Beruflich Dokumente
Kultur Dokumente
Ethan Wright
Joseph Park
Olivia Mugenga
Sylvia Page
Page | 2
Table of Contents
Introduction
P.3
Goals Statement
P.3
Strategy Formulation
P.6
Strategy Implementation
P.8
Industry Analysis
P.11
Global Analysis
P.14
P.17
Competitor Analysis
P.18
P.18
P.21
P.21
Implementation Analysis
P.22
Marketing Implementation
P.22
Manufacturing Implementation
P.24
Financial Implementation
P.26
Performance Analysis
P.28
P.32
P.34
Introduction
Grizzly Footwear is an organization specializing in athletic footwear for people of all
ages. Our firm is competing against twelve other rival athletic footwear companies. Our firm has
operations in four geographic regions, Europe Africa, Asia Pacific, Latin America and North
America. There are footwear production plants in two locations, North American and Latin
American and we ship from all four geographic regions. Our firm has placed most of the focus
on the Internet and wholesale markets. We attempted private label in Year 10 but realized that it
was too competitive and propose to enter the private label market when the opportunity arises.
We started out selling over 5 million pairs annually, revenues of $238 million and net earnings of
$25 million, EPS of $2.50 and ROE of 17.3%. In year 10, unit sales of branded footwear in
North America and Europe Africa were about 50% larger than the unit volumes in the Latin
American and Asia Pacific regions, but the higher annual growth rates in the two lower volume
regions will result in almost equal market sizes in all four regions by Year 20. The prospects for
long-term growth in the sales of athletic footwear are positive. In order to achieve our companys
mission, the following will explain our overall strategy.
Goals Statement
Our mission is to capitalize on continuing consumer interest, keep the company abreast of
the industry leaders, compete for global market leadership and boosts our firms earnings year
after year. We want to focus on maintaining the highest quality shoe at the best price while
creating value for our customers and shareholders. Our goal in terms of the five clear-cut
performance objectives set by the Board of Directors are as follows, earnings per share (EPS),
return on equity (ROE), credit rating, image rating, and stock price gains.
Market Share
Grizzly Footwear is heavily concentrating its focus in the wholesale and Internet market
in order to gain maximum market share. With Grizzlys combined efforts we expect our
projected growth rate for each region as follows; For branded footwear markets in North
America and Europe Africa we project 5-7% in Years 11-5 and 3-5% in Years 16-20, in Asia
Pacific and Latin America we project 9-11% in Years 11-15 and 7-9% in Years 16-20. For
private label footwear markets in all four regions we project 10% annual growth in Years 11-15
and 8.5% annual growth in Years 16-20.
Return on Equity
Grizzly Footwear shareholders expect our firm to maintain a return on equity of 15% or
more annually. Our goal is to meet this expectation as we drive up our net income during plant
upgrades. We also want to provide consistency to let our shareholders believe that our firm is
acting in the best interests of gaining market share of at least 10% or more.
Credit Rating
Grizzly Footwear understands the concept and importance of maintaining a high credit
rating as being a strong suit for our shareholders. Investor expectations for credit rating is a B+
or higher. Grizzly Footwear plans to exceed industry standards by setting in place a financial
plan that will closely monitor our firms debt to asset ratio, interest coverage ratio and the default
risk ratio. Our firm plans to maintain a credit rating of at least an A-, which will give us
borrowing power if and when we decide to take out a loan. We will also have the advantage in
lowering our overall cost to borrow.
Image Rating
Grizzly Footwear considers the companys image rating in each geographic region and
expect so achieve a rating of 70 or higher. We plan to closely monitor branded S/Q ratings in
each geographic region, the companys market shares for both branded and private-label
footwear in each of the four geographic regions and the companys actions to display corporate
citizenship as it relates to the overall image rating. Our firm takes into consideration the need to
meet or exceed investor expectations of 70 or higher. In Year 10 our image rating was 70.
Stock Price
The stock price for the footwear industry is to achieve gains averaging 7% annually
through Year 15 and about 5% annually thereafter. Our firm believes such stock price gains are
within reach if we meet or exceed the annual EPS targets and pay rising dividends to
shareholders. We plan to exceed industry average with providing at least a 10% stock price
increase. In Year 10, our company stock price averaged at $30 per share.
