Gear Case Analysis Essay
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Sample Essay on Gear Case Analysis
It is of importance to note that L.A. Gear in order to gain a better market share has to consider the activity of its major competitors/market leaders as well as the market.
Nike by far is the leader in athletic shoes production that at the same time is one of the lowest cost producers simply because this company managed to switch virtually all of its production to the third world countries of the East Asia. Reebok appears o follow the lead set by Nike, yet is less aggressive to invest the savings obtained from the discounted East Asian production into hyper expensive celebrity advertisements.
The major costs nevertheless, for Nike come from the top notch advertisement campaigns that feature celebrities and stars. By saving big time on the actual production, Nike strives to invest as much as possible in the advertisement in order to create trust and loyalty among the athletes and fans of the stars that participate in the Nike commercials. Such strategy of Nike certainly constantly yields its fruit giving Nike ever growing market share and dollar growth.
Other producers of shoes like Adidas, Converse, and Keds appear to follow focused production concentrating on trendy designs and probably market share growth. These companies together with the market leaders (Nike and Reebok) differ from L.A. Gear, which in turn is perceived as unpopular among customers. L.A. Gear shoes are viewed as shoes inferior to shoes produced by other athletic shoe producers based on performance.
LA gear’s current failure is justified by the situation ‘between two chairs’ when the company provides good shoes, which are neither trendy nor reputable. While the main competitors focus either on advertisement or trends (or both) L.A. Gear does not take any action to remedy the situation. As a result L.A. Gear loses males loyalty to Nike and market share and sales to Adidas, Converse and Keds.
L.A. Gear’s inability to focus on and invest in building trendy reputation and outstanding performance, logically created a negative image in the minds of consumers who will not buy second-tier shoes. As a result, the company is doomed to failure unless some urgent action is taken to revitalize the corporate position.
In order to improve the market share and dollar sales figures, Leardning Team A proposes L.A. Gear to use the strategy currently deployed by Nike and gain mutually beneficial partnership with key US athletes in order to remain competitive with Nike, Reebok and other athletic shoe producers. Such strategy of partnering with athletes has proved profitable for Nike and other companies already and is believed to help L.A. Gear stem the current crisis caused by the current overwhelming competition, falling sales, and lack of proper reputation.