Case Analysis on

Footwear India Pvt Ltd

Summary of the case
 Footwear India Pvt Ltd was the market leader holding 40% of Market share
(2005- 06)- 5 Factories and 2 tanneries in the 4 zones
 Its competitors were:-
 Unorganised small scale footwear makers- Market share 20%
 Foreign Brands like Nike, reebok, Adidas - Market share 30%
 Liberty – Market Share 6%
 Paragon – Market Share 4%
 The company adopted the VMS strategy
 1. Corporate VMS
 Both Production and Distribution under company ownership (Dist Network B)
 2. Contractual VMS
 Appointed retailers - Company’s Franchise ( Dist network A)
Distribution Network A
 60% of Sales came for This Network
 Consisted1500 retail outlets – included company – owned retail
stores and franchise stores
 Franchise ( 150)- located in rural market

 Had agreement to sell only the company's product

 Company _Owned Retail Stores

 Main Store

 Commercial Store

 Family Store

 Discount Store
Distribution Network B

 40 % of sales was contributed from this network

 Network consisted of wholesalers and independent retailer
(dealers)
 Wholesalers->company's wholesale depot-> resell to independent
retailers or dealers
 The dealers sold footwear products of various brands
What were the Problem Areas

1. Decrease in sales
2. Market share was 60% in 1990 which came down to 40% in
2005-2006
3. Low sales per retail outlet in Dist A Model
4. Company heavily dependent on Dist A model where fixed
overheads are high
5. Since 2 years the company is making loss
6. Main Objective is to stop the downward movement
Suggestions

 Focus more on increasing share of sales of high margin accessories

 Increase sales of other footwear brands in Dist A model
 Increase price of its products wherever possible
 Company is heavily dependent on Distribution A model where fixed
overheads are high so Company has to strengthen Distribution B
model to increase sales.
 Performance based commission should be given.
 Focus on improving top-line and bottom line both
Indian footwear market
 The Indian footwear market is expected to worth INR 475 bn by
2025, representing a compounded annual growth rate of 7%.
 The footwear industry is majorly dominated by the men’s segment
which comprises almost 60% of the market.
 The remaining 40% share comprises of the ladies and kids segment.
 Within this segment the kids segment accounts for more than 50%
share.
 This is particularly surprising considering that the world’s major
production is in ladies footwear.
 This inconsistency provides a huge opportunity for the ladies
footwear industry in India.
 Thank You
Submitted By:
Sumera Feroze Dervish
Pavan Kumar