Relevant details of the case
Discuss about the Case Study Of Reebok and Adidas.
The industry related t the production of the athletic shoes initiated in the year 1895. The establishment of the brand Reebok was seen in the year 1958. Reebok started manufacturing running shoes with spikes invoiced in the sole of the shoes. Being the initiator of the spiked shoes the brand gained popularity and the rate of global acceptance of the brand was very high. With the high acceptance rate of the products that were being manufactured by Reebok, the global scenario of the brand in the perspective of sales and brand popularity was at its peak. With the introduction of Nike in the field of athletic shoe manufacturer the sales and the popularity of Reebok was facing a downfall in the global market. This report will discuss about the objective and importance of the case study. This report will also discuss about the details of the case study that are relevant in nature. This report will further provide the analysis of the case study. This report will also discuss about the theoretical implications of the marketing strategies of the project that is being initiated. This project will also discuss about the key issues of the brand Reebok that has been the main reason for the downfall of the brand. This report will also provide recommendations to the brand to sustain the market. Despite of the downfall that it has been facing in the market.Emergence of the athletic shoe brands
Te emergence of the athletic shoe manufacturing brands started in the year of 1980s. The four brands with high aspiration entered the market for achieving the silverware by manufacturing the sports shoes. The legacy of manufacturing athletic shoes started in the year 1895, when Joseph William Foster decided to manufacture athletic shoes and invoiced spikes into the shoes in order to help the runners to gain grip during running. The spikes were totally hand-made. In the year 1958 the two grandsons of Joseph William Foster established the brand Reebok. After the emergence of Reebok, during 1995, when Reebok was going through the downfall, Nike started emerging as the leading athletic shoe brand manufacturer. Adidas saw themselves emerging in the year 1954, after the Second World War. They gained popularity as they supplied cleats to the German International team during the world cup victory.
Despite of the fact that the life cycle of Reebok initiated at 1958, Paul Fireman initiated the modern version of Reebok in the year 1979, when he first came across the shoes in an international trade show. After being introduced to the shoes, he started negotiating for taking the right to sell the brand in the North America. In the year 1979, Paul Fireman established the company with the name of Reebok in the Northern America. In the year 1982, Reebok started manufacturing aerobic shoes that helped women who practiced aerobic. With the drastic growth rate in the acceptance of the brand in the year 1995, Reebok made a sale of $3 billion since the last decade. In the early years of 1990, the trend of aerobics was decreasing in a rapid rate, which causes a decline in sales for Reebok as it was mainly focused on the sales of the aerobic shoes that were targeted for the female clients of the brands. Reebok wanted to expand its business in other sector of sports but Nike was already predominant in the field where Reebok was trying to set up their business. In the year 1995, Nike surpassed the sales of Reebok by $1.33 billion. The main hindrance that stood in front of Reebok the lack of are the lack of relation between the Foot Locker and their brand. This communication gap was made full use by the Nike athletic shoes production house. Previously, when Nike was not completely established and was just emerging as a brand in the field of manufacturing athletic shoes, Reebok got the chance to start the business with the Foot Locker but due to the lack of time to produce custom footwear for the Foot lockers the business never progressed to a fruitful end. Nike in other hand had agreed to meet the requirements of the Foot Lockers and manufactured custom athletic shoes for the Foot Lockers. Considering the weak market bases Eli Lily, the trainer in the Reebok thought that there must have been some software issues that has led to the lack of sales of the brand. Reebok along with Lee and Wrangler processed the advancement of the SAP version. This advancement took longer time than the expected deadline of the project. In the mid 2003, Reebok gained their sales and made a great business. The reason of this increase in their sales was the conflict between Nike and the Foot lockers. In 2005, Adidas took the initiative to buy Reebok. Adidas was fighting to sustain the competition in Europe as Nike proved to be the killer of the entire competition. To face the fierce competition provided by Nike Adidas decided to buy Reebok and use Reebok in the department of training and fitness. After failing to sign Jordan as the basketball ambassador and again losing the chance of signing the wonder kid of basket ball Lebron James, Adidas decided to invest in signing multiple stars as their rookie in the field f basketball (Mantovani and Galvão, 2017). Adidas soon realized that launching the predator soccer shoes in Europe will help them conquer the market as emotion re related to the predator shoes were used by the likes of David Bekham and many other soccer stars. Gradually Adidas started outshining Nike in the mid range sport shoes. Despite the fact that Adidas combined with Reebok was giving a tough competition to Nike but Nike was still crowned as the brand that is labeled to be selling the highest number of pairs of athletic shoes. In the mid 2000s, Reebok was one of the reasons that brought Adidas the success. Out of the net turnover of $12 billion in Europe, Reebok had its share prominent with $1.9 billion. Reebok restocking the old stock of athletic shoes that were in trend that got the brand promoted to the highly ranked tier standing second just behind the likes of the Skechers (Tae-Gyu, K.I.M. and Wi-Young, 2015). The CEO of Adidas was much pleased with the growth of the brand under their legacy. This growth in the brand of Reebok forced Nike to collaborate with the brand named Converse and invest a lot of revenue to buy the brand in order to compete with Adidas in the field of training and fitness field. In the year 2009, Reebok manufactured toning shoes that claimed that wearing them itself is enough to get rid of specific muscular problems and no other mean of treatment will be required. This model of the shoe was targeted mainly for the women. But the science and technology used in the making of the shoes was not well matched with the claims that were made by the brand. Reebok had to settle a lawsuit and pay $25 million to the U.S Federal trade Commission in order to repay the unsatisfied clients. Despite these acts Reebok has still been doing well in the market of athletic shoes and is collaborated with the SAP ERP to sustain the competition with Nike.