Strategy Formulation
Grizzly Footwear follows a cost leadership strategy, which positions the company as a
high quality, low cost shoe. The goal is to focus on making the price as competitive as possible
but maintaining high quality. Based on the 11 sales-determining factors, Grizzly Footwears top
competitive weapons are SQ Rating, models offered, retail outlets utilized and delivery time.
Models Offered
Although, there may be a competitive advantage in offering a broader product line, our
firm offset that advantage by narrowing down customer selection with other appealing
competitive attributes. We were able to maintain market share through the use of retail outlets
carrying our company brand. The number of footwear retailers we can convince to stock our
models and promote our brand with shoppers heavily influences our sales and market share. Our
firm plans to focus on keepings models offered at 100-150, to keep customers selection low but
adding other appealing attributes.
S/Q Rating
We maintained our focus in keeping our S/Q rating high with an 8 or 9 star in all regions.
This will allow us a competitive advantage to outsell companies with lower S/Q ratings. Market
research indicates that the S/Q ratings are generally the second most important factor, aside from
price, in shaping consumers choices of which footwear brand to purchase. Our firm will focus
efforts to analyze these five factors current- year spending per model for new features and
styling, the percentage of superior materials used, current year expenditures or total quality
management (TQM) and six sigma quality control programs, cumulative expenditures for
TQM/Six Sigma quality control efforts and current year expenditures to train workers in the use
of best practices. We plan to fall within range of average to low for costs of production.
Figure 1: Price and S/Q Rating
Delivery Times
Grizzly Footwear understands retailer can deal with 4 week delivery times for footwear
orders; we want to boost the appeal of our brands being carried by retailers by offering a delivery
time of 3 weeks at $0.75 per pair.
Advertising & Marketing
In Year 10, Grizzly Footwear starting with investing low regarding advertising but plan
to increase in all four regions as follows: Latin America - $4000, Asia Pacific - $8000, Europe
Africa - $7400 and North America - $10,00 annually. In Year 10 we did not offer free shipping
but plan to offer free shipping in all four regions through Year 20. We also plan to continue with
offering mail-in rebates averaging $4 - $7 in the wholesale segment depending on the region.
Our firm will strategically watch the moves of our rival companies to determine incremental
changes related to all factors of advertising.
Celebrity Appeal
Grizzly Footwear attempted to gain Celebrity appeal but was not able to successfully
achieve this as we were out bid and found that investing later would be more beneficial to the
company and its shareholders.
Strategy Implementation
Grizzly Footwear has designed a strategic plan in order to remain aggressively
competitive in all four regions providing a high quality, low cost product. In our attempt to gain
more market share, remain competitive and continue to make a profit, we have designed a plan
explaining how our firm will implement these changes.
Grizzly Footwear started out with two manufacturing plants, a 2 million dollar plant in
North America and a 4 million dollar plan in Asia Pacific. We expected to boost our capacity by
20% and operated both plants at regular time and overtime if we saw the need to maximize
hours. The North American & Asia Pacific supplied production in all markets using Internet and
wholesale. Due to unfavorable exchange rates and tariffs on shipments to Latin America, we
decided to open up a plant in Latin America by obtaining a 1year loan for 31 million. The Latin
American plan was only used for production and supply in Latin America with 1000 produced in
Year 14 increasing to 1500 in Year 20. With all three plants running at full capacity, we expect to
see a gradual increase of 90% to 120% in Year 20.
Private label, a third channel to gain market share, projected growth at 10% annually during
Years 11-15 and 8.5% during Years 16-20. We attempted very few private label opportunities in
Years 10, 12, 13, 14, and 15 but was not able to successfully meet demand due to lack of
capacity. We were then able to focus most of our efforts on Internet and wholesale utilizing
maximum capacity. In Year 13, Grizzly had the opportunity to invest in plant upgrades in Latin
America using Plant option A reducing the number of defective pairs by 50%. When also
upgraded our North American and Asia Pacific plant using option C in order to boost SQ rating
by 1 star. With all plant upgrades through Year 20, we were able to increase from 2000 to 2500
pairs in North American, 4000 to 4700 in Asia Pacific and 1000 to 1500 pairs in Latin America.
We had a huge deal of retailer support in all regions and used that to our advantage to
help with sales and market share. Despite the shortage of shoes produced, we were able to
maintain decent market share due to our high SQ rating. We were also able to reduce our reject
rates down to 3.0% or less in all regions by training production workers in the use of best
practices at each step of the manufacturing process.
