A case study analysis of a footwear company

Executive summary

The footwear market is growing at a rapid rate with diverse products and quality footwear available in the market. The study analyses the business environment and business simulation game of a footwear company E, whose aim is to become a dominant player in the global footwear industry. The organisation E initially operates in North America and Asia Pacific and later expands their operations across Europe Africa, and Latin America. The share price and ROE are increasing over the period of time as per the financial report of the business. Through the SWOT analysis, it is possible to conduct internal business environmental analysis and along with this, PESTLE analysis is being utilised for identifying external business environment. The latest technology will be proposed further through which the company can run their operations and gain high competitive advantage by creating values for the stakeholders. The Robotic Process Automation would be suitable for the firm to implement the business game simulation of products differentiation and market expansion, for running the wholesale and internet marketing and sales efficiently.

1. Introduction

The business strategic planning refers to the practice of strategizing the operations, financing and human resource in the organisation with technological advancement, in order to meet the corporate aim and objectives of the firm (Corbo, Pirolo and Rodrigues, 2018). In the recent competitive business environment, the organisations focus on arranging resources and maximising capabilities for choosing the best business simulation game in order to expand their operations and achieve future success (Jestratijevic, Maystorovich and Vrabič-Brodnjak, 2021). The paper aims at discussing the business simulation game of the footwear company E, which is operating across different markets for delivering the best quality footwear to the customers. The study also provides a scope to review the corporate aim and mission of the company and critical evaluate the strategic planning of the company for understanding their tactics in running the business. Additionally, there would be internal, external and competitive environmental analysis by implementing strategic models, to acknowledge the market condition under which the company can expand their operations. Lastly, one latest technology will be evaluated for the benefits of the organisation to sustain in the competition and secure future growth.

1.1 Corporate mission

The corporate mission of the company E is to implement cost leadership strategy to become dominant footwear company in the market. The sustainable solutions must be chosen for expanding their brand efficiently across the international market to have strong brand presence in the global footwear industry.

1.2 Vision

The corporate vision of the footwear company E is to enhance employee satisfaction, as the employees are the major stakeholder in the company to manage the operations and make the brand successful. The management team at the company is concerned about providing monetary and non-monetary incentives to the employees, in order to retain the experienced staff in long run.

1.3 Values

The organisation E focuses on creating corporate values of strengthening their stakeholder’s base. The major values are corporate social responsibility management, diversity and inclusion. Adaptability, innovation, 100% (ROE) as well as private label and increase in brand ratings. The footwear company is concerned about equality and diversity management in the workplace for providing equal scope to the employees. There is good strategic planning for corporate social responsibility as well as the company focuses on creating values for all the stakeholders, by providing high return on investment (Polese et al., 2019). Hereby, through creating value for the members, who are engaged with the company, it is possible to strengthen their stakeholder’s base and run their operations across the market efficiently.

1.4 Corporate objectives

The corporate objectives of the company are such as,

To maximise social contribution by investing in charitable programs and developmental projects in the society

To create employee’s values by providing them monetary and non-monetary incentives

To managing corporate social responsibility by creating green environmental footprint\

To create values of the customers through delivering them the best quality footwear at effective price range

2. Task 1: Evaluation of Major Strategic Decisions, Highlighted Year and critical evaluation

Through identifying the strategic decision, made by the company, it is possible to acknowledge the business simulation games in the organisation (Jiang, 2019). The strategies of the footwear company will be evaluated year by year which further provides a scope to identify the business simulation game of the organisation to sustain in such competitive business environment.

2.1 Evaluation in year 11

The company E is efficient to manage the production material with effective price adjustment that was $6.05 and superior material was $12.49. The organisation has operated in two regions, North America (NA) and Asia Pacific (AP). The branded pairs are available about 30296 for NA and 19200 for AP, in which the brand was successful to sell 29471 in NA and 18652 in AP via wholesale and internet. Hence, the brand is successful to manage both wholesales and internet selling practices, for retaining the customers and small and medium sellers who try to buy at wholesale rate. EPS was 2.25 along with ROE 19.4 and stock price was 23.09. Image rating at that year was 73, and SQ rating was 4.0 for the corporate sustainability and efficient operational process. Facilities space is necessary for identifying the business simulation game, and in his regard the footwear company focused on 2 market facilities for successful market expansion, and the chosen markets was North America and Asia pacific. The production capacity was 5000 and 6000 respectively. Gross investment facility for the brand was $96,000 for NA and 114,000 for AP. The company has invested approximately $5500 for both the countries and after accumulation of deprivation; the gross investment creates facility of $79,462 for NA and $104,162 for AP.

