Deakin University MMS736: Strategic Management Case Study - Reebok

This case study examines the strategic management challenges faced by Reebok, a prominent international sports brand. It delves into the company's decline, exploring issues such as declining revenue, public relations failures related to misleading product claims, and the impact of changing consumer trends. The analysis includes a PESTLE analysis to understand the political, economic, social, technological, legal, and environmental factors affecting Reebok. The study identifies key issues like customer dissatisfaction, unethical promotional practices, leadership shortcomings, and the influence of digital platforms. Recommendations are provided to address these challenges, including improving public relations, enhancing customer relationship management, and adapting to the evolving sports industry landscape. The case study also considers the impact of the company's actions on the Australian sports industry, highlighting the importance of ethical business practices and effective strategic planning.

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