In order for Grizzly Footwear to obtain a sustainable market share in the footwear
industry, we must increase plant capacity in order to produce maximum demand. Our firm plans
to finance additional capacity by maximizing use of ending cash, debt and sell shares of stock.
Grizzly Footwear has decided to improve its positioning by expanding capacity in North
America, Asia Pacific and Latin America by $500,000 each. We will also build a 2 million pair
plant in Europe Africa in an attempt to gain market share. Currently our expenses related to
marketing are ranked closely in line with rivals showing an average percentage of 6.31%. With
respect to operating, administrative and advertising costs, our numbers fall between the high and
low category for industry average.
Figure 2: Industry Plants and Operating Benchmarks
Industry Analysis
Porters Five Forces model provides a sufficient platform from which to analyze the
industry in which we competed. The Global shoe market that is represented in the industry is
very competitive and requires close observation of each force represented in Porters model.
This model outlines the effects that the threat of new entrants, bargaining power of suppliers,
bargaining power of customers, threat of substitute products, and competitive rivalry within the
industry has on our organization and on the industry as a whole. Later we will explain the effect
these factors had on our competitive strategy in more detail.
Threat of New
Entrants
Threat of Substitute
Products
Competitive
Rivalry
Pricing competitively ensured that our
company could sustain an advantage
over our competitors. We also offered a
limited selection of models and styles
to ensure that our S/Q rating was as
high as we could possibly afford.
Power of Suppliers
As mentioned previously, the prices of materials fluctuated from year to year. If
competitors chose a strategy which included the purchase of more superior materials to be used
in the process of manufacturing their product, then the price of superior materials rose. We kept
an eye on the changes in the cost of these materials and made adjustments to production
accordingly. Our company was also privy to the price of labor in each market. Some markets
maintained the advantage of having cheaper labor than other regions. Our company also focused
its attention with regards to production on regions with an advantageous labor cost.
Power of Customers
Since buyer power was relatively high in our industry, it was important that we created
value. Our strategy for doing so primarily involved creating the best product we could and
selling it at a price point that was intensely competitive. Due to the non-existent switching cost
for customers, they could easily switch to another organization. We made sure that we
maintained high retailer support to push our product out to as many customers as we could. We
also attempted to seclude ourselves in the market snapshot analysis where the space between us
and our competitors could be as large as possible.
Threats of Substitutes
All of the eleven other companies in our industry were a possible threat of substitution.
Due to close and intense rivalry among competitors and the limited options that the game
presents, we were required to choose a strategy that would allow us to contain our market share.
Company K was our closest competitor in terms of S/Q rating and price. The threat that they
presented could have made it incredibly easy for customers to switch at no cost. Competitive
pricing for private retailers helped us maintain some advantage over this company.
Threat of New Entrants
Due to the costs associated with maintaining a high S/Q rating, not many companies
used the strategy during the first few years. Slowly after many companies chose the low price,
low cost strategy some companies switched their strategies which brought in the threat of new
entrants. In order to compete with these teams we kept our cost of production and price as low as
we could for the S/Q rating that we had.
Competitive Rivalry
The rivalry experienced in the footwear market would be largely accepted as intense
rivalry. Even though most companies were not trying to obtain the same strategy as we were, the
fight for market share was incredibly competitive. Due to this competitive environment, it was
difficult to grab profits and market share. By putting money into advertisement and retailer
support our company was able to create some brand recognition and loyalty from customers,
which in turn, kept us relevant in the market place.
companies, limited options for variation amongst products, and several other similar variables
that companies were faced with in the game, the struggle to maintain customers and retain profits
was extremely difficult. Due to all of these factors, it would be incredibly difficult for a start-up
company to compete in the environment especially considering the risk associated with failure
of an organization. Therefore, the industry appears to be unattractive if you wish to experience a
safe, risk free market.
Now that we have experienced how competitive the footwear industry is for nearly ten
years, the upcoming years will definitely yield different strategies than we took during our time
with the organization. Considering that most companies are dealt similar hands in the beginning
of the game, it is very important to stand out amongst your competitors and offer customers
something that they would not be able to obtain from other organizations. Focusing on strengths
that other companies are not taking advantage of is the most essential part of succeeding in the
business world. Moving forward, we will highlight the competitive and strategic advantages that
our competitors have overlooked. For instance, our organization will continue to put enfaces on
maintaining the largest amount of retailer support over other companies. Since most
organizations did not use a very S/Q rating, we will continue to offer products like this because
we know that consumers have limited options.
