefits were linked to seniority and loyalty to the firm. These long-term employment relationships between employees and firms were mutually beneficial: firms retained a loyal corps of employees who identified with and internalized organizational goals, while employees enjoyed employment security and stability along with steadily increasing career rewards (Brewster, Harris & Sparrow 2004). Reebok’s HRM strategy focuses on the use of advanced methods of motivating and controlling the personnel. Reebok makes sure that they have the best relationship with the personnel and they make sure that the personnel know their limits and boundaries. Reebok makes sure that they treat well their personnel and they reward the personnel who perform well. The company also sponsors trainings and seminars for the personnel so that they perform at the optimum level
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