CASE 4: GEOX: Breathing Innovation into Shoes

Hi Dear G:ers,

Let's anatomize Geox together!

I just finished reading the artical,The questions are vague though.But some are poping out.

how could Geox Sustain the leading technolodgy in shoes industry?

How could Geox Enter Sports shoes and earn this big market?
More flexible marketing strategy like Nike?

The other elements to be added into GeoX shoe products?

-------The big question is that how to sustain and conquer the mass market.

Your ideas are WELCOME!

Great! Let me go through all the story and share my ideas with you ASAP

I think Geox should pay more attention to the product position while entering into the sports shoes market.Because the lifestyle shoes have been accepted by the market,the company should maintain this market segment.Technology and brand help consumers recognize the product.If in the sports shoes market the company continue using the brand Geox,consumers may be confused what the Geox exactly brings to them,lifestyle or sports?If both,why not choose Nike or other famous sports shoes and the Geox's impression as lifestyle shoes will be
weakened. One way to solve this problem is to develop a new brand for sports segment and use a different market strategy such as selling sports clothing as well,sponsoring a kind of competition and engaging a brand speaker. Products should be discriminating from Nike in packing, promotion,distribution,etc.

Having learned from Geox's story, I was told that the chairman was a legendary entrepreneur. His family businesses have a long history, as the fourth generation of successors, he was head of the family. Legendary speaking, he accidentally discovered a new business, launched a new career. When the very beginning, the production side had not recognized the new patents developed by himself. He had to be responsible for production and sales by himself.But it is the ignorance of such a manufacturer, created the Geox brand was born.

In this story, of course, there is a coincidence, is also inseparable from the ceo's wisdom. His motto is that do not just capture the market, if you develop a new patent, it will bring a steady stream of interest. He attached importance to R & D, encourage talent and innovation,constant breakthroughs in the design of the products, which is key to the success of this enterprise.

After reading ,I find several problems :
1. Idea to business .
2. Brand image. " breathing shoes ".
3. Knowledge power--patent.
4. outside R&D , cooperate with Universities.
5. Short history
6. Many Geox DOS
.....
My opionion is as follows,
1. Set more specific market segment.
2. Innovation not only in techonogly but in new market
3. Diversity( ( such as clothes, bags, outdoor equipment, ect)
4. Sales model--web communication , online shop.

i found the main issue is clear in this case:
-how to sustain the competitive advantages
-how to achieve the goal to the world's biggest shoe maker

The major advantage of Geox is techonology invonation.So how to renew and update its techonology should be the key element. What impress me most is the study of human movement.I believe innovation in this aspect will make Geox improve its leading position.

As to the goal, honestly, I wonder why Geox want to be a giant.Why not position itself as a casual expertise just like Clarks dose.

keep thinking and try to finish this case by today...

Is there anyone who has seen all the GEOX product categories via http://www.shopgeox.com/ViewAll.aspx?GenderID=8&CatID=0&ColorGroupID=0&PageNo=4&sorttype=P&pagetype=R

Or anyone who wears this brand?

My knowledge towards this brand is: its products are designed for comfortable wearing，a good brand for footwear. however, regarding the shoes design, less fancy than Miss sixty, less fashionable than St & SAT. Of course, i am not asking GEOX to copy their designs, but to improve the shose look, the produts appeal to consumers.

btw, i love this brand, just hard to choose the shoese design among GEOX's product categories

thank you for the link.

and you are probably right..it's hard for ladies to choose...

GB-Ni Jingyan-2010961537 wrote:i found the main issue is clear in this case:
-how to sustain the competitive advantages
-how to achieve the goal to the world's biggest shoe maker

The major advantage of Geox is techonology invonation.So how to renew and update its techonology should be the key element. What impress me most is the study of human movement.I believe innovation in this aspect will make Geox improve its leading position.

I agree partly on this.Innovation surely is a key point,But Fashion element could also help sales.

As to the goal, honestly, I wonder why Geox want to be a giant.Why not position itself as a casual expertise just like Clarks dose.

Every business man want to expand sales and market,right? Sports shoes market is the biggest segment in shoes market.Nike global sales in 2003 already reached 6,236M,Clarks global sales only reached 1,646 in 2007.

keep thinking and try to finish this case by today...

[left]

odella.chen wrote:I think Geox should pay more attention to the product position while entering into the sports shoes market.Because the lifestyle shoes have been accepted by the market,the company should maintain this market segment.Technology and brand help consumers recognize the product.If in the sports shoes market the company continue using the brand Geox,consumers may be confused what the Geox exactly brings to them,lifestyle or sports?If both,why not choose Nike or other famous sports shoes and the Geox's impression as lifestyle shoes will be
weakened. One way to solve this problem is to develop a new brand for sports segment and use a different market strategy such as selling sports clothing as well,sponsoring a kind of competition and engaging a brand speaker. Products should be discriminating from Nike in packing, promotion,distribution,etc.

