Foot Locker Case Analysis
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Case 13 — Lady Foot Locker
1. Preparation
Have a table writer:
2. Analyze and Record Problems and Their Core Elements
Time?
February 1997
Give outline & introduce discussion:
Bill Wyatt, general merchandise manager at Lady Foot Locker, is faced with a decision about launching a campaign with signature products. The campaign should be based on a celebrity endorsement with Rebecca Lobo (most popular baseball player in the WNBA). The collection is intended to be made in cooperation with Reebok.
LFL is part of the Woolworth Athletic Corporation, GM is Kathy Daveport
Who are we?
Consultancy for foot locker – Support Bill and his team in his decision making and prepare for meeting with Kathy and Reebok
What industry are we in?
Women Sports footwear
Who are our customers?
End customers, as LFL is a retailer
3. Analyze and Record the Current Situation — Facts
Phase I. Environment
Economic Environment:
Social E.:
Sales for women shoes are not as great as for men’s or kids’ shoes (does anybody think social factors are a reason?).
Political E.:
Environmental E.:
Technological E.:
There are many innovations with cushioning technologies. What is your opinion, is every special cushioning technique really an innovation or a me-too USP?
Legal E.
Phase II. Industry
General:
•
Total athletic footwear sales going down (to est. 324 pairs in 1997)
percent of total footwear going down — does anybody know the reason? Experts say that there is a shift to sandals and casual footwear
•
Is the industry mature and what does this mean for competition?
•
How do companies try to increase sales?
Segmentation has increased (70s and 80s basketball, tennis, running, and fitness) and it has become more important in which segment one competes
Differentiation
Branding (incl. Celebrity endorsement)
•
What are the main industry suppliers and do they use celebrity endorsement?:
Nike (market leader)
Celebrity endorsement: Michael “Air” Jordan
Reebok (declining share)
C.E. Shaquille O’Neill
Fila:
Grant Hill
Adidas:
used to be market leader
•
Going back to the industry of shoe retailing – what does the text say about the competition between companies and channels?
no specialized stores for women’s athletic footwear
competitors are dept. stores/supermarkets
Bargaining power of suppliers:
Moderate to high (LFL needs them, but they need LFL, too)
Rivalry in the channel:
Low to moderate, no direct competition, only with supermarkets
Rivalry between brands:
High (indicator: hard to differentiate, frequent innovations, high advertising costs)
New entrants:
Tough question, some information missing here, e.g. margins.
Mature market and LFL well positioned, main competitors department stores anyway пє probably low danger of new entrants
Substitutes:
Low to medium
Other sport shoes (e.g. Harley Davidson or so)
Sandals, casual shoes
Buyers:
Moderate
Low switching costs, however, they would need to go to a department store, few other specialized shops for women
Overall:
Moderate, mature market but excellent position
Phase III. The Firm
Overview:
Foot Locker belongs to the Woolworth Athletic Group (very profitable). They were the first mover with separate stores for women and started the boom for women athletic shoes. Main target customers are 18 to 34 year-old active female, 12 to 17 year-old are also important. Management considers