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presents a somewhat successful ski apparel company that is addressing logistics-related decisions that face many businesses today. Sport Obermeyer, founded in 1947 by Klaus Obermeyer, has continued to lead the ski apparel industry since that time through continuous product innovation and fashion forward styles. Recently, the company has faced increased competition from other winter apparel makers, namely Columbia Sportswear. Exhibit 1 presents a SWOT analysis of Sport Obermeyer, and identifies core competencies and limitations of the firm. The companys Buying Committee bases quantity ordering decisions on average sales forecasts generated by a number of internal parties. Techniques like this, as well as using a large amount of greige material to delay product differentiation, have helped Sport Obermeyer manage its vast lead times. The nature of the apparel industry necessitates that high quality clothing makers and sellers deal with long lead times; in Sport Obermeyers case this is roughly two years. Routine outcomes of having such a long lead time, however, include stockouts of popular items during peak selling periods, and leftover stock of unpopular items which ultimately are sold at below-cost rates.
Where the firm could find opportunities is in stimulating demand through an aggressive marketing campaign. While such a campaign would exacerbate the firms stockouts of popular items, it would aid in selling overstocked items at still-profitable prices. Another serious consideration for Sport Obermeyer is expanding abroad. Today the company sells products in the United States, Great Britain, and Canada. This limited geographic diversity is surprising, considering the large quantity of winter goods that Sport Obermeyer sells. Limitations to the firm include competition that is emerging from abroad and in Sport Obermeyers home markets. Low-cost manufacturing in China and elsewhere has both helped and hindered the company as its competitors have sourced from the same places. Additionally, regulatory statutes limit the quantity of parkas and other ski apparel that companies may import into the United States. This has forced Sport Obermeyer in recent years to use expensive air transportation to move goods out of Chinese and Hong Kong factories and into the US before these quota levels have been reached.
SWOT
Strengths: History of product innovation. Buying committee forecasts balance expectations. Experienced leadership and focused management team. Deliver products to retailers early in the selling season. Variety of SKUs, with color/size product diversity. Use of greige fabric delays product differentiation. Weaknesses: Excessively long lead times, though this is the nature of the industry. Minimum order quantity at Chinese manufacturers. Leftover unpopular merchandise at end of selling period. Stockouts on most popular items during peak selling. Opportunities: Aggressive marketing campaign. Expanding sales to European/South American markets. Sponsorship of major winter sports events.
Threats: Competition from value-oriented sellers like Columbia. Regulatory limits of goods that can be imported into US.
purposes. Sport Obermeyer has been in the business of selling ski apparel for more than seven decades, which lends to the companys credibility and the notion that the company shouldnt have to show every single product to every wholesale customer before a sale can be made. Producing fewer samples should save Obermeyer roughly 30 to 45 days in its sample-making process, which means that full-scale production can begin two months earlier in December, before the Chinese New Year.
solves the first problem by allowing the company to spot trends early on and fill demand gaps during the peak selling period. Expanding internationally solves the second problem by allowing Sport Obermeyer to ship overstocked products from North America to South America just in time for the start of the South American ski season. The products can be sold as new to retailers at the full wholesale price, and Obermeyer avoids losing money on barter transactions as it is doing now. Each of these four recommendations for Wally are designed to improve near-term supply chain efficiency, while enhancing profitability in the long-term as the supply chain develops into a more agile and responsive unit.