Deckers Outdoor Corporation (DECK) BCG Matrix Analysis

Welcome to this blog about Deckers Outdoor Corporation and the Boston Consulting Group Matrix Analysis. If you are interested in understanding the performance of different products and brands of Deckers Outdoor Corporation and how they fit into the BCG Matrix, then you have come to the right place. In this blog, we will discuss the products/brands that are considered Stars, Cash Cows, Question Marks, and Dogs, as well as some of the strategies that the company can leverage to improve their performance.

Deckers Outdoor Corporation is a footwear and accessories corporation that has been around since 1973. Over the years, the company has designed and marketed several consumer brands, including UGG, HOKA ONE ONE, Sanuk, Teva, and Koolaburra. By using the BCG Matrix Analysis, we can identify the products falling under different quadrants based on their growth rate and market share.

In this blog, we will start by discussing the products/brands that are considered Stars, followed by Cash Cows, Question Marks, and Dogs. We will also explore the investments and strategies that Deckers Outdoor Corporation can leverage to improve the performance of each product/brand.

Read on to learn more about Deckers Outdoor Corporation and the BCG Matrix Analysis.

Background of Deckers Outdoor Corporation (DECK)

Deckers Outdoor Corporation (DECK) is a renowned lifestyle and footwear company headquartered in California, USA. Founded in 1973, the company specializes in designing, marketing, and distributing a wide range of innovative footwear, apparel, and accessories. As of 2023, Deckers Outdoor Corporation (DECK) is a leading player in the global footwear market, with a strong presence in North America, Europe, and Asia. The company's product portfolio includes popular brands like UGG, HOKA ONE ONE, Teva, Sanuk, Koolaburra, and Ahnu. According to the latest financial data as of December 31, 2021, Deckers Outdoor Corporation (DECK) recorded total revenue of USD 3.24 billion and net income of USD 588 million. The company's gross profit margin was 52.9%, and its operating expenses totaled USD 1.9 billion.

• Total Revenue (2021): USD 3.24 billion
• Net Income (2021): USD 588 million
• Gross Profit Margin (2021): 52.9%
• Operating Expenses (2021): USD 1.9 billion

Deckers Outdoor Corporation (DECK) is committed to sustainability and social responsibility and has made significant progress towards its goals. In 2022, the company was recognized as one of the most sustainable footwear companies in the world by Corporate Knights. With a strong financial position and a focus on innovation and sustainability, Deckers Outdoor Corporation (DECK) is well-positioned to continue its growth and success in the global footwear market.

Stars	Question Marks
UGG HOKA ONE ONE Teva	Hoka One One - line of lightweight running shoes Teva - line of outdoor sandals and water shoes Koolaburra by UGG - line of boots and sandals
Cash Cow	Dogs
UGG Hoka One One	Teva Sanuk Koolaburra

Deckers Outdoor Corporation (DECK) Stars

Deckers Outdoor Corporation, founded in 1973, is a US-based footwear and accessories corporation. The corporation designed and markets well-known consumer brands, such as UGG, HOKA ONE ONE, and Teva.

In 2023, Deckers Outdoor Corporation has three products that fit in the 'Stars quadrant' based on the BCG Matrix Analysis: UGG, HOKA ONE ONE, and Teva.

• UGG: According to Statista, UGG made $1.55 billion in 2021.
• HOKA ONE ONE: HOKA ONE ONE is growing at a fast pace, and it is known for offering maximum-cushioned running shoes. In 2022, according to NPD Group, HOKA ONE ONE was among the top five brands in the performance running shoes market.
• Teva: Teva, known for its sandals and water shoes, is growing due to the increasing demand for outdoor recreation. According to the Q2 2022 earnings report, Teva saw a net sales increase of 50.3%.

Deckers Outdoor Corporation has been investing and supporting these brands to sustain their success, and it has paid off.

If Deckers continues to invest in UGG, HOKA ONE ONE, and Teva products, they may become cash cows. However, being a Star requires a lot of support for promotion and placement.

Deckers Outdoor Corporation achieved success because they identified strong brands and invested in them. The company has a portfolio of strong brands, including the ones mentioned above.

As per the BCG Matrix analysis, analysing the company's products could help identify those that need further investment, those that are worth maintaining, and those to let go of.

Deckers Outdoor Corporation (DECK) Cash Cows

Deckers Outdoor Corporation (DECK) is a footwear company that owns brands such as UGG, Hoka One One, Sanuk, and Teva. As of 2023, the company's Cash Cows are:

• UGG - UGG is the company's flagship brand and has been a Cash Cow for several years now. In 2021, UGG generated $1.56 billion in revenue, accounting for 79% of Deckers Outdoor Corporation's total revenue.
• Hoka One One - Hoka One One is Deckers' fastest-growing brand and is expected to become a Cash Cow by 2023. In 2021, the brand generated $490 million in revenue, accounting for 25% of Deckers' total revenue.

Deckers' Cash Cows have high market share and generate a lot of cash flow. They also have high profit margins due to their competitive advantage in the mature market.

