Running Room Case Study
T/TH 9:30 AM
The Running Room company has been a successful and profitable business since its inception, catering to both avid runners and more casual joggers by selling high end running shoes. Its owner, Raina Cisco, used her background as a nationally ranked runner to establish credibility as a running shoe authority, especially for higher end products. In order to maintain this image of quality, Cisco chose to primarily sell Nike shoes. The Nike brand is associated with performance in the minds of her customers, and she was able to make a $5-$7 premium per pair of Nike shoes. Despite this success, after about 10 years of steady growth, profits began to decline due primarily to …show more content…
Furthermore, by employing the second strategy, The Running Room is able to capture more business opportunities in the future, such as a differentiation from lower-cost retailers via more performance-preferred running shoes and a knowledgeable and well-trained staff that can add value to the total product concept for Cisco’s shoes, an expansion to web promotion (which is required by the manufacturer to sell these new custom-fit shoes but which Cisco can also take advantage of to increase The Running Room’s promotion campaign), and the wide array of products and services that Cisco could also offer that complement running shoes (e.g. performance sock, runner’s gait analysis, water-wicking running gear, etc.).
A company must have competitive advantage to be successful. To achieve competitive advantage, the company must be the low-cost producer, have the differential advantage, and focus on the markets of its choice. The Running Room’s most consequential problem is not her emphasis on running shoes or her emphasis on trying to hang on to her