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Section OneTo be completed by the student Pleasetick as appropriate
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Name (s)………………..Zhuocheng He................................ MBA FT □ MIB □ Undergraduate □

MBA PT □ MSc □ Diploma □Certificate□

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Comment Form for Assessed Work
.......................................................................................... Specialization...................................................................

.......................................................................................... Intake n°..........................................................................

Student ID Number (s) ......................................................... Grenoble Main Campus □Off site (state which one) □
Subject ……..International Marketing.................................................................................... ……………………………

Assignment □Oral Presentation□Exam □

Title ….Better Understanding the Target Market and Customer: The Opportunities of Foreign Luxury Products in China.................

I hereby declare that the attached assignment is my own work and understand that if I am suspected of plagiarism or other form of
cheating; my work will be referred to the Disciplinary Committee which may result in my exclusion from the program.

Signature …………..Zhuocheng He....................................... Date …..11-08-2010..........................................................

Section Two To be completed by the Professor I lecturer

Note below your comments on content, structure and presentation. Comments on specific points should be written on the
assignment. Enter grade out of 20 on the bottom of this page. Please indicate whether this is a first or a second grading.

□ First grading…□ Second grading

Professor's name..............................................................

Signature.........................................................................
Date received ................................................................... Date returned to student ........................
 Individual case study:

Geox

Zhuocheng He
GGSB Student--Master in International
Business, Group C

This assignment is for Mr. Coletti Michele due

on 28th January 2011 for the Managing
Technology class.
The key success factors in the footwear market

Affordability

As the statistics published by the SATRA in 2008 (Shoe and Allied

Trade Research Association) have shown, the second the third

largest footwear-consuming countries are China and India with

about 2100 and 800 million pairs respectively. And due to the

fact that both countries are developing economies, the majority

of the customers there are less willing to pay high prices for

shoes than customers in the developed markets of the west.

Thus, the affordability issue is of the most importance in the

footwear market, where the companies can provide the quality

products with the most competitive prices are more likely to win

the market share.

Proper and precise segmentation

As was written in the case, “Footwear manufacturers typically

focused on either the customer group they were targeting, such

as men, women or children, or the product type, such as casual

wear, formal ear or sports shoes.” (Ali Farhoomand, 2010, 5)

Therefore, it’s essential for the companies to adopt a “riffle

approach” rather than a “shotgun approach” unless the

 companies are big enough to compete in all the segments. That

is to say, the companies should only focus on one or two

segments where they have the competitive advantages. For

example, the Italian high-end brand Ferragamo, which charge a

premium for its products, should only compete in the fashion

formal wear at the upper side of the market, while Chinese

brand Lining should currently focus on the upper-middle part of

the sports shoe segment of the China market.

1) Good supply chain management

Due to the fierce competition in the saturated footwear market, the

act of outsourcing the manufacturing has already become a

norm. However, transferring the manufacturing in the countries

with relatively cheaper labor cost also rise additional risks for the

firms, including the potential barrier to the efficient

communication and coordination between the manufacturer and

the retailer and also the quality control over the products. And

also in the upstream, the efficient cooperation with the

distributor and the retailers are also a valid concern.

The competitive advantage of Geox shoes

In my understanding, the competitive advantage of Geox shoes lies

in its patented “breathability” technology. This unique feature of

breathable membrane in the shoe’s sole helped Geox to carve out a

niche in the casual footwear market and sustained its competitive

advantage by the patent that prevents other competitors from

copying the design. furthermore, the proper combination of

technology and fashion, for which is famous in its country of origin,

also increases the competitiveness of Geox.

The innovation Geox introduced and the strategies

they are pursuing

According to my understanding, the innovation that Geox introduced

firstly falls into “modular innovation” , because the product uses

architecture & configuration associated with the existing system of

an existing product, meaning the Geox shoes still composes the

traditional structure of ‘shoes’—membrane, sole, vamp etc.

However, it employs new components with different concepts,

meaning Geox introduced this “breathability” technology to the

membrane in the shoe’s sole that had many small channels that are

too narrow to allow water to enter but wide enough to allow water

vapour to exit.
Secondly, it is a “sustaining innovation” rather than a “disruptive

innovation” because the new feature results in better performance

rather than simpler and also it causes a relatively higher price and

required more complicated design.

The strategies that Geox adopts can be better described as

“technology oriented” and “niche focused”.

For “technology oriented”, it’s obvious that Geox, since inception,

differentiated itself for other shoes by introduction the new patented

“breathability” technology, which it marketed and advertized solely

without even using any models or celebrates, as a lot of other

competitors do.

For “niche focused”, it has, up to now at least, largely stayed at the

casual footwear segment through a “riffle approach” as mentioned

before, even though it eventually will have to expand to other

segments.

Suggestions to Geox

If I were the consultant to the CEO, I would suggests three things to

sustain the growth of the company:

First, I would suggest Mr. Polegato to diluted his current shares from

71% to close to 51%, just enough to maintain a majority shares but

get extra financing from the market to future expand the shops

aggressively.
Secondly, I would suggest Geox to explicitly state to the end user

that the sole with holes are in fact “watertight”. Because being a

customer myself, I don’t think they have said it clearly to the

customers and it’s just the first concern that people will come up

with when they purchase a pair of shoes like that. They can probably

achieve this goal by simply putting a sticker with illustration on the

sole.

Thirdly, I would suggest Geox to enter into the sports shoe segment,

first at the running and golf shoe niches, by using the Diadora brand

they acquired. To do that, they have to restore the brand image by

increasing advertisement and introducing the “breathability”

technology to the Diadora shoes.

Lessons for other companies in mature industries

Through the successful story of how Geox made it big in the

saturated footwear market in such a short time, the other industries

can at least learn these following points from the example:

1) Initially place a focus on the right niche segment

2) Invest in R&D adequately and continuously, also collaborate with

big universities

3) Carefully protect the intellectual property through patents

4) Emphasis the strength and concentrate on it