IntroductionConverse is a leading global manufacturer, designer and marketer of athletic shoes for men, women and children. It was founded in 1908 and has a subsidiary of Nike Inc.
since 2003. During World War II, this shoe company shifted its manufacturing from the public domain and started making footwear for the military. Since it was one of the few manufacturers of athletic shoes therefore for over a half century the company dominated the American shoe market.
It has its headquarters at Boston, Massachusetts, United States.ProductsThe American shoe company “Converse”, primarily manufactures basketball shoes, lifestyle brand footwear and apparel. It is known to manufacture all kinds of athletic footwear. Positioning and Market ShareConverse is an American sports, casual sports and apparel company which focus on individuality and self expression; hence the company has made special product lines for people of many communities including soccer players, skateboarders, artists, teenagers, basketball players and others. It is also a manufacturer, designer and marketer of quality footwear for men, women and kids. Converse has generated revenue of 30.
6 billion US dollars. According to a survey in April 2014 conducted by SportsOneSource amongst U.S. consumers, Converse ranked in the top 10 sports shoe brand. PEST AnalysisPolitical AnalysisThe government policies of any country always have a intense impact on the businesses.
The impact is even more when the businesses are engaged globally. The US government policies are always growth-oriented which helps the organization to grow and expand globally. The trade regulation policies, stable federal government and global competitive tax policies by the Federal Reserve fosters the growth of the company. Converse is known for its environmental-friendly business strategies, it receives tax benefits in this way.Economic AnalysisConverse has an international business. The economic issues that are being faced by the company include the high production demand but low wages. This has led to many strikes and dissatisfaction to the employees. Another key issue that comes to light is the stability of currency exchange and international interest rates which is very critical to constant growth of company’ profit margins.
However, the higher inflation rate at the domestic level i.e. the United States with the fluctuating currency rates with respect to Dollar always had unfavourable consequences on the annual profit margin for the company. Social AnalysisGlobally, the consumers have now become brand conscious. The brand they wear represent their status. They associate Converse with quality, stature, individuality and self expression. This brand awareness has helped the business of Converse to expand and grow.
They were the first company that introduced concept of sports in the footwear and apparel industry. Apart from this, the logo of a “Star” itself speaks about the brand. Technological AnalysisConverse is regarded as the pioneer to introduce various sports footwear and apparels which has captivated the whole world. It has always adapted the latest technology to revolutionize their products. This technological novelty has not only helped the company to set forward from their competitors but has also polished and amplified the production process. It has also stolen being one of the global brands which took a world-shattering step to stop the usage of chemicals and other raw materials which are deteriorating for the environment.
Competitor AnalysisMajor competitors of Converse are Adidas, Reebok and Puma.Strengths of Adidas Adidas has a long heritage and high brand value. Adidas sponsors major sporting events creating its brand value there. The company has worldwide presence.
Adidas offers a diversified range of products ranging from shoes, apparels, equipments and accessories. Adidas has an excellent advertising and marketing approach. Weakness of AdidasThe products offered by Adidas are sometimes too costly due to the innovative technology or manufacturing method to be afforded by everyone.
It has a strong competition which can lead to brand switching. Strengths of Reebok Reebok is amongst the vast manufacturer and seller of athletic footwear and apparel globally. It is known for its fitness products which it introduces each year. The cost of the products is not only in the premium range but also in mid-range. It has a Reebok value store that targets lower income groups thus segmenting its products for each class of society. The brand has been endorsed by many sports stars and movie celebrities globally to make it more desirable.
Weakness of ReebokReebok faces tough problem from fake and duplicate sales of its products. Its brand image is adversely affected by any controversy associated with the brand ambassadors. Strengths of PumaPuma is the foremost manufacturer of enthusiast droving shoes and racing suits. It has entered into partnerships with eminent companies like Ferrari and BMW.
It is a very innovative brand and has a very affluent Research and Development team. The Company manufactured the first innovative brush soles, which were suppose to be the most comfortable running shoes. It has an outstanding brand name throughout the world.
The brand has brilliant management and marketing approaches and has the advertised the products excellently and has made it eye-catching throughout the world.Weakness of PumaPuma has a very tough competition and limited market share compared to its competitors. It is vulnerable to high brand switching which means it is difficult for the company to have loyal customer base.
Unique Selling Proposition for ConverseConverse offers trendy and vibrant sports shoes and apparel for men, women and kids. Converse shoes are notable by a variety of features which includes the company’s star insignia logo, the All Star’s rubber sole, its smooth rounded toe and wrap-around strip.Converse can expand to other casual category of shoes by increasing its product mix.SWOT analysisINTERNAL Strengths:Converse deals with a variety of sports and athletic apparels, shoes and other accessories targeting especially the youth.Its range captures global designs and trends and also offers special editions that are launched for special occasions.The company has a vast history since 1908 and therefore has a huge loyal customer baseIt partnership with RED had given more humanitarian effect to the brand.Strong backing by the parent company Nike gives it a big boostIt incorporates the concept of lean which means minimum wastage and cost Weakness:It has a very tough competition from existing brands which means the limited market share growth for the brandConverse products can any day be cannibalized by its popular parent brand; NikeEXTERNAL Opportunities:The reputation of the brand is very well known across the worldThere is a scope of more product development for Converse as most of its products are fashion sensitiveConverse can also diversify into shirts, eye wares, accessories as these are high value itemsHuge platform for marketing and promotions Threats:This industry is very price and fashion sensitiveLocal market products also poses risk to the brandCounterfeiting or fake imitation products available in the marketBeing a global brand, its business can be affected by recession and economic fluctuationsConclusionConverse is a leading footwear brand globally.
It has a huge potential to grow in this ever changing market which is driven by brand name and fashion status. Since converse has a huge backing of its parent company Nike Inc. and also incorporates the concept of lean for its quality management, it can take a risk of diversifying into other segment such as shirts, eye wares and sports accessories.
This will give it a platform to increase its market share and earn profits. ReferencesJKK Ho, European academic research (2014). Formulation of a systemic PEST analysis for strategic analysishttps://s3.amazonaws.com/academia.edu.
documents/45856248/Week4_PEST_Analysis.pdf?AWSAccessKeyId=AKIAIWOWYYGZ2Y53UL3A=1516297714=mEKtXZoDT05Yx0W2PwHPnixfYyQ%3D-content-disposition=inline%3B%20filename%3DFormulation_of_a_Systemic_PEST_Analysis.pdfRevenue of Converse worldwide from 2010 to 2017 (in million U.S.
: All about Conversehttp://www.vault.com/company-profiles/general-consumer-products/converse-inc/company-overviewFT Rothaermel.
(2015). Strategic Managementhttp://dspace.elib.ntt.edu.vn/dspace/bitstream/123456789/7607/1/Frank%20Rothaermel-Strategic%20Management.pdfhttp://www.vault.com/company-profiles/general-consumer-products/converse-inc/company-overview