Introduction
One of the company’s main problems, considered in this case study, is that the company bears significant costs associated with recruiting personnel. The difficulty lies in its training and the high personnel turnover. The main challenge is that the company hires cheap labor with insufficient skills to start working immediately. Since employed young people only stay for a short time at the workplace, the company is again forced to allocate funds to search and train new employees.
The company is a prominent manufacturer and distributor of sports goods. The brand is transnational and has a large number of subsidiaries. The firm’s product line is broad and mainly includes sportswear, shoes, accessories, and equipment. Most of the company’s products are produced and sold to independent partner companies.
According to the dynamics of financial indicators, the turnover and net profit of the company grew at a nominal rate every year, which indicates a low demand for products, despite the constant updating of the assortment and improvement of brand marketing. The problem of the company under consideration is the insufficient quality of the staff, as well as the low loyalty of the team.
Purpose
The company aims to become a global leader in the sporting goods industry with brands based on a passion for sports and a sporty lifestyle. It strives to strengthen its brand and products to improve its competitiveness continuously. First, the company aims to lead in the world sports goods market. To do this, they focus on sports and the lifestyle of athletes. The company focuses on producing sports and near-sports goods, meeting consumer needs, and developing sales channels to meet their needs and make a profit.
Another aim of the firm is to provide more customization options for consumers, for which it is increasing its production capacity. The company is moving towards openness, intending to get closer to consumers. The brand plans to work more closely with consumers, athletes, and partners, encouraging their participation in product development, creation, and presentation. In economic globalization, the company is actively engaged in communication policy.
First, this is a promising direction for the company’s actions, aimed at ensuring interaction with all subjects of the marketing system to satisfy consumers’ needs and obtain profit. Integrating various elements of communication policy into a single whole has recently become very important. In general, the company’s goals are reduced to the comprehensive development of its own business, increasing profit from the sale of manufactured goods, increasing the company’s market presence, and strengthening the brand image.
Resources and Technology
The company has its own institute for developing new technologies, which allows its products to be unique. In addition, it uses the technologies of other manufacturers. The company’s main activity is producing sports and sports-oriented goods. The production line has a small number of product names that can increase the demand for the company’s products. The company tests its products in various conditions to meet the needs of consumers.
To improve the quality of products, manufacturers use close to natural substitutes, the latest technologies to be more competitive, and also develop other products with characteristics that would satisfy consumer demand. New technologies include the use of innovative materials for footwear and clothing, such as seaweed textiles. The new program on using and recycling materials for producing goods should attract more customers and new audiences. The company also aims to buy another casual wear brand to outpace its biggest competitor. Since the company owns several brands, it strives to develop each one’s range and diversify its products, creating something new and innovative every year.
One of the company’s essential products is sports shoes. Historically, the company began its journey with the manual tailoring of sports shoes. This product is the most popular among the brand line and accounts for the most significant sales. Sports shoes from the company in question are in the high-price segment, which allows them to be classified as premium products that provide the company’s primary income.
Another example of a product in the company’s product line is sports jackets. The company started manufacturing outer sportswear relatively recently, so this product type can be considered a novelty. The price category of sports jackets belongs to elite goods. However, this product line is less successful since the company has several severe competitors.
Markets and Prices
Sports and sports goods are increasingly penetrating people’s lives, going beyond the purely professional sphere or only motor activity and a healthy lifestyle. It is important to note that the rate of development of this market and the increase of its indicators in monetary terms is much higher than in natural terms.
The reasons for the growth of the sports goods market are the population’s desire for a healthy lifestyle and the popularization of an active lifestyle; as a result, a large part of sports goods is bought not only for sports but also used in everyday life. Depending on the change in the structure of consumer value, the cost structure and price of a product or service may change.
The sporting goods market is considered one of the largest in the world. According to experts, the sporting goods market accounts for the majority of the sports industry’s monetary turnover, so its volume has approached 100 billion dollars per year in recent years (Zhang et al., 2018).
According to the international organization World Sports Forum, the European sports market’s growth was 5.4% over the past three years — this is higher than the combined increase in GDP of the countries of the European Union during the same period (Zhang et al., 2018). Competition in the sporting goods market is high, so every company strives to improve its products.
In a market economy, the goal of any organization is to make a profit. The price factor significantly impacts this indicator. Therefore, enterprises pay great attention to developing a pricing policy that increases product competitiveness and effectively sells goods on the market. However, the pricing policy only sometimes corresponds to the market trends where the manufactured products are sold.
