Carter Shoe Company presented their 20-year business plan. Their initial strategy was focused differentiation by providing high quality shoes at a premium price. Over the years they adjusted strategies in response to market changes, including broad differentiation and low-cost provider. Their financial performance fluctuated with strategy and market conditions. They eventually achieved success with a low-cost strategy, but learned markets change and flexibility is key to long-term business success.

1. Riley Wentzel Jake Gilstorff Jordan Frayer
Introductions

2. Carter Shoe Company
“Giving you the performance technology you need and the style that you want”
Riley Wentzel, Jacob Gilstorff, Jordan
Frayer

3. Who are we?
● NBA Star
● Signature Shoe
● Our results

4. Agenda
● Mission Statements (Initial and Final)
● SWOT Analysis (Initial and Final)
● Five Forces Model (Initial and Final)
● Objectives
● Year by Year analysis
● Key financial data
● Awards
● Future recommendations
● Business lessons learned

5. Mission Statement
Initial statement:
“We are committed to providing a shoe
that is both cost efficient and high quality while
being produced in an ethical, responsible, and
diverse setting.”
Final statement:
“Our goal is to provide a shoe that is both
affordable and stylish that will allow our users to
compete at the highest level of performance
with the perfect blend of function and fashion.”

6. Initial SWOT Final SWOT
SWOT Analysis

7. 5 Force Model of Competition
Initial Model Final Model

8. Carter Shoe Company Objectives:
1. EPS growth of at least 7% annually through Year 15 and at least 5% annually
thereafter.
2. A return on average equity investment (ROE) of 15% or more annually.
3. A B+ or higher credit rating.
4. An “image rating” of 70 or higher.
5. Stock price gains averaging about 7% annually through Year 15 and about
5% annually thereafter.

9. Initial Strategy
Focused Differentiation Strategy
● High quality materials
● Small target market
● Premium price
● Number one supplier

10. Year 11
Carter Shoe Company
● Earnings Per Share - $1.76
● Return on Equity - 11.0%
● Stock Price - $17.10
● Credit Rating - B
● Image Rating - 80
Decisions Made
● High Price
● High Quality
● Low model availability
● Average advertising spending
● No celebrity appeal
● Targeted wholesale market
● High Corporate Social Responsibility and
Citizenship.

11. North
America
Europe
Africa
Asia-Pacific
Latin
America
North
America
Europe
Africa
Latin
America
Wholesale Segment Internet Segment
Asia-Pacific

12. Year 12
Carter Shoe Company
● Earnings Per Share - $1.76
● Return on Equity - 10.7%
● Stock Price - $18.3
● Credit Rating - B+
● Image Rating - 88
Decisions Made
● Lowered price very little
● Signed Payton Manyon.
● Increase internet market share
● Maintained high S/Q rating
● Lowered advertising spending
● Maintained high Corporate Social
Responsibility and Citizenship.

13. North America
Asia Pacific
Europe Africa
Latin America
North America
Asia Pacific
Europe Africa
Latin America
Wholesale Segment Internet Segment

14. Year 13
Carter Shoe Company
● Earnings Per Share - $2.81
● Return on Equity - 13.9%
● Stock Price - $30.95
● Credit Rating - A
● Image Rating - 77
Decisions Made
● Maintain high price
● Maintain high S/Q rating
● Increase wholesale market share in Asia-
Pacific region
● Spent less on Corporate Social
Responsibility and citizenship

15. North America
Asia Pacific
Europe Africa
Latin America
North America
Europe Africa
Asia Pacific
Latin America
Wholesale Segment Internet Segment

16. Strategy Reformation
Things that worked
● Stable High S/Q Rating
● Celebrity Appeal
Things that didn’t work
● High Price
● Being the only supplier in the high-end
shoe industry

17. Broad Differentiation Strategy
● Move closer to niche market
● Outcompeting Competitor’s
● Offer Customized Attributes
● Out perform rivals’ products

18. Year 14
Carter Shoe Company
● Earnings Per Share -$ 0.89
● Return on Equity - 4.0%
● Stock Price - $17.33
● Credit Rating - B
● Image Rating - 62
● Runner-Up Corporate Responsibility Award
Decisions Made
● Low Price
● Maintain High S/Q Rating
● Limited Models Available
● Limited Retail Outlets
● Charged a Shipping Fee
● Upgraded Plant in Asia Pacific
● Didn’t sell to Latin America Internet
Segment

19. North
America
Europe
Africa
Asia-Pacific Latin
America
North America
Europe Africa
Asia-Pacific Latin America
Wholesale Segment Internet Segment

