The size of any price-based competitive disadvantage a footwear-maker faces can significantly impact its market share. When the price gap between a footwear maker’s products and those of its competitors is substantial, it can lead to a loss of market share as consumers opt for more affordable alternatives.
Case studies have shown that footwear makers who have faced large price gaps have experienced a decline in market share. For example, in the athletic footwear market, brands like Nike and Adidas have maintained a higher market share due to their strong brand recognition and premium pricing.
However, smaller footwear makers with lower prices have struggled to compete, resulting in a loss of market share.
Competitive Disadvantage: Size of Price Gap
The size of a footwear maker’s price-based competitive disadvantage is directly proportional to the size of the price gap between its products and those of its competitors. A larger price gap creates a greater competitive disadvantage, as consumers are more likely to choose lower-priced options.
Examples of footwear makers who have faced significant price-based competitive disadvantages due to large price gaps include Nike and Adidas, which have struggled to compete with lower-priced brands such as Skechers and New Balance.
Impact on Market Share, The size of any price-based competitive disadvantage a footwear-maker
The size of a footwear maker’s price-based competitive disadvantage can significantly impact its market share. A larger price gap can lead to a loss of market share, as consumers are more likely to purchase lower-priced products. Case studies have shown that footwear makers who have lost market share due to large price gaps include Converse, which lost market share to Vans due to its higher prices.
Strategies to Mitigate Disadvantage
Footwear makers can use various strategies to mitigate the size of their price-based competitive disadvantage. These strategies include:
| Strategy | Pros | Cons | Examples |
|---|---|---|---|
| Cost reduction | Reduces production costs | Can compromise quality | Nike’s lean manufacturing initiatives |
| Product differentiation | Creates unique products that justify higher prices | Requires significant investment | Adidas’s focus on performance and innovation |
| Market segmentation and targeting | Focuses on specific customer segments with higher price tolerance | Can limit market reach | Crocs’s targeting of niche markets |
| Value proposition and differentiation | Communicates the value of products to justify higher prices | Requires effective marketing and branding | Dr. Martens’s emphasis on durability and style |
Market Segmentation and Targeting
Market segmentation and targeting can help footwear makers reduce the size of their price-based competitive disadvantage. By focusing on specific customer segments with higher price tolerance, footwear makers can create products and marketing strategies that appeal to these segments and justify higher prices.
For example, Ecco has successfully used market segmentation and targeting to focus on high-end consumers who are willing to pay more for premium footwear.
Value Proposition and Differentiation
A strong value proposition and differentiation are essential for mitigating the size of a price-based competitive disadvantage. Footwear makers need to communicate the value of their products to consumers and differentiate them from competitors’ products to justify higher prices. This can be achieved through effective marketing and branding, as well as by focusing on unique features and benefits that appeal to specific customer segments.
For example, Birkenstock has successfully differentiated its products through its focus on comfort and support.
Clarifying Questions: The Size Of Any Price-based Competitive Disadvantage A Footwear-maker
How does the size of a price gap affect a footwear maker’s market share?
A large price gap can lead to a loss of market share as consumers opt for more affordable alternatives.
What strategies can footwear makers use to mitigate the impact of price gaps?
Footwear makers can use strategies such as market segmentation, targeting, value proposition, and differentiation to mitigate the impact of price gaps.
