Footlocker Inc Developing a Strategic Framework Term Paper

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Framework: Footlocker. Inc.This paper aims at elaboration of important information about the selected company, Footlocker Inc. The industry economic characteristics include a company description, competitive standing, and competitive advantage in further sections. Further, Porter’s five forces and value chain analysis would also be highlighted, proceeding with its strategies.Industry Economics CharacteristicsIn 2020, the global sports market was valued at $388.3 billion, with a growth rate of 3.4% compared to 2015 (“Global Sports Market”). The market even faced a downfall in 2019, mainly due to Covid-19. The US market share in 2018 in the same industry was 32.5% (“Market Size of the Global Sports”). North America is the largest region with this industry sale in 2020, with 35% of the market globally. Still, the trend towards fitness kept growing, and growth in emerging countries with an increasing need for urbanization promises an increment in the global sports market in difficult times. The Internet has played a critical function in helping the sales grow with sponsorships, working out at home, and internet-accessible devices at home. This is an additional economic characteristic shaping the market since with the infusion of technology, productivity, product development, and channel distribution are to be standardized for an efficient meeting of demand, generating quick sales, and reducing per-unit costs of production.This industry reflects a high fragmentation level with several players in the market, naming Maruhan, Dallas, Cowboys, and New York Yankees, etc. (“Global Sports Market”). The top ten rivals comprised 2% of the total global market in 2019. A globalized approach is being adopted lately in the footwear market, especially to remain competitive. Globalization would provide reduced risks in terms of political restrictions across borders in various countries.Company DescriptionFootlocker is a retail company that sells sports shoes and apparel. It has its headquarters in New York and has its business running in 28 countries. It has more than 2000 stores in the US and Canada. It has mainly two segments: Athletic Stores and Direct-to-Customers (“Footlocker. Inc”). The footwear and apparel clothing lines include kids, ladies, champs, and runner sidesteps. The sales take place through websites, stores, and mobile applications. The total sales that it earns from the US market are 70% of the revenue. Its major competitors are Nike, Adidas, The Finish Line, Dicks’s Sporting Goods, and Hibbett Sports.Competitive StandingCompared to its other rivals, Footlocker stands at the second position (“Footlocker Competitors”). The rating is calculated according to various factors such as CEO rank, pricing, product quality, gender rank, diversity, customer service, and culture, etc. The competitor that topped the ranking is Nike, and standing on the third is Adidas. Concerning its distinct categories, it stands fifth in the product quality category, fourth in pricing, fifth in customer service, second on CEO ranking, second in the company’s overall culture, and third on employee’s net promoter score. It is deduced that the company needs to work hard in product quality, pricing, and customer service to gain high-profit volumes and even a better market position.Competitive AdvantageThe retail model Footlocker follows almost the same as any other sports retailer; however, there are some additional competitive advantages that the company is emphasizing on. The street-wear trendy clothes give them a plus point over its competitors that are popular among customers for their forward fashion sense (“What is the Profit Model”).

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Another element that sets this firm apart from its competitors is its differentiation in various countries since it gets a chance to serve a diverse customer base. Selling huge quantities of clothes and footwear to people worldwide allows the firm to set competitive prices. Its e-commerce presence gives them one more benefit, and…

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…value chain until the final product reaches the customer.Company’s StrategiesNature of Product and ServiceThe products of high quality for the sports apparel and footwear customer in Footlocker’s case; however, recently, it has been making amendments in its retailing style for differentiating it (Duffy). Nike’s products are displayed in one of its newly opened stores, another retailer for sports apparel. The interactive shopping theme has been introduced in brick and clicks model where Footlocker’s children and women categories are displayed. It shows that the company believes in differentiated service with an exclusive style of reaching customers.Degree of Integration in Value ChainThe firm is conducting all the manufacturing operations by itself except that managing the services department, where it has been estimated that the web buying patterns have been on the rise during pandemic times. Handling more than 25,000 online orders per day has become challenging, so fashion-sourcing is now an emerging new concept (Cosgrove). For this, suppliers are contacted to cut costs. It seems that the firm might be searching for help in its distribution matters when it has to process a huge number of orders online.Degree of Geographical DiversificationThe geographical diversification is extended to its international market since it operates in several countries. Internal growth has been concentrated more when it expanded its operations to other countries. There are no signs of mergers or acquisitions. The firm operates in a single industry, which is sports apparel and footwear.Degree of Industry DiversificationThe footlocker industry requires extensive labor; therefore, multiple industries are not focused for now. Also, in difficult times of pandemic, diversification might not be possible as capital investment is required. This might not be the right time to put a financial strain on the company. Hence, it is reasoned that the company focuses on better product quality and improved customer service….....

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