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Pricing strategy for business markets
Pricing strategy for business markets
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Client specification This report is for individual or institutional investors who want to diversify their portfolio by investing in sportswear retail industry. Given the positive announcement of its high profit, it is suggested that JD sports Fashion Plc is undervalued and a final justification will be made in this report. The report will provide in-depth analysis of JD sports Plc. that includes the following content: • Analysis of sports clothing industry, including its main features, key market drivers and competition within industry. • Analysis of JD Sports Fashion Plc, including detailed business description, corporate strategy and SWOT analysis. • Equity valuation using DCF and comparable methods. The valuation is based on …show more content…
Company Overview JD Sports Fashion “Leading brands, exclusive styles, only at JD” • Founded in 1981, JD Sports Fashion is known as the leading specialists multiple retailers of branded sportswear, fashion wear and outdoor equipment. It is a subsidiary of Pentland Group, who owns 57.5% of its share. • JD Sports Fashion has four business areas, ie. Sport retail, fashion retail, outdoor retail and distributions businesses. • JD Sports Fashion operates mainly in the UK and Ireland. But it has business in France, Spain, Australia, New Zealand, the US, Canada and Hong Kong. It is headquartered in Bury, the UK and it has 10,508 employees in total. • JD has more than 800 retail stores, and it keeps increasing its presence in the European market with additional stores in France, Spain, The Netherlands and Germany. • In 2015, JD Sports Fashion Plc reported sales of £1.52 billion, a 14.4% increase from 2014. The profit before tax and exceptional items in the continuing businesses has gone up from £82.0 million to a record of £100 million. • After the announcement of higher- than-expected profit on 31st July 2015, the share price went from 727.5p to
They manufacture and supply a diversity of products for sports like golf, softball, basketball, soccer, baseball, golf and much more.
J. Crew, also known as J. Crew Group Inc., is a private label company known for its preppy fashions that are fashionable yet costly. Essentially, the company was owned by the Cinader family for most of its history. Mitchell Cinader and Saul Charles founded the company in 1947. It was originally known as Popular Merchandise Inc. doing business as the Popular Club Plan, in which Mitchell’s son Arthur was the overseer. The company sold women’s clothing through in-home demonstrations. In the early 1980’s, Cinader and Charles observed catalog retailers such as Land’s End, Talbots and L.L. Bean reporting rising sales in revenue. With intentions to increase sales and duplicate success of these well known companies, Popular Club Plan began its own catalog (http://www.fundinguniverse.com/company-histories/j-crew-group-inc-history/).
Demand these days for athletic apparel and shoes are off the roof because of the health conscious culture. This trendy culture is all cross the world which brings a large profit for companies like Nike, Under Armor and etc. As the companies start to compete with celebrity sponsors or sports teams in this market naturally investors demand and stock prices increase.
Athletic Supreme is a leading sporting goods retailer offering the best selection of brand name athletic equipment. With nearly 10 years of hard work, attention to detail, and great customer service, the company has grown into a full line sporting goods chain and now operating over 250 stores in 22 states across the U.
Although it started with functional, comfortable, athletic clothing, it later changed its focus from performance/functionality to lifestyle. This change in direction was beneficial for the casual apparel brands who don’t have the technology to create performance allowing them to be successful by just looking like activewear, but it made things harder for sportswear brands who have the performance, but not so much the fashion. Because of this many sportswear brands started collaborating with fashion designers (e.g. Adidas with Stella McCartney) and started endorsing female celebrities that are also fashion icons (Puma-Rihanna, Reebok- GiGi Hadid, Nike - Bella Hadid, Under Armour- Gisele Bundchen etc.), and male celebrities especially rapper and R&B singers (Adidas- Kanye West, Reebok-
Only a week earlier, on June 28, 2001, Nike had held an analysts' meeting to disclose its fiscal-year 2001 results.1 The meeting, however, had another purpose: Nike management wanted to communicate a strategy for revitalizing the company. Since 1997, its revenues had plateaued at around $9 billion, while net income had fallen from almost $800 million to $580 million (see Exhibit 1). Nike's market share in U.S. athletic shoes had fallen from 48%, in 1997, to 42% in 2000.2 In addition, recent supply-chain issues and the adverse effect of a strong dollar had negatively affected revenue.
a trend setter in the industry and one of the most profitable in the industry. Many new competitors emerged in recent years hoping to replicate Fancy Fashion’s results. This intensifying competition arrived from manufactures of similar winter and summer outdoor sportswear. Moreover, Fancy Fashion Inc. faced inaccurate demand forecasts on both its winter lines and summer lines. The firm also faced issues on unexpected variations in the length of delivery, consistency on finishing the product at the expected time, and cost of transportation services.
This company has seen major expansions in outlets throughout the world over the years. Adidas on its part has managed to build a powerful brand through its technological innovations and aggressive marketing where they spend up to thirteen per cent of their revenue besides offering high quality services. These scenarios seem to present Under Armour with a massive competitive disadvantage. Through an inside-out perspective, Under Armour has been able to concentrate on the growth mission. Its mission is about building ... ...
