Skechers USA SWOT and PESTLE Analysis

 

Strength

1. Skechers is well expanded in the overseas market and has high returns from worldwide sales: Skechers has expanded well globally with its revenue almost doubling in the last 5 years. With product sales in over 170 countries, the American lifestyle and performance Footwear Company, markets its produce via third-party wholesale partners and directly to consumers via more than 3,000 Skechers retail stores and e-commerce platforms. The main reason being expansion into markets which are emerging and have higher demand for the product. Countries like China, India, Latin America and the Middle East have provided Skechers a wide market with its huge population and increasing demand. Skechers overseas business has witnessed a massive growth of around 20% in 2019 alone and the revenue from overseas market now accounts for around 60% of the total revenue for Skechers. Due to high expansion into emerging markets, Skechers has a huge potential of growing demand and hence higher revenue from these countries.

The remaining section of “Strength” is available only in the 'Complete Report' on purchase.

Weakness

1. Heavy dependence on small customer segment: Skechers was heavily concentrated on its top 5 customers in the last few years. In 2019, the largest 5 customers accounted for 9.6% of their sales. The number was 10.4% and 10.5% in 2018 and 2017 respectively. Such reliance on any customer for a good slice of the revenue, could impact Skechers performance, if these customers decide not to continue with them. These customers who are mainly retailers have no obligation to continue with Skechers owing to the high uncertainty and competition in the retail sector. Such a scenario would act as a blow to Skechers sales.

The remaining section of “Weakness” is available only in the 'Complete Report' on purchase.

Opportunity

This section is available only in the 'Complete Report' on purchase.

Threat

This section is available only in the 'Complete Report' on purchase.

Political

This section is available only in the 'Complete Report' on purchase.

Economic

This section is available only in the 'Complete Report' on purchase.

Social

1. Increasing awareness about sports footwear amongst health-conscious customers: In 2017, the footwear market grew at a rate of 13% but the sports footwear had a growth of 46%. According to experts this growth is expected to continue and rise in the coming years by 20% over the next 5 years compared to the 10% growth for the footwear category. The huge growth of sports footwear can be attributed to the increasing awareness and lifestyle changes among the customers attracted to athleisure market who are willing to spend more on items like performance, outdoor and sports-inspired footwear. The brand ambassadors promoting them also play an important role in influencing their fans towards these shoes.

The remaining section of “Social” is available only in the 'Complete Report' on purchase.

Technological

This section is available only in the 'Complete Report' on purchase.

Legal

1. Lawsuits regarding patent and trademark infringements: Innovation and creativity are vital components in the sporting world. With the rapid expansion of the sector, sports outfit manufacturers and marketers use unique methods to secure exclusive rights in their products through intellectual property protection. Further, industry players in this sector need to be aware of the intellectual property protection laws and utility patent system protections. Skechers has been facing a lot of legal issues for patent and trademark infringement. There have been multiple instances of Nike alleging Skechers of copying its design. Both have taken their grievances to court for around four times. Nike alleges that Skechers does not focus on innovation rather believe in copying its competitors. It’s not just Nike. Adidas has also sued Skechers over patent infringement in the past due to completely similar design. Adidas also filed another lawsuit against Skechers over 3 different trademark claims. There have been several lawsuits filed against Skechers from not so famous companies which are not present in media. Such legal issues will impact the brand and reputation of Skechers. It will also hamper the goodwill and ultimately the sales and revenue. So Skechers need to take extra measure for its intellectual property rights and issues.

The remaining section of “legal” is available only in the 'Complete Report' on purchase.

Environmental

This section is available only in the 'Complete Report' on purchase.