Group Presentation - Company performance in BSG Strategic Game

1. Madaas
Competitive Strategy
Dr. Aliaa Soliman
April 2020
Ismail Mostafa
Ammar Aly
Ahmed Latif
Ahmed Abdella
Shaimaa Abd el Rahman

2. Company Vision & Mission
OUR
Vision
Our
Mission
Create a new landmark for
the footwear industry. Provide
high quality, and safe products
at affordable prices.
With a strategic aim of being ahead of
the competition, we will provide our
customers with the superior quality,
which improves and protects the
health of their feet. In this regard,
Madaas’s corporate mission statement
has the following main components:
Superior quality
Foot health
Worldwide market reach

3. Leadershipcultivates our
culture to empower employees to realize
how vital each of their contributions is to
achieve company mission
Collaboration is the
fuel for our business efficiency
among everyday tasks
Passion is at the heart of
our company, the reason to move
forward and to innovate.
Teamworkis vital for
success. We feel, act and behave as
one big team.
Diversityis valued at our
company and we encourage healthy
debate and differences of opinion.
Quality is important. We
provide outstanding products and
deliver premium value to our
customers.
Company Values

4. We are following a global best
cost strategy to provide a high
quality & durable products
with a affordable price
Company Strategy

5. Financial Performance
Total Revenue
Financial Performance
90,315
116,248
160,925 164,294
231,643
263,485
314,731
380,858
443,965
617,822 613,835
575,232
27,600
58,523 69,642 66,957 87,524 95,194
432,646
555,629
674,532
849,073
933,002
955,371
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
Year 10 Year 11 Year 12 Year 13 Year 14 Year 15
Internet Wholesale Private Label Total

6. Earning Per Share
Financial Performance
1.95 1.93
3.54
3.79
4.06
1.95
1.92
6.68
4.54 5.11
0
1
2
3
4
5
6
7
8
Year 11 Year 12 Year 13 Year 14 Year 15
Avg. EPS

7. Return On Equity
Financial Performance
18
16.8
26.6
25 24.1
18
15.8
39.6
21.9 21.8
0
5
10
15
20
25
30
35
40
45
Year 11 Year 12 Year 13 Year 14 Year 15
Avg. ROE

8. Annual Credit Rating
Financial Performance
Year Credit Rating
Year 11 B
Year 12 C
Year 13 B+
Year 14 B
Year 15 B+
Stock Price
28.16 16.65
133.69
75.27
95.19
0
20
40
60
80
100
120
140
160
Year 11 Year 12 Year 13 Year 14 Year 15

9. Financial Performance
Image Rating
85
91
89
100
97
75
80
85
90
95
100
105
Year 11 Year 12 Year 13 Year 14 Year 15

10. Rewards
Years 12 / 13 / 14 / 15

11. ● internet Market is essential market for Madaas,
● Increasing the product quality by increasing (Superior Materials, Enhanced Styling /Features & 6-Sigma).
● Providing the higher S/Q in market, with Average Market Price
● increasing (Superior Materials, Enhanced Styling /Features & 6-Sigma).
● Increasing the number of Models to match a wide area of customer Taste.
● Targeting the higher percentage of market share by increasing Search engine advertising.
17.50% 12.80%
18.70%
27.10%
25.10% 23.10%
20.00%
22.00%
26.10%
26.60%
31.90%
28.50%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
Year 10 Year 11 Year12 Year 13 Year 14 Year 15
Operating Profit Margin Market Share
Internet Marketing
Strategy Overview

12. ● Wholesale Market customers are actually our partners.
● provided “Highest Value of Money”
● Increase our credibility with our partners, to maximize Market Share
● Achieve Investors targets as much as possible.
● Gradually increase our (S/Q level, Number of models).
● Optimizing our Production cost (Superior Materials, Enhanced Styling /Features & 6-Sigma).
Wholesale Market
15.60%
11.60%
9.80%
28.00%
15.40%
16.90%
20.00%
23.20%
25.50%
34.50% 34.10%
25.50%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
Year 10 Year 11 Year 12 Year 13 Year 14 Year 15
Operating Profit Margin % Total Market Share
Strategy Overview

13. ● P-Label Market rules, Law Profits
● Our Strategy targeting (Maximum Market Share).
● Manipulated special rules, Producing typical Required S/Q
● Provide Minimum accepted prices.
● Optimize costs , minimum (Superior Materials & Enhanced Styling
/Features), just ……Targeted S/Q.
● Achived Highest Market Share through 5 years.
● Market Share absorbed extra production capacity, Not wasted.
● Conclusion, we succeeded to not lose the opportunity cost of adding
additional profit to support us continue sticking to our main difficult
strategy in our brand main markets (Global Best Cost)
Private Label Market
Strategy Overview

14. Private Label Market
Performance
27,600
58,523
69,642
66,957
87,524
95,194
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
Year 10 Year 11 Year 12 Year 13 Year 14 Year 15
Operating Net Revenues (M)
20.00%
39.45%
43.10%
38.53%
50.00%
48.28%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
Year 10 Year 11 Year 12 Year 13 Year 14 Year 15
Market Share

15. ● Year 11 New 2 locations in (LA & EA), Also increased Facilities in existing Plants.
● Year 12 utilizing Latin America Plant , Demand Shipping cost Latina America region.
● Madaas gradually adding production facilities/ years, to cover the smooth increase in its
products Demand.
● Madaas targeting High S/Q with low cost, Utilizing (trainings and incentive Payments)
● Minimize Rejection-Rate and Maximize Productivity/worker
● Utilizing its Workers over time capabilities to afford its market needs.
Production Strategy
Capacity, Locations & Workforce

