Date post: | 15-Jul-2015 |
Category: |
Business |
Upload: | leah-klacko |
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Mission Statement
"We are committed to delivering the highest quality shoes to our customers that are made
responsibly in an ethical, diverse setting."
Strategy Formulation
Initial Broad Differentiation Strategy
● High Quality Shoes at a High Price Point
● Higher S/Q Rating than competitors
● More models and more advertising
● Retain loyal customer base with rebates and more retailers carrying the products
● Best practices training to employees to provide excellent customer service
Financial Objectives Short Term:
● Maintain a credit rating of B+ through the first two years
● Maintain a return on equity investment of 15% or more annually.
Long term:
● Grow earnings per share 7% annually through first five years, and 5% annually after.
● Achieve stock price gains of 7% through the first five years, and 5% annually after.
Strategic Objectives
Short Term● Construct an upscale brand that was the leader for its quality product offering and
use of superior materials.
● Consistently be the leader in advertising and marketing as well as recognized in the global shoe industry.
Long Term● Achieve an image rating of 70+ within the first 5 years.
● Incrementally increase prices for our products to remaincompetitive.
Strategy & Tactics● Invest in environmentally responsible practices to improve our CSR.
● Achieve maximum capacity in plants as well
as invest in upgrade options A and D for the
North American Plant.
● Free shipping as well as a mail-in rebate.
Adjustments
● Corporate Citizenship○ Use of Recycled Boxing and Packaging○ Energy Efficiency Initiatives○ Charitable Contributions○ Ethics Training and Enforcement○ Workforce Diversity Program
Adjustments
● Sales Forecast○ Inventory Clearance
● Plant Capacity○ Purchase/ Sale of Capacity○ Upgrade Option A and C at N.A. Plant and Asia Plant
Adjustments
● Branded Production○ Achieve highest S/Q rating○ TQM/ Six Sigma Quality Program○ Compensation
Adjustments
● Internet Marketing○ Competitive Pricing○ Increased Models Offered○ Achieved highest S/Q rating○ Free Shipping○ Increased advertising
Adjustments
● Wholesale Marketing○ 200 models offered in the market
○ Competitive Pricing○ Rebates offered
○ Support Retail Outlets
● Celebrity Appeal○ Tiger Green
○ Oprah Letterman
● Private-Label Operations
Finance & Cash Flow
● Paid $1.50 Dividend● Repurchase 2000 shares @ $39.05 a share● Allowed Leah's Loafers to significantly raise
Return on Equity
Assessment - EPS● Board of Directors Expectations
○ 7% annually through Year 15○ 5% annually Year 16 on
● Competition○ Company F EPS○ Industry Overall
Assessment - ROE● Expected to have an annual return on equity a 15% or higher.
● Struggled year 11 at 4.6%
● Significantly better performance for years 12, 13, 14 and 18. All above 15%.
● Company F competition
● Overall industry
Assessment - Stock Prices
● Beginning Stock Price○ Year 11, $16.65
● Ending Stock Price○ Year 18, $101.02
Key Learnings
● Adapting Strategy to changing market○ product offering, pricing
● Celebrity behind Leah's Loafers○ Tiger Green
● Private-Label Operations