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Strategic Management, Task1

Foundational study of strategic management principles and frameworks.

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    Strategic Management, Task1 Subject: Strategic Management, Task1 A. F inal C umulative B alanced S corecard, Income S tatement, and Balance S heet Cumulative Balanced Scorecard based on performance Evaluation : Cumulative Balanced scorecard of Excellent Footwear based on Industry Report : Cumulative industry results for last four years ending in year 18 Minimum Maximum Average Excellent Footwear Total Overall 0.00 1.68 0.24 0.00 Financial Performance 26.32 30.94 28.95 28.95 Market Performance 0.01 0.38 0.20 0.20 Marketing Effectiveness 0.16 0.72 0.55 0.16 Investment in Future 1.00 98.87 16.99 98.87 Wealth 0.01 0.33 0.18 0.07 Asset Management 0.04 4.54 1.59 0.04 Manufacturing Productivity 0.17 0.54 0.38 0.17 Financial Risk 0.48 1.00 0.84 1.00 Cumulative industry report of Excellent Footwear for year 18

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    Income Statement : Particulars of Cumulative Balanced Scorecard based on Industry Report Investors Expectation Score Best Industry Score Overall Score Earnings Per Share ($) 24.00 12.00 4.77 Return on Equity (%) 16.00 13.00 15.93 Stock Price ($ per share) 24.00 9.00 9.00 Credit Rating 24 20 00 Image Rating 15.00 10.00 55.00 Corporate Social Responsibility and Citizenship N/A N/A N/A Total Overall Balanced scorecard 103 64 84 Income Statement Consolidated Income Statement Year - 18 Gross Revenues: $000s Internet 65120 Wholesale 230903 Private - Label 0 Gross Revenues from Footwear Sales 296023 Exchange Rate Adjustment - 10764 Net Revenues from Footwear Sales 285259 Operating Cost: Cost of pairs sold 134447 Warehouse expenses 20761 Marketing Expenses 43297 Administrative Expenses 8830 Operating Profit (Loss) 77924

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    Balance Sheet : Balance Sheet Balance Sheet Year - 18 Assets $000s Cash on hand 343171 Accounts Receivable 71315 Footwear Inventories 19945 Total Current Assets 434431 Net Plant Investment 120074 Construction WIP 0 Total Fixed Assets 120074 Total Assets 554505 Liabilities $000s Accounts Payable 11195 Overdraft Loan Payable 0 1 - year Bank Loan Payable 0 Current portion of LT loan 10000 Total Current Liabilities 21195 Long Term Bank Loan Outstanding 40000 Interest Income (Expenses) 909 Other Income (Expenses) - 779 Pre - Tax Profit (Loss) 78054 Income Taxes 23416 Net Profit (Loss) 54638

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    Total Liabilities 61195 Shareholders’ Equity $000s Common Stock 9400 Additional Capital 75493 Retained Earnings 408417 Total Shareholders’ Equity 493310 B. Generic Competitive S trategy of the Excellent Footwear Company Low price and product differentiation are the two factors that drive the customers. Based on the idea, cost leadership or product differentiation is the two basic competitive adv antages that a firm can possess (Porter's Generic Strategies, 1996) . Figure: Competitive Strategies available to the company The Excellent Footwear Company employ ed a combination of both the cost leadership strategy and product differentiation strategy. Cost Leadership plus the product differentiation strategy help ed the company to concentrate on the low cost offering but at the same time not compromising the quality of the product. The cost lead er ship strategy help s to attract the customers who search for good quality footwear with low cost. On the

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    other side, the product differentiation strategy help s to attract the customers who search for distinct and fashionable footwear. The main strategic goal of the ‘ Excellent Footwear Company ’ was to p rovide customers the best value for their money. It attempte d to ensure so much performance as possible, within the given price that the customers are willing to pay . Figure: Competitive Strategies pursued by the Excellent Footwear Company Strategic plan (actions) to achieve competitive advantages & financial success Game Plan # 1 Choosing Target Market At first the company chose its target market to which the company will offer its products. T he company offer ed its footwear goods for all the men, women and children. In one tale , t he company chose the ‘ cost cutter ’ customer segments to design & offer its low cost product. The ‘cost cutter’ segment include d the bargain based customers who make demand for cost - effective footwear products instead of branded and stylish footwear products. On the other tail, the company cho se the ‘Innovators’ market segment to design & offer its low cost product. The ‘ innovator ’ segment include d customers who are less cost concern and make demand for branded and stylish footwear products. Both

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    of the target markets better align with the company’s generic strategy of offering customers the best value for their money . Available Market Segments Figure: Pursued market segments of the Excellent Footwear Company Game Plan # 2 Designing the brand for each of the target m arket s The company initially served to the ‘Cost cutter’ and ‘Innovator’ market segments. Then it began to design its brands for each target market by considering the Price Performanc e Mercedes Innovator Traveler Cost Cutter Work Horse

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