2.2 Evaluation in year 12

In this year, the organisation still operated across the North America and Asia Pacific in order to create strong brand image and strengthen their customer’s base. The initial gross investment was $101,500 for NA and 119,500 for AP. 2.5% of gross investment along with after accumulated depreciation of year 11 about 22038, the facility space was of $79,924 for NA and $101,174 for AP. in this particular year, the branded pair available was 32,878 for NA and 21,343 for AP. the pair sold in this year was 31693 in NA and 21,648 in AP. the organisation is efficient to manage their operations and as per the financial report of the organisation, there was 37% of superior material usage in NA representing 4% growth from year 11 and 51% for AP representing 2.0 increments from year 11. Stock price was 23.09 in this year along with ROE 19.4 and EPS 2.25. The organisation E is hereby efficient to manage their return on investment and expand the business for maximising its sales volume and profitability. The initial gross investment in this year was $80,000 for NA and $57,600 for AP and the organisation mainly focuses on implementing cost leadership strategy for delivering the footwear at effective price.

2.3 Evaluation in year 13

In this year, the organisation E aims at market expansion for increasing global presence and it was successful to expand their operations across North America, Europe, Asia Pacific and Latin America. The superior material used was 37% in North America, 13% in Europe Africa, as well as for Asia pacific it was 51% and 48% for Latin America. There is decrease in standard materials ion the production and increase in superior materials to make the best quality products for satisfying he customers. The Branded Pairs for NA was 35,052, EA 29,517, AP 23,407, LA 23,379 are available in this year. Among this, the pairs sold 33,370 for NA, 28,599 for EA, 22,714 for AP and 22,721 LA, representing 41% of the pairs in the company. The demand for their footwear pairs is increasing over the period of time, where the organisation is successful to maximise their sales volume and overall profitability. Hence, product diversification strategy along with market expansion tactic is effective for the company to increase their global presence and attract the audiences for their quality shoes. As per the financial report of the company, EPS was 3.84 and increase of 0.69 from year 12. Along with ROE 25.6 increased from 2.8 in year 12. Corporate social responsibility is about 20344 compared to the average of 4601. The stock price of the company has also been increased to 99.52 from 51.53 in the year 12. Financial stability is maintained well with effective business simulation game, where the organisation mainly focuses on market expansion and managing product portfolio. In this regard, the company also focuses son maintaining both wholesale and internet market for retaining wide range of customers across the international markets.

2.4 Evaluation in year 14

In the 14th year, the organisation E tries to expand their business activities through wholesales market and internet selling process, in order to conduct both business to customers and business to business activities sustainably. SQ score was 7.3 along with EPS score 4.63 and ROE 29.8. Stock price of the brand is increasing over the period of time, and in this particular year, it was 117.43. The organisation tries to maintain the footwear products equipment as well as manage the stakeholder’s base by providing high return on the investment. The Gross investment to $169,269 for NA and $87,269 AP. the brand mainly focuses on these two markets, for strengthening their client base.

2.5 Evaluation in year 15 ad 16

As compared to year 14, there was sudden fall in revue, with rise in marketing expenses about $46490 and administrative costing about $47912. The organisation also focuses on enhancing their production process for which there is 29% growth in expenses related to production and operations. Total production cost was $184561 to meet the customers demand in the market. Facilitates cost was $316544 along with production equipment cost was $550598. The organisation E also focuses on expanding their marketing and administrative operations in the next year, for running their business in a strategic way. Cash in that year was $14860 and cash outlays were $122407 with net cash about $244531. The market expansion with increase in production process is effective in this year, where the company is successful to re-establish the brand and mitigate the effects of low revenue generation in the previous year 15. Net product in this 16th year was $187627 with effective distribution and warehousing, for which the company E is successful to regain high market share and serve the customers with the best quality products. The operating expenses are also increasing throughout the year 16, where cost of branded pair sold was $361284 and the warehouse expense was approximately $75402. Hereby, the company E is able to manage their operations and maintain warehouse and production process to meet the market demand for their quality pair of shoes.

2.6 Corporate social responsibility (CSR)

The Carroll’s pyramid of CSR is effective to identify the strategies of maintaining brand sustainability. As per the pyramid, there is economic responsibility, legal responsibility, ethical and philanthropic responsibilities. The organisation is efficient to manage the economic responsibility by maximising their stock price, sales volume and ROE. It provides high return on the investment to all the stakeholders, including shareholders, investors, board members, managers and employees (Pantano and Vannucci, 2019). The company runs the operations ethically, by obeying the government rules and maintaining business intellectual property rights. On the other hand, the ethical responsibilities are maintained by developing good corporate governance in the workplace. The philanthropic responsibility is being fulfilled by maximising the social contribution. There is more than $750 annual cost for maintaining CSR. The brand E uses recycled box and paper packaging system for creating values for the customers. The product materials and superiority of the products are effective to satisfy the clients. There is investment ion social developmental projects and charitable institution for creating values of the social communities. Energy efficacy, reducing greenhouse gas emission and managing supplier code of conduct are other strategic planning for which the company is able to maintain their CSR score. Employee’s management practice is also effective at the organisation E, to prevent the employees working more than 50 hours per week as well as preventing substandard wage and preventing child labour and providing health and safety in the workplace.

