Cima Mountaineering Inc - Situation Analysis

Cima Mountaineering, Inc

Case Analysis

Submitted by:

Kavya Shivaram

9/12/2011

BUAD 6300:002

Situation Analysis:

Cima Mountaineering, Inc. is a company that manufactures mountaineering and hiking boots for mountaineers and serious hikers. The company mainly manufactures two classic kinds of leather boots- Glacier boots for mountaineering and Summit boots for Hiking. Although the demand for mountaineering and hiking boots has increased in 1994, only serious mountaineers and hikers are interested in their boots and the demand is seasonal, while the foreign competitors target both serious and weekender hikers offering them a line of fashionable boots at lower prices.

Over the years, Cima's sales and profits have increased. The owners of the company grew up learning and inheriting the boots business and thus have considerable knowledge about the industry. Through there were different styles and features in each product line, quality is not compromised and every design has standard features to emphasize quality. Since the changing market is demanding lower performance and lower prices, there is a high opportunity to grow by extending the product lines to cater to the changing market.

Problem Statement:

The company's growth has started to decline because of a changing market. More and more consumers are using more casual, low end stylish hiking boots for a variety of uses. In addition to that, there is increased foreign competition and these foreign competitors are targeting a major chunk of the market – the Weekenders, by selling low end fashionable hiking boots with basic protection. The main issue here is to expand the company in order to increase growth and keep up with competitors.

Available Alternatives:

Management is contemplating on two expansion approaches. One alternative to deal with the current issue as proposed by Margaret is to enter a whole new market and cater to the "weekender" segment of the hiking boots market. The weekender market share has been growing rapidly and consumers are demanding more style with lower prices and lightweight boots which has multiple casual use. The new boots will be positioned as hiking boots that deliver performance and style for the demands of light hiking and casual outdoor wear.

The second alternative as proposed by Anthony is to expand the existing product line by introducing two new boots in the Summit line and another women's boots in the Glacier line. These new boots would have a lower pricing to provide price points at the