L A Gear
.... Gear needs to be able to still promote the fashion side of the shoes. They do not want to alienate part of the market that is purchasing shoes for fashion. There needs to be a fine balance of marketing. Life Cycle Stage § The life cycle stage for the athletic footwear industry is coming out of the “growth” stage and moving into the “maturity” stage. This is due to the increases in cost of producing shoes, which could lead to consumers buying less and wearing existing shoes for longer periods of time. § L.A. Gear is in the “competitive turbulence” stage heading toward the “declining” stage. Since 1989 sales and revenues have continued to decline. There is major competition from Nike and Reebok. There is also competition from smaller athletic footwear companies that are starting to grab market share. The cost of shoes is increasing, so is the selling the price. This may affect consumers buying habits, they may not buy shoes because they look good, but they might buy based on price and functionality. Macro environmental Trends § Due to the fashion and fitness trend in early 1980s athletic footwear has become essential clothing item. The importance of athletic footwear in everyone’s wardrobe is going to continue because it makes the buyer feel young and comfortable. § Economy and prices play a major role in shoe industry. If the prices are increasing the buyers may decide to wear their old shoes instead of buying new ones. § As consumers become more demanding there will be growing importance for shoes that can perform and have fashionable look. As buyers become more aware of the shoes the demand for only fashionable or performing shoes will decrease. International Issues § Due to the American influence on the World Fashion the sneakers have become a universal accessory in everyone’s wardrobe, which gives new opportunity for L.A. Gear to succeed in international market. In international market Nike and Reebok are main competitors to L.A. Gear. To succeed internationally L.A. Gear must customize its products to international buyers tastes and should promote its products with the celebrity athletes in the respective countries. Strengths and Weaknesses § L.A Gear strengths include its reputation for stylish shoes among fashion segment. It has successful combination of good advertising and merchandising. It is able to spot trends in the market that appeal to the consumers. § Its weaknesses include the poor quality of its products. Due to this it had overflowing inventories. It was not able to form loyal retailer relationship. It did not have performance driven image, which affected its expansion beyond women’s segment. Nature of Competition § L.A Gear’s main competitors are Nike and Reebok. Nike emphasizes on performance whereas L.A. Gear and Reebok concentrate on fashion aspects of sneakers. L.A. Gear has to target and attract the men buyers to overtake Reebok. However as the market is expanding L.A Gear is also facing competition from old competitors like Adidas, Keds and Converse, which are struggling to recapture the market share. PROBLEMS, OPPUTUNITIES AND THREATS Problems § LA Gear’s image as fashionable athletic footwear targeting only young women is a problem. It is very risky and difficult to keep up with the latest trends and fashions. Also, it would be very easy for competitors to enter this ...