Business strategy of the footwear company - Essay Example

?The footwear company Introduction In this report am going to make a close study and analysis of the footwear company over the past ten years. I willpick on some few specific years and show the market trends by analyzing the company reports over those years. By the end of it I expect to bring into view the developments that have been made by this industry over these years due to some major decisions made. The report critically analyses the scoreboard the marketing strategy and how they have influenced the general performance of the industry. In this report charts will be used and an analysis done on them to show the different performance of the industry in the four regions that it operates in. These regions are North Atlantic Latin America Asia and not to mention Africa. Industry and company report This part of the report gives an insight into the company’s performance. In this case the data shows the performance of each of the eight companies under the footwear industry. The performance is rated against the investor’s expectation. Investor set the target for the performance of each company over a particular period, and in this case it is one year. From the information gathered most of the companies are quite scoring well on the scoreboard by exceeding the investor’s expectation and as such earning some bonus point. The company leading with the highest point is the bold footwear company which up to date is shown having 6 bonus points. Looking at some of the scoreboard performance over the few years, we see quite a fluctuation with companies showing a positive trend by increasing from the previous year’s while others going down the trench. Significant of this is the last year. That is year 20 where all the companies showed a significant reduction from the previous year. But something to note is that there is quite a good trend in the industry since the companies show quite good performance higher than the expectation of the investor. The earning per share shows quite a starling performance for three companies, company B, E, F. This is by the fact that these companies are scoring high above the investors’ expectation on the EPS. Greatly performed is company B with an average performance of above 15 while the other two have an average performance of between 2 and three. The other companies are performing quit below the expectation, with company H having the lowest weighted expectation. These results are replicated on the stock price per share and the return on shares. It is quite evident to mention that, there is a great correlation between these three because the company scoring high on the ROE similarly scores high on EPS. The credit rating shows a starling performance for three companies A, B, F, all of them scoring an A. That is high beyond the expectation of the investors. The other companies’ though not scoring that high, they are still within the range of the investors’ expectation. The image rating only gives three companies scoring beyond the expectation in the period of ten years. Page 4 of the report gives an insight on the company’s production and how they have been fairing in the market. The rate of production is compared against the consumption and rejected items. The rate of rejected production seems to be reduced and maintained below five percent in the last five years, but there appears to be a significant change in the year 20th year were the percentage moved up beyond 5 percent, on the footwear production. Page five of the report is a look at the financial performance that is the profit earning of each company. The records show quite a level performance at year 10. All the companies have a similar performance. At year 14, there is quite a very significant change with company B scoring a very high net profit while company H is scoring losses. The trend is replicated in the subsequent years with company B having the highest profit level while company F still scoring the great losses. It would be clear to mention that the decisions made by the companies H are the ones resulting to poor performance. The last page of these reports shows how celebrities are endorsing the products of our companies. The records show many celebrities having lengthy contracts with companies ranging from four years to six years. The records clearly depict that for the ten years celebrities have had confidence in our products. Clarity of strategic position The records in the first page show an increase from year eleven to year 14 in the plant capacity and plant investments. Over these years it clearly emerges that the companies’ production keeps on increasing since in the 11th year. At this year, the company records 6000 pairs and $255000 investment. But, at the end of the 14th year the company records 8000 pair and an investment of$ 320480. Four years later, that is, at year 18th there is still a great improvement and the upwards trend is recorded. The 20th year shows a very starling performance and it is possible to make a projection of an upward trend both in the investments and the production. The second page is on distribution and from the data collected the distribution keeps on fluctuating and. For example, at the begin years it seems quite high then at around year sixteen it goes down to around 600 pairs distributed. The subsequent year’s changes positively since there is quite an increase in distribution with a projection of 2000 pair in the following year that is year 21. The distribution has quite a direct impact on the company’s expenses. The less the company distributes the high the expenses, because these increases the warehouse cost since most of the products have to stay in the warehouse for quite a long time The income statement of the company shows a constant profit from the early years. For instance the company records a net profit of $53000 dollars in year elven. Three years later the net profit is still high at year 14 were it records it at $57000. This trend is still maintained up to the 19 year were the company records a very high net profit of about $111000. But something bizarre occurs in the 