Very good idea of creating a new Brand for GeoX sports products. I am thinking if Market stratedgy should also be changed accordingly? Sports stars? Young Stars?

After reading the case, we can find some advantages of Geox:
1)patent, this is what GEOX highly valued and it is the core technology of the firm
2)Italian-made，the GEOX brand is an Italian brand which has an advantage over others shoe brand as the symbol of fashion and design.
3)GEOX outsourced most of production in China and India which has significantly lower the product cost

Haha, discussion so warm! Let me share some of my thoughts.
Gexo is a young company, compared with those old shoe brands in Italy. Set up in 1995, Geox started only with a patent and 5 people. In 2007, Geox sold 21 million shoes. No doubt GEOX is success, how does Geox make it? In my point of view the factors can be summarized as:
1. Patent consolidated and protected the innovation.
2. Product design, manufacturing and supply chain management; Geox’s shoes sell not only because they “breathe”, but also because they are stylish and reasonably priced.
3. Wide range of distribution and retail strategy; Geox distributes shoes and apparel through its 278 mono-brand stores, 9,000 multi-brand stores and 10,000 retail distributors in 68 countries.
4. Product differentiation. Geox has focused its efforts on the application of new technologies to the shoe outsole, not just n the upper style and design. The product range Geox offers is wide in scope and targets a large customer base.

However. . . . All of these can only represent the past, the completion in present shoe industry abnormal cruelty. Maintain the cutting edge and continue to be the market winner, I have the following recommendations for Mr Polegate.
1. Extended Patent and Applied to Apparel, not just the shoe cover.
2. Constantly on R&D and Innovation (could buy some advanced technology or acquire some company)
3. Keep close eye to the consumer preference trend.
4. Cross industry cooperation like with Apple, Seiko..etc.
5. Constantly competitor research. Keep difference and stay in “Blue Ocean”
Finally, let me quote another sentence said by Mr Polegate, and it’s also the mission of him - "a long interplanetary journey to show my invention to whomever needs it"

After reading the whole story of Geox, deeply impress of its CEO's innovative spirits. And will consider to try Geox shoes. List some advantages and problems of Geox for sharing.
Advantages: 1. Innovative Technology & Patent
2. Appropriate Development & Marketing Strategy
3. Strong Distribution Network
Problems: 1. Limited Overseas Market Share
2. Simple Product Segments

GA Tian Liqing 2010960181 wrote:After reading the whole story of Geox, deeply impress of its CEO's innovative spirits. And will consider to try Geox shoes. List some advantages and problems of Geox for sharing.
Advantages: 1. Innovative Technology & Patent
2. Appropriate Development & Marketing Strategy
3. Strong Distribution Network
Problems: 1. Limited Overseas Market Share
2. Simple Product Segments

My husband has one GeoX.Its technolodgy is not as good as the advertisement.It is not waterproof.Can not wear it in rainy days. So Geox still need invest on Technology.

Really? OK, seems needing double checking before buying.

The Strength of Geox:
 The company has a core competence involving technology and innovation.
 Geox has grown substantially over recent years, and has experienced global expansion.
 Geox is a very profitable organization.
 Geox has no factories. It does not tie up cash in buildings and manufacturing workers.
The Weak Points of Geox:
 Geox’s income of the business is still heavily dependent upon its share of the footwear market.
 Geox’s brand recognition is not enough. Although I like the products of Gexo now, my friends or me do not know them before.
The Opportunity for Geox:
 There are many markets that have the disposable income to spend on high value goods. For example, emerging markets such as China and India have a new richer generation of consumers.
 To take over, merge with, or form strategic alliances with other famous brand, focusing on specific markets such as sporting goods products.
The Threat for Geox:
 The market for footwear and apparels is very competitive.
 Geox has no products that were priced the low to low-medium price range of the market. In countries such as China and India, affordability remains a significant factor.
My Suggestions to Geox
 If competitors invented the new method and materials to produce "breathes" shoes, Geox would be deeply affected. From my opinion, firstly, Geox should provide high-quality and cost-effective “breathing shoes” to occupy more market shares.
 Second, Geox can not only use image of the product and its breathable sole technology, but also use fashion models or celebrities, who wear Geox shoes to increase brand recognition quickly in the world. Of course, it is also important to enhance customer loyalty for Geox.
 Last but not the least, Geox shall accelerate the development of the “breathing” apparel because the profit margins for apparel are higher than those for footwear.

WANGCHUN/2010961599/GA

Geox was a successful innovation-oriented company.Although Geox had performed very well, there still were some issues to be improved.

