It's required and mandatory that the expert have a Business Strategy Game knowledge and experience.
Please refer to the
WORD FILE
named “Complete Items Highlighted in Yellow”
1. Financial Strategy
2. A summary of your company’s performance to date (Year 15).
3. Based on your evaluation of the performance of your company, develop specific strategies for Year 16 and beyond. Briefly explain the approach you have taken and the reasons why with reference to the industry and competitors within the industry.
You will then need to outline the Business Strategy Game (BSG) decisions you would make, specifically addressing each of the following aspects:
Financial Management– Based on your company’s current financial position, outline and justify your approach to the ongoing financing of your company. Include aspects such as investments in assets, debt and/or equity financing, credit rating, refinancing as required and cash flow.
Human Resourcing
– Outline and justify your approach to ongoing resourcing and worker productivity.
Based on Financial Management, Operational (already written), Human Resourcing and Marketing (already written): Justify your decisions with reference to your strategy AND the current market (Year 15) conditions within your industry (JUSTIFICATION of strategies vs Industry and Rivals).
INSTRUCTIONS: PLEASE COMPLETE SECTIONS HIGHLIGHTED IN YELLOW. MUST BE BASED ON THE REFERENCES PROVIDED AND WHAT HAS BEEN WRITTEN HERE ALREADY. OVERALL STRATEGY All Sports Shoes Co. has throughout the years led all its tactics towards reaching the biggest audience to enjoy its affordable premium quality shoes. Therefore, the company will continue with its previous strategies, directing all its focus to the consumers. More value for money strategy will remain our number one focus while implementing new and effective executions to become the leaders in the industry. Financial STRATEGY Considering the amazing performance the company has achieved in the past three of years, the management is determined to improve all its key performance indicators……….. The market in NA and EA is forecasted to increase its wholesale revenue between 3 to 5% while AP & LA between 7-9%. Our company has forecasted an average growth of 19.3% in our internet sales, 15.7% in our wholesale figures and 100% in private labels sales. Operating STRATEGY The company will continue improving its shoes quality yearly by augmenting its superior materials usage by 2% and increasing its TQM and enhanced styling spend to reach 25% of its production cost. We will also carry on its plants improvements in each region with a special focus on reducing its reject rate and production run set up costs. Looking Ahead All Sports Shoes Co. will continue to fulfill its mission to deliver the finest shoes in the industry and implement enormous efforts to become the leader in each market. We have succeeded in the past because of you, because you believe in us and we are hoping in the years to come that you will extend us the same support for many years to come. YEAR 15 COMPANY SUMMARY YEAR 16+ DECISIONS 1. FINANCIAL MANAGEMENT 1. OPERATIONAL 1. STOCK LEVEL The management has forecasted it Days of Inventory to be reduced from 88 days achieved in Year 15 to an average of 66 days per year. The company will monitor closely its production to make sure all the markets’ orders have been fulfilled on time. 2. PLANT CAPACITY AND PRODUCTION LEVEL The company has been optimizing the use of all its plants’ capacity in the past years and the same will be followed for the years to come. It is crucial to meet all the demands of the markets and with the outstanding increase in the retail outlets distribution, the company must maintain a high level of production. The management has decided to increase the space and production capacity of AP and LA in Year 17 and Year 18 by 1 Million pairs each yearly. 3. PLANT UPGRADES AND REJECT RATE The management has forecasted the below yearly upgrades per plant: · Year 17 To minimize production run set up cost by 50% in NA To ameliorate S/Q rating by 1 star in AP · Year 18 To revise the assembly layout to reduce production run set up cost in LA · Year 19 To purchase robots to assist in assembling and boost worker productivity by 50% in AP To invest in special equipment to increase NA S/Q rating · Year 20 To buy Option D to be installed in LA The company will continue to reduce its reject rate per plant from 4.4% in Year 15 to 4.1% in Year 16 and continue to lower it gradually for the coming years to 3.5% in Year 20. 4. PRODUCTION COST AND MATERIALS The company’s biggest threat is HIGH PRODUTION COST. The management will continue monitoring the same yearly and will reduce its production run set up, the labor high cost in especially in NA, while increasing its TQM per pair, enhance its styling features. The company will also improve its superior material usage yearly until reaching 100% superior material usage in Year 20. 