Market analysis c m clarks ltd essay

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Particulars supporting my personal findings and recommendations will be detailed in the main report. A summary of the main items are the following: -FindingsClarks company is recognized as one of quality with a good market share of children’s shoes or boots and the “the more mature customer.

The corporation has a strong distribution network which could be used as a platform to launch new products by minimal incremental cost.

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We have a significant threat from fresh competitors such as the major grocery stores as well as high fashion stores extending their product range to footwear.

Footwear keeps growing in importance as a “fashion item and evidence helps an increase in “impulse buying specifically by girls.

Consumers inside the age range 30 to 49 years olds spend the most on shoes, on average 322 per annum.

There is certainly increased personal threat upon “cheap imports e. g. tariffs upon imported goods from China and Vietnam. The EU commission payment is also monitoring anti ” competitive tendencies closely. This could escalate in the future.

Social styles are affecting Clarks’ marketplace. There is a move towards “cheaper more stylish boots and shoes created from synthetic materials which can conveniently be discarded after a fairly short period of your time.

The UK economic climate is showing signs of reducing which will come with an adverse effect on demand in 2008 since consumers spend less about “fashion and focus on basics.

KEY RECOMMENDATIONSSHORT TERM ” diversify in selling clothing accessories which would be marketed alongside Clarks’ shoes and boots.

MEDIUM TERM -Investment in advertising, brand image and impressive design

PERMANENT ” Concentrate on the teenager/young adult market

INTRODUCTION

1 . 1I have been completely requested by C & J Clark Limited (Clarks) to prepare an industry analysis of the UK footwear industry and present some recommendations1. 2 I have one of them report suggestions over the temporary (1 ” 3 years), the method term (3 -5 years) and the permanent (5 + years)1. several I have used various sources to assemble information intended for my market analysis. The Internet has been a very beneficial source of information on the shoes industry. Clarks’ website in addition has proved to be extremely helpful in featuring detail around the range of products, along with providing a quick history of the business.

Mintel is definitely an online reference which has up to date information on distinct industries which has been utilized in my study. I have likewise made use of ‘key notes market review 2006’ and ‘key notes monetary survey report’ which I utilized in the Uk Library.

To compliment my ideal recommendations I possess researched articles or blog posts from the ‘Times Online’ plus the ‘BBC website’ to determine which usually direction the industry is taking1. 4 Section 3 comprises of a market examination of the shoes or boots industry including macro and micro elements which can influence Clarks1. 5 Section six outlines my strategic recommendations for the brief, medium and long term.

2 . COMPANY HISTORY AND PROFILE

2 . 1 C&J Clark Limited (Clarks) is among the largest exclusive companies in the UK and is amongst the largest suppliers of standard footwear. The organization produces much more than 40 , 000, 000 pairs of shoes and shoes a year with turnover for the year to 31st January 2007 of 973 million, 5. 6% higher than before year.

2 . 2 From the early eighties until the the middle of 1990s, two companies focused the Uk footwear marketplace ” Clarks and the British Shoe Organization (BSC). The break up and the demise of BSC improved the aspect of the UK footwear market leaving Clarks as the largest vertically included UK boot company. (Source: Clarks Net Site)2. three or more The shoe market in the united kingdom is dominated by imports, which showcases the clothing industry. Manufacturing in another country has become the usual with almost all UK footwear companies.

This really is driven by simply lower costs, which include labour, elements and standard manufacturing costs. Clarks just lately closed straight down its last factory in britain (Ilminster, Somerset), with all making now staying undertaken in Portugal and other low cost countries. (Source: Important Note Report)2. 4 Clarks is accepted for making cozy, durable and well installing shoes. The item is not regarded as a way item. Clarks’ target its products at infants/young children right through to 15 yr olds and adults in the age range forty five ” 50. The company presents a wide range of items such as sports, smart, and casual shoes or boots and footwear.

Over the years Clarks has introduced many innovative models such as Dessert Boots, ‘Wallabees’, ‘Softees’, ‘Springers’ (with air filled soles) and a CICA array of sports shoes, which includes consolidated the Clarks manufacturer as one of quality and advancement.

2 . a few Clarks likewise owns T Shoes that has over five-hundred stores in britain, and markets through a couple of, 000 & outlets, making them the largest store of shoes in the area.

