SWOT Analysis

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SWOT analysis
In order to set specific growth objectives for Geox, first, we need to
evaluate the company’s current position. We used SWOT analysis to
determine the company’s strengths, weaknesses, opportunities and
threats.
Strengths:
Patented innovative technology, constant focus on research and
development Cross-market positioning for products
Brand recognition
A growing presence on international markets
Vast distribution network
Optimized production
Weaknesses:
High cost of research and development
Patent protection costs
Opportunities:
New-product development to attract new customers
Expansion to new markets
Diversifying the production to include sports footwear
Partnerships
Threats:
Highly competitive industry
Other companies’ similar technology development
Economy and demand fluctuations
Instable political climate
Goals
Reaching the leading position in the casual lifestyle market
Differentiating the product line
Expanding to emerging markets
Developing new products
Growth Strategies
Overall, first half of 2009 was successful, and currently the company
has $133.9 million of free cash flow to reinvest in future growth.
1. Continue expansion to China
China is the second largest footwear consumer, following the US.
And if the US footwear market is over saturated and highly
competitive, which implies that in order to reach the customer, Geox
would have to invest huge amounts of money in distribution and

marketing. China, on the other hand, is an extremely attractive
market that requires less investment and offers bigger outcomes.
Furthermore, 95% of the production facilities are located in China,
which ensures relatively fast and inexpensive distribution to the
retailers in the
Republic. European plants contribute only 5% of the output of the
production, so it would be efficient to relocate those plants to China.
2. Expand to other emerging markets
Such countries as India, Asia Pacific, Brazil and Russia are the other
attractive markets for future expansion. They are some of the top
footwear consumers, and rising incomes among the population of
those countries ensure affordability, and therefore, the demand for
Geox products. Thus, Geox is interested in future partnerships with
department stores in those countries, as well as opening its own
single-brand stores.
3. Focus on the casual lifestyle footwear
In order to keep the leading position and to secure high profits, the
company has to progress in this direction and not to shift from it
completely as it risks losing its loyal customers who are the main
sources of profit.
Casual footwear is the biggest and fastest-growing product
segment, and by 2009, Geox was second largest casual lifestyle
sector operator with 31.9% percent increase over the previous year,
which also makes it the fastest-growing company in this particular
market. The leading casual footwear producer, Clarks, had
experienced only 9.7% growth over the year. Therefore, there is an
opportunity to get a bigger market share and take the dominating
position in the casual lifestyle footwear market.
4. Find its own niche in sports footwear
Geox has all the resources to continue developing its sportswear
line. Biggest competition, companies Nike and Adidas together
control nearly 60% of the athletic footwear market. Their budgets
are higher than those of Geox, and they put all of their resources
towards promoting and distributing only products designed for
sports and active lifestyle.
Eventually, in order to successfully enter the sport footwear market,
Geox
would have to find some support from athlete celebrities or wellperforming sports teams to endorse its products. It does not
necessarily have to be in the form of flashy marketing campaigns as

it contradicts with company’s values, but it could be done in the
form of sponsoring the events, teams, or single persons.
As both sportswear leaders are American companies and focus
primarily on US athletes, Geox could partner with someone
representing European sports. Innovation and breathability are
company’s main strengths; so high-intensity sports like racing would
be a perfect match.
5. Invest in the new product lines
Geox positions itself as a producer of innovative “breathable”
products. Moreover, the company is aware that this is not enough to
appeal to consumer, so it ensures that its shoes follow the fashion
trends. For that matter, Geox employs the best Italian designers. So
far, that has been a successful move that gained a lot of loyalty
from more fashion-conscious buyers. Therefore, Geox could develop
a new line for high-end formal wear. The other Italian brand and one
of the competitors operating in that segment, Ferragamo, has
shown a significant increase in sales and profits over the last few
years, so there are a lot of opportunities in competing in this
market. In order to do that, the company might need to develop a
signature look, to add some other distinctive design features to the
shoes, to develop a line of products on the cutting edge of both
technology and fashion.
6. Continue research and development
Innovation is a key competitive advantage of Geox, so as the
competition is aware of that, Geox has to constantly come up with
something new and add more and more unique features to stay on
top of the game.

Internal Strengths & Weaknesses
Strengths
1. Focus on technology and innovation (High)
2. Product differentiation­Unique product based on patented 
technology (High) 3. Heavy investment in R & D (High)
4. Largest brown shoes manufacturer in the world(High)
5. Strong distribution network (Moderate)
6. Solid financial position(Moderate)
7. Wide footwear product range (High)

8. Unique selling point­“Breathing Shoes” (High)
9. Patent extended and applied to apparel (Low)
10. Large and loyal customer base in Europe (Moderate)
11. Low cost­Manufacturing outsourced to third parties in Asia 
(Moderate) 12. High profitability (Moderate)
13. Collaboration with Italian and International Universities and 
research centers (Moderate) 14. Young entrepreneurial company 
(Moderate)
Weaknesses
1. Weak presence in emerging markets of India and China (High) 2. 
Weak position in sports footwear segment (High)
3. Dependence on third party manufacturers­control and quality risks
(Moderate) 4. Competitive position based on a single innovation 
(High) 5. Flattening sales growth (High)
6. Low capital investment (Moderate)
7. Weak presence in high end North American market (Low)
8. Low diversification into peripheral product and sports equipment 
segment (Moderate)
External Opportunities & Threats
Opportunities
1. Emerging markets in India and China for affordable, mid price 
range shoes (High) 2. Opportunity to develop products such as bags, 
sportswear apparel and sports equipment (Moderate) 3. Opportunity 
to develop products for high price range US market (Moderate) 4. 
Web based technologies for design and sale of shoes (High) 5. 
Strong appeal for Italian brands (High)
6. Growing apparel market (Low)
Threats
1. Worst economic recession in the world (High)
2. Mature footwear market in Europe (High)
3. Increasing rivalry among competing firms (Moderate)
4. Increasing leverage by buyers (Low)
5. Strong entrenchment by Nike and Adidas in China (High) 6. Easy 
imitability of product and process (Moderate)
7. Market demand tapering off (High)
8. Weak brand as compared Nike and Adidas in sportswear 

segment(Moderate)

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