company d presentation final
TRANSCRIPT
ORIGINAL STRATEGIC VISION YEARS
10-13
Vision Statement
Our vision is to lead the athletic footwear industry by creating distinct athletic footwear to enhance player performance through efficient operations and high quality materials and high models
Strategic Goals
Our goal is to provide our customers with a quality product by employing a strong consistent process and to empower employees in quality control
To promote a respectful and diverse work environment where our employees bring their best into every shoe created
REVISED STRATEGIC VISION YEAR 14-
16
Vision Statement
Our vision is to lead the athletic footwear industry by creating distinct athletic footwear to enhance player performance through efficient operations and low quality materials and high models
Strategic Goals
Our goal is to provide our customers with a quality product by employing a strong consistent process and to empower employees in quality control
To promote a respectful and diverse work environment where our employees bring their best into every shoe created
FUTURE PERFORMANCE TARGETS
Year 17 Year 18
Earnings per Share $11.75
EPS
Return on Equity 33%
Credit Rating A
Image Rating 72
Earnings per Share $13.00
EPS
Return on Equity 36%
Credit Rating A+
Image Rating 73
ANNUAL TOTAL REVENUES
ANNUAL EARNINGS PER SHARE
ANNUAL RETURN ON EQUITY
ANNUAL CREDIT RATING
YEAR-END STOCK PRICES
ANNUAL IMAGE RATING
MARKET STRATEGIES OVERVIEW
Wholesale Market Internet Market
Low SQ rating
High number of models
Competitive prices
Advertising costs consistent and low
Utilized retail outlets
Offered retail support
Increased celebrity appeal
Wholesale price 40% less than internet price
Low SQ Rating
High number of models
No free shipping
Advertising costs
consistent and low
Internet price 40% more
than wholesale price
North America Region
NA Plant
•Operation average 100% capacity
•2,000 pair capacity
•Higher compensation
•Lower rejection rates
Internet
•Strategy change year 14
•Increased profits from $3,128 to $7,642 in last three years
•Pairs sold increased from 147 to 385 in last three years
•Operating Margin made gains and losses
Wholesale
•Strategy change year 14
•Increased profits $20,837 to $26,133 in last three years
•Pairs sold steady increase
•Operating Margin increased steadily
Latin America RegionLA Plant
•Operation at full 100% capacity
•3,000 pair capacity
•Lower compensation
•Rejection rate kept low
Internet
•Strategy change year 14
•Increased profits $2,440 to $3,612
•Increased pairs sold 95 to 249
•Profit Margin average 29%
Wholesale
•Strategy change year 14
•Increased profits $2,675 to $12,973
•Increased pairs sold 1,582 to 1,653
•Profit Margin increased fro 4% to 20%
Asia Pacific RegionAP Plant
•Operation near full capacity 90-120%
•6,000 pair capacity
•Lower compensation
•Rejection rates kept low
Internet
•Strategy change year 14
•Increased profits $2,900 to $6,405
•Pairs sold increased 89 to 310
•Profit Margin decreased 39% to 32%
Wholesale
•Strategy change year 14
•Increased profits $11,423 to $23,707
•Pairs sold increased 1,650 to 1,891
•Profit Margin increased 17% to 28%
PRIVATE LABEL
Additional capacity was purchased that would go towards private
label sales
Lost out on private label sales by almost .50
Lowered our private label sales by $4, in hopes of winning bids
PRODUCTION STRATEGY
Incentive pay was issued to workers
Capacity was purchased in EA
This turned out to be a mistake
Expensive production & shipping tariffs
FINANCE STRATEGY
Small dividends were issued and increased every year.
Loan for NA, EA, and LA capacity purchase
Capacity was sold off in NA in year 16
Loans established in years when credit rating was at it’s highest
and paid high interest loans off during that time.
Internet CompetitionTeam B was our major competitor in the internet market
This was not our strongest area, but we decided to focus on the wholesale market and out perform Team B
Our team and team B had same high quality and high models strategy
Our prices and models were the same and to compete with Team B we needed to differentiate our company
We changed strategy and decided to go with a low quality and high models
New strategy was profitable and with low competition
Wholesale CompetitionTeam B was our major competitor in the wholesale market
Team B had more of the wholesale market share during some years
Our team took advantage of Team B’s decisions:
• Internet and wholesale prices too close
• Purchased extra capacity
• Strategy was similar to other teams
We changed strategy and decided to go with a low quality and high models
New strategy was profitable and with low competition
PRIVATE LABEL COMPETITION
Goal to have lowest price per pair
100% win was great
Less that 100% win was always helpful in reducing our inventory
Our profits increased each time our Private Labels were sold
All other teams were our competition
Began to exit Private label by year 16
YEAR 17 AND 18 PRODUCTION
DECISIONS
Branded Production Private Label Production
Low Quality/ High Models
AP plant 3 star, same number of
models
LA plant 4 star, more
models, +.05 incentive pay
Modest capacity increase in LA
plant
Operations in LA plants
Minimum star SQ rating
Lower styling/ features costs
Out bid competition
YEARS 17 AND 18 MARKETING
DECISIONS
Wholesale marketing
SQ rating at 3 & 4 star
More focus on LA market
More retail outlets
Lower prices
More models
More celebrity appeal
Internet marketing
SQ rating at 3 & 4 star
More focus on LA market
Increase number of models
Keep advertising costs low
Increase celebrity appeal
No free shipping
FUTURE RESULTS
Outperform competition by
Focusing on our Low SQ / High Models strategy
Increasing profits
Out perform High SQ/ High Models strategy due to high competition
Results Team B will struggle with competition in High SQ/ High Models strategy
Our product will be have more coverage throughout the regions and markets
LESSONS LEARNED
Produce in regions with higher profit margins
Offering labor compensation rates
Manage capacity well
Do not purchase capacity in Europe-Africa region
Win Private-Label bids
Change strategies when market is saturated with same strategy