Strategic Management Case Study on Reebok

This strategic management case study on Reebok highlights the key issues faced by the company, including customer dissatisfaction, lack of seriousness in meeting customer requirements, and availability of digital outlets. The case study also discusses the management issues faced by Reebok, such as leadership and public relations management, and suggests strategic initiatives for dealing with them. The case study includes a situational analysis of Reebok, a competitive analysis, and recommendations for improving customer relationship management and promotional strategies.

Running head: STRATEGIC MANAGEMENT
Strategic management
Name of the student
Name of the university
Author note

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Table of contents
Part 1................................................................................................................................................2
Introduction and relevant details of case study................................................................................2
Part 2................................................................................................................................................7
Detail analysis of the case................................................................................................................7
Part 3..............................................................................................................................................16
Key learning and recommendations..............................................................................................16
Reference list and bibliography.....................................................................................................21

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Part 1
Introduction and relevant details of case study
Strategic management process can be considered as the important management technique
adopted by the organizations for ensuring the positive growth for the future (Ansoff et al., 2018).
Based on the creation of vision as well as developing the long term operational strategies in the
strategic management initiative of an organization can significantly drive the long turn benefit
through proper utilization of resources. Reebok is a popular international brand that has
established its strong image in the global market introducing sports and lifestyle products
(Reebok.com.au, 2019). In the middle of the 90th century, the company has started contributing
to the GDP of the Australian economy. As stated by Moutinho and Vargas-Sanchez (2018), in
the initial stage, fitness was the negligible topic for people. Only for the comfort and fashion, the
sports products have been introduced in the market. Following the decent market segment,
Reebok has established its strong image in the market. It cannot be denied that over the last few
years, Reebok has become a leading sports brand that has significantly supported the local
business groups.
As stated by Noe et al., (2017) Sports and Apparel industry is being considered as the
extremely diverse industry where the involvement of different segments of people, as well as
health fitness, intercollegiate athletes, professional sport and recreational sport management
related departments, are available. It is true that the Global Sports industry is currently facing
Rapid growth in different segments (Moutinho & Vargas-Sanchez, 2018). However, with the
increasing growth opportunities in the market management issue has become a major concern for
the companies. Analyzing the sudden fall in Reebok, it has been identified that the revenue of the

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company has suddenly got decreased by 26% in the global market. The Weak performance of the
company has misbalanced the ratio of return on investment. Due to commercial regulation as
well as restructuring charges, the company has dealt with various commercial challenges. In the
current business scenario, public relationship management is being considered as an important
strategic component that significantly influences the business profitability (Ginter, Duncan &
Swayne, 2018). Analyzing the changing consuming trends of the customers, it has been
identified that different media channels have significantly impacted on Australian sports sector.
In the case of Reebok, it has been identified that due to misleading as well as a false
representation of the production, Reebok Australia has paid the penalty of $350,000
(Accc.gov.au, 2019). The complaint against the company aroused for sharing the false benefits
information of the products. In the promotion of Reebok, it has been mentioned that the Reebok
shoes can help to increase the muscle tone and strength more compared to the traditional
working shoed. However, the actual product was different from the product, which has been
introduced through promotion. Consequently contravening the Australian Consumer Law, the
company has faced several complaints. Therefore, it can be said that improper public relation can
be considered as an important strategic failure faced by Reebok.
It has also been identified that in the market, increasing numbers of sports outlets, it has become
challenging for the customers to choose the right one. Analyzing the recent purchasing rights of
Reebok customers, it has been identified that it has been highly criticized by the people. It has
also been identified that increasing numbers of outlet can be considered as another issue that has
influenced the customer reaching process.
In the competitive business environment, establishing a strong position in the market, the
strategic direction of the company can play a significant role. However, in case of reebok it has

