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Dansko voice
- 1. Daniel Capps, Megan Schafer & Brendan Markle
- 2. Background •Wholesale shoe business • Established in1991 in West grove, P.A. •One design • Closed back, stapled constructed leather clog •Growth • Started as small start up • Now over 100 employees and $90M in revenues
- 3. Issues Facing Dansko •Foreign exchange risk • $ value is decling relative to € •Outsourcing to Asian manufacturers • To offset increased production costs & increase capacity •Lacking industry expertise • Required to sustain growth
- 4. U.S. Footwear Market 2000-2004 •Compound annual growth rate of 2.7% •Annual sales reached $2.3B in 2004 •Forecasted value projected at $60B by 2009 U.S Footwear Industry $52B in Sales Brown Shoes 47% (Leather,Office,and Casual) White Shoes 30% (Athletic Footwear) Other 23% U.S. Comfort Wear (Style & Comfort) Euro Comfort (Durability & Orthopedic)
- 5. Financial Analysis • operating margins = 50%-60% • profit margins of =17% • D/E ratio = 0
- 6. Competitors • Ecco •operating margin of 7.9% • D/E of 1.79 • profit margin 4.4% •increased marketing spending by 22% • Brown Shoe Company •operating margin 3.33% •profit margin of 2.56% • D/E of 1.03 • Both firms have some international exposure and are diversified against the change in consumer tastes
- 7. Value Chain
- 8. Strategy •Differentiation • US company with European style • 9 different product lines • Mom & Pop culture • All decisions go through CEO Calbot • “Home-schooling method” • Informal mentoring • Affects growth
- 9. Aspects of the firm related to performance •Organizational • Affected by lack of knowledge about the industry •Culture •Everyone is like family •Educational opportunities •People & Top Leaders •Cabot insists on having much of the control
- 10. Issues Going Forward •Skyrocketing manufacturing costs • Manufacturing mostly in Europe • $ value is decling relative to € • “No experts” management model will not continue to work • need mentors to teach staff how to run a multi-million dollar company • employees not developing as fast as the business
- 11. Issues Going Forward •Should Dansko partner with a big shoe company? • Suitor has over $1B in annual revenue • Many industry experts
- 12. Option 1: Manufactoring Keep Manufacturing in Europe Move Manufacturing to Asia or South America Pros --Lower costs Cons -Quality could suffer Pros -Higher quality -Fits company’s image Cons -Expensive
- 13. Option 2: Outside Sources Hire More Outside Experts Partner with Big Shoe Company Pros -could mentor current employees -would offer expert solutions to current problems Pros -Gain money and experience big company has -would take stress off current employees (and Cabot) Cons -Would be paid more than current employees -most experts already have good jobs -current employees may resent them Cons -Dansko would lose its autonomy -Current culture could change dramatically -Dansko might become a face in the crowd
- 14. Option 3: Big Box Retailers Pros -increased market share -higher revenues Cons -Saturated market -decreased profit margins -no longer gourmet -no longer the shoe everye wants, but can’t get
- 15. Option 4: New Organizational Structure Pros -Keep Mandy stress free -Mandy keeps control of the company -get professional advice and mentoring Cons -Hard to obtain experts -higher admin costs -Lose some control
- 16. Recommendation •create a new organizational structure and bring in experts •best option to solve multiple problems •Mandy’s stress level •lack of industry knowledge •keeping control of the company •not fading into obscurity
- 17. How will we implement this? •Financial Resources • extra salaries to hire experts •Time •To implement new organizational structure • 3 months to a year •Depends on adaptation of employees
Editor's Notes
- GROWTH!