Global Analysis
Only a few decades ago businesses main concern were obtaining market share from their
local community and surrounding markets. Today the entire planet is every organizations
market. Globalization is the process of interaction and exchange between businesses,
organizations, and governments over many countries and nations, and is becoming increasingly
necessary for most firms that want to survive especially medium to large size organizations.
Businesses now have to consider all of the aspects of their operations and how they fit
into the increasingly globalized world. For instance, does their product design and functionality
apply to the regions of the world whose cultures, ethics, and ideas are vastly different from their
own? Is the business choosing the right suppliers, distributors, and managers to operate in places
that top level executives may not be able to? In the future, anyone working for an organization
will have to consider these questions and make decisions that apply to the entire globe. Several
other factors also play into these decisions that are mostly financial; for example, tariffs,
exchange rates, labor costs, and distributions costs. Our organization was faced with these
obstacles and made strategic decisions to either benefit from the differences or offset the
negative impacts.
Tariffs incur a cost depending on what region the organization is shipping from and
where the shipment is going to. Our organization looked at these tariff rates and made decisions
that would offset the costs of the rates for each region. For instance, if we were producing shoes
in the two North American regions, we knew that tariffs were not applicable both ways and
therefore shipped from either U.S. to L.A. or from L.A. to U.S. as much as we could. We also
considered the fact that N.A. did not apply an import tariff from other regions and made
decisions utilizing these advantages. Shipping costs also vary from region to region. Depending
from what region you ship from and to, there are associated and different costs. We made
decisions that would lower these costs and sell as many shoes as we could.
One of the more prominent costs we faced in our time of running the organization
was the costs that exchange rates could have when selling or producing shoes in any given
region. Exchange rates affect each movement of product twice per transaction. Once when the
product is manufactured and shipped to a foreign warehouse and once when the product is
shipped to retailers to be sold to customers. Our organization was constantly analyzing the rise
and fall of these rates and making decisions that would either lower costs or raise profits from
year to year. If an exchange rate was favorable for production costs in a region, then we would
produce more shoes in said region and fewer shoes in another. If exchange rates were favorable
for selling in a given region then we would sell more shoes in that region.
Each region also maintained differences and similarities in demand for purchasing
footwear. Overall the global demand for footwear rose from year to year, which made it
plausible to assume that we would have to produce an increasing amount of shoes over the years.
However, not all regions are looking for the same product at the same price point as other
regions. Some regions are looking for footwear to aid them in walking, running, or working,
while other countries may have a demand for shoes that help with sporting events or special
occasions. Moving forward, we will offer more styles and models of shoes so that we can cater
to several regions while maintain a high S/Q rating. We will also change our production
operations to further benefit from regionalization by meeting demand for each specific customer
continent.
Competitor Analysis
The following competitor analysis provides a detailed investigation of our companys closest
competitor. The report examines both the wholesale and the internet market of our operations.
All of the graphs shown below are representative of our most relevant geographic market: AsiaPacific. The first graph is for year 18, the second is for year 19, the third is for year 20 and the
last graph is a compiled version of the years 18-20. The X axis represented below is the S/Q
rating which is denoted in scores of 1 through 10 and the Y axis represents the price, in dollar
amount.
Figure 3: Strategic Group Map (Year 18)
90
80
F, 6.5%
G, 11.3%
D, 12.1%
PRICE ($)
70
60
I, 9.7%
50
C, 9.3%
L, 7.2%
A, 7.1%
H, 8.1%
J, 4.8%
K, 9.6%
B, 5.7% E, 8.8%
40
30
20
10
0
0
10
12
80
E, 12.8%
L, 7.4%
A, 7.2%
I, 16.8%
H, 8.1%
C, 9.3%
70
G, 12.6%
K, 9.4%
PRICE ($)
F, 1.7%
60
50
J, 4.6%
D, 7.6%
B, 2.6%
40
Series1
30
20
10
0
0
S/Q RATING
8
(points)
10
12
PRICE ($)
80
D, 12.7%
F, 1.2%
L, 9.7%
70
60
I, 12.7%
C, 9.3%
50
G, 14.7%
K, 9.6%
A, 8%
H, 8.1%
J, 4.4%
E, 7.1%
B, 2.5%
40
30
Series1
20
10
0
10
12
PRICE ($)
80
70
60
50
40
30
20
10
0
0
10
12
Based on the series of graphs presented above, we find that company J is a strong
competitor for our team. However, company K is our closest competitor. Both our S/Q ratings as
well as our prices were very close in the years 18 and 19, and the same trend continued in the
20th year.
