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ON
Submitted as a part of
CONTINUOUS ASSESSMENT- 1
For the partial fulfillment of award of degree of
Master of Business Administration
School of Business
1
Oct 2012
Table of Content
S. No. Chapters
Executive Summary
7. Conclusion
Referen ces
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Executive Summary
The Company
The Mission at Reebok is to be on the cutting-edge of sport and lifestyle products
built upon a strong heritage in sports(Reebok, 2011). Reebok strives to challenge
convention and lead through creativity and have been doing so for over 100 years(Reebok,
2011). The company was founded on one important value in the 1890‟s, helping athletes
run faster (Reebok, 2011). Since then the main vision has been to help athletes fulfill their
potential (Reebok, 2011). Reebok is an American- inspired global brand, which celebrates
individuality of the athlete while also helping the athlete to obtain goals they once thought
unattainable (Reebok, 2011). Reebok is a subsidiary of Adidas Sportswear.
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Introduction
Reebok started its operation in INDIA in 1995. Headed by Managing Director Mr. Subhinder
Singh Prem and it has dominated the India sports market with 51% market share far ahead
of its competitors NIKE, PUMA etc. Reebok India has a PAN India presence with its branch
offices in Mumbai, Kolkata, Bengaluru. It has always challenged and lean through creativity.
It has introduced products in a wide range of sport shoe category from running, walking,
aerobics, lifestyle, and newly introduced Runtone ready, Zigdynamic, Realflex etc. It
celebrates individuality in sports and lifestyle. Reebok has introduced its internationally
acclaimed fitness programs in India, conducted under the banner of Reebok Instructor
Alliance, which is dedicated to fitness instructors, personal trainers and health club owners.
Reebok has trained and certified more than 800 trainers till now.
Reebok has introduced its internationally acclaimed fitness programs in India, conducted
under the banner of Reebok Instructor Alliance, which is dedicated to fitness instructors,
personal trainers and health club owners. Reebok has trained and certified more then 800
trainers till now.
Reebok India commands a 54% market share in the premium sportswear industry according
to the calendar year December 2008. Its revenue has touched 1400 Crores (at retail price)
in 2008. It plans to increase the store count from the existing 500 to over 600 before 2007.
Reebok reaches out to its target customers through its 500 exclusive Reebok Stores, 200
Shop in the shop outlets & 2500 dealer outlets. Reebok has the single largest store in
Hyderabad.
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Mission And Vision Analysis
Reebok’s Vision
Fulfilling Potential
"Reebok is dedicated to providing each and every athlete - from professional athletes to
recreational runners to kids on the playground - with the opportunity, the products, and the
inspiration to achieve what they are capable of. We all have the potential to do great things.
As a brand, Reebok has the unique opportunity to help consumers, athletes and artists,
partners and employees fulfill their true potential and reach heights they may have thought
un-reachable "
Reebok’s Mission
Nike’s Vision
“To carry on his legacy of innovative thinking, whether to develop products that help
athletes of every level of ability reach their potential or to create business opportunities that
set Nike apart from the competition and provide value for our shareholders.”
Nike’s Mission
” To bring inspiration and innovation to every athlete in the world"
*”If you have a body, you are an athlete.” – Bill Bower
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Analysis on the basis of elements of mission
Statement
In In
Son. Elements Reebok numeri Nike numeri
c c
1 Customers Yes 1 yes 1
2 Product or Services Yes 1 yes 1
3 Market No 0 no 0
4 Technology Yes 1 yes 1
Concern for Survival,
5 Yes 1 no 0
Growth & Profitability
6 Self-concept No 0 yes 1
Concept for Public
7 Yes 1 no 0
Image
Concern for
8 No 0 no 0
employees
Total 5 4
Value in percentage 62.5 50
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ENVIRONMENTAL ANALYSIS OF REEBOK
Basically, it means those aspects of the surroundings of business which affect its operation
and determine its effectiveness. It is mixture of complex, dynamic and uncontrollable
factors within which a business is to be operated. And these are those factors which affect
the business for taking the managerial decision by the top-level management of the
company. These are divided in two part internal and external environment of company.
1) Company objective:
2) Marketing strategies:
Create, produce and deliver a breakthrough Reebok core training video series that
generated excitement around the Reebok core training phenomena.
Reebok merge with aides.
Execute an integrated Reebok marketing asset strategy to launch and deliver Reebok
core training to the fitness and sport training market.
Maximize the penetration of Reebok core training into the US and key international
markets by tapping the global Reebok University human infrastructure (master
trainers, alliance members etc.
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3) Reebok’s Fitness Culture and Positioning:
Reebok created Reebok core training and the Reebok core board based on a breakthrough
training technology and consumer market research. By synthesizing the intrinsic human
need for self improvement and feeling good with the functional needs of improved strength
and performance for an active lifestyle, Reebok endeavored to redefine sports and fitness.
Reebok‟s goal was to communicate the key benefits to consumers globally. This targeted
approach would ensure deep penetration and allow Reebok to create the necessary “forest
fires” to successfully drive Reebok core training nationally and globally.
Build program to emphasize strength training as key element for a total body workout
Offer short (15 -30 minute) executions of Core Training classes to induce trial and
Appeal to men
Train instructors to incorporate strength training into Core Board use
These are the above mention some internal factors which are controllable by the company.
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External Environmental Factors
PESTLE ANALYSIS
1) Political & legal:-
2) Economic:-
3) Social:-
Reebok products declare in any raise, age, religion, and lifestyle, always in fashion
with special design in any of product.
Focus in people who like sports and athletes, almost everybody can purchase Reebok
products.