Life Cycle of Reebok
This case study initially deals with the emergence of the athletic shoe brand Reebok. The brand seems to emerge in a very fast rate, as they were the initial manufacturers of athletic shoes with spikes invoiced in the shoes that will help the athletes to gain a proper grip during running in the track (Romeo, 2016). The business of Reebok was flourishing in a very fast rate as it started manufacturing products that were aimed at a particular scope of the athletics field as well as the products for the general athletic fields. With the increase in popularity of the field of athletics that the brand was gaining, according to the report the brand was not willing to make further modifications in the making of their products. This stable and never changing technology in the brand motive brought in stagnation in the market for the style of shoes that Reebok manufactured. Due to lack of time, Reebok could not manufacture customized products for the Foot Lockers. The gradual profit terms were decreasing in annual basis as the in between 1997 to 1999 the net sales dropped by $3.6 billion again in between 1999 to 2000, the sales decreased by $2.9 billion. This decrease in the net sales of the brand Reebok resulted in growth of the brand Nike as an elite athletic shoe brand. Nike took the advantage of collaborating with the Foot lockers for the supply of their athletic shoes (Jain, 2017). This causes the flash marketing for the Nike as they were collaborated with the Foot lockers in order to increase the sales growth. This growth in the sales of the athletic shoe with the Feet Lockers took Nike to an elite level. This phenomenon was the main reason behind the decline in the growth of Reebok (Fatma, 2018). Another aspect that resulted in the down fall of Reebok is that the downfall in the interest of the aerobics, as Reebok mainly focused on the field of aerobics under which they targeted the women participants of the field (Kempf and Franklin, 2016). Due to the lessening of the interest in the field of aerobics, the sales of athletic shoe decreases which in turn affected sales of the brand annually (Erus, 2016). Adidas being another athletic shoe manufacturing brand that has been emerging as one of the biggest brands after Nike in Europe. To get into the competition of being the biggest manufacturer of athletic shoes, they decided to collaborate with Reebok and spent a huge revenue to buy the brand (Lee and Kahle, 2016). After buying the brand for few years Reebok was not yielding the expected outcome in number of sales, but during the conflict of Nike with the Foot Lockers Reebok again gained the acceptance in the market by restocking the old foot wears and was just ranked behind Skechers in terms of yearly turnover of the training and fitness aspect of athletics. In 2010, a web served store was constructed where the shoes of Reebok was sold as the official product where discount on very less amount was provided (Erhard, Werner and Michael, 2014). This increase in the emergence of the turn over by Adidas that had already collaborated with Reebok forced Nike to collaborate with Converse and spend a huge revenue. Despite all this competition, Nike remained the brand with the highest turnover (Cho and Kim, 2016). The SAP version that was used initially by Reebok was also upgraded to a much updated version of SAP which was possible with the help of LEE and Wrangler as the modification was suggested by the Reebok, Lee and Wrangler (Duncan, 2016).
Analysis of the case
The main issues in the management of Reebok that led to the downfall of the brand are that the brand after getting a proper start to the marketing aspect of the brand due to the innovative ideas that were incorporated in the products that were manufactured by the company and did not intend to evolve their manufacturing infrastructure (Chatwin, 2017). The main motive of the company was to manufacture the most in numbers and to reduce the cost of production. This aspect of the increasing the production as well as lowering the production cost leads to the factor of not being able to customize the shoes manufactured by them. This led to the decline of the brand (Dolgin, 2017). Another reason of the company for not being able to flourish is the reason that they did not pair up with the Foot Lockers despite the fact that the Foot Lockers wanted to collaborate with the brand but due to lack of time for customizing shoes for them the Foot lockers and Reebok did not went on to crack the deal (Burns, Carberry and Schwartz, 2015). Nike was later seen to collaborate with Foot Lockers and reach the highest standards of the business their field leaving behind Reebok as their competitor.
The only recommendation that can be provided to the brand is that they must not provide misleading marketing policies as they did for the toning shoes which will lead to the decrease in good will of the brand and the brand loyalty decreases and this in turn positively affects the growth of their competitors (Nigg et al. 2015) . The company must seek to improve their technologies and the modification and customizations must be made in order to stay updated with the regular trend. The company has already collaborated with Adidas hence must act with the technology that the Adidas uses in order to gain the dominance in the global market and reach the peak of the market. The software systems that the brand is using must be updated to its highest order. This updated version will provide the increase in the efficiency of the marketing strategy of the brand leading to the success in marketing of the products that will be launched by Reebok. On following these recommendations the brand can regain its glory days.
From the above discussion it can be concluded that the emergence of Reebok was an obvious choice as it was the first brand to launch athletic shoes with spikes in order to found better grip on the track. Despite of getting a massive launch Reebok failed to maintain the dominance in the field of athletic shoe brands as Nike took over Reebok as a brand due to the availability of customized shoes. Reebok did not intend on growing as fast as it needed to and did not focus on modifying the shoes as per the requirement of the clients. This factor of not being capable enough to cope up with the pace created Nike the space to conquer the market. The downfall of Reebok embarked the superiority of Nike, which later led to Reebok being sold to Adidas for te betterment of the company.
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