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Company D presentation final
- 1. 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
- 2. REVISED STRATEGIC VISION YEAR 1416 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
- 3. FUTURE PERFORMANCE TARGETS Year 17 Earnings per Share $11.75 EPS Year 18 Earnings per Share $13.00 EPS Return on Equity 33% Return on Equity 36% Credit Rating A Credit Rating A+ Image Rating 72 Image Rating 73
- 5. ANNUAL EARNINGS PER SHARE
- 6. ANNUAL RETURN ON EQUITY
- 10. MARKET STRATEGIES OVERVIEW Wholesale 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 Internet Market Low SQ Rating High number of models No free shipping Advertising costs consistent and low Internet price 40% more than wholesale price
- 11. 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
- 12. Latin America Region LA 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%
- 13. Asia Pacific Region AP 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%
- 14. 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
- 15. PRODUCTION STRATEGY Incentive pay was issued to workers Capacity was purchased in EA This turned out to be a mistake Expensive production & shipping tariffs
- 16. 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.
- 17. Internet Competition Team 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
- 18. Wholesale Competition Team 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
- 19. 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
- 20. YEAR 17 AND 18 PRODUCTION DECISIONS Branded 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 Private Label Production Operations in LA plants Minimum star SQ rating Lower styling/ features costs Out bid competition
- 21. YEARS 17 AND 18 MARKETING DECISIONS Wholesale marketing Internet marketing SQ rating at 3 & 4 star SQ rating at 3 & 4 star More focus on LA market More focus on LA market More retail outlets Increase number of models Lower prices Keep advertising costs low More models Increase celebrity appeal More celebrity appeal No free shipping
- 22. 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
- 23. 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