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been identified that rather than following the modern business approach, the company has
focused on following the traditional business approach, which has significantly impacted on the
strategic direction of the company. Analyzing the market, it has been identified that due to some
product characteristics, the performance quality of the company has got decreased. In between
the year 2011 to 2013, Reebok has refunded $35 against per pair of Easy Tone Shoes
(Accc.gov.au, 2019). On the other hand, it has also been identified that Reebok shoes have not
been appreciated by the customers due to their old model. It cannot be ignored that increasing
numbers of outlets as well as a competitive business environment in the sports sector, marketing
and promotion has brought the significant impact on the influencing the sales rate of the
company.
In some of the cases, it has been identified that due to availability of money in the
different field maintaining the integrity in sports and apparel sector has become an important
concern for the management authority of Reebok (Schmid et al., 2018). The Australian sports
industry is being considered as the extremely diverse industry where the involvement of different
segments of people, as well as health fitness, intercollegiate athletes, professional sport,
recreational sport management related departments, are available. It is true that the Australian
Sports and apparel industry is currently facing rapid growth in different segments. However,
with the increasing growth opportunities in the market management issue has become a major
concern for the Reebok.
In this situation, avoiding the negative reputation of the company in the Australian sports
sector, the company has developed various strategies for developing public relations. Reebok
Australia has introduced the 24hrs of the customer support team
(Economictimes.indiatimes.com, 2019). On the other hand, developing its strong image in the

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market, the company has decided to strengthen its brand image through the women
empowerment initiatives. It has also been identified that due to ignorance of the requirement of
the customer segment as well as a poor treatment towards the high valued customers have
increased the customer dissatisfaction in the industry. It can be said that improving the customer
relationship management system has become necessary for introducing an effective promotional
strategy through digital media platforms.
Introduction of sports news through television, as well as newspapers, had significantly
impacted on the customer relationship management process. However, in the current scenario,
due to the availability of digital platforms in the sports sector, it has dragged the consumers from
old platforms (Schmid et a., 2018). Due to the high digital presence in the market, the core
product adding system has got influenced in the sector. On the other hand, it is true that although
the availability of digital platforms has got increased in the sports sector, however, it is also true
that lack of understanding regarding the basic necessities of the consumers, the sports industry is
dealing with the trouble. On the other hand, using different mobile apps, the accessibility of the
customers has got increased, which is negatively impacting on the business revenue in the sports
industry (Schoombee & Bick, 2018). It has also been identified that in promotional areas, the
standard commercial model is being used, that reflects the offset future of the Australian sports
industry. Reckless customer demands, as well as decreasing interest towards the core product
offering process, has made the Australian sports industry is an unstable position.

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Figure: Growth statistics of Reebok
(Source: Economictimes.indiatimes.com, 2019)
It is also true that negative image of Australian players in the global market has
significantly impacted on the revenue of the company. In the year 2012, increasing business
scandals regarding the stolen goods, fudge accounts as well as secret warehouse, the revenue of
the company got decreased at 333cr (Economictimes.indiatimes.com, 2019). In this situation,
involving in different financial documentation activities as well as the company has aimed to
develop the employee morale towards introducing the betterment in the market. After facing the
huge loss in the market, most of the Reebok stores in the global market has got shuttered; in this
situation, the company has focused on increasing the control over customer experience.
Improving the relation sip with franchise partner and enhancing the distribution channel, the
company has significantly pushed up the sales in the market. Introducing the women-centric
business approach, the company has significantly established its strong image as the popular

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fitness and sports brand in the market, which has significantly increased the 25% of sales rate
through the online distribution channels (Ferguson, 2018). The case study aims to focus on
highlighting the strategic issue faced by Reebok, which has created the challenges in strategic
management.
Case study questions
 What are the major key issues in the case study?
 What is the main management issue in Reebok, which is dragging the question of
unethical practice in the business?
 What can be the strategic initiative for dealing with the management issue?
 How has the public relations management impacted on macro environment of the
country?
Part 2
Detail analysis of the case
Identifying the key issues
In the above case analysis, it has been identified that due to increasing customer
dissatisfaction as well as increasing numbers alternative options in the market in lower cost, it
has become challenging for the organization to maintain the availability of customers. Analyzing
the above case, it has been identified that lack of seriousness while meeting the necessary
requirement of target customers, and availability of digital outlets are the important issues, which
has been aroused in the above case. It can also be said that due to changing consumption trend of

