Reebok Audit
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. The strategy worked and soon things w
The current leaders in the shoe market are Nike and Reebok, which sold 200 million pair of brand-name shoes last year (Reebok of America, 2000). While Nike leads with the most market share, Reebok is not far behind. Reebok was ranked number two, just behind Nike, for the best selling athletic footwear brands with $1.05 million in sales (Davis, 1997). The main difference between these two competing companies is their strategies. Nike focuses mainly on product development while Reebok focuses primarily on diversification (Reebok of America, 2000). Reebok continues to expand all of its product lines making it a broader company. In addition, Reebok has focused on a horizontal integration strategy by acquiring new companies. While Nike has only acquired Cole-Haan, Reebok has acquired five companies since the 1980s, which include a variety of shoe and apparel products (Reebok of America, 2000) The company has recently moved its headquarters from Stoughton, Massachusetts because of the expiration on their lease. In June of this year, they moved their headquarters to Canton, Massachusetts where they have signed a five-year lease. The new site is larger and holds more opportunities for the company (Reebok Company Description, 2000). Currently, the company is focusing most of its' efforts on the DMX technology. The DMX system provides cushion in all areas of the shoe while allowing airflow to move freely about the shoe. There are various styles of the DMX system all focusing on the specific need of the shoe. While this shoe technology was introduced in 1995, Reebok is still making advancements to this system. In 1999, they expanded the product line with the DMX system to include the Velocity basketball and Rapidfire tennis shoes (Reebok Home Page, 2000). It is estimated that by the end of this year DMX will be in 65% of their shoes (Lefton, 2000). The company will continue to use DMX cushioning technology as their main marketing plan.
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Approximate Word count = 2743
Approximate Pages = 11 (250 words per page double spaced)
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