Strategies in a Global Environment MBA C695 Essays

Strategies in a Global Environment MBA C695 Essays Strategies in a Global Environment MBA C695 Essay Strategies in a Global Environment MBA C695 Essay Shoe industry represents a separate market segment in apparel industry. This segment relies on innovations and fashion which determines main trends in this industry. Today, many companies have been dramatically influenced by the rise of globalization and internalization of trade seeking to maximize their global reach, in the belief that those that offer a global service will be in the strongest competitive position. Athletic shoe industry is a fast growing segment which is influenced by changing demographics, new lifestyle trends and a shift in consumers attitudes towards accessories. The major competitors in athletic shoe industry are Adidas, Nike, Reebok, New Balance and smaller firms such as Fila. On the functional level, high rates of its development, great volumes of currency receipts have an active influence on its various sectors. The main objective of the companies is to maintain the level of product quality and develop strategies to improve their performance. In the infrastructure of athletic shoe industry quality is the major question. With the success of new technologies, stating in the end of 1990s, athletic shoe industry began to rationalize its product lines reducing prices and production costs 1. The development and management of new technology has, in recent years, become a central focus of marketing policy and conceptualization of a firm. In order to compete on the market, many companies implement new product lines based on natural materials only for those who are health conscious and are willing to pay for natural fabric. This strategy helps to create a core of loyal supporters and repeat buyers. For instance, â€Å"New Balances successful 950, a $90, technical -looking, hybrid cross-training/running shoe exclusive to Foot Locker that is popular with young consumers† 2 1.Cassidy, H. (2001). Lifestyle, Teens Fuel Recovery athletic shoe industry experiences economic growth Brief Article Statistical Data Included. Brandweek. Jam 8, p. 34. 2. ibid, p. 34. To compete on the market and remain profitable, many companies introduce strategic business unit strategy within organizations. The strategy allows the companies to reduce product costs and operational expenses through effective budgeting and price setting, product innovations and, hiring decisions. Adidas, Nike, Reebok are engaged in a network including expert distributors, agents, foreign customers, competitors, and consultants as well as regulatory and other agencies. Approaches, aimed to meet high service standards, are based on customers environment interaction and changes affected both of them. Developments in IT have led to interactive communication tools such as the telephone and the Internet being used to complement less interactive mechan ­isms such as mail or media advertisements. Nike and New Balance increases their advertising budget to be â€Å"well-positioned for a consumer push† 3. Business strategy level can be regarded as the company’s philosophy governing how customers should be treated and how staff could meet their standards and needs. Taking into account the major competitors in the industry, Adidas, Nike and Reebok, it is possible to say that they employ similar business strategies aimed to improve product quality and deliver customer satisfaction. The main business strategies in athletic shoe industry include differentiation and focus-differentiation strategies. Adidas and Nike follow a differentiation advantage because their products have a perceived uniqueness in a broad mar ­ket For instance, â€Å"Many of Nike’s customers are athletes on school, college, or professional teams and use shoes specially developed for their sports† 4. This is an extremely effec ­tive strategy for defending market position and obtaining above-average finan ­cial returns; unique products often command premium price. This marketing strategy helps to deliver customer value in a 3. Cassidy, H. (2001). Lifestyle, Teens Fuel Recovery athletic shoe industry experiences economic growth Brief Article Statistical Data Included. Brandweek. Jam 8, p. 35. 4.Part VI in a Series About Investing your Money. (2006). http://googolplex.cuna.org/18672/cnote/story.html?doc_id=682 way that clearly distinguishes the product from its competitors.   Differentiation focus allows both major and minor competitors to concentrate on a particular target audience and product line segment for instance, shoes for a specific purpose (a soccer shoe, a marathon runner’s shoe) 5. Some of the companies, like Fila, concentrate on a small geographic market which ensures profitability and market share.   Competitive advantage in athletic shoe industry is driven by manufacturing and product innovation, customer relationships and sales. The direct sales model (or other near-direct models) has been successful in the U.S., and the industry is moving more in that direction. â€Å"Competition in the shoe industry is fairly intense† 6 On the corporate level, many companies are driven by technological innovations and knowledge management systems. In addition, this industry began to follow a strategy of withdrawing from small markets with limited potential for its core products and to look for markets in countries with a major growth potential for athletic shoe industry products. Such giants as Adidas, Nike, Reebok, New Balance are globally oriented companies. Relationship marketing approach is applied by many competitors within athletic shoe industry in order to ensure long-term partnerships with customers and suppliers. Mergers and acquisition strategy opens new opportunities for the main competitors who have access to information and channels of influence which are not available to many other stakeholders. To maintain public relations athletic shoe companies use Internet as the main tool of advertising and communication7. Some companies, like New Balance, use computerized stitching department to reduce operationa l costs and other expenses.