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the customers, promotional activities have become the major barrier for getting direct control, on
the customers. Increasing customer dissatisfaction in the sports industry has got influenced by
the false promise made by the company (Economictimes.indiatimes.com, 2019).
False promise as well as misleading the customers can be considered as one of the
important taboos in Promotional field. It refers to the illegal manipulation of product condition.
As per ACCC regulation, the organizations are not allowed to add any false promises that can
negatively impact on the fundamental rights of the consumers. In this situation, the ethical
concern regarding promotional practices has got aroused (Accc.gov.au, 2019). It has been
identified in the case study that leadership, as well as public relation management, are the
important key issues faced by Reebok. As a result, the contribution of marketing management
authority towards following the business legislative frameworks becomes a big concern. In this
situation, the corruption in the management team as well as the lack of moral value of the
company highlights the importance of leadership and human relationship management practices
in the workplace.
Analyzing the strategies adopted by Reebok, it has been identified that responding to the
rapidly changing world the organization has aimed to establish its strong image in the sport and
entertainment sector. In order to deal with the changing demands of the consumers, the
association needs to focus on embracing diversity. It is true that in order to set the successful
future valuable contribution of individuals has become necessary for ensuring the growth in the
organization.
Situational Analysis
PESTLE

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Political
In the current scenario, the sports and fitness industry has become an important
contributor for developing the Indo-Australian relations, which has significantly impacted on the
political environment in Australia (Haines & McConnell, 2016). The political independence, as
well as diplomatic rules among the countries, have got influenced on conducting the business
operations related activities. However, after the false and misleading product characteristics
related scandal incident the negative impression in the international market can create the
situation tough for the managing authority of Reebok.
Economic
It is true that increasing contribution of Sports and Apparel industry in the economic
status of the country, negative impression of companies on customers’ mind can negatively
impact on the Australian economy(Haines & McConnell, 2016). After the false and misleading
product characteristics related to the scandal, Reebok has not only got negatively highlighted in
the international market but also aroused its improper management-related concerns. In this
situation, introducing promotional interference has become necessary.
Socio-cultural
It is true that with the increasing socio-economic opportunity, consumers have become
aware of the sports-related controversies. By continuing this, changing consumption trends as
well as the influence of digital platform in the sports and fitness sector, the customer is getting an
update for every news. The promotional activities have become an important contributor in the
sport and apparel sector that helps to develop a strong link between managing authority and
consumers (Hook et al., 2017). Therefore it can be said that social media has become an

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important contributor that helps to maintain the strong connection between the sports industry
and the consumers. Although the influence of digital media has helped Reebok to reach the
larger customer segment, it is also true that negative news regarding the organization has also
negatively impacted on the brand image.
Legal
After the false and misleading the product characteristics related incident in the
Australian market, sudden fall in revenue graph has impacted on the company (Kohr et al.,
2018). As a result, the negative impact on audience mind as influence the reputation of Reebok.
On the other hand, it is also true that in this situation that needs for effective customer
relationship management model has got increased. In this situation, dealing with the competitive
sports industry without has become really tough for Reebok. On the other hand, strict ethical
guidelines of consumer relationship management in Australia has significantly contributed to the
revenue loss of the company.
Technological
Technology can be considered as a significant contributor in enhancing the business
growth opportunities in the workplace (Hook et al., 2017). After the introduction of
technological innovation in the global market, it has become easier for introducing the sales and
promotional activities in the market for customer experience betterment. In this situation,
introducing an effective promotional initiative in the market can be beneficial for the company.
Environmental factors

