Question

Like many other footwear brands, Skechers independently contracts its manufacturers. In 2016, 51% of total purchases came from 5 contract manufacturers. These manufacturers are mostly located in China and Vietnam. This allows Skechers to keep its capital investments low and flexibility in manufacturing and production capacity. However, this places a large dependence on its suppliers. Skechers keeps its agreements with suppliers relatively short (30 to 60 days), yet it has long-standing relationships with several for continuity and reliability. When Skechers looks for a new supplier, the focus is on manufacturers with previous footwear experience. The design process begins about 9 months prior to the next season by in-house design staff. These staff design and monitor products from the US, China, and Vietnam with inspection teams located in China and Vietnam.

Skechers distributes through two major channels: wholesale and retail stores. Wholesale includes department stores, specialty stores, and independent retailers. Retail stores includes e-commerce, concept stores, factory, and warehouse outlet stores. Concept stores are larger stores where the company tests new marketing activities, hosts events, and showcases new product designs. Such locations include Times Square, Powell Street in San Francisco, Westfield London, Shinsaibashi district of Osaka and Harajuku in Tokyo. Factory stores are located in manufacturers’ direct outlet centers in US and international, while warehouse outlet stores are primarily in US and Canada and used to liquidate excess merchandise, discounted lines, and odd-sized inventory.

Skechers advertising and marketing motto is “unseen, untold, unsold.” Its omnichannel strategy includes print (specialized magazines such as Runner’s World, Seventeen, Men’s Fitness), TV, online, outdoor, trend-influence, social media, promotions, in-store events, and celebrity endorsers. All of this is managed by in-house teams.

Assess Skechers global expansion strategy and entry mode choices; does the current approach make sense for the future?

DISCUSS MARKET ENTRY STRATEGIES. DO NOT DISCUSS ANY OTHER STRATEGIES. Discuss expansion strategy and entry mode choices: exporting, turnkey projects, licensing, franchising, establishing joint ventures with a host-country firm, or setting up a new wholly owned subsidiary in the host country. Please discuss Brownfield investment (mergers and acquisitions), Greenfield (direct entry), JV (strategic alliance)

ONLY 200 WORDS

Answer 1

In Brownfield investment, the brand leases an existing facility in the country. In Greenfield, the company opens up a subsidiary of its in the foreign market. It is a direct way to penetrate the foreign market. A joint venture is a one in which the company strikes a partnership with a local player in a foreign country and they together form a new offering for the market.
The current marketing expansion strategy of Sketchers is to expand through an omni channel way through wholesalers, retailers, and directly. Most of the manufacturing and production is in the US and Canada and the factory units are in almost all foreign markets. Through this strategy, the company has reached out to almost the entire world.
In the future, this strategy might not work because of the long waiting period and low suppliers. To match the competition, the production and manufacturing has to be there in each country. As the name of Sketchers is already very big and it is a successful brand, it will be good for it to directly enter the foreign market and set up its production and manufacturing plant.

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