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Reebok Strategic Audit

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Read Case 14, "Reebok International, Ltd. (2002)" pages 14-1 through 14-42 in your text. Based on the case, your readings to date, and any additional resources necessary, you are being asked to complete the following sections of a Strategic Audit:

1. Analysis of Strategic Factors

2. Strategic Alternatives and Recommended Strategy

3. Implementation

4. Evaluation and Control

For a sample outline of a Strategic Audit review Appendix 15.C in your text (pages 371-375).

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Solution Summary

Reebok Analysis; Reebok vs. Addidas, Reebok vs. Nike - 2 attachments - (1st attachment) - 9 Pages - 3267 Words - 104 Paragraphs - (2nd attachment) - 5 Pages - 1394 Words - 49 Paragraphs - 4 + References

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Question:

1. Analysis of Strategic Factors - Here is a step by step example for you to follow - http://www.auburn.edu/~boultwr/html/body_strategic_analysis_model.htm

2. Strategic Alternatives and Recommended Strategy - A firm's strategic goals drive business strategy and address the key success factors of the industry. Strategic goals often include the vision or mission statement for the business. They should also set the direction and standard for financial and market results against which actual performance can be measured. The two most common strategic goals are:

1. Competitive and market goals that define market share or market growth and penetration for the firm's products or services.

2. Financial performance in terms of key ratios, like return on investment and sales, and growth in revenues and/or profitability.

3. Implementation - The Business strategy analysis begins with a description of the strategic goals and business strategy of the firm. Its implementation is then analyzed in terms of the firm's functional and operational capabilities and the resulting financial and competitive performance. Also, the analysis concludes with recommendations that address the critical issues and result in changes of product-market strategy or functional implementation.

4. Evaluation and Control - Understand Loss Potentials

Determine the Organization's Exposures to Loss Potentials

Identify Controls and Safeguards to Prevent and/or Mitigate the Effect of the Loss Potential Considerations: The actions taken to reduce the probability of occurrence of incidents that would impair the ability to conduct business.

Evaluate, Select, and Use Appropriate Risk Analysis Methodologies and Tools

Identify and Implement Information Gathering Activities

Evaluate the Effectiveness of Controls and Safeguards

Risk Evaluation and Control

Security

This article shows you all of the main elements in developing a strategic audit - excellent outline and easy for you to follow -http://www.bus.iastate.edu/jdhunger/OldClasses/478Spr03/478Ch14Spr03.ppt#283,5,Main Elements of Strategic Audit
I would first start out your assignment with a proper Introduction of the company. I would write it something like this...

Introduction - following along the guidelines with the link http://www.auburn.edu/~boultwr/html/body_strategic_analysis_model.htm

J.W. Foster and Sons, a Massachusetts based corporation, was founded in 1895 by Joseph Foster and eventually became Reebok in 1958. Reebok currently employs over 9,000 workers and is second in the United States in athletic shoe sales. Their global athletic shoe market share is 9.6 percent and their annual revenue and net income were $3.7 billion and $192.4 million in 2004, respectively. Their annual research and development budget was $54.6 million in 2004. Reebok's major subsidiaries include Reebok Classic, Rbk, Rockport, Greg Norman, and The Hockey Co. The combination of adidas and Reebok will give the combined company revenues over three times as large as their next closest competitors, Puma and New Balance, in the athletic footwear industry. Combined, all other worldwide competitors made up $5.8 billion of the $20.4 billion in global athletic footwear revenues in 2004.

When British born Joseph William Foster invented a spiked running shoe in 1894, it gained enough popularity among his fellow runners to inspire the formation of his own company, JW Foster and Sons. In 1958, Foster's grandsons created a companion company, Reebok (named for the speedy African gazelle), which eventually absorbed JW Foster and Sons. Reebok was a little-known British shoe company when, in 1979, sporting goods distributor Paul B. Fireman spotted its shoes at a Chicago trade show. Fireman acquired an exclusive license to distribute Reebok in North America, and subsequently financed Reebok USA. Reebok started in 1979 by Paul B. Fireman. Fireman was first interested in Reebok when he saw some British athletic shoes that were made by Reebok International, the European company. The first British company was started in the 1890s in England producing world-class athletic shoes. The head of the original company was Joseph William Foster, and in 1958 his two grandsons founded Reebok, which was named after African gazelles (Hast, 1988). Fireman decided to get a business license, and soon he started Reebok in the United States (Hast, 1988). When Fireman got the right to sell shoes, he sold them for $60 a pair, which at the time was the most expensive shoe on the market. After only two years, things starting looking down for this company. The competition in the US was making it difficult for Reebok to be successful. They had to work hard to keep up with Nike and Converse. Shortly after their downturn they developed a new strategy. They were going to make a shoe that was appealing both in color and style. In the 80's aerobics was becoming popular so Reebok designed aerobic shoes in all colors of the rainbow to appeal mainly to women.

Financial Look

The company has enjoyed financial success, but that was in the past. Since 1994 to 1995, net sales increased 6.1% to $3.5 billion, but remained unchanged the following year. While the company's cash increased threefold in 1996, its net income decreased 45.4% from 1994-96. Looking at other indication of the financial condition for Reebok is its declining inventory. In 1995, the company had $635,000 in inventory on hand, but had only $545,000 the following year, a decrease of 14%. Reebok has become financially stagnant and needs change. The massive financial resources at the disposal of Reebok allow the company to exploit economies of scale. It is assumed that Reebok has plenty of funding and financial resources available to compete in any market desired. Reebok primarily uses Flagship Implementation as their rhetorical stance. These findings lend support to research showing a negative correlation between corporate social responsibility and profitability.
Mention some major points you would like to also point out - something like the following:

The Reebok Development Center is a modern, state-of-the art design and manufacturing facility that can put Reebok near the market forefront in technological innovation. The development and production process at Reebok is inefficient. The development window of 18 months to three years is far too large. Reebok USA received worldwide acclaim after the 1982 introduction of its Freestyle shoe, an oxford-style women's sneaker designed for newly popular aerobic exercise. The Freestyle became the most successful athletic shoe of all time. Reebok became the darling of aerobic aficionados everywhere and is a trademark of yuppie 1980s style. In 1985, three years following Freestyle success, Reebok USA acquired British Reebok. Sales went from $3.5 million in 1982 to $919 million in 1986, the same year that Reebok supplied apparel to more than 3,100 Olympic athletes in Atlanta, Georgia.

Nike and Reebok

Nike and Reebok are two of the most popular brands of athletic shoes on the market today. In the same year Nike and Reebok had sales of $3.With sales in the billions and an astounding command of the market, Nike and Reebok were highly visible and came under constant scrutiny by many consumer groups and human rights group. They not only shift the production costs to the contractors, but used athletes and celebrities to endorse their products, some of the more notable ones being Michael Jordan, Tiger Woods (Nike), and Shaquille O'neal (Reebok). Nike and Reebok were very powerful companies and contracts were secured by proving that the ...

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