Competition and business risk Essay Example | Topics and Well Written Essays - 2000 words

Competition and business risk - Essay Example The industry also has celebrity endorsement campaigns. The prospects for long-term growth in the sales of athletic footwear are excellent. Athletic shoes have become the everyday footwear of choice for children and teenagers. Adults buy athletic shoes for recreational activities as well as casual use, attracted by greater comfort, care features, and lower prices in comparison to leather shoes. Athletic footwear has proven to be very attractive to people who spend a lot of time on their feet, as well as to older people with foot problems. The Global Shoe industry has a great amount of shares in the market and is in a position to achieve even more. The company currently has two plants in North America and Asia, each producing 2 million pairs and 4 million pairs respectively. Both plants are operated at overtime to enhance annual capacity by 20%. In year 10, the company’s annual capacity of shoe pair was 7,200,000. This makes sales volume equal to 5.2 million pairs in year 10. Th e company’s staff is capable of bringing in new shoe models, features and styles to keep the product line up to date. In year 10, the company sold 4,500,000 million pairs of shoes to retailers and individuals. 740,000 pairs were sold to private label through contract and bidding (Thompson, Stappenbeck & Reidenbach, 2011). The industry also has various distribution centers that not only facilitate the company but also its consumers. The distribution center includes wholesale sales, retail stores and apparel stores. The other distribution center includes online shopping through the company’s website. The industry also supplies its products through private label sales to multi-outlet retailers. The company manufactures 500 designs of products, which include shoes for different categories, from daily use to specialty shoes designed for walking, golf, tennis etc. The raw material is supplied to the industry by different suppliers, almost 250 suppliers supply raw material of different types. In short, the industry from-time-to-time enhances its footwear with new styling and performance features and alters the number of models/styles in its product lineup. The company strives to enhance its sales volume and standing in the marketplace via attractive pricing, advertising, mail-in rebates, contracting with celebrities to endorse its brand, convincing footwear retailers dealers to carry its brand, providing merchandising and promotional support to retailers, goods delivery times on shipments to retailers, and promoting online purchases at its Web site. Consumer demand for athletic footwear is diverse in terms of price, styling, and purpose for which athletic footwear is worn. Many buyers are satisfied with no-frills, budget-priced shoes, while some are quite willing to pay premium prices for top-of the-line quality, multiple features, or trendy styling. The biggest market segment consists of customers who buy athletic shoes for general wear, but there are sizable buyer segments for specialty shoes. â€Å"The diversity of buyer demand gives manufacturers room to pursue a variety of strategies, from competing across-the-board with many models and below-average prices to making a limited number of styles for buyers willing to pay premium prices for top-of-the-line quality† (Thompson, Stappenbeck and Reidenbach, 2011). Price, styling, features, quality and a wide choice of appropriate styles and models typically have the