20. Year 15
Carter Shoe Company
● Earnings Per Share - $0.83
● Return on Equity - 5.2%
● Stock Price - $9.9
● Credit Rating - C+
● Image Rating - 83
● Corporate Responsibility Award
Decisions Made
● Maintained Low Price
● Stable High S/Q Rating
● Free & Quick Shipping
● Took out a Loan
● Signed Eight Celebrities
● Management Change

21. North America North America
Latin America
Europe Africa
Asia PacificAsia Pacific
Europe Africa
Latin America
Wholesale Segment Internet Segment

22. Year 16
Carter Shoe Company
● Earnings Per Share - ($2.01)
● Return on Equity - (18.5%)
● Stock Price - $6.15
● Credit Rating - C-
● Image Rating - 93
● Corporate Responsibility Award
Decisions Made
● Industry Average Price
● Maintain High S/Q Rating
● Built Factory in Asia-Pacific
● Made Loan Payment
● Had Eight Celebrities Under Contract

23. Wholesale and Internet Segment (Year 16)
North
America
Europe
Africa
Asia-Pacific Latin
America
North
America
Europe
Africa
Asia- Pacific Latin America

24. Strategy Reformation
Things that worked
● Low Price
● Found the Niche Market
Things that didn’t work
● High Quality
● Customized Attribute’s
● Didn’t Outcompete Our Competitor’s

25. Final Strategy
Low-Cost Provider Strategy
● Achieving a cost-based advantages over competitors
● Sell our shoes at the lowest possible price to attract customers
● Aim our markets towards broad markets
● Have high-profit margins due to our high-volume sales capacity

26. Year 17
Carter Shoe Company
● Earnings Per Share - $2.96
● Return on Equity - 27.5%
● Stock Price - $32.61
● Credit Rating - C
● Image Rating - 93
● Runner-Up Corporate Responsibility Award
Decisions Made
● Reduced the price
● Reduced the S/Q
● Payed back part of the loan
● Increased celebrity appeal
● Entered into the private-label market
● Increased sales in wholesale market

27. Wholesale and Internet Segment (Year 17)
North America
Asia Pacific Latin America Asia Pacific
North AmericaEurope Africa
Latin America
Europe Africa

28. Year 18
Carter Shoe Company
● Earnings Per Share - $4.50
● Return on Equity - 31%
● Stock Price - $63.79
● Credit Rating - B
● Image Rating - 82
Decisions Made
● Lowered the price in wholesale market
● Payed back outstanding loans
● Lowered our spending in CSR
● Decreased wages of labor
● Increased sales in private-label
● Bought more capacity

29. Wholesale and Internet Segment (Year 18)
North
America
Europe Africa
Asia-Pacific Latin
America
North America Europe Africa
Asia-Pacific Latin America

30. Year 19
Carter Shoe Company
● Earnings Per Share - $8.27
● Return on Equity - 39.6%
● Stock Price - $145.43
● Credit Rating - A
● Image Rating - 78
Decisions Made
● Raised prices in private-label
● Increased our delivery time
● Increased retailer outlets
● Lowered the amount of superior materials
being used
● Paid back loan

31. Wholesale and Internet Segment (Year 19)
North America
Asia Pacific
Latin America
Asia Pacific
North America
Europe Africa
Latin America
Europe Africa

32. Year 20
Carter Shoe Company
● Earnings Per Share - $7.40
● Return on Equity - 25.8%
● Stock Price - $111.75
● Credit Rating - A+
● Image Rating - 74
Decisions Made
● Halted all manufacturing in North America
● Raised price in wholesale market
● Reduced all spending in CSR
● Paid off final loan payment
● Increased sales of private label

33. Wholesale and Internet Segment (Year 20)
North America
Asia Pacific Latin America
Europe Africa
Asia Pacific
North America
Latin America
Europe Africa

34. Key Financial Data

35. Key Financial Data (Cont.)

36. Awards and Accomplishments
LEAP FROG
AWARD
for Most Improved Overall Score (current
year to current year)

37. Future Recommendations
1. Use the low cost low price method (if niche market doesn’t change)
2. Spending less on Corporate Social Responsibility can be beneficial in the
long run
3. Create a large number of shoes
4. Build a factory in every country

38. Business Lessons Learned
1. The market is a changing place.
2. Strategy is based on your market and your product.
3. Must be able to adapt and change your strategy.
4. Using your competitor's weaknesses to your strengths is very effective
5. Teamwork is crucial.

39. Questions?
Thank you for your time!