Market analysis C & J Clarks Ltd Essay Essay
Detailss back uping my findings and recommendations are detailed in the chief study. A sum-up of the chief points are as follows: -FindingsClarks trade name is recognised as one of quality with a strong market portion of children’s footwear and the “the more mature” client.
The company has a strong distribution web which could be used as a platform to establish new merchandises at minimum incremental cost.
There is a important menace from new rivals such as the major supermarkets every bit good as high manner retail merchants widening their merchandise scope to footwear.
Footwear is turning in importance as a “fashion” point and grounds supports an addition in “impulse” purchasing peculiarly by adult females.
Consumers in the age scope 30 to 49 old ages olds spend the most on footwear. on mean ?322 per annum.
There is increased political menace on “cheap” imports e. g. duties on imported goods from China and Vietnam. The EU committee is besides supervising anti – competitory behaviour closely. This could intensify in the hereafter.
Social tendencies are impacting Clarks’ market. There is a move towards “cheaper” more stylish boots and places made of man-made stuffs which can easy be disposed of after a comparatively short period of clip.
The UK economic system is demoing marks of decelerating down which will hold an inauspicious impact on demand in 2008 as consumers spend less on “fashion” and concentrate on necessities.
KEY RECOMMENDATIONSSHORT TERM – diversify into selling vesture accoutrements which would be sold aboard Clarks’ places and boots.
MEDIUM TERM -Investment in selling. trade name image and advanced design
Long TERM – Focus on the teenager/young grownup market
1. 1I have been requested by C & A ; J Clark Limited ( Clarks ) to fix a market analysis of the UK footwear industry and show a set of recommendations1. 2 I have included in this study recommendations over the short term ( 1 – 3 old ages ) . the average term ( 3 -5 old ages ) and the long term ( 5 + old ages ) 1. 3 I have used assorted beginnings to garner information for my market analysis. The Internet has been a really utile beginning of information on the footwear industry. Clarks’ web site has besides proved to be highly helpful in supplying item on the scope of merchandises. every bit good as supplying a brief history of the concern.
Mintel is an online resource which has up to day of the month information on different industries and this has been used in my research. I have besides made usage of ‘key notes market reappraisal 2006’ and ‘key notes fiscal study report’ which I accessed in the British Library.
To back up my strategic recommendations I have researched articles from the ‘Times Online’ and the ‘BBC website’ to find which way the market is taking1. 4 Section 3 comprises of a market analysis of the footwear industry including macro and micro factors which can impact Clarks1. 5 Section 6 lineations my strategic recommendations for the short. medium and long term.
2. COMPANY HISTORY AND PROFILE
2. 1 C & A ; J Clark Ltd ( Clarks ) is one of the largest private companies in the UK and is amongst the largest distributers of general footwear. The company produces more than 40 million braces of places and boots a twelvemonth with turnover for the twelvemonth to 31st January 2007 of ?973 million. 5. 6 % higher than anterior twelvemonth.
2. 2 From the early 1980s until the mid 1990s. two companies dominated the British footwear market – Clarks and the British Shoe Corporation ( BSC ) . The interruption up and the death of BSC altered the kineticss of the UK footwear industry go forthing Clarks as the largest vertically incorporate UK shoe company. ( Beginning: Clarks Web Site ) 2. 3 The shoe market in the UK is dominated by imports. which mirrors the vesture industry. Manufacturing abroad has become the norm with about all UK shoe companies.
This is driven by lower costs. including labor. stuffs and general fabrication costs. Clarks late closed down its last mill in the UK ( Ilminster. Somerset ) . with all fabrication now being undertaken in Portugal and other low cost states. ( Beginning: Key Note Report ) 2. 4 Clarks is recognised for doing comfy. lasting and good fitting places. The merchandise is non regarded as a manner point. Clarks’ aim its merchandises at infants/young kids through to 15 twelvemonth olds and grownups in the age scope 45 – 50. The company offers a broad scope of merchandises such as athleticss. smart. and insouciant places and boots.
Over the old ages Clarks has introduced many advanced designs such as Dessert Boots. ‘Wallabees’ . ‘Softees’ . ‘Springers’ ( with air filled colloidal suspensions ) and a CICA scope of athleticss places. which has consolidated the Clarks trade name as one of quality and invention.
2. 5 Clarks besides owns K Shoes which has over 500 shops in the UK. and sells through 2. 000 + mercantile establishments. doing them the largest retail merchant of places in the state.
