Course Instructor

NameCourseTitleCourseInstructorInstitutionDate of SubmissionCASE:Geox: Breathing Innovation into ShoesGeox’sis a leadingshoebrandin themarket,anditwaspreciselyrankedat positiontwo in 2009 as thelargestshow2009. Thiswaslessthan 15 yearssince thebusinesswasfoundedby its distinguishedchairmanandfounder,Mario Moretti Polegato. Thebusinesswasopenedin collaboration with otherbusinessperson,five in numberto be exact.Since then,Geox has madea nameforitandis themostpopularbrandof showin thecasualfootwear(pg. 2).

Businessidea

Theideabehind theGeox shoescamefrom a verydramaticturnof event.Mario Polegato wasbornin a wine producinganddistributioncompany.Thefamily,in fact,produceda veryfamoustypeof wine acceptedin theItalian market.Further,thefounderhadstudiedwine productionin an officialinstitution.Assuch,hehadknowledgeandbackgroundtechniquesin thefieldof wine production.Itfollowedin theyear1992 thatheparticipatedin a wine tradefairin Nevada, United States. Itwasduring thesummerandaddingmattersworseNevada is a relativelyaridstate.Mario decidedto takea walkduring a breakin thedryenvironmentwearinghis rubber sneakers. Itturnedout thattheheatwastoounfathomable,anditsuffocatedthelegsandmakingthem excessivelyuncomfortable.Hewenta stepfurther,usinga kitchenknife,andmadeholeson thesoleof thesneaker in orderto maketheconditionsfriendly.Oncebackin Italy, his nativehome,hevisitedallstorestryingto lookfora shoethat allowedbreathing butallin vain.Heembarkedona researchto comeup with a shoethat allowsbreathing andat thesametimepreventedmoisture.By 1995 andin collaboration with universities,Mario cameup with theshowthathehadin mind(pg. 2-3).

Fiveforces

Fiveforcesis a techniquethat is usedto analyzetheforcesin theenvironmentthat influencethedecisionandalsodeterminethestepstakenby an individualfirm in orderto remainrelevantin themarket.In marketingtheseforcesare categorizedinto five differentcategoriesto easeunderstanding.In relationto our topicandcaseanalysis,theywill be discussedbelow in details.

Threatsof newentrants

Beforeventuringinto a businessplan,itis importantto determinethethreatsthat would bebroughtby entranceof newfirms in themarket.Whena companyearnsexcess profitin a certainarea,companieswill be attractedto thatfield.Assuch,theprofitsin themarketwould be sharedby all thefirms that enterthemarket,hence,theneedforcompaniesto protectthemselves. Anumberof methodscan be appliedto prevententryof newfirmsin themarket.Mostcompaniesare protectedby lawand,therefore,operateas a monopoly.Forothers, theymay fightback theeffortsof newentrantsby reducingpricing to a verylittlemarginmakingitnonviable fornewfirms from enteringthemarket.Geox on its partgotinto a marketalreadydominatedby incumbentin thebusiness.However,theone factorthat madethem succeedin theenormouscompetitiveindustryis probablytheuniqueutilitytheproductsprovided.Theshoesare comfortableandat thesametime,theinventionwaspatentedby its novelandfounderof Geox, Mario. Entryinto footwear is openandas suchitis upon thecompaniesto be innovative to avoidbeingobsoleteandlosingcustomers.

Threatof substitutes

Substitutesare goodsthat can beusedin placeof anotherproductandis believedto bringthesameutilityorsomething closerto that.Acarefulanalysisof availability of closesubstitutesought to be identifiedin orderto protecta situationwherecustomersdecidenot to useGeox productandgoon usinga closesubstitute(Harris, pg. 144) The one factorthat could causesuch a situationis thepriceof arealproductrelativeto thatof thesubstitute.Ifthedifferenceis verysignificantandunaffordable, then,customerswill not haveanyotheroptionbutto quittheproduct.Theonlyclosesubstituteof Geox breathable shoecould be thenon-breathable shoesby otherproducersin themarket.Thepremiumchargedto takecareof thebreathing innovationshould be fairandreasonableto convincethebuyerto buysucha product(Orcullo, Norberto A. J, pg. 45-50).

Bargainingpowerof buyersandsuppliers

Bargainingpowerof buyersis a potentialthreatto anyfirm in themarket.Thisis theabilityof consumersto pressurethecompanyinto acceptinga certainpricetheyconsider.Itcan becausedby theenterprise’sconcentrationof customersin one singlearea.Thebuyersareabletojointheir effortsandforcethefirm to acceptthepricesince theyare actingin unison.Toavoidsuch a situation,marketingstrategiesshould aimat diversifyingthegeographicallocationof customersin orderto makeeacha verylittleproportionof clientsbargainingas a unit.Thatwayitis easyto dictatetheprice(Hill andJones, pg. 45). Bargainingpowerof suppliers, on theflip coin,is theeffecton themarketof inputsdue to thenumberof vendorsavailable.Dealingwith a soleprovider is detrimental,anditis costly.Thisis becausethesupplier will dictateon whatpriceto charge,hence,not accuratelyableto determinethecostof input.Like mostfirms in thefootware, Geox sources its suppliesfrom verymanydifferentclientsandalsolocatedin variouscountries.Nosinglesupplier is, therefore,in a positionto chargehigherbecauseitis easyto switchto others (Groucutt, Leadley andForsyth, pg. 224).

Valuechain

Geoxbelievesin offeringqualityto its customers,andthatisclearlystatedin thecorporate goalsandobjectives.Massiveinvestmentis channeledtoward theresearchanddesignfunctionalunitof thecompanyto ensurethatthefashionanddesignof theproductmeettheconsumerstaste.Theproductsshould continueto be improvedto respondto newchallengesof customersandalsodevelopingotherproductswith superiorcapabilities.At Geox, Mario is verykeenon ensuringthattheproductsmeetthetasteof allconsumers.Toaid,thecompanyhadmorethan ten engineersandotherprofessionalwhoworkedtogetherwhileexperimentingandcomingup with a prototypeof a showfitfordifferentconditions.Valuechainis an importantfactorto understandandalsoa vitaltoolin thedesignof a product.Aproductthat meetstheconsumers’specificationandparticularneedsmust gothrough a valuechainin orderto createa satisfyingproduct(West, Ford andIbrahim, pg. 117).

WorkCited

Groucutt,Jon, Peter Leadley, and Patrick Forsyth. Marketing.London: Kogan Page, 2004. Print.

Harris,David. IntegratedManagement.Oxford, U.K.: CIMA Publishing/Elsevier, 2005. Print.

Hill,Charles W. L, and Gareth R Jones. StrategicManagement.Boston: Houghton Mifflin, 2008. Print.

West,Douglas C, John B Ford, and Essam Ibrahim. StrategicMarketing.Oxford: Oxford University Press, 2010. Print.

Orcullo,Norberto A. J. Fundamentalsof Strtegic Management.Manila, Philippines: Rex Book Store, 2008. Print.

Related Posts

© All Right Reserved