1 . INDUSTRY ANALYSISA. MINI ENVIROMENT

several. 1 The Footwear marketplace is inextricably from the clothing industry. Analysts generally group both industries. Jointly the market is worth just over 44 billion. The footwear industryaccounts for 13. 7% (6bn). (Source: Footnote 2006)The shoes or boots industry is split up in 3 main categories: -Children’s footwear which accounts for 23% (1. some billion pair) of the total marketMen’s shoes or boots has a higher market share in 31. 1% (1. 9 billion pairs) andWomen’s total market share which is at 45. 9% (2. 9 billion dollars pairs)(Source ” Office of National Statistics)3. 2 Clarks has several main opponents. The largest competitor is Stylo PLC. containing 650 stores, trading mainly as Barratts, Bacons, Invaluable and Shelly’s.

Other significant competitors areR Griggs Group, famous for the Doc Martins Boots. Griggs is secretly owned and sells through the entire UK in several major outletsStead & Simpson Ltd., that has over 400 outlets. That they trade beneath the names of Peter Briggs, Stead & Simpson, Boot Express and Lilley & Skinner andShoe Zone, which has 370 spots in the UK.

(Source: footnote 2006)More recently new competitors have emerged particularly some of the main Supermarket organizations such as Asda, who have their particular clothing and shoe selection. Other style outlets have also recently varied into the boots industry, elizabeth. g. ‘Arcadia’ which today sell the “own brand shoes and also known brands. ‘Oasis’, ‘Next’ and ‘New Look’ can also be taking the same direction.

The Internet has also elevated competition from the other parts of the earth although this may not be at present materials.

3. a few From my research, it may be evident that fashion in the footwear market is becoming essential and individuals are becoming more trend conscious with regards to their ft. However developments change rapidly and it is hard to forecast the place that the market is heading. Predicting the trend correctly are the differences between success and inability.

The majority of shoes sales in the united kingdom are through retailers. A third of women admit to buying sneakers and accessories on impulse (source -Mintel). Only hardly any people buy online.

Parents are likely to take their children to recognised retailers to have theirfeet properly measured (source: Mintel). Parents insist on buying the right boot for their kids. On the other hand teens will are likely to go purchase from the fashion shops.

In 2006 the average person put in around 4. 60 weekly on sneakers (source: Friends and family spending). 25 to fourty nine season olds had been spending on normal 6. 20 (322 per annum) per week on shoes and boots because we were holding buying for children.

B. MACRO ECOLOGICALLY

3. 5 There are a number of political elements which influence Clarks’ organization.

The EUROPEAN has dicated to impose a two year regime of tariffs on imported merchandise from China and Vietnam. Responsibilities of 16. 5% and 10% respectively will now be used on shipments (Source: Independent 05/10/06). This will indicate higher adding cost intended for Clarks which could put up rates.

The Western Commission likewise imposes rules re cost fixing and protecting tiny suppliers against anti competitive behavior from your large operators. (Source: Concepts and Techniques of Marketing)3. 5 Interpersonal factors possess affected the footwear marketplace such as dress codes. The 21st century can be described as period of quickly changing vogue; for example underneath 35 12 months olds want to replace their shoes with all the newest and many fashionable pairs, rather than mending their shoes or boots or shopping for shoes that could last for years.. This really is partly due to the fall in value of shoes lately enabling young people to be more fashionable. This sort of has been the interest in fashion among young and middle aged people who inadvertently, it has created passion in shoes and boots (source: Mintel Report 2007).

3. 6 There have been many technological adjustments which have affected the market. There is the ability to mass produce shoes or boots from a mix of natural and synthetic materials at low priced and to relatively high quality standards.

3. 7 The use of the Net has meant that customers include a larger choice ofwhere to buy all their shoes from. There is evidence to support growth buying “on line mainly because it fits in with people’s active lifestyle.

several. 8 Current Economic elements are beginning with an impact on the footwear industry. Whilst rates of interest are now starting to reduce in the united kingdom after couple of years of increases, there is concern that the economic climate will transfer to recession. The financial institution of England reduced the base rate with a quarter of the point in Dec 2007 (Source: Mintel).

Families are finding there is a greater pressure on their financial constraints, so they are tending to buy fewer recreation such as shoes and boots. The “credit crunch i. e. availability of debt with what price, has additionally slowed down consumer spending, and can do so even more in 2008. Sterling in addition has reached a list low resistant to the ¬uro, that may impact the price of imports by EU countries. The Bank of England affirmed that homeowners are being hit while the effect in the global credit crunch spills over into the true economy (source: times online 03/01/08) There exists a tightening of both consumer and business spending, and it is expected to deteriorate over the next few months.

four. CLARKS SWOT ANALYSIS4. 15. IDENTIFICATIONS OF STRATEGIC ALTERNATIVES

5. 1 There have been a number of factors which in turn Clarks ought to focus on while outlined in section 3. 2 .

