Reebok Swot Analysis

SWOT Analysis

Reebok experienced a period of strong growth and success in the 80's and 90's, though new developments in the sports market are challenging Reebok and are changing its competitive situation. The following analysis gives an overview of were Reebok is standing at the moment and what their challenges for the future are. On the basis of this analysis Reebok can set out their strategy for the future and anticipate on the opportunities and threats they are facing.

Strengths

Size & strong brand awareness and perception.

For decades Reebok has been one of the leaders in the sportswear market and has had a large market share and market presence in especially the American market. Due to this large market presence and the performance of the company in especially the 80's and 90's the brand has gained momentum and has a great awareness with the typical customer. This awareness and the strong perception help marketing the Reebok brand and overcoming future challenges.

Wide range of celebrity associated sponsorship

Affiliating itself to globally renowned celebrities Reebok enhances the company name among many different customer groups and reaches a large base of their target customers. The wide range of celebrity individuals and celebrity teams & associations they have under their umbrella help in marketing the Reebok brand and in increasing the appeal with the Reebok brand, something which has become increasingly important in the 90's.

It's strong position in the women's sector

Reebok in the past has anticipated perfectly to the new and upcoming women's sector in the sports markets, whereas other companies are relatively late to react in this market. With a large market share and a growing popularity in this sector, the women's sector is one of the main strengths and sources of revenue for Reebok. As women are very sensitive to trend and are on average spending more on sport's clothing and shoes than men do, this market has already proven its value and has a still large potential for the future. Since Reebok has established itself so firmly in this market they are likely to reap the benefits for the decades to come.

True product innovation

Reebok has a strong record of technological innovations and improvements for its footwear and after some difficult years they are again managing to be in the top league of product innovations and being able to launch several new product lines.

Weaknesses

Maturing US markets, flat revenues and declining income

Recent numbers show that Reebok's US combined footwear and apparel revenues dropped 3.5% and its footwear market share dropped 11.8% (1994-1996 period). As this indicates, Reebok's revenues are flattening out and its income is declining. This trend in Reebok's result is partly due to the fact that the US market seams to be nearing maturity and that they have lost market share to main competitors in crucial market segments. Reebok will have to find new sources of revenue and will have to reposition itself to improve their financial situation and to guarantee growth for the future.

Shift in core consumer groups

Reebok's traditional core consumer base no longer is the sweet spot in terms of athletic footwear and apparel purchase volume and frequency. The recent trend is a shift of importance in buying segments from the 25-39 and 40-59 segments to the 12-17 and 18-24 year old consumer segments. Reebok's core consumer base for decades has been mainly composed of the older consumer segments and therefore Reebok is suffering from this recent trend and will have to reposition and refocus to win customers in the younger consumer segments. Recent figures don't look to good though as Reebok's market share in the 12-17 consumer segment, which is becoming more and more vital for company success, is declining.

Mixed marketing message

Reebok has been experiencing problems with choosing the right marketing campaign and in reaching their target customer with a consistent marketing message. This unclear and constantly changing marketing message may in turn lead to a mixed and unclear consumer and retail perception of what the Reebok brand stands for and contribute to the declining sales they are experiencing

Opportunities

Increase average shoe selling prices

Reebok is still selling at lower prices compared to the competition, especially the direct competitors Nike and Fila are charging prices of on average 10$ more than Reebok does. This gives them some space to increase their prices and to introduce higher-end product lines competing more directly in the upcoming market and generating higher revenues.

Geographical expansion

As Reebok

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