BSG online company strategy

1. Exotic Footwear
Amit Shelar
Kapyldeep Dharmaraj
Hyder Ali
Chen Yen Hua
Navin Krishnarajah

2. Content
Exotic Footwear Year 10
Initial Strategy
Risk
Internal Analysis
Competitor Analysis
Key Decisions
Company Position
7 Success Secrets
Lessons Learnt

3. Exotic Footwear Year 10
$238 Million $25 Million 17% B+
Target Markets
All 9 Companies
started Yr 10 on a
level playing field
Scoring Targets
• Grow Earnings Per Share ≥ 7% Market Wholesale
• Return on Equity ≥ 15% Segments
• Credit Rating ≥ B+
• Image Rating ≥ 70
• Stock Price ≥ 7% Private Label
Internet

4. Initial Strategy - Option
DIFFERENTIATION : “Providing
something unique that is valuable to the
buyer beyond simply offering a low
Athletic Footwear
price.” (M. Porter)
Exotic Footwear’s “Differentiation” strategy
implemented was to create ‘Value Add’ for our
customer.
This strategy is inline with our vision of achieving the
‘HOT’ status in the Athletic Footwear industry
Customer Centricity and Product Uniqueness has
always been our best approach in this mature market
Retail Product Lifecycle

5. Initial Strategy - Justification
As our reputation dictates, we will continue to place our emphasis in
product differentiation as our competitive strategy. Nike has built its
business on providing products that rise above all others; it has made us
the success that we are today – Phil Knight (Co-founder & Chairman of
Nike, Inc)
Our positioning here clearly starts in producing the best products for use in specific
sports such as football, basketball, running and regional sports. We then seek to
leverage brand loyalty and strength through differentiation and innovation -
(adidas-group.com)
“Joy” is what we will try to bring to our consumers and is what will
differentiate us from our competition – it’s our point-of-view. While others
talk about blood, sweat and tears of sports, we recognize that they cannot
be the only rewards. Rather, we’ll talk about the moments of joy inherent
in both sport and life - (about.puma.com)

6. Initial Strategy - Competitive
Advantage
Ensuring High Service Quality ratings
Unique Brand Recognition with Celebrity Endorsement
Competitive Pricing based on Industry Average
Similar models sold in both Wholesale and Internet to reach a wider
geographical area
Free Shipping for Internet purchases
Attractive Rebate offers and Retailer Support
Upkeep with latest consumer trends by focusing in
Enhanced Styling/Features to sustain our ‘HOT’
status

7. Risk - Potential
Saturated market growth being a mature industry
Cost leaders tend to capture more
market share via product dumping
especially among the lower income
nations
Private label marketing reduce marketing and operations cost
Internet market creates equal playing fields with transparent comparison
Volatile yearly exchange rates will impact product shipment
from warehouse to stores

8. Risk - Management
Strategize to capture more market share than growth
Upkeep with latest trends, styling and high quality to
promote brand loyalty
Uncertain sales in Private label due to competitive bidding
Incentives given for purchases via internet to attract customers
Change in yearly logistics strategy according to exchange rates
to minimize distribution cost

9. Internal Analysis
Scoring Measures
Profit & Revenue
Overall Score measurements
and profits shows significant
positive growth

10. Competitor Analysis
Manufacturing Cost Warehouse Cost Admin Cost
Marketing Cost
Operating Profit Net Profit
Exotic Footwear Exotic Footwear maintains an industry
average operating cost to improve profits

11. Competitor Analysis - Threat
Pricing Strategy from Cost Leadership competitors
Private label marketing to capture bigger market share globally
Less investment in styling, celebrity endorsement and service
quality to reduce fixed cost per pair
Additional plants in other geographic regions for faster shipment to display shelf
Availability of yearly “Competitive Intelligence Reports” allows
competitors to copy similar strategy

12. Competitor Analysis - Opportunities
Styling, celebrity endorsement and high service quality rating enables
premium price for products
Efficient utilization of plant capacity to cater for market demand
Free shipping boost internet sales and private label as backup for
stock clearance
Product shipments decisions from warehouse to stores
changes according to the volatile yearly exchange rates
Yearly “Competitive Intelligence Reports” helps to analyze competitors
strategy and market position to plan for upcoming year

13. Key Decisions
100% efficient utilization of plant capacity
Increase in employee wages and incentives
Focused on Internet & Wholesale
segment. Private label as backup in case
of surplus production
SQ rating constantly maintained higher than competitors

14. Key Decisions
Emphasis on product styling and features
Exchange rate to determine distribution methods of
shoes from warehouse
Constantly increase dividends for shareholder
Green approach as part of CSR to enhance Image rating

15. Company Position - Wholesale Segment
North America Europe-Africa Asia Pacific Latin America
YEAR 11
YEAR 14
YEAR 16
Exotic Footwear has always been in the
Exotic Footwear high end of the wholesale segment

16. Company Position - Internet Segment
North America Europe-Africa Asia Pacific Latin America
YEAR 11
YEAR 14
YEAR 16
Exotic Footwear has maintained as a leader in
Exotic Footwear the high end of the internet segment

17. Company Position - Year 11 vs Year 16
Year 16
• Earnings Per Share 13.03
• Return on Equity 37.5
• Credit Rating “A+”
• Image Rating 98
Year 11
• Stock Price $267.98
• Earnings Per Share 2.9
• Return on Equity 17.6
• Credit Rating “A”
• Image Rating 84
• Stock Price $41.56

18. 7 Success Secrets
1. A clear set of objectives and targets. “Impossible is Nothing”
2. Commitment of each team member.
3. An efficient team leader.
4. Well defined roles / task for each member. “Just do it”
5. Decision making process and conflict resolution methods.
6. Collaboration through meetings for effective communication
7. Basic skills and technical knowledge to achieve goals

19. Lessons Learnt
“Every team can have only one Captain” –
M.S. Dhoni (Rediff.com, 2011)
“Delegate, it isn’t all about you” –
Sir Richard Branson
(BusinessInsider, 2011)
“Quality is more important than
quantity. One home run is much
better than two doubles”. –
Steve Jobs (Businessweek, 2006)
"If you are first you are first. If you are second, you are
nothing” – Bill Shankly (Mirror Football, 2010)

20. Thank You