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Following the strict ethical guidelines of strategic management, waste management, as
well as sustainability practices in the Australian market, is being maintained. In this situation, the
strategic initiative of Reebok can be successfully implemented in the country.
False commitment, as well as misleading consumers sharing the wrong product
information, can be considered as one of the important taboos in the marketing sector. It refers to
the illegal manipulation of product information. As ACCC regulation sharing the false
commitment is the punishable offence that can significantly drive the negative impact on Reebok
business revenue.
Competitive analysis of Reebok
Reebok is the International brand which operates in the niche market by introducing the
standard quality of products. Reebok is a subsidiary of Adidas for a long time. Reebok is known
in the market through sports licensed division as well as Reebok-CCM hockey division which
was introduced in the year 1980 (Reebok.com.au, 2019). All the river work has developed a big
name as well as reputation in the market, but it also faces challenges due to strong competition
with the selected companies in the industry which are causes of Sleepless nights of Reebok.
Nike
Analyzing the Australian market, it can be said that Nike is one of the important
competitors of the Australian Sports and apparel industry (Boeuf, Carrillat & d’Astous, 2018).
Introducing the standard quality of products it is the topmost competitor of Reebok feeds has got
a strong reputation in the market by designing a variety of products in the market. Analyzing the
sealing courtesy of Nike it has been identified that involving men women and children in the

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business activities as well as inspiring them towards sports field the company has introduced its
competitive business activities in the market.
Fila
Fila is another important competitor that is a Korea based company which has introduced
its strong image in the sportswear industry by producing leisure shoes and sport accessories. Due
to diversify and working culture as well as specialization in training and running shoes, Fila has
created travel for revoke to maintaining customer satisfaction in the market (Boeuf, Carrillat &
d’Astous, 2018).
Puma
Puma is another popular sports accessories manufacturing organization that has
introduced by German brothers. It cannot be the night that Puma holds the Heritage of sports and
epithelial cells growth which has got influence due to its competitive designs as well as pricing
and product strategy of the company.
Industrial analysis
Porters’ five forces
Situation Analysis
Bargaining power of the
customers
In the changing consuming trends of customers as well as
different digital outlets, have become an important contributor
that influences the purchasing behaviour of the customers
(Emerson, 2017). On the other hand, it is also true that the
availability of large numbers of alternative options in the lower

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cost bargaining power of the customers gets increased.
Bargaining power of the
supplier
Especially in the sports industry, raw materials are considered an
important factor that helps to ensure the standard quality of the
product which has been delivered to the customers. In the case of
Australian raw material market, availability of suppliers has made
the bargaining power of suppliers low in the market.
Existing rivalry Reebok is a sports manufacturing giant in the Australian market,
but it is also true that availability of others reputed organizations
such as Nike, Fila and that's in the market the company may face
threats from the existing competitors (Emerson, 2017).
Substitute products in the
market
In the increasing business outlets in the market availability of
alternative products in the lower price has become very common
in the food manufacturing industry (Siegmann, Merk &
Knorringa, 2017). Small organizations which are trying to enter
in the sportswear manufacturer industry produces the alternative
of similar kind of product in a different name in the market. In
this situation, it can be said that threats from substitute products
are quite high.
New entrants in the
market
It is true that the availability of business opportunities in the
Australian market intercoolers get the chance to develop business
in this Australian market easily. However, compared to the
position of Reebok, it can be said that it will be tough for a new
organization to compete in the Australian market. By continuing

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this, it can also say that the chances of new entrants in the
Australian market are quite high.
Strategic analysis of Reebok using Porter generic model
Figure: Porters generic model
(Source: Ouma & Oloko, 2017)
Cost leadership:
Cost leadership is being considered as the traditional method which is being adopted by
the companies while enabling the business to exploit the economics. In order to minimize the
cost of the company, this cost leadership approach is being adopted (Wicker et al., 2015). In this
initiative, the company significantly produces the product at a lower cost and provide the best
benefits to the customers. Analyzing the above case scenario, it has been identified that in order
to deal with the increasing customer relationship challenges, the organization needs to focus on

