Answer – 3

The company can either:

1) Focus on increasing its work boots activities,

Reasons:

 The work boot market represents almost 40% of Duraflex’s business (from question 1),
thus it would be difficult as well as impractical to avoid such an profitable situation like
this.
 While Duraflex does have greater market share in the casual boot market, the case states
that the casual boot market is smaller in size than the work boot market as well as work
boot market has lower margins (15% vs. 21%) from casual boots (Exhibit 4), which
illustrates fewer opportunities for share growth. Therefore Duraflex can invest on the
work boots market to further increase chances for market growth in the future
 Considering that a new line is to be introduced by Badger, new growth potential in the
market might become significant which Duraflex may also want to capitalise on
efficiently in order to survive in the competition
 Building a stronger image among blue collar workers may entice them to try other
Duraflex footwear products through extensive advertisings on mediums the blue collar
workers would be best convinced e.g radio, TV etc

Results:

 Duraflex may be face pressure from Badger exerting influence on retailers in this channel
to prefer their boots over Duraflex
 With proper marketing, Duraflex may be able to build the “Comfort” and “Quality /
Durability” perception among blue collar workers and thus gain more market share over
the time
 Increasing the proportion of costs allocated to materials and labour is likely to potentially
reduce the company margin
 There may be unique / niche positionings for Duraflex such as introducing cap toe boots,
Chelsea boots etc

2) Emphasize on producing casual boots,

Reasons:
 Duraflex has 40% market share now, which shows them in a somewhat strong
position, which the company can utilize to produce casual boots
  Casual Boots represents almost 40% of Duraflex’s business (from question 1),
making it very difficult to profitably ignore this market
 Focusing additional resources on the work boot market would risk casual boot
buyers (white collar workers and students), causing those buyers to switch to
other brands competing in the market
 “Style” is the top BPC for Duraflex (from Exhibit 3). From the given statistics on
Badger and Steeler, we can assume that this is an insignificant criteria for the
work boot market. By focusing on the casual boot market, Duraflex can allocate
their additional resources to keep up with styles that would appeal better to this
target market

Results:

 There is very less chance to have a strong competitor reaction, since Duraflex’s position
in the market is already dominant
 Duraflex will not need to enter new distribution channels, therefore they will not have to
incur additional costs and allocate what they already have to keep up with the latest
designs of casual boots
 Candidate should discuss a strategy for work boot market – either winding down,
maintenance etc. and implications of this

Recommendation

In our opinion and retrospect, Duraflex should introduce a sub-brand. If not, they should increase
the promotion of their brand by focusing on blue collar workers through several ways :

 On-site promotions, hiring creative copywriters for unique content creation

 Advertising in industry publications, which the blue collar workers would usually
read/keep an eye out for their work-related reasons
 Advertising in generic magazines
 Television ads during programmes that have a higher blue collar readership / viewership
e.g tv sitcoms portraying nuclear middle-class families etc