Case Analysis, Runners World

3444 Words Jun 22nd, 2008 14 Pages
1.) Problem Recognition:
Tamara started her running shoe business in 1994 when she was 24. Tamara was a nationally ranked runner herself and hence she recognized a market for high quality running shoes specifically designed for serious runners. Tamara made good profits in the first six years of business from 1994 to 2000. Initially, she emphasized on Nike because it was well accepted and considered a top quality product.
She did not have much of a problem doing business in the initial years because of the jogging boom. She earned good returns on her investment and made profits.
However Lately, Tamara’s sales figures have started declining slowly. This has hurt her profitability and Tamara had flat sales figures and there was no further
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Competition Factors:
Many of the big established shoe brands have seen consolidation and hence they have become bigger and more powerful in terms of competing with the rest.
These established big shoe firms like Nike, ADDIDAS sign up with international sports personalities and sponsor annual sports events like soccer world cup or cricket world cup. They also sign up the entire teams or clubs like NBA, NFL, and the Indian Cricket Team and then sponsor their clothing and accessories. This attracts a lot of youngsters to a particular brand.
The new small entrants are coming out with completely new idea which eats out of the existing segment of buyers. For an example, Heelying Shoes’ unique shoe with imbedded and detachable wheel turned out to be a success. They sold 1 million pairs in the first year of operations.
The big retail stores have the advantage of making the highest possible margin as they buy in bulk from the suppliers and hence they can afford to play with their prices. Regulatory Factors:
The shoe market is completely governed by competition. There are no monopolies or any other rules defining the pricing here.
There are regulations on the materials which is to be used while manufacturing shoes. Technological Factors:
The new technological advances have made it easier for even small time stores to come out with some unique idea like designing your shoe online. For an example, Customix offers 3 billion

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