The emergence of fashionable and “cheap shoe retailers just like Arcadia and New Look means people are moving away from Clarks trusted and comfy sneakers. Even though this can be a danger to Clarks, there is considerable opportunity too for the business to move into stylish shoe industry. Clarks posseses an in depth knowledge of the footwear market and already have a highly established making and syndication network not only in the UK but also internationally and in America. Using level and the capability of a strong marketing campaign could make this kind of into a accomplishment.

The challenge is usually to overcome the Clarks brand image with clever and innovative marketing and advertising ” expensive but worth the investment asthis part of the market is developing significantly while market research provides demonstrated. The customer has become more charm conscious and caring about what they wear and will shell out a premium for leading edge shoes with a good brand image.

5. a couple of Consumers in the 30 ” 49 year old age music group tend to spend most about shoes; the reason for this is because they can be buying not only for themselves also for their children. Normally they dedicate around 322 a year compared to other age ranges which spend around 239. Clarks has a great little one’s range since outlined in S2. four. Making the shops more kid friendly will attract more parents in to the shops. This would hopefully produce shopping for adults less demanding. At the moment Clarks’ strength is their little one’s shoes and “older mature shoes. Consequently improving the information and design of their retailers should appeal to additional sales and increase profitability.

your five. 3 An additional opportunity that the company has to address can be utilising different methods of providing their products. One example is they may sell on the internet or perhaps in brochures. Selling for the internet might be a positive way forward to get Clarks. This already provides a well established site. It is very user friendly and get, and contains all of the latest shoes for men, ladies and children. A wider target audience could be reached at a relatively low cost.. While using World Wide Web being a much more popular place to shop, this can be a positive push.

There are some concerns to be tackled when advertising footwear online. People usually want to test shoes before they buy them. As Clarks has a solid reputation for well appropriate shoes personalized for the client, this could be known as an advantage above its competition.

5. 5 Clarks also need to consider diversifying into new sectors in the footwear and clothing marketplace, such as clothing accessories, bags, and shawls. It would be a good option having shoes and equipment together since many women purchase both of these in impulse, since research affirmed. Clarks ought to target all their range of components initially by children as well as the “older era, its two strongest market segments. It would be too difficult at this point to targetteenagers and young adults because of the substantial competition from your well established excessive fashion organizations such as Topshop and Next who also are seen by simply teenagers because trendy, the opposite of Clarks image nowadays.

Clarks gets the resources to make the “accessories idea work. They own outlets around the UK, almost one out of every town, so they have distribution capacity; and Clarks has the financing to advertise their particular new products. More importantly they have the in depth understanding and understanding of the clothing and footwear market.

5. five Clarks could consider decreasing the price of selected ranges sneakers in order for them to maximize market share by simply competing properly against grocery stores, large retailers and other significant shoe retailers. Clarks is definitely a profitable organization (81 mil operating revenue for the season to thirty first January 2007) with low production costs due to production abroad. The business could reduce their rates on particular ranges with minimal influence on bottom line earnings. They could also build in “special deals such as buy one pair of shoes and get the second half selling price.

5. six Clarks must look into modernizing it is brand image, and make people more aware about the high quality, good looking shoes this supplies. With its marketing finances being the biggest in the boots industry, it must be possible to change people’s perceptions of Clarks as a brand. Even giving their very own shops a face lift to generate them more contemporary is an easy way of getting people in and hopefully making behavioral instinct buys.

6th. RECOMMENDATIONS6. 1 SHORT TERM (1-3 YEARS)

Shift into AccessoriesAs discussed in 5. 4 increasing the merchandise range is an excellent way of raising revenue and profitability. People may come to Clarks for more than just shoes. I have noticed that some of the competition are starting to introduce several product to their shoe outlets. Clarks would want to be the marketplace leader and stay the first to effectively diversify to a different marketplace. First valerse initiative will certainly consolidate you’re able to send market dominance. I strongly recommend that Clarks moves quickly to put into practice this strategy.

6. 2 MEDUIM TERM (3-5 YEARS)

Targeting 30-49 12 months olds30-49 12 months olds are the highest spenders on shoes as discussed in S5. 2 Aimed towards this market might be a wise way to take. The upside of being good in this marketplace would be significant to Clarks in terms of earnings, market share and brand awareness.

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