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introducing its products in lower cost so that it can be able to introduce its market uniqueness
successfully.
Differentiation leadership
This business strategy is being adopted while achieving competitive advantage from a
market. The differentiation leadership is being adopted by the companies in case of operating in
the larger target segment. This strategic involvement indicates the introduction of uniqueness in
the market, adding superior product quality (Min & Joo, 2016). Ensuring the wide distribution
channels through the major channels, product development strategy significantly impacts on the
case of driving the consisting promotional support in the company. In the case of Reebok, it has
been identified that in order to gain competitive advantage, the company can adopt the newly
designed product development strategy for managing customer satisfaction.
Cost focus
Cost focus is also related to the lower cost advantage strategy. In this situation, providing
a similar product at a lower cost, the company aims to give tough competition to its competitors
(Wicker et al., 2015). Analyzing the case, scenario, it has been identified that due to changing
consumer trends of the customers, the sports market has got highly dependent on the digital
platforms. In this situation, grabbing the attention of the customers, the cost focus strategy can
help the company to introduce similar leading products at the lower cost and introduce it to the
customers through the digital platforms.
Differentiation focus
In the case of differentiation focus strategy, the company provides a completely different
product from the competitor for gaining a competitive advantage in the market (Wicker et al.,

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2015). However, in the case of Reebok following this strategy, new products such as BMR
calculating machine needs to be introduced.
It has been identified that in order to deal with the rapid changes in product design as
well as increasing customer dissatisfaction, Reebok can revise its cost strategy. By continuing
this, it can also be said in order to involve in the competitive environment, in the running year
the company can adopt the acquisition strategy for taking the control over small companies for
reducing the market competitiveness.
Strategic suggestion for addressing the challenges
In the case analysis, it has been identified that customer relationship management has
become an important concern for Reebok. It can also be seen that whether the following the
traditional business approach the company needs to focus on adopting the modern strategic
approach by highlighting the customer-centric business operations (Haines & McConnell, 2016).
Business environment of Reebok in the Australian market it has been identified that all the sum
market has brought various opportunities developing business in the sports industry, but it is also
true that due to strict guidelines of Legislative practices it can be challenging for the company to
introduce strategic initiatives in the market. Analyzing the case study, it can also be said that cost
leadership strategy can be beneficial for introducing its products at a lower cost can help the
company to satisfy the customers need. Analyzing the case study it has been suggested that
improving the customer relationship management process new product development strategy can
also be beneficial for gaining The Lost reputation of the company. On the other hand, improving
the business operations related situation, administrative theory of management can be adopted
in which addressing the challenges organizational structure can be improved, which can
indirectly impact on workplace culture.

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Part 3
Key learning and recommendations
The major theme of the case study has got influenced based on customer relationship
management and its significant impact on the strategic directions of the company. In the case
study, it has been clearly mentioned that depending on the current challenges faced by Reebok
the brand reputation, as well as the customer base of the company, has got negatively affected.
Due to false commitment as well as misleading promotional activities has brought huge loss for
the company. Analyzing the case study it has been identified that in order to sustain in the
diversified and business environment sales and promotional activities are being considered as the
important strategic components that can significantly impact on the revenue generation process
(Haines & McConnell, 2016). The key learning points of the study has got highly influenced
based on the changing consumption Trends of the customers in the market, and those impact on
Revenue generation process in Reebok.
In response to the current situation in the Australian Sports industry, it can be said that
sustaining in the competitive business environment customer relationship management through
the digital platforms has become necessary in terms of reaching the large numbers of customer
segment. By continuing this, it can also be said that customers have become more conscious
regarding the fitness product they are purchasing. Pre and post purchasing behaviour can also
significantly influence the further perching initiative of the customers from that particular brand
(Kohr et al., 2018). On the other hand, it is also true that in the diversified community, it is really
challenging for the organization to serve without making any dissatisfactory situation. The case
study has highlighted the strict legislative Framework followed by the Australian government

