The North Face Case

Executive summary The report seeks to analyse The North Face Company to determine its marketing strategies. The company manufactures and sells clothing, tents, backpacks, and sleeping bags. It also specializes in skiwear. The aim of the report is to apply different marketing concepts with the aim of formulating a recommendation that would be applicable in future decision making and marketing strategic direction of the company.Advertising We will write a custom report sample on The North Face Case specifically for you for only $16.05 $11/page Learn More It evaluates the different competitive advantages, competences, and capabilities that have made the company successful. It also accesses whether these are transferable and operable in the ski clothing market. The findings indicate that while some could be applicable, others are hard to determine. Based on the report the move by TNF to have skiwear was appropriate given that it had a market share of 1.9%. S everal growth alternatives applicable to TNF as well as recommendations have been provided. Background information North Face is a manufacturing company that specializes in clothing outdoor equipment of high quality. Some of the products that have been part of its success are clothing, sleeping bags, tents, and backpacks (Mezzatesta Cook 1983, p. 743). These products are based on high quality and state- of- the art design, and this has ensured its competence and a high market share over the years. Its major market is in the U.S although the company also has operations in more than twenty oversees countries. The company also co-owns Ski wear cloth line that makes quality and affordable products. As part of its marketing strategy, the company has always believed in high quality products which are affordable to its customers with a lifetime warranty. The success of the company has been attributed to its good reputation in supplying quality products, good management team, and closer re lationship with the established distribution network. However, its skiwear line was not a success as the other products it sold, owing to the presence of stronger competitors who had specialty skiwear stores. Because of the low level of market penetration, The North Face skiwear products were ranked as having the lowest market share. The report analyses The North Face (TNF) case based on marketing knowledge so as to formulate recommendations that would be viable for future application in TNF future strategic marketing directions. Analysis Evaluation of existing competences for competitive advantage Competitive advantage is that particular unique aspect used by a company to gain a competitive edge in the market over the rest of its competitors by either offering quality products and services or through pricing (Botten 2007, p. 264). A company can also offer high prices compared with its competitors based on the quality of the products. There are different distinctive aspects that hav e placed the TNF Company at par with other companies in the market. The company has applied marketing mix as part of its marketing strategy thus gaining a competitive advantage in the market. A marketing mix is comprised of the 4ps applicable in marketing and they are price, product, distribution/place, and promotion. The company specializes in the manufacture of a variety of quality products which are durable and have a lifetime warranty (Mezzatesta Cook 1983, p.743).Advertising Looking for report on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More For example, the back packs manufactured by TNF are superior and are able to compete with other products as they have coil zippers, stitches, and nylon fabric which make them durable and adaptable. This according to Michael porter’s competitive model is a form of differentiation that offers a company a competitive edge (Botten 2007, p. 264). The manufacture of different products that were adaptable to different occasions made the company a success. All the products of The North Face Company had distinctive features and varieties that differentiated its products with those of the competitors, thereby offering the company a competitive advantage. The pricing of TNF products are affordable as it offers premium prices to its products. Mezzatesta and Cook (1983, p.746) note that as part of the corporate strategy the company believes in the manufacture of quality products, price them fairly and remain in the market for ever. It is also noticeable from the case that TNF manufactured quality back pack products that were sold at high prices than the competitors and still maintained its market share because of its quality products. Through price competition the company has been able to place itself ahead of its competitors. The distribution channels of the NTF were well organised and the shops were strategically placed. The positioning of the company based on the case study is well established as the company has different outlets in the US and other foreign countries. This enlarged its customer base and the market share. The company had specialized markets and through the building of specialty stores, it was able to create a brand name that was used as a competitive advantage (Mezzatesta Cook 1983, p.748). Brand name was created through the specialty shops, as they acted as the marketing strategy for the company. Correlation of TNF competences and competitive advantages to Skiwear Most of the stores that sold skiwear were specialty stores that were well established than the TNF. The assumption made by the TNF prior the introduction of the skiwear was that it would gain a market share if it introduced the products through the specialty stores it had. Based on the data, NTF was ranked 18 in the ski wear provision with a market share of 1.9% (Mezzatesta Cook 1983, p.752).Advertising We will write a custom report sample on The Nort h Face Case specifically for you for only $16.05 $11/page Learn More This means that although The North Face controlled the other products, the outlets that controlled the market were not TNFs’ stores. If the company transferred some of its competencies and competitive advantage on the ski wear operations, it would not be appropriate to set specialty stores so as to create a band name. This is because the skiwear market has no dominant brand and to gain a market share of 70% a firm requires at least 9 brands. Furthermore, the market is highly fragmented and customers have no particular brand. However, through the production of quality ski wear and apply the pricing concept of premium prices that varies through differentiation the strategy would be operable and could be used as a competitive advantage. As explained in the case, there was no specific brand that