Cape Shoe Company Case Study

ATENEO DE DAVAO UNIVERSITY

SCHOOL OF BUSINESS AND GOVERNANCE

MARKETING DEPARTMENT

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In partial fulfilment of the requirements for

MKTG 321 Strategic Marketing Management

2nd  Semester, S.Y. 2016-2017

CAPE SHOE COMPANY CASE STUDY

Submitted by:

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OSTAN, Frances Coreen Shane A.

Submitted to:

Prof. Donna Abrina, MBA

TABLE OF CONTENTS

Title Page ………………………………………………………………………………………. 1

Table of Contents ……………………………………………………………………………... 2

Situational Analysis …………………………………………………………………………… 3

1. Environment
2. Industry
3. Organization
4. Current Marketing Strategy

Marketing Strategy ……………………………………………………………………………. 6

1. SWOT/TOWS Matrix
2. Analysis of Target Market/s
3. Analysis of Marketing Mix

Problems found in Situational Analysis …………………………………………………...… 6

1. Statement of the Problem
2. Statement of Secondary Problems

Strategic Alternatives …………………………………………………………………………. 7

Selection of Strategic Alternative and Implementation ……………………………………. 8

Summary ……………………………………………………………………………………….. 9

1. SITUATIONAL ANALYSIS

1. Environment

• Cooperative Environment

Cape Shoe is a shoe manufacturing company that had built itself from the then Florsheim shoe factory. Florsheim, which was once an empire of high-quality shoe and apparel manufacturers, faced a loss in the industry, pushing plastic-molding Abbey Manufacturing to purchase the shoe plant creating the current company. This includes the employees of the factory with almost 20 to 30 years of experience, the equipment of more than 800 shoe-making machines, and the building fully air-conditioned.

• Competitive Environment

Cape Shoe’s ultimate competition is the overseas production which entails lower production costs than in the US. Companies such as Wal-Mart, Kathie Lee Gifford, New Balance, and Timberland benefit with this kind of overseas production, making their products cheaper. The US had always been the top in the manufacturing game but had started to weaken since developing countries led costs and imports to be substantially cheaper because of inhuman working conditions, such as those in Asia (China to be exact). However low the costs may be, US production still has an edge since the quality produced during manufacturing is almost always guaranteed to be high.

• Economic Environment

Over the years, the lower cost of overseas production has become a problem for the manufacturing industry of the US. Most of the production has also moved to developing or Third World countries, shutting down shoe and apparel factories rapidly in the US. Thus, manufacturing has had a decrease in volume and significance for workers. Moreover, because of the continual support on cheap imports, jobs related to manufacturing in the US have slowly faded away; from a 31%, it became halved to only 15% of the manufacturing labor force. In a larger scale, 20% of the citizens in the US are considered underemployed, which is an amount the double of that in the 1970s.

• Social Environment

The social issue brought about by the companies which outsource their production could have an impact on their buyers’ impulse to purchasing their products, especially ones who are concerned about social injustices and abuse.

In terms of resellers, retail chains and department stores often lean to patronizing products which already have established brand names. Independent retailers are even more willing to accept new products and present them to potential customers.

• Legal Environment

No matter how important it is to gain profit from the customers, the company should be able to abide by the rule of law, such as observing employee rights, unlike that of the situation that happened in Chinese production factories. Therefore, in this light, the CEO opted to highlight the importance of employee satisfaction because happy employees create a good business venture in the long run.