Interestingly, company Ks market share in Asia Pacific has decreased from 9.6% in
2018 to 9.4% in year 19 and stabilized again to 9.6% in year 20. We retained a bigger portion of
the market with 11.3% in year 18, 12.6% in year 19 and 14.7 in year 20. Company K was able to
get that share of the market because while its S/Q rating matched ours, its prices were lower than
ours. This enables them to sell a significant amount of shoes.
In the years to come, our firm is most likely to threaten company Ks retail market share
because we offer many more models (we offer 150 and they only offer 50). In addition to this,
we dedicated a lot of money to advertising, which we trust to bear fruits, than they do. Lastly,
both our rebate offer and the number of our retail outlets are higher than that of company K.
Implementation Analysis
Our overall strategy was to be the high quality shoe maker at the cheapest price. We
sought to use this strategy to give us the competitive edge and help us achieve a higher market
share than Just Shoes and Kool Kicks. Some key parts of our strategy implementation against our
competitors are marketing, manufacturing, and financial implementation.
Marketing Implementation
Our companies marketing implementation was to market more aggressively than our
competitors Just Shoes and Kool Kicks. We used this strategy to help us compete against their
celebrity appeal in each of the regions.
$ in millions
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
G
3.8
J
4.03
K
3.16
$ in Millions
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
4.04
4.2
3.43
$ in millions
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
G
Marketing Unit Cost Year 20 4.18
J
2.15
K
3.13
Some opportunities that arise from our competition are to get celebrity appeal to help us
increase market share in each of the regions and making it tougher on them to increase market
share. Threats that we may face is that our competitors may increase their advertising and retailer
support in the regions to erode some of our market share. Just Shoes did have a higher marketing
unit cost for years 18 and 19 but this was due to how small their cost of pairs sold was in relation
to how much they spent on advertising.
Manufacturing Implementation
For manufacturing implementation, opportunities that arise are to install plant upgrade
option C to increase our star quality by one which in the Latin America plant to help reduce the
cost of pairs sold and to build a plant in Europe to reduce the effect of exchange rates on the cost
of pairs sold to that region. Some threats to what we could improve upon in manufacturing are
that our competitors could do the same thing and stop us from getting a competitive advantage.
Figure 10: Manufacturing Cost of Pairs Sold Year 18
300000
$ in millions
250000
200000
150000
100000
50000
0
G
MFG. Cost of pairs sold Year
259574
18
J
146819
K
215184
$ in millions
300000
250000
200000
150000
100000
50000
G
MFG cost of pairs sold 19290662
0
J
152248
L
219035
$ in Millions
350000
300000
250000
200000
150000
100000
50000
G 0
MFG. cost of pairs sold313395
Year 20
J
141723
K
206302
Financial Implementation
Looking at our finances and our competitors some opportunities are looking at our net
profit compared to our competitors and make sure that it is higher than theirs. One way to
increase net profit would be to invest into CSR to lower taxes which would increase net profits.
Another opportunity would be to reduce our administrative expense by increasing the cost to
train employees. Some threats that could arise are that our competitors could invest more into
CSR and they could also increase the training of employees to reduce the administrative expense
they incur.
