Evaluate Carla Gomez’s present strategy. Evaluate the alternative strategies she is considering. Is her primary problem her emphasis on running shoes, her emphasis on trying to hang on to her current customers, or is it something else? What should she do? Why? Carla Gomez is the owner of Running On—a retail store that sells shoes and accessories to runners. Carla is trying to decide what she should do with her retail business and how committed she should be to her current target market.

Carla started Running On retail store in 2002 when she was only 24 years old. At that time, she was a nationally ranked runner and felt that the growing interest in jogging offered real potential for a store that provided serious runners with the shoes and advice they needed. The jogging boom quickly turned Running On into a profitable business selling high-end running shoes—and Carla made a very good return on her investment for the first 10 years. From 2002 until 2012, Carla emphasized Nike shoes, which were well accepted and seen as top quality.

Nike’s aggressive promotion and quality shoes resulted in a positive image that made it possible to get a $5 to $7 per pair premium for Nike shoes. Good volume and good margins resulted in attractive profits for Carla.

Committing so heavily to Nike seemed like a good idea when its marketing and engineering were the best available. In addition to running shoes, Nike had other athletic shoes Carla could sell. So even though they were not her primary focus, Carla did stock other Nike shoes, including walking shoes, shoes for aerobic exercise, basketball shoes, tennis shoes, and cross-trainers. She also added more sportswear to her store and put more emphasis on fashion rather than just function.