Hereby, the business simulation game is effective at the firm, where the footwear company has chosen market expansion and product diversification strategy, for maintaining good product portfolio to retain more customers across the markets. There are both wholesale and internet selling practices, through which the clients can make effective purchase decision for the products. On the other hand, the brand is efficient to maintain its CSR and expand their business sustainably.

3. Task 2: Analysis of Internal, External and Competitive Environments

3.1 Internal Environment

SWOT analysis is effective for conducting internal analysis for the footwear company E,

3.2 External Environment

The PESTLE analysis is being utilised of evaluating the external business environment for the brand,

3.3 Competitive Environment

The competitive environmental analysis can be conducted by implementing Porter’s five forces strategy,

4. Task 3: Evaluation of One Emerging Technology

In the recent era of globalisation, the organisations are trying to digitalise the whole operations, for maximising customer’s satisfaction in long run (Lv, 2019). In this regard, Robotic Process Automation (RPA) would be the best strategy for this footwear company E to manage their operation and provide the efficient customer services to all the clients. Investment in RPA is high, but it maximises organisational efficacy by ensuring operational excellence (Jestratijevic, Maystorovich and Vrabič-Brodnjak, 2021). The operational process becomes easier to handle along with automated services provided to the customers. The customers can get immediate reply from the robots as well as the check the availability of the products in the organisation. Such initiatives would be effective for enhancing communication with the customers and also it would be beneficial for acknowledging the client’s actual needs and preferences. It is important for the firm E to implement RPA in order to sustain in the market and retain more long term and loyal customers for the best quality footwear products and client centred services (Makhmudova and Umarova, 2021).

5. Conclusion

It can be concluded that, the organisation E is efficient to manage their operations globally and secure future sustainable development by achieving high CSR score. As per the business simulation game, it focuses on product differentiation, market expansion and cost leadership strategies, in order to manage product portfolio and maximise market growth. The organisation is also efficient to manage their employees in order to retain experienced staff for running their operations strategically. The organisation is successful to expand their services across North America, Europe Africa, Asia Pacific and Latin America with high stock price about 117.43. It would be beneficial of the company to implement automation by investing in robotics, so that the customer’s service efficiency can be ensured. It would be effective for the firm to develop mobile application for e-commerce services, where the customers can get continuous support through the robotics system and make their purchase in a systematic way.

6. Reference List

Corbo, L., Pirolo, L. and Rodrigues, V., 2018. Business model adaptation in response to an exogenous shock: An empirical analysis of the Portuguese footwear industry. International Journal of Engineering Business Management, 10, p.1847979018772742.

Jestratijevic, I., Maystorovich, I. and Vrabič-Brodnjak, U., 2021. The 7 Rs Sustainable Packaging Framework: Systematic Review of Sustainable Packaging Solutions in the Apparel and Footwear Industry. Sustainable Production and Consumption.

Jiang, W., 2019. Sustainable development of supply chain in footwear industry–take Nike as the case. Asian Business Research, 4(3), p.86.

Kim, Y.K., Zaman, M., Ha, S. and Fairhurst, A., 2018. Competitive Analyses for Shoes Retailers: A Correspondence Analysis. In International Textile and Apparel Association Annual Conference Proceedings (Vol. 75, No. 1). Iowa State University Digital Press.

Lv, Q., 2019. Analysis on the operation and supply chain strategy of the fashion goods industry under new retail. Advances In Industrial Engineering And Management, 8(1), pp.57-59.

Makhmudova, D. and Umarova, M., 2021. Analysis of the Consumer Market of Footwear at the" Uzbekcharmpoyabzal" Enterprises. European Journal of Life Safety and Stability (2660-9630), 12, pp.294-300.

Mina, J., Subia, G. and Ermita, P., 2020. Value Chain Analysis of Slipper Industry in the Footwear Capital of the North. International Journal of Supply Chain Management, 9(5), pp.178-183.

Pantano, E. and Vannucci, V., 2019. Who is innovating? An exploratory research of digital technologies diffusion in retail industry. Journal of Retailing and Consumer Services, 49, pp.297-304.

Polese, F., Ciasullo, M.V., Troisi, O. and Maione, G., 2019. Sustainability in footwear industry: a big data analysis. Sinergie Italian Journal of Management, 37(1), pp.149-170.

Rahman, M.K.U. and Ayaz, M., 2018. The Impact of Marketing Mix on Customer Buying Behavior: A Case Study of Footwear Industry. NUML International Journal of Business & Management, 13(1), pp.107-117.

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