20th year were the results are very low coming down to around $43 dollars. The record on the cash flow shows continues up wards trend from the early years all through to year 20. At year 10 the cash flow is at the low $233000 with assets having a higher value than the cash flow. In the subsequent years the cash flow keeps increasing and getting higher than the assets. Looking at the year 15 the cash flow is at $ 513000 while the assets are at $448000. This trend even gets at the pick at the last year 20 when the cash flow goes beyond the$ 6000000 mark. Funky footwear performance analysis and evaluation This evaluation is based on the charts that have been provided by the company. From the analysis of the charts we can get a better view of the company performance. Image rating This chart shows the performance of the image rating against the investor expectation. It is evident that in the early years the most of the image rating were slightly lower than the investor expectation. But at the 14th year the image rating goes up and maintains a similar trend over the subsequent years. Credit rating This chart shows the credit ratings and the investor expectation. It is evident that the credit rating does not have an exact trend since the trend keeps on changing from one year to another, hitting low at year 13 and taking a high note at the 12th, 14th and 17th year Global unit sales This is a chart showing the global unit sales. The chart depicts an upward trend in units sold globally over the ten years period. From the 10th year the units’ keeps on increasing up to the 19th year were it hits a very high bar more than the investor’s expectation. But the 20th year sees a significant drop in the global sales. Net revenue share This chart shows the net revenue share for the industry over the ten years. The revenue shares at the beginning years are quite low but things begin looking up in the subsequent year, and hitting a bar high at the 19th year. Market shares The market share chart shows seemingly fluctuating trend especially in the early years till the 14th year. From the 15th year the trend changes significantly and we see an increase in the shares till the 19th year. The 20th year shows depreciation. Pricing strategy: North America The charts provided will give an insight in to the marketing strategy of these companies in the ten years period This chart give information on the performance of the company shares on the three marketing strategy that is the internet, the wholesale and the private label. The chart shows the performance in North America. From the information gathered it is clear that in this region the best marketing strategy is the private labeling. It is seen that in all the years the private labeling is giving a high results. The internet segment shows a very low rating over all the year. Companies pricing and S/Q ratings This chart shows the companies pricing in North America. The data shows that, at the beginning years the interne pricing were hitting a high level. But shortly changed and at the 14th year. At this year they were low and maintained at that over the years that followed. The other marketing strategy remains low over all the years. Europe and Africa Markets share In this region of Europe and Africa the company’s marketing share works well with the private label just as it was seen in North America. The trend is seemingly, is at the low end in the early years and tries to pick at the 14th year but still remains low in the subsequent years. But, point to note is that the private label has a high rating in most of the years. I In this case, the internet pricing still takes the high note in the beginning years and dwindles at the 14th year. The wholesales maintain a constant trend over the years just as whiteness in North America. Asia pacific From the Asian pacific region there is quite a different trend all together in the market share. At the early years there is quite a similarity in all the three marketing strategies. But in the years 11 to 13 we realize that private label is not used as a marketing strategy but on its reintroduction from the 14th year shows it leading as a marketing strategy in this region. Just to note in the years that only the internet and the wholesale are used the wholesale takes the lead as a marketing strategy for the shares. Latin America The companies share in the Latin America is quite low. The marketing strategy in this region shows quite a low impact on how the shares are trading especially in the early years. But in the 15th year and the years that follow there happens to be quite a change and the marketing strategy that picks well is the private labeling just as it is seen in the other regions The trend in this region is not quite different from the others since as it is clearly seen the internet price is high at the early years and goes low in the subsequent years. Data presentation and management. From all the information collected it is quite important to mention that the decision made have herd quite an influence in the way the industry has been changing. Looking at the profits that were gained over the years it is quite prudent to note that there was a great increase in profits and the trend was quite impressive. It is then clear that the decisions made in each year by the management were Important. Conclusion: Many companies realize gains and improvement not because of the hard work of a single individual but from the combined efforts of the entire stake holder. For instance, in the case of this industry all the seven companies must work together so as to realize the ultimate goal of high profits. The performance of one of the company greatly influences the general performance of all the t others and the industry as a whole. This does not end there. There is need for the entire stakeholder and the staff of all this companies to work together so as to realize their goal. This calls for team work in the individual companies. In this case it is good for the workers to have close relation in the working areas and the management to try and better the coordination so as to realize better performance. Read More