1. Market ANALYSISA. MICRO ENVIROMENT
3. 1 The Footwear market is inextricably linked to the vesture market. Analysts normally group both industries. Together the market is deserving merely over ?44 billion. The footwear industry histories for 13. 7 % ( ?6bn ) . ( Beginning: Footnote 2006 ) The footwear industry is split up into 3 chief classs: -Children’s footwear which accounts for 23 % ( ?1. 4 billion brace ) of the entire marketMen’s footwear has a higher market portion at 31. 1 % ( 1. 9 billion braces ) andWomen’s entire market portion which is at 45. 9 % ( 2. 9 billion braces ) ( Source – Office of National Statistics ) 3. 2 Clarks has four chief rivals. The largest rival is Stylo PLC. which has 650 shops. trading chiefly as Barratts. Bacons. Priceless and Shelly’s.
Other important rivals areR Griggs Group. celebrated for its Doc Martins Boots. Griggs is in private owned and sells throughout the UK in many major outletsStead & A ; Simpson Ltd. . which has over 400 mercantile establishments. They trade under the names of Peter Briggs. Stead & A ; Simpson. Shoe Express and Lilley & A ; Skinner andShoe Zone. which has 370 locations in the UK.
( Beginning: footer 2006 ) More late new rivals have emerged peculiarly some of the major Supermarket ironss such as Asda. who have their ain vesture and shoe scope. Other manner mercantile establishments have besides late diversified into the footwear industry. e. g. ‘Arcadia’ which now sell its “own brand” places every bit good as known trade names. ‘Oasis’ . ‘Next’ and ‘New Look’ are besides taking the same way.
The Internet has besides increased competition from other parts of the universe although this is non at present stuff.
3. 3 From my research. it has become apparent that manner in the footwear industry is going of import and consumers are going more manner witting when it comes to their pess. However trends alteration quickly and it is hard to calculate where the market is traveling. Predicting the tendency right is the difference between success and failure.
The bulk of footwear gross revenues in the UK are through retail merchants. A 3rd of adult females admit to purchasing places and accoutrements on urge ( beginning -Mintel ) . Merely a little figure of people buy over the Internet.
Parents tend to take their kids to recognized retail merchants to hold their pess decently measured ( beginning: Mintel ) . Parents insist on purchasing the right shoe for their kids. On the other manus adolescents will be given to travel purchase from the manner shops.
In 2005 the mean individual spent around ?4. 60 per hebdomad on places ( beginning: Family disbursement ) . Thirty to forty nine twelvemonth olds were passing on mean ?6. 20 ( ?322 per annum ) a hebdomad on places because they were purchasing for their kids.
B. MACRO ENVIROMENT
3. 4 There are a figure of political factors which impact Clarks’ concern.
The EU has voted to enforce a two twelvemonth government of duties on imported goods from China and Vietnam. Duties of 16. 5 % and 10 % severally will now be applied to cargos ( Beginning: Independent 05/10/06 ) . This will intend higher importation cost for Clarks which could set up monetary values.
The European Commission besides imposes regulations re monetary value repair and protecting little providers against anti competitory behaviour from the big operators. ( Beginning: Principles and Practices of Marketing ) 3. 5 Social factors have affected the footwear market place such as frock codifications. The twenty-first century is a period of fast changing manner ; for illustration under 35 twelvemonth olds choose to replace their places with the newest and most stylish braces. instead than mending their places or purchasing places that will last for old ages. . This is partially due to the autumn in monetary value of places late enabling immature people to be more stylish. Such has been the involvement in manner amongst immature and in-between aged people that unwittingly. it has created enthusiasm in places ( beginning: Mintel Report 2007 ) .
3. 6 There have been a figure of technological alterations which have affected the market. There is now the ability to mass green goods places from a combination of natural and man-made stuffs at low cost and to comparatively high quality criterions.
3. 7 The usage of the Internet has meant that clients have a wider pick of where to purchase their places from. There is grounds to back up growing purchasing “on line” as it fits in with people’s busy life style.
3. 8 Current Economic factors are get downing to hold an impact on the footwear market. Whilst involvement rates are now get downing to cut down in the UK after two old ages of additions. there is concern that the economic system will travel into recession. The Bank of England reduced the base rate by a one-fourth of a point in December 2007 ( Beginning: Mintel ) .
Families are happening that there is a greater force per unit area on their budgets. so they are be givening to purchase fewer luxuries such as places. The “credit crunch” i. e. handiness of debt and at what monetary value. has besides slowed down consumer disbursement. and will make so farther in 2008. Sterling has besides reached a record depression against the ˆuro. which will impact the cost of imports from EU states. The Bank of England confirmed that families are being hit as the consequence of the planetary recognition crunch spills over into the existent economic system ( beginning: times online 03/01/08 ) There is a tightening of both consumer and concern disbursement. and it is expected to deteriorate over the following few months.