they associated themselves with and hence TNF would be the new brand. The corporate standard of TNF was to make better products, price them at return earning level, and promise that it would attract customers (Mezzatesta Cook 1983, p.743). This, coupled by the pyramid of influence, would be operable in skiwear as people belief in referrals and recommendations. This would address the product needs to different segments of the market. Examination of skiwear move The move by TNF to establish ski wear was appropriate and timely according to the given data. After analyzing the market for ski wear products, the company had a market share of1.9% despite the fact that it did not manufacture skiwear products and that most of its outlets sold skiwear. Although the company feared toppling of some of its existing stores, through the offer of skiwear to competitors, what the company needed was to position its skiwear products in the market and make a brand out of it that would be competitive like some of its products like the backpack. Given that the company did not manufacture skiwear its market entrance gave it the chance to exploit the 2% market share that existed. It could increase its market share based on the 2% share to increase its performance in the market. Evaluation of Growth alternatives Growth alternatives strategies are crucial as they propel the profits and the products market share to the next level (Hoskisson, Hitt Ireland, 2008, p.196).Advertising Looking for report on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More The major growth strategies applicable to any organisation are the market development, product development, product penetration, and diversification (Doole Lowe 2008, p.170). The skiwear products can be propelled through different market segmentation instead of relying on a singular market. This could be achieved through product development that involves the expansion of a product line. This could be applied on skiwear where the material used, weight, and size would be improved to counter the existing market (Ansoff 1957, p.113). Through product mission, the company would concentrate on making a product that would meet the needs of customers at affordable prices. The company would also try market penetration as a way of ensuring its growth (Gessinger 2009, p183). Market penetration is a growth strategy that ensures a company penetrates already existing markets. According to Ansoff (1957, p.114) it aims at increasing the sales of product or service without the departure from the pro duct marketing strategy that was adopted during its inception. Through this growth alternative, the company either increases its volume sells or find new markets for its products. This increases the market share as well as the product usage leading to market growth in the long run. Since the skiwear products are new the company can segment the market and target these new segments that are not currently occupied by TNF. Instead of concentrating in the already existing market, it would be advisable to introduce the skiwear products to other geographically placed markets thus ensuring growth. Lastly, the company would adopt diversification strategy to ensure market growth (Baker 1998, p.77). This strategy is different from the other three because it requires the incorporation of new skills, new techniques and, new techniques (Doole Lowe 2008, p. 170). This changes the whole operational, organisational and physical structure of the firm. A distinctive break from the past business opera tions based on experience is realised Recommendations Based on the analysis of TNF and the skiwear it has emerged that there some recommendations which are important to see full success of the company. The company needs to position its skiwear products through branding that needs more than backpacking account. This would be achieved through establishment of different product and market segments as well as appropriate targeting. Instead of depending on already existing markets, the company can venture in new and more diverse markets that have not been penetrated much and establish themselves as a new brand. This would grant the company a market share that would absorb its products. The company could establish a marketing mix that was used as driving force for TNF products in establishment a market share for its skiwear products. This can be achieved through quality production, establishment of proper distribution channels, and offer of premium and affordable prices to its customers. The company can introduce specialty stores that specialize in the selling of skiwear products. Although, there exists other 5 skiwear stores with no backpacking, TNF could be the first to introduce the idea to ensure that they provide a particular product under a particular store. This could be a competitive edge for the company. The company could adopt the growth alternatives discussed in the report and incorporate them in the marketing strategy. The combination of different marketing alternatives would make it possible to gain market share and expand in terms of customer base. Conclusion The TNF is a company that specializes in the manufacture of tents, backpacks, sleeping bags, and clothing wear. Its products are state- of- the art and of high quality. The competitive advantage of TNF is based on premium prices, high quality products, and organised chain of distribution as well as strategic position in different US store outlets and in other foreign countries. These could be ap plied to skiwear to ensure that it gains a market share. The alternative growth strategies that can be applied are through product development, diversification, market development and market penetration. The recommendation given can be applicable in TNF marketing strategy to propel it in a more successful direction. Reference List Ansoff, H. I. 1957, Strategies for diversification [Online], Harvard Business review, pp, 113-126. Web. Baker, M. J. 1998, Marketing: managerial foundations, Macmillan Education Australia, South Melbourne. Botten, N. 2007, Management accounting: business strategy. Oxford, CIMA. Doole, I. Lowe, R. 2008, International marketing strategy: analysis, development and implementation, South Western Cengage. Learning, London. Gessinger, G. H. 2009, Materials and innovative product development: using common sense, Butterworth-Heinemann, Burlington. Hoskisson, R. E., Hitt, M.A. Ireland, R. D. 2008, Competing for advantage, Thomson/South-Western Mason, OH. Mezzatest a, G. Cook, V. 1983, The North Face, ‘Case 19’, Stanford University Graduate School of Business, pp. 743-754. This report on The North Face Case was written and submitted by user Samiya N. to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.