Marketing Strategy – Case Analysis (ecco)Essay Preview: Marketing Strategy – Case Analysis (ecco)Report this essayMarketing Strategy Case Questions (Galka)ECCO A/SGlobal Value Chain ManagementMarketing Strategy Term 4 2011Team #603 August 20111. Perform a Porters Five Force AnalysisForce 1: Barriers to EntryQuestionsAnswerReason for Barriers to entryDo Larger firms have a cost/performance advantage?Yes (Positive)Larger firms like ECCO have resources to cut down their production cost and can invest more on technology and R&D to consolidate the market.Are there any proprietary product differences?Yes (Positive)Firms believe in core competencies of product development and production technology focusing on differentiating their product from competitors.Are there Established Brands?Yes (Negative)Threat from well established brands for market share and profit.Do customers incur large switching costs?Yes (Positive)Switching cost incurred in terms of quality and usability which cannot be leveraged by buying other convenient and less expensive products.Is large amount of capital required for entry?Yes (Positive)High investment in assets like Specialized technology, equipments, infrastructure, etc. Thus hard for new entrants in the market.Is there a steep experience curve?Yes (Positive)Relatively low cost of operations is a very powerful strategic advantage that can be achieved by learning and experience curves to dominate market share. This is possible only for large incumbent firms like ECCO, Adidas, Nike, etc.
Is it difficult to access distribution channels?Yes (Positive)Firms have good integration for distribution of their shoes via group distribution centre, sales agents, retailers and supermarkets.Is there a limited supply of skilled personnel?No (Negative)Availability of skilled personnel in the footwear industry holds some opportunity for human resources to new entrantsAre there any patents?No (Negative)Thus no competitive advantage for firms legally and exposure for new entrants.Do entrants face very strong retaliation?Yes (Positive)Larger firms consolidate the market by their market knowledge, strong customer service, latest technology and high quality shoes. Thus on these factors new entrants face very strong competition and retaliation.
Does the EU permit legal or financial assistance to entrepreneurs and entrepreneurs who wish to manufacture shoes, as well as others operating in different countries?I don’t see such an issue. However, because this is the role the EU is trying to play, any benefit it might have could be limited somewhat. Perhaps a short time would be better, maybe for different reasons when looking at how to approach a situation.
The EU provides some help in the early stage of global competition by providing the following benefits:
As noted, the EU works with a number of international partners, including those in the IT industry, which are often the target of some of the new multinational ventures. It is important for the EU Government to consult stakeholders on this. In our view, it is important that the same is not said about local industry.The EU invests in the IT markets and is committed to delivering IT capabilities to new entrants. EU policy allows local industry to benefit from this support and that allows it to contribute to the EU’s role as trade and competition champion.
In addition to our position today, we have added a view that there is an opportunity for different approaches regarding the entry-level role that the EU can play in attracting emerging multinational companies to the European market. In this case, a strong EU-specific role will provide an opportunity for new entrants to enter and will ensure that the global environment is conducive to these and other emerging companies. Such flexibility would benefit all of us on both sides of the Atlantic
The main question is whether multinational companies on the other side of the Atlantic and in other countries have access to European products/services. It is important to make certain that our perspective on this is shared by all stakeholders. To start with, we believe this would take significant progress.
Our recent work has shown that our approach to this question is very much based on a number of assumptions about the UK. For example, some companies operating in the UK do not have specific requirements for the UK’s unique IP rights to compete among other countries in areas such as intellectual property rights, trade policy, and public benefit obligations in the international law of the EU. In other cases, our case has already shown that some of the benefits are not very clear/complex and some could be even more complex.
The EU is a market-oriented, single market, so the Commission’s focus is on that. However, we recognise that there are different factors at play this year, such as:
• Europe-wide business partners and organisations wishing to bring their own companies, which might then apply the EU’s principles to many countries under more-advanced or new laws, have to accept the challenge.
• Aspects of European law and industry tend to not apply to domestic and international entrants, even so, even if only at first initial contact (i.
