Columbia Sportswear Company

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Columbia sportswear being one of the largest footwear and outdoor apparel companies in the world. The company develops designs, distributes and markets footwear and related accessories under Columbia, Sorel, Pacific trail, Mountain Hardwear brand names. The strong portfolio of brands helps the company to expand the market for its products which differentiate them from competitor’s products.

Columbia strengths and weakness to leverage the external trends

Strengths

Diversified business operations- as discussed earlier the company is well in diversified in terms of products categories and geographically. The company is able to deter the economic fluctuations and enhance its social trends along different states. Due to the need of diversification the company is able to integrate the latest technology, to keep the customers more satisfied with innovations fitting their needs. The company through strong multi-channel distribution is able to compete perfectly well with its competitors. (Joy, 1990)

Weaknesses- reliance on few for distribution activities

Columbia Sportswear depends on a single or two facilities for distribution operations. Scarcity of the distribution channels exposes the company to threats to the main distribution centers which are highly automated, the centers may be exposed to risks of computer viruses, power failure or other mechanical failures. Failure of these centers can result to delay of distribution operations and result to increases to extra finances.(Löfgren, 2003)

Columbia Sportswear Company BCG Matrix analysis

- Stars- high growth, high market share

The company uses large amounts of cash of technology and innovation of their products, there improved products have made them to generate large amounts of cash.

Most of the times, the company have balance on net cash flow. the company needs to hold its shares, resulting in rewards in the cash cow.

- Cash cow- characterized by low growth rate and high market share.

At this point, the company should be experiencing high profits and cash generation, the company need not to invest due to low growth rate.

- Dogs- characterized by low market share and low growth

Columbia should minimize the aspects of dog, that is, the company should do extensive research for their future plans for investments or innovation. When Columbia Sportswear finds itself in such situation they should liquidate.

- Question marks- characterized by low market share and high growth rate

It’s the worst situation for a company to find itself in. products in this stage have low market share, low returns and high demands. In such situation, Columbia sportswear should invests heavily to prevent the great amounts of cash that are absorbed, saving the company future loss and a benefit of future revenue.

Summary points and recommendation

strengths

- strong brand portfolio

- low cost manufacturing base

- diversified business operations

opportunities

- the company should expand its retail operations in Europe and further to china and other parts of world such as Africa.

Weakness

- reliance of new facilities for distribution activities- the company should invest in building more distribution operation centers to ensure that the customers have timely supply of the products.

Threats

- Intense competition- through its diversification the company is able to deter the competitors but they should get more to online marketing to create more awareness to the new markets.

- Counterfeit products- the company should keep watch to counterfeit products by keep the consumer aware of the authenticity of their brands.

References

Easterwood, J., & Seth, A. (1993). Strategic Restructuring in Large Management Buyouts. Journal of Applied Corporate Finance, 6(1), 25–37. doi:10.1111/j.1745-6622.1993.tb00371.x

Hertenstein, J. H., Platt, M. B., & Veryzer, R. W. (2005). The Impact of Industrial Design Effectiveness on Corporate Financial Performance*. Journal of Product Innovation Management, 22(1), 3–21. doi:10.1111/j.0737-6782.2005.00100.x

Joy, A. (1990). Marketing in Modern China: An Evolutionary Perspective. Canadian Journal of Administrative Sciences / Revue Canadienne des Sciences de l’Administration, 7(2), 55–67. doi:10.1111/j.1936-4490.1990.tb00646.x

Löfgren, O. (2003). The new economy: a cultural history. Global Networks, 3(3), 239–254. doi:10.1111/1471-0374.00060

Shao, J., Krishnan, H., & Thomas McCormick, S. (2013). Distributing a Product Line in a Decentralized Supply Chain. Production and Operations Management, 22(1), 151–163. doi:10.1111/j.1937-5956.2012.01359.x