Reebok ’s Overview : Reebok ’s Overview Reebok’s principal business activity is to design, development & worldwide marketing of high quality footwear, apparel & equipment.
Reebok is 3rd largest seller of athletic footwear and athletic apparel in the world.
2004 Annual Sales = $4 billion
Reebok India commands a 51% market share in the premium sports wear industry .
Over 500 exclusive Reebok Stores, 200 Shop in the shop outlets & 2500 dealer outlets. History : History Reebok's United Kingdom-based ancestor company for athletes those wanted to run fast.
In 1958, two of the founder's grandsons started a companion company that came to be known as Reebok, named for an African gazelle.
Reebok started its operations in India in 1995.
Reebok was the first multinational footwear company to enter India after the liberalization of the country's economy and post profits Mission Statement : Mission Statement “At Reebok , we see the world a little differently and throughout our history have made our mark when we’ve had the courage to challenge convention . Reebok creates products and marketing programs that reflect the brand’s unlimited creative potential. ." Proposed Mission Statement : Proposed Mission Statement “To continue to offer quality products with increasing growth in the industry and expanding globally. Our mission has always been to provide a competitive edge by developing the most technological products. Keeping in mind fair labor practices in all our suppliers ’ factories, while maintaining a competitive advantage, with the shareholders interests, and company profits in mind. We also believe our employees are one of our most important assets. To increase the responsibility towards the environment by evaluating the impact of day to day operation and attempts to change operations that have a negative impact.” Reebok Financials : Reebok Financials 2004 Annual Sales = $4 billion
An improving financial performance for the last five years:
Five consecutive years of earnings improvement.
Compounded annual growth rate of 23.4%.
Returned $226 million to shareholders in the form of dividends and share repurchases
We have generated $900 million of operating cash flow.
Our share price increased more than 400% and during the past year it outperformed the S&P 500 for the fifth consecutive year.
Cash position at December 31, 2004, $565 million
On August 3, 2005 Reebok agreed to be purchased by Adidas for $59 a share – a 34% premium. Athletic Shoe Market Share : Athletic Shoe Market Share Reebok background : Reebok background Multiple Brands Variety of Product Types Multiple Retail Channels Competitive Profile Matrix (CPM) : Competitive Profile Matrix (CPM) Products : Products External Opportunities and Threats : External Opportunities and Threats OPPORTUNITIES:
Strengthen management team
Relevant advertising and marketing campaigns
Grow quality market share
Restructured production creation teams
“The Sounds and Rhythm of Sport.” – fashion consumers
National Football League campaign
Changed leadership for difficult brands THREATS:
Strong US dollar
Weak department store channel
Foreign market is suffering
Economic decline in key markets
Strong Competition Internal strengths and weaknesses : Internal strengths and weaknesses Teams more connected to the consumer
Dedication to employees
Hydro mover moisture technology
4 major divisions & 6 SBU’s
Advertisement campaign Rely on retail stores to sell products
Issues with foot lockers
Poor employment practices at their international manufacturing sites
Heavy dependency on footwear sales STRENGTHS: WEAKNESSES: Recommendations : Recommendations Reebok is basically internally strong organization with lazy management team However
It develop a more detailed plan grow sales.
Reliance on department store channels
Suffering foreign markets
Find markets that are not in an economic decline
Strengthen the brand name and message of suffering brands
Need strong goals and plan to grow the sales & global reputation
By changing advertising agencies frequently, Reebok has dug themselves in a marketing hole. To accomplish their current goals they need to produce better marketing campaigns.
Change Management Conclusion : Conclusion Focus on finding the most promising customers (kids and women) and introduce more products or improve current ones to satisfy potential increase in demand
Keep expanding into current and future foreign markets by being aggressive and the worldwide leader of the footwear industry
Accelerate funding for numerous marketing campaigns in order to get to specific markets or customer groups
Focus on improving working conditions and human rights at international manufacturer centers and at the same time increasing their productivity
Implement product diversification with company’s newest technologies . References : References http://finance.yahoo.com
Reebok Annual Reports
Reebok Quarterly Reports
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Sitesh Smarak Pradhan