Just like any other organization, Geox seeks to maximize its revenues and to be competitive among its rivals in the market. Geox, the Italian manufacturer that, in less than a decade, has grown to be one of the world largest brown shoe manufacturers, outperforming the industry in terms of market and financial results. It has defined a new strategic position in the footwear industry by creating a somewhat uncontested market space where competition is less relevant by changing the traditional market segmentation rules, involving a unique of activities, removed from the stereotype of the Italian “fashion” footwear manufacturer, but also significantly different from other US and European competitors; and has broken the value/cost trade-off, succeeding in the feat, impossible for most other competitors, of serving successfully a large, diverse customer base with a wide variety of product lines and styles. Geox’s configuration of activities builds on patented product innovation and makes the most out of leveraging on complementary choices as regards marketing and communication, production and supply chain management, and distribution and retail.
Differentiating for Competitive Advantage
Geox group’s success is due to its distinctive elements that makes it stand out in the Italian and international footwear industry scenario:
• Constant focus on the product
• “Across-Market” positioning of its products
• Strong awareness of the Geox brand
• Increasing presence in international markets
• Network of single-brand Geox Shops
• Flexibility of delocalized business model and mainly in outsourcing,
• Track record of net sales growth
Geox was able to achieve competitive advantage since it had some type of edge over rivals in attracting buyers and coping with competitive forces. Geox’s routes to competitive advantage involved giving buyers what they perceive as superior value compared to the offerings of rival sellers. Superior value provided by Geox included offering a good product that is worth paying more for, and a best-value offering that represented an attractive combination of price, features, quality, service, and other appealing attributes. The latter was a result of continuous researches and innovation in the field of shoe making.
Geox’s generic competitive strategies didn’t involve a low-cost provider strategy, nor a focused (or market niche) strategy based on low costs, but rather adopted a broad differentiation strategy seeking to differentiate the company’s product offering from rivals’ in ways that will appeal to a broad spectrum of buyers. It had also used the best-cost provider strategy-giving customers more value for their money by incorporating good-to-excellent product attributes at a lower cost than rivals; the target is to have the lowest (best) costs and prices compared to rivals offering products with comparable attributes. The success of Geox is not only a result of product innovation, but an outcome of various strategies. Geox did not achieve a sustainable advantage simply because it devised an innovative product (“the shoe that breathes”) or because of its timely investment in Romania (reducing production costs). Geox had concentrated on deepening a strategic position rather than broadening and compromising it. Diversification and International Strategy:
Geox currently sells its shoes in 68 countries and offers to customers a full range of styles and models for different uses. Its strategy has re-defined the market space in the footwear industry, because its unique selling proposition (foot wellness thanks to “breathing shoes”) appeals. Geox’s shoes sell not only because they “breathe”, but also because they are stylish and reasonably priced. This is possible thanks to Geox’s product design strategy and production system. This production system reflects an articulated supply chain strategy, with sourcing and production decisions contingent on market segment, product type and cost or time constraints. Thus, production is not simply moved around the world according to labor cost dynamics. Rather, flexibility, speed and quality related considerations drive the supply chain configuration and the sourcing decisions. Modes of Entry and Geographical Scope:
On the international markets Geox group has implemented a diversified distribution strategy characterized by a balanced mix of multi-brand and single brand stores, tailored to each geographic market to promote a rapid penetration of new markets. Geox products distribution takes place through two distribution channels: multi brand stores, managed by independent third parties (approximately 10.000doors), and single-brand stores, Geox Shop, (DOS and franchise stores). Firstly, Geox penetrated and saturated the domestic market. Then, it attacked the adjacent European markets, consolidating significant shares in Germany, Spain, France and, lately, the UK and Poland. Geox drives its international expansion with four key marketing strategies within a local-global appeal:
1. Entering a market initially by way of licensing agreement with retailers who sell a multi-brand and multi-national shoe range at similar price-point to the Geox shoe price in the major cities. 2. Establish the mono-brand Geox shops – carrying their men’s, women’s and children’s shoes and clothes in the same locations and cities in that country. Shop numbers are nearly doubling every year. 3. Partner with a local shoe manufacturer to adapt the Geox “technology shoe” to the local fashion and taste to produce a Geox “local” shoe that complements the standard Geox technology shoe range. 4. Invest in communication programs to educate the country market as to the benefits of the Geox technology shoe – health and hygiene benefits – and thereby shift buyer decision making beyond just a “fashion” buying decision.