SWOT ANALYSIS

- REEBOK

SUBMITTED BY:
NEHA RUHELA
MASTER OF FASHION MANAGEMENT
(2008-10)

NATIONAL INSTITUTE OF FASHION TECHNOLOGY,

NEW DELHI
ABOUT REEBOK

Reebok is an American-inspired, global brand that creates and markets sports

and lifestyle products built upon a strong heritage and authenticity in sports,
fitness and women’s categories. The brand is committed to designing products
and marketing programs that reflect creativity and the desire to constantly
challenge the status quo.

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

• Always Challenge and Lead through Creativity

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.

REEBOK'S POSITIONING

• Celebrate Individuality in Sport and Life

Reebok understands that people are, above all, unique. Reebok’s positioning
reflects this; celebrating the distinct qualities that make people who they are -
their unique points of view, their individual style and their remarkable talents
and accomplishments. Reebok celebrates their individuality, their authenticity
and the courage it takes to forge their own path to greatness. While some may
call them crazy or eccentric, Reebok calls them visionary and original.

REEBOK'S PURPOSE

• To Empower Global Youth to Fulfill their Potential

Commitment to Corporate Responsibility is an important legacy and hallmark

of the Reebok brand. For two decades, Human Rights, through the Reebok
Human Rights program, was the primary focus of this effort. Reebok has
expanded on what had been built and created a Global Corporate Citizenship
platform with a purpose for the brand that will help underprivileged,
underserved youth around the world fulfill their potential and live healthy,
active lives.

An 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.
 Reebok India being the largest in the premium sports wear industry in
India commands a 51% market share.
 Over 500 exclusive Reebok Stores, 200 Shop in the shop outlets & 2500
dealer outlets.
 Turnover in year 2008- 828 crores (INR)
A BRIEF 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

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 2007-08

Variety of Product Types

 Footwear, apparel, fitness equipment, licensed watches, bottled water, etc

 Products may be merchandised as collections or assortments requiring coordinated
delivery
 Products may require special fixtures or collateral promotion material like posters,
print ads, and store signage.

Multiple Retail Channels

 Department stores
 Sporting goods
 Specialty retailers
 Company-owned stores
 Licensees
  Wholly-owned, international
 Subsidiaries and distributors
 Sales in 140 countries
 Internet selling

Competitive Profile Matrix (CPM)

 SWOT Analysis

STRENGTHS WEAKNESSES

Product Product

 Continuous innovation in technology.  Lack quick innovation.

 Continuous improvement in design  Less design in terms of silhouettes.

development specifically for domestic
market.  Heavy dependency on footwear sales.

 Emphasis on new product development.  Lifestyle collection not getting much

attention.
 Consideration of comfort along with
technological development. Price

Price  Too high priced regular sports wear as well.

 Product in every price range is available.  Unavailability of middle and low prices
collection everywhere.
 RVS (Reebok Value Store): This comes
under reach of lower middle class.  Collection for tier I and tier II compromise
with design for being cost effective.
 Special collection for tier- I and tier- II cities
for being cost effective.  Bad practises for price freezing.
Promotion  Pricing strategy is not that effective.
STRENGTH
 Effective advertisement campaigns.
Promotion
 Good sales promotion strategies.
 Electronic media promotion is still less in
 Influencing celebrity endorsements.
frequency.
 Icons of different fields as Brand
Ambassadors. Place

 Rely too much on retail stores to

Place
sell products.
 Multiple Retail Channels. For e.g. Department  Decreasing number of company owned
stores , Sporting goods, Specialty retailers , retail stores.
Company-owned stores , Licensees.  Reebok Value Stores are too less to reach
People more number of people.
 Too less space in their retail outlets.
 Teams more connected to the consumer.
People
 Multi-brand strategy by managers.  Bad working practises in their
 Dedication of employees. manufacturing units.
 Bad dealing ways with their suppliers.
 Strong customer relationship management.
Opportunities Threats
Economic Economic
 Increasing sportswear market share  Increasing competitor’s market
in the country. share.

 Increasing kids market is yet  Competition offered by Chinese

another opportunity for Reebok products.
Juniors.
 Fluctuating US currency effects
Technical
exports.
 Increasing innovative labs for
Technical
technology.
 Variety in design in ADIDAS
 Increasing awareness for different
products.
technologies among the consumers.
 Increasing product range of NIKE.
Demographic
 Good technology with
 Increasing disposable income of
competitors.
Indian consumer.
 Better supplier base of
 Common wealth games coming up
competitors.
in India.

 IPL and Force India gaining

popularity in India.
 Recommended Strategies for Reebok

Opportunities Threats

Strengths S-O Strategies S-T Strategies

 Should use the best of their design  Completely focus on their

and innovation capabilities for strengths because building
capturing increasing sportswear on that they can maintain
market. their share in the market.

 More emphasis should be given in  More attention should be

product development for Reebok paid to the domestic market
Juniors as their market is quickly as dollar fluctuation effects
increasing. exports but Indian market is
increasing.
 Should introduce Juniors collection
in RVS stores also.  Keep maintaining the quality,
durability and promote on
 Should collaborate with upcoming
that for building brand
technical innovation firms for fast
loyalty as Chinese products
and better technical products.
will not able to provide all
 Should make the best of increasing that.
technical awareness among
consumers by emphasizing their
technology as USP in promotion.

 Should capture market for common

wealth games, not just the athletes
but the fan gear as well.

 Should put more emphasize on IPL

and Force India product
development. More variety should
be added to it. Price range should
also be increased for increasing the
reach.

 Disposable income of the customers

are increasing, they should be
captured and loyalty must be build
 by use of their good CRM practices.

Weaknesses W-O Strategies W-T Strategies

 Outsourcing or working in  Maintain existing customers

collaboration with technical
innovation firms for fast technical
improvement.
 Watch completion closely and work
on prices effectively.
 Should pay more attention to
company owned store as market is
increasing and margins are higher in
self owned stores and also they are
better managed.
first and try increase loyalty
in them by providing them
better services to survive
existing market share.
 Work more on their
strengths over competitors
to sustain.
 Capture tier I and tier II and
also the lower middle class in
urban areas in order to
increase the reach of their
product and create loyalty in
those markets as well so as
to keep competitors behind.

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 domestic markets by being
aggressive and the worldwide leader of the footwear and apparel
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

 http://finance.yahoo.com
• Reebok Annual Reports
• Reebok Quarterly Reports
• www.rbkindia.com
• www.reebok.com
• www.bigcharts.com
• www.businessweek.com
• www.wikkipedia.org