16. ● Year 11 Locations Expansion Year, Madaas Financed by 2 Loans, distributed (1.25$ Dividends).
● Year 12 , Facilities Expansion & upgrades Year, new Stocks issued (500K Stock).
● Year13 Highest profit year, Madaas distributed (1.50$ Dividends), Repurchased (400K Stocks)
● Year 13 Aggressive increase in Stock price, EPS & ROE
● Year 14 1.25$ Dividends distributed, (150K Stock) Repurchased.
● Year 15 N.A facilities depreciated, Profits financed Facilities replacements, distributed 2$ Dividends,
Repurchased (200K Stocks).
Finance Strategy
1
1.25
0
1.5
1.25
22 1.95 1.92
6.68
4.54
5.11
0
1
2
3
4
5
6
7
8
Y 10 Y 11 Y 12 Y 13 Y 14 Y 15
Dividends Per Share Earnings Per Share
28.16 16.65
133.69
75.27
95.19
0
20
40
60
80
100
120
140
160
Year 11 Year 12 Year 13 Year 14 Year 15
Price

17. Madaas company is the market
leader on the internet market,
however we can notice that the
main competitor on this market is
“Start Track” company which
have the nearest net sales revenue
on this market.
Competitors – Internet Market
Internet Market Y 10 Y 11 Y 12 Y 13 Y 14 Y 15 Total
A Fit Hero 90,315 107,891 135,545 187,653 216,799 194,475 932,678
B 90,315 0 0 0 0 0 90,315
CMX Holding 90,315 116,302 110,734 110,576 89,183 118,629 635,739
D StarTrack 90,315 133,962 117,852 185,757 205,548 230,964 964,398
E Madaas 90,315 116,248 160,925 164,294 231,643 263,485 1,026,910
0
50,000
100,000
150,000
200,000
250,000
300,000
Y 10 Y 11 Y 12 Y 13 Y 14 Y 15
Net Sales Revenue - Internet Market
D StarTrack E Madaas

18. Madaas company is the market
leader on the wholesale market,
however we can notice that the
main competitor on this market is
“Start Track” company which
have the nearest net sales revenue
on this market.
Competitors – Wholesale Market
Wholesale Market Y 10 Y 11 Y 12 Y 13 Y 14 Y 15 Total
A Fit Hero 314,731 360,505 344,535 566,506 574,059 502,311 2,662,647
B 314,731 0 0 0 0 0 314,731
CMX Holding 314,731 333,781 367,444 357,357 300,083 237,793 1,911,189
D StarTrack 314,731 422,417 429,761 411,302 554,679 545,590 2,678,480
E Madaas 314,731 380,858 443,965 617,822 613,835 575,232 2,946,443
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
Y 10 Y 11 Y 12 Y 13 Y 14 Y 15
Net Sales Revenue - Wholesale Market
D StarTrack E Madaas

19. Madaas company is the market
leader on the wholesale market,
however we can notice that the
main competitor on this market is
“Start Track” company which
have the nearest net sales revenue
on this market.
Competitors – Private-label Market
P-label Market Y 10 Y 11 Y 12 Y 13 Y 14 Y 15 Total
A Fit Hero 27,600 0 29,075 35,710 35,190 46,311 173,886
B 27,600 0 0 0 0 0 27,600
CMX Holding 27,600 0 0 0 0 0 27,600
D StarTrack 27,600 24,040 64,076 63,262 61,079 52,717 292,774
E Madaas 27,600 58,523 69,642 66,957 87,524 95,194 405,440
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
Y 10 Y 11 Y 12 Y 13 Y 14 Y 15
Net Sales Revenue - Private-label
D StarTrack E Madaas

20. The total net sales revenue
indicate that there was a high
Competition between “Madaas”
and “Start Track” on the market,
however the market leader was
“Madaas”
Competitors – Total Markets
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
Y 10 Y 11 Y 12 Y 13 Y 14 Y 15
Net Sales Revenue - Total
D StarTrack E Madaas

21. 2 Years Forecast
5.11 6
7.5
21.8
30
40
8.4 9.5 10
0
5
10
15
20
25
30
35
40
45
Year 15 Year 16 Year 17
EPS
ROE
S/Q Rating
Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17
EPS 1.95 1.92 6.68 4.54 5.11 6 7.5
ROE 18 15.8 39.6 21.9 21.8 30 40
Credit rating B C B+ B B+ A A+
Image rating 85 91 89 100 97 100 100
S/Q Rating 5.3 6.4 6.8 7.9 8.4 9.5 10
Marketing 114,772 128,448 121,227 138,550 175,598 190,805 195,000

22. ● Keep the increasing rate of S/Q and more investments in Product Quality
● Keep the Number of models at the maximum
● Internet market:
■ Target much market share by increasing the search engine advertising
■ Keep the Retail price at the market Average even below the average
■ Consider Free shipping at some regions
● Wholesale
■ Keep going with the existing Strategy by keeping the price below the average
■ Increase the retailer support
● Private Label
■ Target the biggest share of Private label market by keeping prices below the average
■ Keep the S/Q just above the global minimum
2 Years Forecast

23. ● Enhance product S/Q rating
● Focus on the Incentive Pay
● Marketing expenses return as market share
● Feed local market prevent extra cost
● Monitor market demand before production
● Loan and external finance should be studied carefully
● More production facilities does not mean high market
share
Lessons Learned

24. Thank You