Figure 13: Net Profit Year 18
120000
$ in millions
100000
80000
60000
40000
20000
0
G
Net Profit Year 18 64382
J
60042
K
107671
$ in millions
120000
100000
80000
60000
40000
20000
0
Net Profit Year 19
G
63645
J
55589
K
98405
$ in Millions
120000
100000
80000
60000
40000
20000
G
Net Profit Year 20 115334
0
J
70265
K
130416
Performance Analysis
Our companys main competitor was Kool Kicks for most of the game. They started to
compete against us in year 14 with a high S/Q rating. Our sales compared to Kool Kicks sales
during the 18-20 year range were higher and shows how well our company was marketing our
shoes and the demand we had relative to them. Every year we beat out our competition and the
industry average in sales due to advertising and the high retailer support in each region. While
we beat our competition in sales we did not have a higher net income than them. Kool Kicks had
a higher net income in years 18-20. Our net income for the years 18-20 was always below the
industry average. Our earnings per share and return on equity were also lower than the industry
average and Kool Kicks during years 18-20. Our earnings per share were so low due to the fact
that we sold stock in year 15 and could not repurchase it until year 20. Our return on equity was
so low due to the fact that we had to keep building plant capacity during years 18-20 to keep up
with demand. The credit rating of A+ through years 18-20 was better than our competition by
year 20 and was at the industry average. During years 18-20 we were able to maintain an interest
coverage ratio at or above 100. During these years we were able to cover an interest that we
incurred. We were able to stay close to the industry average and Kool Kicks. Having a high
interest coverage ratio improved our credit rating allowing for us to have lower interest rates
compared to Kool Kicks. Our stock price in years 18-20 rose from $66.74 in year 18 to $150.91
in year 20. During years 18-20 we did not have a higher stock price than Kool Kicks or the
industry average.
700000
600000
500000
400000
300000
200000
100000
0
YR
18
YR
19
Yr 20
G
456287
K
475774
Industry Avg
425405
491876
458077
461937
596224
489447
504291
140000
120000
100000
80000
60000
40000
20000
0
YR 20
YR 18
G
115334
64382
YR 19
63645
K
130416
10767
1
98405
Industry
117608
Avg
78453
86203
G
4.29
4.3
8.84
K
14.28
13.12
17.39
Industry Avg
8.42
9.28
13.29
ROE
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
YR 20
YR 18
YR 19
YR
YR 18
G
28.80%
19.90
%
16.70
%
K
34.10%
33.60
%
24.40
%
Industry
30.50%
Avg
19.64%
21.39%
Industry
Avg
A+
YR 19
YR 20
A+
A+
A+
B+
A+
A+
K
78.06
YR 19
G
173.8
8
100
Industry Avg
77.36
100
98.63
YR 20
100
100
121.5
9
$YR 20
YR 18
G
$150.91
$66.74
YR 19
$63.06
K
$305.06
$292.7
5
$243.4
9
Industry
$235.93
Avg
$140.35
$168.98
0
YR 20
YR 18
G
8.84
4.29
YR 19
4.3
K
17.39
14.2
8
13.1
2
Industry
13.29
Avg
8.42
9.28
Some competencies that we achieved were having a high S/Q rating, meeting investor
expectations during years 18-20, and having an inventory turnover of 9 days. The value that we
created for shareholders by year 20 was having earnings per share of 8.84, a return on equity of
28.8%, a credit rating of an A+, and a stock price of $150.91. Some problems that we have
would be that we need to expand capacity in Latin America, North America and Asian Pacific.
We should also build a plant in Europe to reduce tariffs in that region. We have no celebrity
appeal in any region and we cannot compete in private label against Kool Kicks or LLC
Olympic Footwear. Going forward our company should look into investing some into corporate
social responsibility in order to compete against Kool Kicks and to help boost our company
image.
Internet
Revenue
Wholesale
Revenue
Private
Label
Net Revenue
Cost of
Production
Warehouse
Expense
Marketing
Expense
Administrative
Expense
Interest Expense
Operating Profit
Net Profit
Shares
Outstanding
Earnings Per
Share
Year 21
77140
476610
0
553750
321502
32886
75320
Year
22
87500
49491
0
58241
0
32370
0
33765
76210
Year 23
94300
521650
0
615950
325670
34550
77160
12590
0
111452
111452
13050
10.35
12618
0
13611
7
1361
17
13050
12750
0
165820
165820
13050
13.37
11.86
Some assumptions that we made for the three year pro forma income statement was that
we would remain above 10% market share. We would have sales revenue increase by 1.5% year
over year. We assumed that internet market would make up 12% of total sales with wholesale
making up the other 88%.
To tie everything together we see that our company markets heavier than our competition
which leads us to having a greater manufacturing cost and leads us to having less net income
than our close competitors. Our company vs its competition and the industry average are very
comparable and show that we are doing well in the game. Our company should focus in the
coming years to build capacity to satisfy the demand for our shoes. We should look to compete
against Kool Kicks for celebrities and we should work on cutting costs to help us have better
profit margins on our shoes.