Usually men and women from urban sector with an annual income of 1.5 laths are
users of Reebok . Frequent users are those with an annual income of 5 lakhs or
more.
As a crucial component of Reebok‟s Global Corporate Citizenship Platform, the
Reebok Foundation focuses its philanthropy in communities where Reebok‟s offices
are located.
The Foundation strives to promote social and economic equality by funding non-
profit organizations delivering programs aimed at inner-city youth and underserved
groups to empower youth to fulfill their potential – programs that provide youth with
the tools they need to lead healthy, happy and actives lives.
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4) Technical:-
R&D teams at Reebok create footwear, apparel and hardware with the primary focus
on developing products that provide maximum performance, comfort and fit for the
consumer.
Teams are structured along the brand‟s product category focus in addition to certain
cross-category groups such as the Reebok Advanced Concepts (RAC) team. Activities
are primarily located in Canton/Massachusetts, USA to facilitate close collaboration
with the respective product marketing teams.
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Internal Environmental Factors
Favorable Unfavorable
Strengths Weaknesses
Opportunities Threats
(1) Expanding current market and reach (1) Many companies produce
current markets with their new products. barefoot shoes and this leads to a
External (2) Marketing towards several age strong competition.
groups to increase profits. (2) Changing trends in footwear
(3) Product development opportunity. technology.
(4) Expanding to market for the product (3) As barefoot shoe is a want
on social media websites. and not a need, some people may
(5) Creating new channels of think twice before purchasing.
communication on social media websites. (4) Poor economy
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Industry Analysis of REEBOK
NEW ENTRANTS
There are many barriers to entry preventing new entrants from capturing significant market
share. Today‟s athletic shoes are highly technical. An extremely large capital investment is
required for new firms to open athletic shoe factories and conduct research and design to
create a popular athletic shoe. The aggressive marketing campaigns turn their products into
household names making it arduous for new firms to compete. Athletic shoe manufacturers
greatly attempt to differentiate their products from all shoe manufacturers.
If they are a startup firm, it is extremely difficult to get shelf space at major shoe retailers.
If the firm is currently in the dress shoe industry, and is entering the athletic shoe industry,
they may use their existing connections to easily access athletic shoe distribution channels.
Switching costs are very low for the athletic shoe industry.
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RIVALRY AMONGST EXISTING FIRMS
In the athletic shoe industry, corporations are mutually dependent. A competitive move by
one firm directly effects competitors, forcing retaliation or counter efforts. For example,
Reebok‟s expansion of the women‟s walking shoe, inspired other firms to follow.
The number of competitors is stable, partially due to high entry barriers. This adds to the
rivalry among existing firms. Manufacturers watch each other carefully and make
appropriate countermoves to match a competitor‟s move.
The rate of industry growth is stable, but the quest for global market share is eminent. This
increases global rivalry. Product characteristics are related to market share. Name
recognition alone sells athletic shoes. The larger the market share, the greater advertising
capabilities and hence increased name recognition.
Capacity has minimal impact on rivalry, because most firms have means to manufacture the
demanded amount of athletic shoes. This ability to meet demand reduces market because
most firms overproduce and drive down the selling price.
Low exit barriers and diversity among competitors has minimal impact on profit potential. If
the athletic shoe industry becomes too unprofitable, firms could switch to other shoe
markets. Additionally, diversity among firms is small because every firm follows one
another. The rivalry among existing firms is high where weak firms are easily acquired by
fierce competitors. This may have a high impact on profit potential.
Buyers have high switching costs in regards to opportunity cost. If an athletic shoe retailer
decided to drop one of the popular athletic shoe brands, their sales would fall due to high
consumer brand loyalty. Most buyers have a medium profit margin so price sensitivity of
buyers is moderate. In the athletic shoe industry, price increases pass to the consumers.The
overall impact from buyer‟s bargaining power to profit potential is moderate.
Athletic shoes are manufactured primarily from raw materials including rubber, leather and
nylon. These materials could be classified as commodities, where the manufacturing process
adds to their value. For this reason, the suppliers have limited bargaining power, and little
impact on profit potential.
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THREAT OF SUBSTITUTES
Athletic shoes are designed to improve comfort and personal safety during periods of
increased movement. Substitutes for athletic shoes are using other forms of shoes, or going
barefoot(rural areas). A large population of athletic shoe consumers wear athletic shoes
strictly because they are comfortable. Comfortable dress shoes or sandals are equally
interchangeable with minimal switching costs. If the athletic shoe is used for sports, then
there are relatively few substitutes. Given these reasons, the threat of substitute products is
moderate and the impact to profit potential is moderate to high.
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COMPETITOR ANALYSIS OF REEBOK
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CONDITION(RATING SCALE)
1 LESS THAN AVERAGE
2 AVERAGE
3 MORE THAN AVERAGE
4 STRONGLY
INTERPRETATION
After competitive analysis of Reebok & nike, we conclude that the reebok faces fierce
competition from all sides. The athletic shoe industry is quite large and very competitive.
Reebok receives most of its competition from Nike. Which is clearly shown in above table,
that reebok is having better market then nike & other competitors in the shoes industries.
And Reebok has been capturing 4.5% market more than that of nike. The EPS of reebok
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CONCLUSION
From the above-study, we were able to conclude that people buy Reebok products mostly
because of comfort and they mostly go for the quality & brand value of the product. And the
The „after-sales‟ service provided also acts as a factor for the purchase decision. The
product quality & comfort along with style & promotional strategies of using sports
celebrities as their endorser has helped Reebok gain the significant market share.and
according to the above study reebok is the leading company in compare to nike in the shoe
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