Mercury Athletic Footwear: Valuing the Opportunity

There are several reasons why AGI should consider Mercury Athletic as an appropriate target for acquisition. First, acquiring Mercury could improve both companies financially. Acquiring Mercury would double AGI’s revenue. Although Mercury’s financial performance has been disappointing, they experienced top line growth of 20% in 2006. Unfortunately, their profitability has been disappointing due to price concessions to big box retailers and an unsuccessful women’s line. Mercury’s (and ultimately AGI’s) profitability could be improved by the synergies of the two companies merging. Synergies within supply chain, operations, research and development, and advertising should all improve Mercury’s EBITDA.

How would you analyze possible synergies or other sources of value not reflected in Liedtke’s base assumption?

The background of this paper we need to mention is that West Coast Fashions, Inc. (WCF), a large designer and marketer of branded apparel announced a strategic reorganization calling for a divestiture of certain assets, and one of the divisions it intended to shed was Mercury Athletic, its wholly owned footwear subsidiary. John Liedtke, the head of business development for Active Gear, Inc. (AGI), a privately held athletic and casual footwear company, contemplated an acquisition opportunity of Mercury that would significantly improve his business. So, he wanted to evaluate this opportunity.

West Coast Fashions, Inc has decided to sell one of their segments, Mercury Athletic in the context of a broader reorganization. The head of the business development for Active Gear, Inc(AGI), John Liedtke, views this event as a good

Solely Shoe Industry has an annual revenue of about $360.1 billion. Europe is the largest market of shoes all over the

Sportsman Shoes has been a leader in the shoe industry for more than thirty years. Sportsman manufactures and sells athletic shoes for all types of sports. The company has pursued a low-cost strategy in order to sustain their success. They sell a limited number of shoe designs and have held costs low through manufacturing efficiency and standardized operations. However, the past five years have been a struggle at Sportsman. The shoe market has seen a rise in the availability of low-cost imported shoes that has threatened Sportsman’s competitive position. As a result, company executives have decided it is time for a strategy shift.

Obviously, there is a big number of driving forces in the athletic footwear industry. Each of these driving forces has different impacts—some of them can have a more considerable effect than others on figuring out how much cross-company differences influence market shares and a number of units sold. The first line of most influential factors includes comparative prices, S/Q ratings, and a number of models offered among the footwear competitors. These three most important competitive forces affect customer decisions of which athletic footwear brand to choose. Furthermore, the decisions of customers whether to purchase one brand or another are also influenced by such forces as advertising, celebrity endorsements, the number of independent retail

The following memo aims to outline the results of the audit of Apollo Shoes, give recommendations to improve the company’s operations, and provide justification for our qualified opinion.

Customers make purchasing decisions based on the information they have among products and the values of goods a company offers. For that reason, companies have to promote their products to increase products awareness. In order to achieve organizational goals, companies must understand the market’s needs to ensure the success of their businesses. Such information can be gained through research. The industry that will form the basis of this paper is Western Canadian Shoe Association. The three brands under study are Reebok, Adidas, and Nike.

How well does active-wear fit with the Vigor division (e.g. target customer, advertising and sales strategy, production capabilities)? What possible impact could this new product line have on the Vigor brand name?

Porter’s five forces refers to five forces which can affect a company in relation to external factors. These forces help review the strengths of a market position for a company. The forces are: threat of new entry, competitive rivalry, bargaining power of suppliers, power of buyers, and threat of substitution. These five forces vary in terms of threats from low to high as they relate to Nike (Rowland, 2016). First is the threat of new entry which is relatively low. There has been some but now much new competition recently. This is seen by Under Armour and Lululemon which demonstrates that threat of new entry is possible but not easy. Due to the difficulty of entry into a market overshadowed by the big names of Nike, Adidas, and Reebok the threat is relatively low for this force (Dalavagas, 2015) (Rowland, 2016). This joins the high threat of competitive rivalry. There are existing brands such as Adidas and Reebok which are among Nike’s biggest rivals (Friesner, n.d.). Next is the force associated with supplier power which is weak. There are many sources for the items used to produce Nike equipment and merchandise. This allows Nike to have the choice of suppliers. If one supplier does not work, Nike can go with a variety of other suppliers (Rowland, 2016). The fourth force is buyer power. The customer determines how well Nike will do as a business. The customer can choose which company to buy their shoes and clothing from and can switch companies throughout the process (Rowland, 2016). Last is the threat of substitution which is high. The high price of Nike shoes makes them inaccessible to many people. There are “knock” off versions of the name brand shoes which look very similar to the expensive Nike brand. A person could go to a different store and find a similar shoe at a less expensive price (Friesner, n.d.).

High level of commitment from the dominant coalition which trickled down the whole organization structure.

the company was acquired by VF Corporation. Today, as a subsidiary, the outdoor and action sports

As one of the leading companies in the athletic shoe industry, Debel has experienced success in many areas. Debel has thus far successfully differentiated themselves from other competitors. Many players in the industry seemingly began with a strategy of differentiation but suffered from tunnel vision and focused mainly on the quality of shoes being produced. To combat other differentiation focused companies in the market place, Debel has invested in not only producing high quality shoes, but also a wide range of model for consumers to choose from (488), two celebrity endorsements (Oprah Letterman and LaBron Game), and traditional marketing and retailer support. The financial outcomes of Debel’s decisions will be discussed in the following text.

Distribution – to make certain they are getting the latest most innovative products to customers quickly