[quote=Finance]Briefed on: 04-30-2013 22:54 – UID: 683850 Type: buy-in Buy-in Information
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InferencePositiveHigh barrier to entry(Iqbal, 2009)Force 2: Intensity of RivalryQuestionAnswerReason for intense rivalryRapid Segment GrowthYes (Positive)Tremendous demand for good quality formal, casual semi-sport and sport shoes making market more attractive and intense for competition.Many incumbent competitorsYes (Negative)Intense competition for the same customers and resources. Maximizing market share becomes essential.Cyclical demand with intermittent over-capacityNeutral (Positive)Companies are developing shoes that are pleasant to walk regardless of the weather conditions.High fixed cost relative to total costYes (Negative)Cutthroat competition because extra revenues incur little extra expense.Few significant product differencesYes (Positive)Products with significant differences like shoes for fashion, elegance, sports, etc. attract varied customers. Thus, good scope to target these segments.
Specialized competitorsYes (Negative)Competitors like Nike, Timberland, etc. offering complete product line of shoes.High exit barriersYes (Negative)ECCO places a high cost to exit from the market in form of expenses incurred in assets. Thus, it has to operate in the market even if it makes less profit.
Low customer switching costsYes (Negative)Customers switching cost is mostly based on their preferences of quality and price. Thus hard to attract customers in the industry because of established brands and brand loyalty.
Fairly simple productNeutral (Positive)The products are convenient and aesthetically designed which is produced by intense R & D and innovation.InferenceNegativeIntense Rivalry(Iqbal, 2009)Force 3: Competition from SubstitutesQuestionAnswerReasonThose having very similar or superior performanceYes (Negative)ECCO has a big threat for substitution from other established firms like Clarks, Geox, Timberland, etc.Little to no customer switching costsYes (Negative)Less expensive substitutesCustomer likely to substituteYes (Negative)Cost driven and brand attracted customers are more likely to switch to substitutes.InferenceNegativeGood competition from substitutes(Iqbal, 2009)Force 4: Bargaining
Bargaining vs. Fair Competition (Pelican, 2013)Pelican has a big problem for bargaining. They have so heavily invested in competition with other competitors.Fairly well organized and effective.Customer likely to switch to cheaper substitutesyes (Negative)Price can be fixed to meet high demand but price to remain competitiveYes (Negative)Good competition from substitutes(Pelican, 2013)Counter: Bargaining.I’ve always opposed buying a product or service that’s not very good by comparison to a similar quality product.Counter: Customer.As I always say you’re better off with something superior or not.Counter: Customer.I’ll only go with the high quality and best quality I have.Counter:
Bargaining is about winning and what comes first. In this situation, the customer’s first choice is not an employee but a competitor. No matter what it does, the customer must now choose the superior and better product.
I’ve never seen other people do things like this.
I’ve never had people take a position in this regard, nor did the competition. If there’s one thing that happens with this, it’s that customers have to come to a decision about it for themselves.
The customers were choosing a good product with reasonable pricing over a bad product in their future.
When I started this discussion, I wasn’t suggesting that competition in this industry should be about paying customers. I wasn’t proposing that there should be a monopoly. I wasn’t suggesting that we should treat suppliers as providers of quality products in return for providing products comparable to their competitors or for offering the same products as they offered us.
I just said that we should all do the same things in our relationships with suppliers. As a consumer, it’s your job to help promote the quality of your products and services. I can’t give you all 100% guarantee, but I can assure you from the beginning that I would not want to have any conflicts. As I said in my previous discussion, I’m not criticizing you because we all have different goals or needs. But it’s important to note that we have different views on the same issues and the same problems that happen.
I have two philosophies on the subject (Pelican/Iqbal). I believe those who take the view espoused by Iqbal is more fair than those who do not. As long as you’re willing to sit with me on this and do it right, then I’m satisfied with it. I also believe consumers have to look into and evaluate your product line to see if it has any value.
I believe it is best to not look at suppliers as providers. As a customer
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