“The shoe business is very competitive, with competition most intensive in low-medium price lines and low price lines. Competitive factors are price and fashion with price more important. In the medium price shoe market, manufacturers' brands are more prevalent, and manufacturers compete for consumer loyalty and distribution. Fashion is generally less important in medium price lines, but it is the key
The corporation should invest more money in research and innovation since this is what has helped them to make a product that rivals their competitors. At the same time, it is imperative for them to improve their machinery for cheap labor costs which will help the company increase its production allowing it to meet the demand in the market. By improving production leading to lower costs of making shoes, apparel, and equipment, Nike will achieve higher demand assuming a quality product is maintained in that process. They will stand a better chance of competing in the industry (Hill, 2009). The organization is already in a better position for meeting the demand, customer taste, and needs. The company should improve quality by focusing on developing lightweight products that are more durable compared to those offered by the competitors. Also, Nike can keep up their success by continuing to reinvent and improve their items and continue to meet the current demand by using new technology. It can also use the Internet to communicate with consumers (Hill, 2009). By developing new technology, Nike will allow the customers to suggest and design their shoes online. To achieve this goal, it is fundamental to enhance areas such as their website to make it more user-friendly. Finally, the company should pay attention to small startup organizations that enter the
Six years after deciding to be an independent public company in late 2000, Coach Inc.’s net sales had grown at a compounded annual rate of 26 percent and the stock price had increased by 1,400 percent due to a strategy keyed to a concept called accessible luxury. Coach crafted the accessible luxury category in women’s handbags and leather accessories by differentiating themselves on price, but matching competitors on styling, quality, and customer service. The accessible luxury strategy mirrors a focus (or market niche) strategy based on low costs. Coach concentrates on a narrow buyer segment and outcompetes rivals by having lower costs than rivals and thus being able to serve niche members at a lower price. Management believed that new products should be based on market research rather than on designers’ instincts. Coach utilized extensive consumer surveys and focus groups to gain insight in the market, and ultimately a competitive advantage over competition. Coach’s $200-$500 handbags appealed to both middle class consumers who now were able to afford a taste of luxury, as well as affluent consumers with the means to spend $2,000 on a handbag on a regular basis.
In reviewing the case of New Balance Athletic Shoe, Inc. it is clear that there are a few major problems that the company is facing. First of all, New Balance falls behind its other major competitors, Nike, Adidas and Reebok, in the area of marketing. Unlike its competitors, New Balance does not undertake celebrity endorsements. This puts them at a disadvantage when it comes to brand building. This also causes the company to lose out somewhat on gaining awareness on a global scale as it lacks endorsements in major sporting events. Most global brand names generate strong brand recognition through celebrity endorsements in sporting events that would give them the needed momentum to carry their brand name further into the global market.
The current market for footwear particularly sneakers is booming, fueled by millennial demand and the organization 's strategic business approach. The international sneaker market has also grown by approximately 40% since 2014 to an estimated $55 billion. In 2015 the athletic footwear industry in the United States grew by 8% generating about $17.2 billion in sales. Out of that number, Nike sales are approximately 3% with the average selling price increasing by 5% which translates to $61.15 (Hill, 2009). The millennials alone are driving the market as they spent approximately $21 billion on footwear in 2014. In Japan alone, the organization has boosted the market by about $2.6 billion. Furthermore, the footwear industry is expected to be one
Executive Summary Introduction Kimi Ford, a portfolio manager at NorthPoint Group, a mutual-fund management firm, was considering buying shares in the fund she manages, the NorthPoint Large-Cap Fund, with an emphasis on value investing. Ford held an analysts’ meeting to disclose its fiscal-year 2001 results and, most importantly, to communicate a strategy for revitalizing the company. Nike has maintained revenue of about $9 billion since 1997. However, its net income had fallen from almost $800 million to $580 million. Moreover, Nike’s market share in U.S. athletic shoes has fallen from 48% in 1997 to 42% in 2000.
Sport Obermeyer is a high-end fashion skiwear design and merchandising company headquartered in Aspen, Colorado. Over the years, Sports Obermeyer has developed into a dominant competitor. Sports Obermeyer's estimated sales in 1992 were $32.8 million. The company holds 45% share of children's skiwear and 11% of adult Skiwear market. Sport Obermeyer produces merchandise ranging from: parkas, vests, ski suits, shells, ski pants, turtlenecks, and accessories. These products are sold throughout U.S. department stores in urban areas and ski shops. With increasing demands and rising competition, Sport Obermeyer needs to have an edge on the market. Starting in 1985 with a joint venture in Hong Kong called Obersport, the company began to increase productivity to meet their new demands. Recently, a number of contractual ventures were added and a new complex in Lo Village Guangdong China have enhance production but increase the level of difficulty on the planning and production stages. The Sport Obermeyer case describes the forecasting, planning and production processes of a global skiwear supply channel. The case provides an in-depth description of the planning and production processes Sport Obermeyer and its supply channel partners undergo each year to develop and deliver Obermeyer's product line. The case will emphasis on the nature of the information that flows among the members of the supply chain and the timing of key decisions and events in order to have a successful inventory line.