Therefore, enterprises need to consider the peculiarities of pricing in individual markets when developing their pricing strategy (Ali & Anwar, 2021). Under the pricing policy’s instruments, the enterprise understands all those areas of its activities that are used to set prices and achieve the goals of the pricing policy. The company’s pricing policy plays an important role in winning the consumer and competition.
The company uses pricing strategies, such as a high-price approach and the so-called “price-skimming.” This strategy involves selling well above production costs and lowering them initially (Ali & Anwar, 2021). This applies to novelty products protected by patents. Such a strategy is possible in a high level of current demand, where the consumer perceives a high price as evidence of the product’s high quality. The company adheres to the strategy that the product is of high quality, has exclusive, individual properties, differs from other substitute products, and is offered to the consumer at the highest possible price.
Risks
One of the company’s main risks is a decrease in demand because the brand is available only to a small number of consumers with high purchasing power. Because of outsourcing, suppliers have more trading power than the company, so import, duty, and tariff rules play an important role in pricing. Most of the production is in Asian markets, which reduces labor costs and allows for access to cheap resources. However, the quality of the company’s goods risks deteriorating. Employees need to be more motivated, which leads to decreased labor efficiency and reduced product quality.
Other risks include high competition in the market, as mentioned earlier. The company needs to pay more attention to increasing consumer loyalty. The company’s managers are actively seeking collaborations with other brands and sports organizations to increase the company’s competitiveness. Every year, the company creates new products that should be more attractive to consumers. However, even if this will allow new consumers to be found, without loyalty programs for the existing audience and without increasing employee motivation, the company’s current problems will not be solved.
Solutions
Today, the company’s main task in the state of economic globalization is to increase its competitiveness and position in the sporting goods market. Companies should focus on and optimize their functioning, such as management activities and related communication policies.
Management activity is distinguished by an intellectual character, expressed in its focus on the development, adoption, and practical implementation of management decisions designed to change the state and outcome of people’s processes, behavior, and activities in the desired direction. According to Jeffrey Zonenfeld’s classification, the company’s management culture belongs to the “Club culture” type because teamwork occurs here (Zainullin & Zainullina, 2022).
Only employees receive promotions, while career growth is slow and gradual. However, the company has problematic areas that need to be improved to increase its competitiveness. For example, it should pay attention to personnel management aspects, such as changes in hiring procedures. The recruitment process needs to be improved by changing its conditions, as due to unqualified workers, the company can probably incur losses and suspend the work process.
In the product management segment, the manager needs to pay attention to products that have lower costs. The effects of the non-premium segment can increase the demand and interest of people in the company’s products (Cooper, 2019). This will be facilitated by constant monitoring of the purchasing power of potential buyers, as it will make it possible to satisfy the consumer demand of the maximum number of buyers (Cooper, 2019). It is also necessary to optimize all distribution channels of the company’s products and develop its own methods of product promotion, which will also increase the company’s competitiveness.
Corporate style is a system of identification and design of the company’s appearance, in which it appears to the outside world and distinguishes it from other companies. The corporate style system aims to create a visual and substantive unity of the company’s products and services, all source information, and its internal and external design (Polinkevych & Kamiński, 2018).
In addition, the company’s communication policy is also considered in the context of promoting the company’s product. It requires the formation of its complex, establishing, and maintaining permanent relations between the company and the market to intensify product sales and form a positive image by informing, persuading, and reminding about its activities.
Conclusion
Considering the company’s existing problems, risks, and peculiarities, optimizing and paying attention to several aspects is advisable. These aspects are human resources management, namely the recruitment and training of personnel, and communication policy, namely the formation of brand recognition and consumer loyalty at the expense of corporate style. The proposed management methods will significantly improve the company’s position in the sporting goods market.
References
Ali, B. J., & Anwar, G. (2021). Marketing Strategy: Pricing strategies and their influence on consumer purchasing decisions. International Journal of Rural Development, Environment and Health Research, 5(2), 26-39.
Cooper, R. G. (2019). The drivers of success in new-product development. Industrial Marketing Management, 76, 36–47. Web.
Polinkevych, O., & Kamiński, R. (2018). Corporate image in the behavioral marketing of business entities. Innovative Marketing, 14(1), 33–40. Web.
Zainullin, S., & Zainullina, O. (2022). The Corporate Culture of the Enterprises of the Military-Industrial Complex. Corporate Social Responsibility. Web.
Zhang, J. J., Kim, E., Mastromartino, B., Qian, T. Y., & Nauright, J. (2018). The sports industry in growing economies: critical issues and challenges. International Journal of Sports Marketing and Sponsorship, 19(2), 110–126. Web.