1.) Problem Recognition:
Tamara started her running shoe business in 1994 when she was 24. Tamara was a nationally ranked runner herself and hence she recognized a market for high quality running shoes specifically designed for serious runners. Tamara made good profits in the first six years of business from 1994 to 2000. Initially, she emphasized on Nike because it was well accepted and considered a top quality product.
She did not have much of a problem doing business in the initial years because of the jogging boom. She earned good returns on her investment and made profits.
However Lately, Tamara’s sales figures have started declining slowly. This has hurt her profitability and Tamara had flat sales figures and there was no further growth. The profits declined and there was significant decline in demand for Nike as a brand.
Tamara tried to manage the declining sales by selling running accessories ankle weights, T-shirts, water bottles, etc and she also tried offering more choices in athletic shoes for serious walkers.
But all these efforts did not help much because other stores in the neighbourhood offered them at a lower price. Tamara while talking to her customers found that there was demand for style, fashion and economy these days than high quality specially designed shoes.
So, Tamara had flattened out sales and reduced profitability as her main problems. The main reasons for reduction in sales are as follows:
• Reduced interest in jogging.
• Committing heavily on Nike.
• Initially she offered only Nike runner shoes.
• Higher prices as compared to other department stores.
• Customers do not have more options in terms of fashion and style.
2.) Situation Analysis:
We will need to carry out Situational Analy ...