Scribd
Upload
524 views5 pages

Asics Case Analysis

The document discusses Asics' PESTEL analysis, strengths, weaknesses, opportunities, and threats. It analyzes Asics' financial performance compared to competitors like Nike, Adidas, Puma, and Under Armour. While Asics' net income is lower than competitors and its sales target of 750 billion yen by 2020 may be too ambitious, acquiring Runkeeper will help expand its customer base by diversifying into fitness and boosting its direct-to-consumer strategy. Overall, the acquisition of Runkeeper is justified to enhance Asics' e-commerce and enter the growing fitness sector.

Uploaded by

Rahul Roy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
524 views5 pages

Asics Case Analysis

The document discusses Asics' PESTEL analysis, strengths, weaknesses, opportunities, and threats. It analyzes Asics' financial performance compared to competitors like Nike, Adidas, Puma, and Under Armour. While Asics' net income is lower than competitors and its sales target of 750 billion yen by 2020 may be too ambitious, acquiring Runkeeper will help expand its customer base by diversifying into fitness and boosting its direct-to-consumer strategy. Overall, the acquisition of Runkeeper is justified to enhance Asics' e-commerce and enter the growing fitness sector.

Uploaded by

Rahul Roy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 5

 PESTEL

 Political- NA
 Economic
 In 1980s, Japan experienced a rapid economic growth and the
company was able to diversify its product in new areas such as
tennis, badminton etc.
 In early 1990s, the domestic market in Japan saw a sharp downturn
triggered by the burst of the asset inflated economy and this caused
heavy losses to Asics.
 Social
 Japan’s declining and aging population affected Asics sales
detrimentally.
 From 1990-2013, there has been an increase in the number of
people participating in marathons, which in turn increased Asics
sale.
 Increased participation in sports like Tennis, Rugby Basketball also
increased the sale of Asics.
 Later, the age of the marathon runners increased and Exhibit 1 also
shows the number of Marathon runners decreased from 2013
onwards. More people participated in 5K and 10K runs. Hence, this
decreased Asics demand.
 Technology
 Sales through e-commerce platform.
 Increase in the number of fitness apps used by the people to
monitor their health drove Asics to acquire Runkeeper, which
increased their customer base.
 Environment-NA
 Legal-NA

SWOT ANALYSIS
STRENGTH
PRODUCT DIFFERENTIATION THROUGH INNOVATION

The company has constantly increased the quality of the products through innovation using
advanced technologies. Due to their superior cushioning, shock absorbent technologies and gel
technologies they have been very popular for the serious runner segments or the professional
athletes

DOMINATING MARKET SHARE IN SERIOUS RUNNER SEGMENT


They are leading in the serious runner segment and have generated a brand awareness of 50 %
globally.

WEAKNESS
 NOT POPULAR IN FUN SEGMENT

The Asics product price ranged from 150 $ to 200$. The products were not popular with the
‘fun segment’ who would generally buy at a range of 50 to 75 $

 SALES THROUGH THEIR OWN ECOMMERCE PLATFORM WAS VERY LOW


 APPAREL SALES ARE LOWEST AMONG THE MAJOR SPORTS BRANDS.
 AVERAGE AGE SERIOUS RUNNERS CUSTOMER IS INCREASING
 DECREASE IN MARATHON PARTICIPATION SINCE 2013(As per exhibit 1)
 POTENTIAL FOR BRAND CONFUSION

OPPORTUNITY
 MIDTIER SEGMENT HAS A LOT OF CUSTOMERS
Diversifying in this segment can increase the customer base

 ASICS AND ASICS TIGER BRAND CAN BE MODIFIED TO TARGET FEMALE CUSTOMER BASE AS
WELL
 USING RUNKEEPER TO ENHANCE THE ECOMMERCE PLATFORM
 ENHANCING DTC THROUGH RUNKEEPER APP
 DIVERSING AND EXPLORING THE FITNESS SEGMENT
 ASSOCIATING WITH JAPANESE ROOTS THROUGH TOKYO OLYMPICS MIGHT PROVIDE MORE
SALES FOR THE COMPANY

THREATS
COMPETITORS LIKE NIKE, ADIDAS, PUMA, UNDER ARMOUR AND NEW BALANCE ARE THREATS TO
ASICS BUSINESS. LOSING SPONSHOIRSHIP OF NEW YORK MARATHON TO NEW BALANCE SENDS A
NEGATIVE MESSAGE TO THE CUSTOMERS.

 Customer Needs Fulfilment


 Durable
 Flexible
 Good Feet
 Increased performance during running
 Affordable
 Light weight
 Good Grip
 Attractive shoes
 Status associated with the brand
 Value Proposition
 Superior Cushioning
 Stability
 Durability
 Light weight
 Fit
 Grip
 Breathability
 Increased performance in marathon
 Shock absorber
 Competitor Analysis
As of May 2015,
 Nike
Sales revenue =USD30.6Billion
Net Income=USD 3.27Billion
 Adidas
Sales revenue =Euro 16.9 Billion
Net Income=Euro 720 Million

 Puma
Sales revenue =Euro 3.4 Billion
Net Profit= Euro 37.1 million

 Under Armour
Sales revenue =USD3.96Billion
Net Income=USD 232Million

 New Balance
Sales revenue =USD3.3Billion

Business problem
1>Do you think the Company is following right track to
ensure attainment of AGP 2020?
As per exhibit 2 and exhibit 7

(MILLION $) PUMA UNDER ARMOUR ASICS


OPERATING IMCOME 105 409 253
NET INCOME 40 233 94.39
ROE 2.3% 13.9% 5.1%
SELLS AND 1572 1500 1492
ADMINISTRATIVE
EXPENSE

We see:
ASICS net income is much less as compared to UNDER ARMOUR
Even the ROE is less.

The company is in the right track for growth. The association with Runkeeper will help the
company expand the customer base and diversify into fitness segment.
But to achieve 750 billion-yen sales in 2020 is a quite lofty target. This would need a revenue
increment of 15 % per year and we do not think that they will be able to achieve the target
since the sales and administrative expense is quite high for Asics and with the acquisition of
Runkeeper this expense will increase.

2>IS THE ACQUISITION OF RUNKEEPER JUSTIFIED?


We recommend ASICS to associate itself with Runkeeper because:
1> Asics can use Runkeeper app as their new ecommerce portal as the present portal is
clearly underperforming.
2>The acquisition of this fitness app has given Asics the opportunity to diverse into the
fitness sector. They can launch shoes, apparels, gadgets based on fitness which they can
promote through the Runkeeper App. This will clearly differentiate this brand from other
brands of ASICS.
3>The Runkeeper app will help boosting the DTC strategy of ASICS.

OTHER RECOMMENDATIONS:
 Increase the market in South East Asia and Oceania.
 Target potential markets such as India and South Africa
 Modify the ASICS and ASICS tiger brand products to target female segments as well.
 Modify the BRAND logos in order to distinguish them to avoid brand confusion.

You might also like