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Essay on Analysis of Clarks Competitive Strategy

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2.0 Literature review

Chapter one provided the rationale for this dissertation, namely that there is a link between the undertaking of a competitive analysis and the change in fortune of Clarks. It was suggested that there are many factors which may have an effect upon these issues and which relate specifically to the tactics used to overcome an apparent downtown in the company's profits. Factors affecting these issues will be discussed in chapter two and will incorporate literature from the fields of strategy, operations and marketing. A company, Clarks, based in Somerset, was stated as being a case study for the author's research and a brief overview of that company was given.

2.1 Clarks and the shoe market in the UK

(this paragraph from customers notes as researcher cannot access Mintel reports or the customers interview with Lynn Benfield…. " The UK shoe market saw declining market values in the 1990's but is now seeing an increase in spending on shoes, with customers spending more on individual pairs of shoes, like designer brands, than they had previously increasing by 5.5% in 2001.(Mintel - Accessed 18/11/04). At the same time shoe prices have fallen by 8% since the 90's due to UK shoe manufacturers moving abroad to take advantage of cheap labour. Keynote predicts that shoe sales will increase over the next five years.(Mintel accessed 18/11/04)" In fact, it would appear that Clarks are also going to source their manufacturing abroad. A report on the BBC website, www.bbc.co.uk. dated 11/01/05 has the headlines "Clarks ends shoemaking in Somerset" with managers in Somerset telling staff that "the only way the company can survive is by switching production to the Far East."

(this paragraph from customers notes as researcher cannot access customers interview with Lynn Benfield…"Clarks are in the process of implementing a new competitive strategy consisting of a new innovative designers and an advertising campaign aimed at young adults (18-35) mainly utilising TV advertising and a refurbishment of all Clarks stores. (Lynn Bedfield) "

Clarks offer a huge range of shoes for adults from slippers to boots, casual wear to wedding shoes, and the traditional desert boot to the practical office shoe. No longer limited in colour ranges, the fashion items closely colour match the clothes of the season and accessories are available. But sustaining market share is hard in today's market. No longer are there a handful of shoe retailers, but many retail stores, such as Next, River island and Dorothy Perkins have successfully introduced shoes into their fashion ranges whilst new trendy shoe shops such as Schuh are also becoming established within the shopping malls. Moreover, sports shops, such as All Sports are introducing casual wear into their ranges, competition is definitely now a big factor in this market. (Observation)

Trying to address this, Clarks have introduced an awareness campaign for their wide range of adult shoes. Following on from the "my shoes" campaign of 2004, the current advertising campaign features a professional, well dressed woman, in her late twenties, trying to purvey the international appeal of Clarks shoes, "Nottingham is my New York" and "Preston is my Paris" the two current campaigns, can also be observed on www.clarks.co.uk

How a firm addresses the competition, is determined by it's orientation (Miles and Snow) and so it is pertinent to this dissertation to explore the following themes:-
1. How firms may be orientated
2. How competitive analysis can help a firm refocus
3. How advertising can raise awareness of products

2.2 How firms may be oriented

Orientation refers to the relative position that an organisation takes in relation to it's products, services and markets (Miles and Snow). There are four main orientations, production, sales, process and customer.

2.2.1 Production orientation

Production orientation focuses on the company driven belief that excellent quality is what the customer wants over and above everything else. Often associated with family run companies and owner managers, such companies tend not to undertake market research into external customer needs resulting in them trying to satisfy the perceived needs of the general or production manager. Generally scientifically based, this orientation has been the cause of decline of many successful companies such as Apple computers and Harley Davison. Danny Miller, in his book the "Icarus Paradox" used the phrase "Craftsmen becoming Tinkerers", for whilst focusing on continually improving their products, they were unaware that consumer tastes had actually changed.

The author suspects that Clarks is production oriented based on the emphasis given on their website www.clarks.com, where much emphasis in the 'history' and 'about us' sections are given to quality and innovation, rather than style, fashion or customer needs.

2.1.2 Sales orientation

It is not unusual for one of the side affects of a production oriented company to be excess stock. Often employing aggressive sales tactics, to move the goods, they spend a great deal of money on advertising to try and create a need and flood the market with their products, often at a discounted rate, to try and decrease the stock pile. Customers are reactive to the message the company portrays, that this one transaction is all important, rather than try and retain regular loyal customers.

The author believes that there has been an element of this with Clarks. Recent years have seen many sales in the stores and the Clarks village, opened in the early 1990's, was a method of disposing of old stock. However, the author does not believe that Clarks takes a transactional approach to all customers for certainly, many parents buy Clarks shoes for their children because their parents bought Clarks shoes for them. But whether or not these parents now buy their own shoes from Clarks is an issue to be discussed during the survey.

2.1.3 Process orientation

Process orientation involves the company in the continual monitoring of systems and procedures necessary to ensure total quality management, processes deemed necessary to undertake before delivery to the customer.

With respect to this orientation, the author believes that there is a strong element of process orientation within Clarks, for whilst innovating with new materials for soles (airwear, www.clarks.com ) and working on the perfecting techniques, they had probably lost site of the fact that fashion was becoming a key influencing decision when customers were purchasing shoes.

2.1.4 Customer orientation

A customer oriented business is one that puts the customer at the heart of it's business and realigns it's strategy, systems, structures, people and leadership around customers. Often known as marketing-led, organisations which observe this orientation take both the needs of the internal and external customer into consideration and concentrate on customer retention and lifetime value, rather than a transactional approach. "The very core of marketing is the customer. The customer is the reason for an organisations existence, and customer satisfaction is the source of the organisation's profits." (Fifield and Gilligan).

Recent trends had not been seeing customers buying shoes for life, rather that they were buying shoes for current fashion needs and were probably not looking towards keeping such for long periods. Clarks have tried to address this by offering a choice of fashionable ranges and trying to target customers with more disposable income.


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