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We believe that Geox has defined a new strategic position

By: mayun

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They concentrate on incremental innovation, on performance improvement via best practice benchmarking, on introducing piecemeal change to optimize single activities, and on imitating rivals. But, as the space gets increasingly crowded, prospects for profits and growth are reduced, especially for newcomers.

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These behaviors are often evident in mature industries like textiles, apparel, footwear, and eyewear, where the potential applications of new technologies are less valuable, or, at least, less immediately straightforward. Consider, for example, the Italian footwear industry (but similar trends can be observed in other European countries, in the US, as well as in other mature industries (Faust, Voskamp and Wittke, 2004).

For decades, Italian companies (Ferragamo, Magli, Pollini, Rossetti, Rossi, Tod’s, etc.) have successfully competed by carving out a strategic position characterized by a market niche focus, fashion based reputation, continuous style innovation, craft-like quality, and domestic production.

But now, challenged by globalization as never before, many of these companies have lost their edge or even experienced sharp declines in profitability. Mitigation strategies have failed, including investment in brand and retail, defensive strategies based either on clinging desperately to the Made in Italy label, or on moving production abroad to reduce cost. These initiatives have rarely proven successful in the long run, usually because they have not created a value difference for customers, and rather produced “more of the same things”.

Why does this happen? Is finding new strategic positions an impossible mission for companies operating in such mature industries as footwear? Are they doomed to be “hollowed out”, to become the easy prey of some multinational retailer, or simply to die? Is it inevitable, for those who survive, to accept thinning margins and to move production around the world relentlessly, seeking for ever lower cost sourcing? And what are the chances for courageous entrepreneurs who start a business in this industry to grow it successfully? Do these companies have options other than rushing production to China or evoking the “magic” of creativity and style? This article addresses these questions analyzing the Geox case.(http://www.fad77.com)
We believe that Geox has defined a new strategic position in the footwear industry. Geox’s “blue ocean strategy” (Kim and Mauborgne, 2004): a) has created a somewhat uncontested market space where competition is less relevant by changing the traditional market segmentation rules; b) involves a unique configuration of activities, removed from the stereotype of the Italian “fashion” footwear manufacturer, but also significantly different from other US and European competitors; and c) has broken the value/cost trade-off, succeeding in the feat, impossible for most other competitors, of serving successfully a large, diverse customer base with a wide variety of product lines and styles. Though grounded in product innovation, Geox’s competitive advantage has not grown out of operational excellence in single activities in the business, but, rather, is derived from a unique and consistent configuration of complementary activities.

First, we describe Geox’s choices within four important stages along its value chain: product design, marketing and communication, production and supply chain, distribution and retail (section 5). Then, we illustrate some of the complementarities among these activities providing examples of how the adoption of one makes the adoption of others more attractive (section 6). We also contrast Geox’s strategic position and configuration of activities with that of its competitors. The final section draws some implications in terms of strategic management and organization design.(http://www.fad77.com)

Article Source: http://depositarticles.com/

After providing a brief methodological note on the case research GHD Straighteners, we propose a theoretical framework that draws upon recent strategy research that uses the notions of complementarity and performance landscape. We then apply replica handbags the framework to the Geox case.

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