Case Study Description of Geox: Breathing Innovation into Shoes
On 28 July 2009, the board of directors of Geox approved the footwear and apparel company's half-year results, which showed consolidated sales of US$653 million. This was a remarkable achievement and recognition for a company that had only been in the business since 1995. In the early 1990s, inventor, entrepreneur and erstwhile winemaker Mario Moretti Polegato, suffering from hot and sweaty feet, used a pocketknife to cut holes in the soles of his sneakers, thereby creating the first pair of "shoes that breathe". Convinced that his creative solution could be transformed into a commercially successful product, Polegato spent several years developing a breathable membrane for shoes that allow the feet to breathe while remaining watertight. When he succeeded in producing the prototype of such a technology in the laboratory, he immediately patented it and began marketing it to existing shoe manufacturers. However, none showed any interest in his product. He thus decided to embark on his own, and commenced manufacturing these "breathing" shoes under the Geox brand name. Since then, Geox's innovative products have continued to carve out a niche for themselves in the global footwear market. By 2002, the company had extended its "breathability" technology to fabric and entered the apparel market. By 2009, after a mere 14 years, Geox had become a global name and was ranked the world's second-largest casual lifestyle footwear sector operator. The company conducted its business in 68 countries around the world through over 10,000 multi-brand points of sale and 997 single-brand Geox shops. By introducing yet another product to the established and intensely competitive shoe industry, Geox had successfully demonstrated the power of innovation. But like any other innovative company, Geox has to fret about sustainability of its competitive advantage.
Swot Analysis of "Geox: Breathing Innovation into Shoes" written by Ali Farhoomand, Havovi Joshi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Geox Shoes facing as an external strategic factors. Some of the topics covered in Geox: Breathing Innovation into Shoes case study are - Strategic Management Strategies, Creativity, Innovation, International business, Marketing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Geox: Breathing Innovation into Shoes casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models,
talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Geox: Breathing Innovation into Shoes
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Geox: Breathing Innovation into Shoes case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Geox Shoes, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Geox Shoes operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Geox: Breathing Innovation into Shoes can be done for the following purposes –
1. Strategic planning using facts provided in Geox: Breathing Innovation into Shoes case study
2. Improving business portfolio management of Geox Shoes
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Geox Shoes
Strengths Geox: Breathing Innovation into Shoes | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Geox Shoes in Geox: Breathing Innovation into Shoes Harvard Business Review case study are -
Sustainable margins compare to other players in Sales & Marketing industry
– Geox: Breathing Innovation into Shoes firm has clearly differentiated products in the market place. This has enabled Geox Shoes to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Geox Shoes to invest into research and development (R&D) and innovation.
Organizational Resilience of Geox Shoes
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Geox Shoes does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Geox Shoes has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Geox: Breathing Innovation into Shoes HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Geox: Breathing Innovation into Shoes Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Diverse revenue streams
– Geox Shoes is present in almost all the verticals within the industry. This has provided firm in Geox: Breathing Innovation into Shoes case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Analytics focus
– Geox Shoes is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Ali Farhoomand, Havovi Joshi can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
High switching costs
– The high switching costs that Geox Shoes has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Training and development
– Geox Shoes has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Geox: Breathing Innovation into Shoes Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Learning organization
- Geox Shoes is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Geox Shoes is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Geox: Breathing Innovation into Shoes Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Geox Shoes has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Geox: Breathing Innovation into Shoes - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Geox Shoes has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Geox Shoes has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Cross disciplinary teams
– Horizontal connected teams at the Geox Shoes are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Weaknesses Geox: Breathing Innovation into Shoes | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Geox: Breathing Innovation into Shoes are -
Skills based hiring
– The stress on hiring functional specialists at Geox Shoes has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Geox: Breathing Innovation into Shoes, in the dynamic environment Geox Shoes has struggled to respond to the nimble upstart competition. Geox Shoes has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Geox: Breathing Innovation into Shoes HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Geox Shoes has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study Geox: Breathing Innovation into Shoes that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Geox: Breathing Innovation into Shoes can leverage the sales team experience to cultivate customer relationships as Geox Shoes is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Geox: Breathing Innovation into Shoes, is just above the industry average. Geox Shoes needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High cash cycle compare to competitors
Geox Shoes has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Need for greater diversity
– Geox Shoes has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Geox Shoes supply chain. Even after few cautionary changes mentioned in the HBR case study - Geox: Breathing Innovation into Shoes, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Geox Shoes vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Geox Shoes products
– To increase the profitability and margins on the products, Geox Shoes needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Geox: Breathing Innovation into Shoes HBR case study mentions - Geox Shoes takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High bargaining power of channel partners
– Because of the regulatory requirements, Ali Farhoomand, Havovi Joshi suggests that, Geox Shoes is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Opportunities Geox: Breathing Innovation into Shoes | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Geox: Breathing Innovation into Shoes are -
Leveraging digital technologies
– Geox Shoes can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Using analytics as competitive advantage
– Geox Shoes has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Geox: Breathing Innovation into Shoes - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Geox Shoes to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Geox Shoes has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Buying journey improvements
– Geox Shoes can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Geox: Breathing Innovation into Shoes suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Manufacturing automation
– Geox Shoes can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Geox Shoes can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Geox Shoes can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Geox Shoes can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Geox Shoes in the consumer business. Now Geox Shoes can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Geox Shoes can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Geox: Breathing Innovation into Shoes, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Geox Shoes can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Geox Shoes can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Geox Shoes has opened avenues for new revenue streams for the organization in the industry. This can help Geox Shoes to build a more holistic ecosystem as suggested in the Geox: Breathing Innovation into Shoes case study. Geox Shoes can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Geox: Breathing Innovation into Shoes External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Geox: Breathing Innovation into Shoes are -
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Geox Shoes will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Environmental challenges
– Geox Shoes needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Geox Shoes can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Regulatory challenges
– Geox Shoes needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Geox Shoes can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Geox: Breathing Innovation into Shoes .
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Geox Shoes.
Technology acceleration in Forth Industrial Revolution
– Geox Shoes has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Geox Shoes needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Consumer confidence and its impact on Geox Shoes demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Geox Shoes in the Sales & Marketing sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Geox: Breathing Innovation into Shoes, Geox Shoes may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Geox Shoes business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Geox Shoes high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Weighted SWOT Analysis of Geox: Breathing Innovation into Shoes Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Geox: Breathing Innovation into Shoes needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Geox: Breathing Innovation into Shoes is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Geox: Breathing Innovation into Shoes is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Geox: Breathing Innovation into Shoes is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Geox Shoes needs to make to build a sustainable competitive advantage.