4. CLARKS SWOT ANALYSIS4. 15. IDENTIFICATIONS OF STRATEGIC ALTERNATIVES
5. 1 There have been a figure of factors which Clarks need to concentrate on every bit outlined in subdivision 3. 2.
The outgrowth of stylish and “cheap” shoe retail merchants such as Arcadia and New Look has meant people are traveling off from Clarks dependable and comfy places. Even though this is a menace to Clarks. there is considerable chance every bit good for the company to travel into the stylish shoe market. Clarks has an in deepness apprehension of the shoe market and already hold a good established fabrication and distribution web non merely in the UK but besides internationally and in North America. Using graduated table and the capableness of a strong selling run could do this into a success.
The challenge is to get the better of the Clarks trade name image with clever and advanced selling and advertisement – expensive but worth the investing as this portion of the market is turning significantly as market research has demonstrated. The consumer has become more manner witting and caring about what they wear and will pay a premium for taking border places with a strong trade name image.
5. 2 Consumers in the 30 – 49 twelvemonth old age set tend to pass most on places ; the ground for this is because they are purchasing non merely for themselves but besides for their kids. On norm they spend about ?322 a twelvemonth compared to other age groups which spend around ?239. Clarks has a great children’s scope as outlined in S2. 4. Making the shops more kids friendly would pull more parents into the stores. This would hopefully do shopping for grownups less nerve-racking. At the minute Clarks’ strength is in their children’s places and “older” grownup places. Therefore bettering the cloth and design of their stores should pull extra gross revenues and increase profitableness.
5. 3 Another chance which the company needs to turn to is utilising different methods of selling their merchandises. For illustration they could sell on the cyberspace or in catalogues. Selling on the cyberspace could be a positive manner forward for Clarks. It already has a good established web site. It is really easy to utilize and entree. and contains all the latest places for work forces. adult females and kids. A wider audience could be reached at a comparatively low cost. . With the World Wide Web going a much more popular topographic point to shop. this could be a positive move.
There are some issues to be addressed when selling footwear over the cyberspace. Peoples tend to desire to seek on places before they buy them. As Clarks has a strong repute for good suiting places tailored for the client. this could be seen as an advantage over its rivals.
5. 4 Clarks should besides see diversifying into new sectors of the footwear and vesture market. such as vesture accoutrements. pocketbooks. and scarves. It would be a good thought holding places and accoutrements together as most adult females buy both of these on urge. as research confirmed. William clarks should aim their scope of accoutrements ab initio at kids and the “older” coevals. its two strongest markets. It would be excessively hard at this phase to aim adolescents and immature grownups because of the considerable competition from the well established high manner ironss such as Topshop and Next who are seen by adolescents as trendy. the antonym of Clarks image at the present clip.
Clarks has the resources to do the “accessories” construct work. They ain stores around the UK. about one in every town. so they already have distribution capableness ; and Clarks has the finance to publicize their new merchandises. More significantly they have the in deepness cognition and apprehension of the vesture and footwear market.
5. 5 William clarks could see take downing the monetary value of selected scopes places in order for them to increase market portion by viing efficaciously against supermarkets. big retail merchants and other big shoe retail merchants. Clarks is a really profitable concern ( ?81 million operating net income for the twelvemonth to 31st January 2007 ) with low production costs due to fabricating abroad. The company could take down their monetary values on certain scopes with minimum impact on bottom line profitableness. They could besides construct in “special deals” such as bargain one brace of places and acquire the 2nd half monetary value.
5. 6 Clarks should see overhauling its trade name image. and do people more cognizant of the high quality. good looking places it supplies. With its selling budget being the largest in the footwear industry. it should be possible to change people’s perceptual experiences of Clarks as a trade name. Even giving their stores a face lift to do them more modern is an easy manner of pulling people in and hopefully doing impulse bargains.
6. RECOMMENDATIONS6. 1 Short TERM ( 1-3 Old ages )
Diversify into AccessoriesAs discussed in 5. 4 increasing the merchandise scope is a good manner of increasing gross and profitableness. Peoples may come to Clarks for more than merely places. I have noticed that some of the competition are get downing to present different merchandise into their shoe stores. William clarks will desire to be the market leader and be the first to properly diversify into a different market. First mover initiative will consolidate the company’s market laterality. I strongly recommend that Clarks moves rapidly to implement this scheme.
6. 2 MEDUIM TERM ( 3-5 Old ages )
Targeting 30-49 twelvemonth olds30-49 twelvemonth olds are the highest Spenders on places as discussed in S5. 2 Targeting this market would be a wise way to take. The top of being successful in this market would be important to Clarks in footings of profitableness. market portion and trade name consciousness.