La Gear Case Study

EXECUTIVE SUMMARY L.A. Gear, Inc was started in 1985 when Robert Greenberg was looking for the next trend to follow, and saw the opportunity after watching Reebok attack the shoe market with their fashionable aerobic shoes. Greenberg saw an opportunity and created L.A. Gear, and sold highly fashionable candy colored sneakers aimed at trend conscious teenage girls. The company since then expanded into the third most dominating shoe company in the world entering the 1990s. With their eyes set on no.1, Greenberg and L.A. Gear went after Nike with a fast paced aggressive strategy by starting to develop and sell men's athletic shoes, but by 1991 and 1992 L.A. Gear found itself severely losing market share and instead of turning large profits, starting to loose money, consequently watching its share price plummet. Facing Bankruptcy, L.A. gear was bailed out by a group of savvy capital investors hoping to save the brand. The group investors made strict changes to upper level management and made desperately needed cuts across the board. But in order for L.A. Gear to survive, new emphasis needs to be placed on the development of new shoes, a refined product strategy, clearly defined distribution strategy to rebuild lost brand image, aggressive promotion campaigns across adequate channels to drive sales and recreate lost demand for L.A. Gear products.
SITUATION ANALYSIS
Industry
The general shoe industry is a dog-eat-dog world, with new entrants to the athletic side of the industry facing stiff, well developed, financed competitors. With the domestic shoe market expected to grow at a rate of 5.5 percent per year until the year 2000, outlook for the industry is high. The footwear industry is not perfectly cyclical, but does show seasonality in times of back-to-school and the spring. The athletic side of the footwear market is highly competitive In two distinct parts. The premium athletic shoe where the focus is placed on the technology involved in the shoe and demand