you work in the marketing department of a small sportswear and accessories, but a proposal to diversify into sports shoes is under consideration. your marketing director asks you to write a report on the advantages and disadvantages of entering the sports shoe market to help him prepare for a meeting to discuss the proposed diversification. Write a report in a suitable form to present to your marketing director. make up whatever names and information you need.
The best way to do this is present the information as a SWOT analysis. Strengths, weaknesses, opportunities and threats.
So some things you might consider
Strengths,
in line with current business, staff already 'talk' about this market
weaknesses,
large initial cash outlay to have stock as you need to have stock for many sizes and makes.
storage will cut down selling area,
needs different display to sportwear - another cash outlay.
opportunities
new market for you, and may increase foot fall because of people looking for sports shoes, hence may sell more sportswear and accessories.
threats
a saturated market, many stores including supermarkets stock sport shoes.
Thank you very much for your help.
[Your Name]
[Your Title]
[Date]
[Marketing Director's Name]
[Position]
[Company Name]
[Company Address]
Dear [Marketing Director's Name],
Subject: Advantages and Disadvantages of Entering the Sports Shoe Market
I am writing to present a report outlining the advantages and disadvantages of diversifying our product offering into the sports shoe market. This information will assist you in preparing for the upcoming meeting where we will discuss the proposed diversification.
Executive Summary:
The purpose of this report is to provide an analysis of the potential advantages and disadvantages associated with entering the sports shoe market. By considering both sides, we aim to weigh the risks and opportunities that this diversification could bring to our small sportswear and accessories company.
Advantages:
1. Market Growth and Demand:
The sports shoe market has experienced remarkable growth in recent years due to increasing consumer interest in sports and fitness activities. This provides us with an opportunity to tap into a growing market segment and attract new customers who may also be interested in our existing product offerings.
2. Opportunities for Brand Extension:
Diversifying into sports shoes allows us to leverage our existing brand image and customer loyalty. By introducing high-quality sports shoes in line with our brand ethos and values, we can extend our brand presence and create additional revenue streams.
3. Increased Sales and Revenue:
Sports shoes generally have higher price margins compared to other sportswear items and accessories. Introducing this new product category can potentially boost our sales and revenue, leading to increased profitability.
Disadvantages:
1. Intense Competition:
The sports shoe market is highly competitive, with established brands dominating the industry. As a small company, we will face significant challenges in capturing market share and establishing ourselves among the well-known competitors.
2. Need for Expertise:
Entry into the sports shoe market requires specialized knowledge in areas such as design, manufacturing, and distribution. Acquiring the necessary expertise might involve additional investment in hiring or training employees, or even outsourcing certain aspects of the production process.
3. Inventory Management and Seasonality:
Unlike other sportswear items, sports shoes are subject to seasonality effects. Poor inventory management can lead to issues such as stockouts, excess inventory, or markdowns due to changing trends and seasonal fluctuations.
Conclusion:
After considering the potential advantages and disadvantages of entering the sports shoe market, it is evident that this diversification offers significant opportunities for our company. However, it is crucial to approach this decision with careful planning, considering factors such as competitive landscape, expertise requirements, and inventory management.
Recommendation:
Based on the analysis presented, I recommend that we proceed with diversifying into the sports shoe market, acknowledging the potential risks and rewards associated with this venture. To mitigate the disadvantages, we should develop a comprehensive market entry strategy, including investment in talent acquisition and strategic partnerships, while maintaining a strong focus on brand differentiation and customer value.
I hope this report provides you with the necessary insights to make an informed decision on whether to enter the sports shoe market. I am available to discuss any further questions or concerns that you may have.
Thank you for considering my recommendations.
Sincerely,
[Your Name]
[Your Title]
[Contact Information]