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while ensuring the consumer right benefits. Due to changing business trends customer rights has
become the main priority of the companies.
Promotional activities of Reebok can significantly drive the sales rate of the company.
Marketing and promotional activities can be considered as the only way that can help to develop
a direct relationship between organization and consumers. In the study, it can be suggested that
focusing on adopting customer-centric business approach develop can focus on introducing the
cost-effective product for the consumers so that the company can significantly grab the attention
of large numbers of customers.
In response to the promotional scandal as well as financial penalty faced by Reebok, it
can be suggested that introducing the customer support team as well as the standard quality of
products in the lower range can significantly impact on regaining the lost reputation of the work
in the Australian Sports industry.
In the case study analysis process, different strategic tools have been used for measuring
the situation of Australian external environmental factors the growth process of Reebok. In the
case analysis process, it has been mentioned that giving a competitive advantage is also an
important strategic initiative that can significantly focus on improving the position of the
company in a competitive business environment. In the competitor analysis, the major
sportswear manufacturing Giants such as Nike, Fila and Puma have been described as the major
competitors of Reebok in the Australian market. Analyzing the case study, it has been learnt that
in order to survive in the competitive business environment introducing the uniqueness is
important for establishing a noticeable position in the market. On the other hand, it is also true
that in the strategic analysis, different environmental factors in the Australian market have also
been critically analyzed that can significantly drive the strategic direction of the company.

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Analyzing the case study scenario as well as false commitment and misleading the customers'
related scandal of Reebok the company can focus on adopting effective customer experience
management strategy through the introduction of promotional initiatives in the market. In the
current business scenario, CSR initiatives are being considered as an important strategic tactic
that can significantly ensure community engagement towards the growth process. In that case,
Reebok can involve itself in different related activities so that sustainability in the business
environment can be ensured.
Analyzing the case study it has been identified that in order to deal with the negative
impression in the market the company has decided to introduce 24 hours customer service team
and contributed towards women empowerment for improving its image in the market.
Analyzing the case study, it has been identified that marketing and promotion are the
major concern in the company that has significantly controlled the customer relationship
management as well as revenue generation process in the company. In order to improve the
situation, it can be suggested that the standard promotional strategy can be adopted by the
company through different digital media platforms. In the case study analysis process, it has been
repeatedly mentioned that due to changing consumer behaviour of the customers, influences of
digital platforms in the promotional field has got increased. It is also true that people have
become highly concerned about product information as well as characteristics. Before purchasing
any product from the market, people do research on the particular product and collect
information regarding the product through different promotional activities introduced by the
companies. In the case of Reebok, the company has met the commitment to providing different
characteristics of shoes that can strengthen the muscle of the runner. However, after getting the
actual product, people have got disappointed, which has negative impact on the revenue

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generation process of the company. This is the only reason that has brought declining revenue
graph or sudden fall in the sales report of Reebok.
Introducing the standard promotional strategy by adding strong content in different
promotional platforms, Reebok can be able to recover its image in the Australian market. In the
case of introducing the unique product can also be beneficial in terms of grabbing the attention
of large numbers of customers towards the company. It is true that due to negative reputation in
the market, sudden fall in revenue has brought a huge impact on the growth process of Reebok.
In this situation, the promotional strategy can effectively recover the previous image of the
company as well as it can significantly control the revenue-generating process. Improving the
customer relationship management initiatives the company needs to focus on adopting customer-
centric as well as customer engagement operational approach so that ensuring the effective
engagement of the customers, community development as well as a rise in revenue graph can be
ensured.

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Siegmann, K. A., Merk, J., & Knorringa, P. (2017). Positive class compromise in globalized
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Sport and Society, 12(3), 281-307.

24STRATEGIC MANAGEMENT
Wicker, P., Soebbing, B. P., Feiler, S., & Breuer, C. (2015). The effect of Porter’s generic
strategies on organisational problems of non-profit sports clubs. European Journal for
Sport and Society, 12(3), 281-307.