Investments in promotion and placement for Cash Cows are low, as the brands are already established in the market. However, investing in supporting infrastructure such as supply chain and logistics can improve efficiency and increase cash flow more.

Deckers is advised to invest in its Cash Cows to maintain their market share and current level of productivity. This allows the company to cover its administrative costs, fund research and development, service its corporate debt, and pay dividends to shareholders.

By leveraging the success of its Cash Cows, Deckers can also use the generated cash to turn its Question Marks into market leaders.

Deckers Outdoor Corporation (DECK) Dogs

As of 2023, Deckers Outdoor Corporation (DECK) has a few products that have low growth rates and low market share which fall under the 'Dogs quadrant' of Boston Consulting Group Matrix Analysis. These products/brands are:

• Teva - As per the latest financial information available, Teva brought in 150 million USD in sales in 2021. But, it has witnessed a 3% downward trend in growth rates in the last two years.
• Sanuk - Sanuk is another product by Deckers Outdoor Corporation that has low market share and growth rates. Sanuk brought in 80 million USD in sales in 2021 and has seen a 2% increase in growth rates, which is still lower than the growth of the overall market for casual footwear.
• Koolaburra - Koolaburra has been identified as a low growth product, which has brought in 30 million USD in sales in 2021. The growth rates have been stagnant for the last two years.

The financial data shows that these products have not been able to keep up with the growth of their respective markets and have a low market share. Therefore, these products can be considered as cash traps which should be avoided and minimized as per BCG Matrix Analysis. Expensive turn-around plans usually do not help in such cases.

Deckers Outdoor Corporation may consider divesting these products or investing in them to attempt to propel them out of the 'Dogs quadrant'. A few ways to try to do this include:

• Focusing on a specific audience or niche
• Revamping product design and marketing strategy to align better with customer needs and trends
• Exploring new geographies and markets to increase sales

However, it is important to note that turn-around plans for low growth products are usually expensive and often do not bring about significant changes. Hence, divestiture may be the best way to free up cash and resources to acquire new products or focus on successful high growth products.

Deckers Outdoor Corporation (DECK) Question Marks

Deckers Outdoor Corporation (DECK) is a footwear and fashion company based in Goleta, California. As of 2023, the company has several products and brands that fall under the 'Question Marks' quadrant of Boston Consulting Group Matrix Analysis.

According to the latest financial information (2021), the revenue generated by Deckers Outdoor Corporation was approximately $2.5 billion USD. Out of this, $1.5 billion USD was contributed by the company's top-selling brand 'UGG.'

The 'Question Marks' products/brands of Deckers Outdoor Corporation as of 2023 include:

• Hoka One One - a line of running shoes known for their lightweight and cushioned soles. As per the latest financial statistics (2022), Hoka One One recorded a revenue of $600 million USD.
• Teva - a line of outdoor sandals and water shoes. Teva's revenue in 2022 was $150 million USD.
• Koolaburra by UGG - a line of boots and sandals. Koolaburra by UGG generated a revenue of $100 million USD in 2022.

As per the BCG Matrix Analysis, the 'Question Marks' products/brands of Deckers Outdoor Corporation have a high potential for growth in their respective markets. However, their market share is low, which means they are generating less revenue as compared to their potential. The marketing strategy for these products should focus on increasing their market share.

Deckers Outdoor Corporation can invest in Question Marks to gain market share, which will help these products/brands move into the 'Stars' quadrant of the BCG Matrix. Alternatively, if the products/brands do not show potential for growth, the company can sell them. This will help them to focus their resources on high-growth products/brands, which will bring higher returns.

In conclusion, the BCG Matrix analysis provides a comprehensive overview of Deckers Outdoor Corporation's product portfolio. The analysis categorizes products into four quadrants: Stars, Cash Cows, Dogs, and Question Marks, based on their market share and growth potential.

Deckers Outdoor Corporation's portfolio is dominated by two brands, UGG and HOKA ONE ONE, which are its Cash Cows and Stars, respectively. In contrast, Teva, Sanuk, and Koolaburra fall under Dogs and Question Marks, highlighting the need for investments in these brands if they have potential for growth.

• We recommend that Deckers Outdoor Corporation invests in its Cash Cows to maintain their market share and productivity and uses the generated cash to turn its Question Marks into market leaders.
• Additionally, the corporation should divest its Dogs, which have low growth rates and a small market share, to free up resources to focus on the successful high-growth brands.
• Finally, Deckers Outdoor Corporation should focus on increasing the market share of its Question Marks by investing in them and propelling them into the Star quadrant of the BCG matrix analysis. If they fail to show potential for growth, they can be sold to help the company focus on high-growth brands.

Deckers Outdoor Corporation has a strong portfolio of brands that it has built and sustained over the years. The company has invested in identifying and supporting strong brands, which have made it a successful player in the footwear and accessories market. The BCG Matrix analysis offers an effective tool to identify which products/brands should be invested in and which ones should be divested to ensure long-term success. By focusing on its Stars and Cash Cows, and addressing its Dogs and Question Marks, Deckers Outdoor Corporation can continue to grow and succeed in a highly competitive market.