After being bought by Adidas AG eight years ago, Reebok has experienced many difficulties, ranging from the loss of sports contracts to the failure of its toning shoes. Nevertheless, Adidas is currently changing Reebok’s business strategy in the attempt to re-boost sales and narrow the gap with market leader Nike.
Reebok is re-positioning its company in the minds of consumers by focusing on a more specific point of difference; it will now promote itself as a fitness brand. To maximize the success of its plan, Reebok has started sponsoring groups engaging in CrossFit, a new strength and conditioning sport with growing popularity around the world. In addition, Reebok plans to launch a continuous stream of higher performance products at higher prices to increase its profitability.
Thus far, their strategy has proven to be successful, increasing sales by 11% during this year’s second quarter, and its gross margin by 4.1% in the first six months. Further improvement is expected.
As a result, with Adidas keeping its competitive advantage in soccer and basketball, and Reebok gaining a unique selling position as a fitness and fashion brand, the company’s market share is likely to increase and place competitors under pressure.
Websites:
http://gestion.pe/empresas/adidas-apunta-al-acondicionamiento-fisico-revivir-reebok-2077519
http://ca.reuters.com/article/businessNews/idCABRE99007F20131001
Some Reebok commercials that show its support for CrossFit: