Company Case Study: Volcom: Business And Marketing Strategy

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Register to read the introduction… * Integrated SKU, that provided management with a summary of all departments as well as a summary report outlining business and financial trends * Sound financials with large amounts of cash on-hand and high earnings yield

Weakness * Clothing products are very interchangeable with competitors * Target customers (youth) are very unpredictable and often change their taste and sense of style * Large segment of their customers aren't true extreme sport followers but are what is commonly called a "poseur", and will only purchase the Volcom product to fit the lifestyle; causing reduced brand loyalty and an increased opportunity for Volcom clothing to be part of a phase that eventually passes - Volcom products are constantly in jeopardy of being a fad, opening the possibility to lose large amounts of revenue * Huge amount of extremely similar competitors which limits its margin potential * Volcom is reliant on outsourced production companies, therefore they can be influenced by the financial woes (international market exposure) * Reliant on external distributors like Pacific Sun, a company who has been facing financial difficulties, forced to close stores and reduce
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As licensing agreements expire they can greatly increase their profit margins overseas by taking over complete operational control * Volcom's acquisition of Electric, a popular sunglass brand can help Volcom branch out into new markets that can enable the company to collect a more diverse customer base * Volcom is sitting on close to $80 million in cash with limited debt. This gives them the ability to invest large amounts of money in R&D and expansion

Threats * Large amounts competitors all with very similar and interchangeable products (very substitutable) - Good possibility of new entrants to the market, many extreme sport athletes start their own brand lines after making a name in the competitive circuit (new

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