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Reebok presentation for in context to International Business subject...

Reebok presentation for in context to International Business subject...



Its useful to MBA student who study International Business as subject.

Its useful to MBA student who study International Business as subject.



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    Reebok presentation for in context to International Business subject... Reebok presentation for in context to International Business subject... Presentation Transcript

    • REEBOK Ruchi Dalal MBA Sem – III
    • Company profile • Founded in England in 1895 as J.W. Foster and Sons, a manufacturer of track shoes • Renamed Reebok in 1958. • North American distribution rights purchased by Paul Fireman in 1979. • Fireman and a few investors bought the parent company in 1984.
    • PRODUCT LINE • The product line of a Reebok retail outlet generally consists of sports accessories. The product line is divided into four sections: 1) 2) 3) 4) 5) Shoes Apparels Sports equipment Exercising / health products Personal grooming.
    • Major competitors At Global level • Nike • Woodland • Liberty • Lancer • Lotto • Puma • Red chief In India • Bata • Lakhani • Action
    • Reebok in India • It entered the Indian market in the year 1995. When Reebok entered India, fitness was a primitive industry in India. • People used to buy branded shoes only for fashion and image. • Reebok started educating people about the fitness and by the time Reebok established itself in the Indian market, a significant portion of consumers started buying sports shoes for fitness activities. • In year 2006, Adidas acquired Reebok for USD 3.8 billion. • In India, Adidas and Reebok have integrated in the year 2011. Reebok India strategy is different from Adidas strategy.
    • PEST Analysis Political Factors • In India, government allows foreign companies to establish their business, this is favorable situation. • In Q1 2012, the central government approved 100% FDI in single brand retail (with 30% goods sourced from Indian SMEs) which means foreign sports shoe retailers can now set shop more easily in India.
    • Economic Factors • GDP growth rate is estimated at 7.3% for the FY 2012-13, up from 6.8% for the previous year. • Inflation rate has fallen to 6.8% as compared to 8.0% last year. • The rupee has depreciated to record lows and the country’s high trade and fiscal deficits are pressurizing financial markets. • The middle class is rapidly emerging with increase in the no. of DINK households accompanied by an increase in disposable income; this is acting as a driver for the increasing demand for new goods like branded sport shoes.
    • Socio-Cultural Factors • In 2010, approximately 39% of the Indian population was in the age group of 20-44. • This growing young population drives up demand for branded sports shoes. • The country is steadily moving towards a more urbanized setup with a forecasted 32% of population attributed to urban India by 2015. • The urban Indian middle class as a whole is slowly moving away from its unhealthy Dalda consuming habits, and is adopting a healthier lifestyle which includes exercising and playing sports.
    • Technological Factors • The online retail market is growing at an annual rate of 35% helped by increased internet access; and easy returns by e-tailing websites like Myntra.com make it easier for the consumer to buy online. • India is poised to have the third largest no. of internet users in the world by 2013.
    • SWOT Analysis Strengths • First foreign player to change its existing shoe designs to fit the Indian foot better. • 1000+ stores across India – highest no. of single brand sports shoe retail stores in the country Weakness' • “Factory outlets” offering discounts all year round lead to brand dilution • Franchisees currently work on the Minimum Guarantee model which has led to high losses for the company in wake of dipping sales.
    • Opportunities • Adidas is planning to reposition the Reebok brand in India in 2013. • Change to the Cash and Carry model from the Minimum guarantee model will drastically reduce losses in the near future. Threats • Reebok was booked for Foreign exchange management act (FEMA) violations in July 2012. • Plan to switch to Cash and Carry model could result in the closing of more than 300 stores.
    • Related Facts • • • • 40 Main Footwear Factories in 8 Countries 600 Apparel Factories in 29 Countries 450 Raw Material Suppliers 27 Freight Forwarders • Transportation modes include Ship, Truck, Rail and Air • 34 Custom Brokers • Over 5,000 purchase orders placed each month