I. Factual Summary Ã¢ÂÂ¢ Cima's sales and profits had grown steadily. However, the growth was beginning to slow as a result of foreign competition and a changing boot market.
Ã¢ÂÂ¢ Cima focused on classic boots that were relatively insensitive to fashion trends.
Ã¢ÂÂ¢ The boot market had shifted to a more casual, stylish hiking boot that appealed to hikers interested in a boot for variety of uses. These boots are inexpensive and lightweight. Fashion also became a factor, and companies like Nike and Reebok marketed lightweight boots in a variety of materials and colors to meet the demand for styling in addition to performance Ã¢ÂÂ¢ Cima's target markets are mountaineers and serious hikers. In 1994, they had 6.25% of the retail market share in the United States.
Ã¢ÂÂ¢ The demand for Cima boots is seasonal, and most of the purchases are made during the summer months when the mountains and trails are most accessible.
Ã¢ÂÂ¢ Cima implemented a computer-aided design (CAD) system in 1993 to shorten product development. Significant cost savings were achieved as the new approach improved the profit and quality of the company's boots.
Ã¢ÂÂ¢ Cima uses traditional styling to avoid fashion obsolescence and the need for frequent design changes. However, all boots have features that the company believed is essential to positioning. Cima priced its boots higher than competitors, supporting the positioning of the boots as the top quality product at each price point.
Ã¢ÂÂ¢ Cima boots are distributed in 10 western states and western Canada through specialty retailers.
Ã¢ÂÂ¢ Promotions are directed to costumers and to retailers. Cima uses print advertising, product literature, and point of sales to promote its boots. The company regularly exhibited at industry trade shows.
Ã¢ÂÂ¢ Retailers are encouraged to take 50 percent margin on the retail-selling price.
II. Company Problem/Opportunity Ã¢ÂÂ¢...