First, the sales propotion between footwear and apparel needed to be improved.
Second, the market share of Geox in sports market is too small.
Third, Asia market was not explored enough.

To me, the success of Geox is self-illuminate, and as long as it continue this three strategy:
1> Maintaining high quality standards, which means product innovation, fulfill to customers’ needs, etc…
2> Continuously improving flexibility and time to market, which means related product, branding and target group focusing, etc…
3> Increasing productivity and reducing costs, which means outsourcing, diversity production line all around world, process improvements, etc..

After reading this case, I`m like to show my admiration to GEOX, for the innovation and technology of the "breathing shoes". However, there are several problems existing.
1.The products of GEOX are too simplex, almost all what they product are shoes. It will block the further development if product line is not expanded.
2.The sports apparel market is full of competition, apart from famous brands like NIKE and ADIDAS, there are a great many brands sharing the market. How does GEOX be the victor in this business war?

My advices are as follows.
1.Design the products of the same series. For example, GEOX`s shoes are well known, why doesn`t the company sell "breathing socks", or "breathing trousers"? With the seccess of shoes, I believe that other kinds of "breathing apparel" will also catch customers` eyes.
2.Consider carefully about the South America and the Africa markets. South America and Africa are both areas in tropic zone. Large demand of breathing apparel created an attractive market.
3.Cooperate with the governments and public organizations. It`s one of the most effective way to enlarge the sales in China. And with the cooperation with public organizations, popularity of a brand will be raised quickly.

GEOX is widely accepted by youngsters, I hope the company make a greater success in the future.

(student number: 2010962402)

 Need to sustain the current competitive advantage—technology/style mix.
 Need resume the fast growth, which has been paused due to financial crisis
 Need to expand the market to different Geography other than Italy/Europe---For example USA/China/India
 Need to improve the product portfolio and improve profit margin—expand to apparels/fashions other than shoes, expand from casual shoes to sports shoes.

Geox once found its position in the casual footwear market as a market niche in the year of 1992. The technology and idea innovation about “shoes that breathes” was really eye-catching and carved out a niche for Geox in the red ocean of global footwear industry.

However, Geox was not satisfied with its market niche position any more after that it was ranked No.2 in the international casual footwear market. To reach its ambition to be the world’s biggest shoemaker, Geox has started to buy sportswear brand and established product lines to enter the sportswear market, especially that in America since 2008.

Due to the influence of Financial Crisis from 2008 on consumers’ pocket and the crucial competition in Geox’s target market, Geox is faced with laid-back of its ambition.

To maintain its sustainability and competitive advantage, Geox should continue the strategy of a market niche, rather than the blind market expansion strategy.

There are mainly three ways advised to implement the pursuit of a market niche strategy. Firstly, Geox should protect the niche position from the ways of brand specification and medium-price strategy in U.S sportswear market. Secondly, expanding the casual footwear market into the countries around the existed market. Thirdly, creating a market niche position in the apparel market segment.

Today I have been the GEOX shop at Jinqiao International Square. My impression is as follows:

1. The shjop is single brand shop, but it is small, only two sales.

2. The men's causal shoes look good on design and quality;

3. The women's shoes look not very fashion;

4. The design of sports shoes look a little bit old, it can not compare with Nike and Adidas.

5. The price is around 1500RMB/pair, more than 200USD.

Still GEOX has something to do to improve the marketing and product in China.

2010GB Mei Ming 2010960870

Geox also can purchase one famous sports footwear & apparel brand, for example Puma or Fila to have more market share by introducing its technology.

2010GB Mei Ming

I would like to comment on the distribution channel. To increase its revenue, Geox need to expand its distribution channel, to make its products more accessible. On the other side, the operation of the distribution channel requires huge operating cost.
One alternative is e-business. With the development of the online-payment platform and the distribution center service, Goex could set up online stores and sell to customer directly. It will extend its distribution network, and on the other side reduce its cost.

Geox has several disadvantages:Firstly, Geoxs main market is located in Europe, and second in North America, with 665 DOS and franchises. While its number of DOS and franchises in other countries is only 332, 1/3 as much as the number in Europe and North America. Since China and other developing countries have very broad and promising market, new generation of rich people in such countries will be a great target of the shoe makers to pursue.
Secondly, Geox just entered the shoe market in 1995, which is only 15 years old, comparatively younger than other shoe making giants, as Nike with 53 years and Adidas with 61 years. It will be particularly difficult for Geox to gain considerable share in the big sports shoe market.
Thirdly, Geox is a kind of family owned business. In 2008, Polegato’s son, Enrico Moretti, was appointed as deputy chairman of the company. The family owned business model may raise some feelings of limited promotion spaces for other managers.