1. HUMAN RESOURCING 1. MARKETING 1. SALES PER SEGMENT All Sports Shoes Co. is currently selling total average of 13 Million pairs. In Year 20, the company is expected to sell around 20 Million pairs worldwide just in one year. The company is anticipating selling 83 Million pairs in the next 5 years, where 18% will be sold online, 79.7% in the retails outlets and 2.3% in production labels. 1. SALES PER REGION The management have forecasted its sales per unit and per market according to the previous trends and anticipated marketing activities in each region. The below chart represents an overview of the total sales unit in each region where NA’s sale will represent 27.5% of the total sales, EA 24.2%, AP 26.5% and LA 21.7% 1. PRICES AND MARKET SHARE Focusing on CUSTOMER FIRST, the management decided to reduce yearly its prices in all segments to deliver affordable high-quality shoes in all the markets compared to the industry average and other competitors. With the changes in prices and the improvement of the quality, the company is anticipating a better penetration to each market, especially in NA and AP. 1. MARKETING SPEND AND CELEBRITIES All Sports Shoes Co. is determined to reach out to all consumers. Therefore, the marketing expenses per pair has been set to be higher than the industry average and other competition. We believe that the more you are visible to customers, the higher the chances to sell. Since the company as well decided to boost its internet sales in the next 5 years, the management to decided to spend more on search engine and brand advertisement in each market, recording its highest spend of $22 per pair in Year 20. KEY DECISIONS ON BSG · EMPLOYEES PRODUCTIVITY: Compared to the Year 15 industry average, our productivity per plant is average. Our employees are the base of our business and the management will introduce more training programs (Best practices training average growth of 25% Year on Year), higher incentives ($2 Incentive pay in Year 17 per non-rejected pair which is double of the incentive paid in Year 16) , more competitions, and rewards to boost their morals and optimize their productivity. We aim to increase the average productivity of 9% for the next five years. · PRODUCTION SPECIFICATIONS: The company has forecasted a steady growth in the production specifications of each plant every year, where the superior materials usage will grow from 90% in Year 15 to 100% in Year 20, expecting to double the trend of the industry average. The TQM and Enhanced styling features are also estimated to raise progressively to $3.3 and $4.1 per pair respectively. Our brand will offer 500 models to consumers to satisfy everyone’s taste and preference. · PRODUCTION FACILITIES: The company will purchase new and refurbished equipment in Year 16 for NA and AP to replace the depreciated ones in Year 15. In Year 18, another 4 Million pairs as the company is planning to extend AP & LA both capacities in Year 17. There will be more upgrades to all plants as stated above in section II/3. · DISTRIBUTION: All Sports Shoes Co. is planning to reduce the tariff yearly and have all our markets (except of EA) to be self-efficient. This company will also invest in upgrading its online systems and reduce the delivery times for both Internet and Branded segments to 1-week lead-time in Year 19. · INTERNET MARKETING: +56% increase of search engine advertising has been forecasted for Year 16. Going forward, the management will always invest +30% more than the industry average to boost the online sales. The online prices will be reduced gradually to become $90 per pair in Year 20. · WHOLESALE MARKETING: With the increase of the brand advertising and retail support, the company aims to increase the mail-in rebate per pair to become $7 in Year 20. The management feels that the company is offering a current rebate that is low compared to the market average and will increase this rebate yearly. The prices as mentioned in section IV-3 will be gradually lowered to become $64.25 per pair in Year 20. · PRIVATE LABELS: The company consider Private labels as an opportunity to liquidate the yearly unsold pairs and is forecasted to sell 500’000 pairs in Year 18, 600’000 pairs in Year 19 and 800’000 pairs in Year 20. The company will offer competitive prices to win the bids and will reduce its superior materials usage to 20%. · CELEBRITY ENDOREMENTS: All Sports Shoes Co. currently has secured 3 main contracts for the most famous celebrities in the world to last till Year 17 and 18. This year, we will also bid to secure more contracts and will make sure to renew all of the one expiring soon. The plan is to maximize their appearance in our events and advertisements to improve the brand image and eventually maximize our revenue. · CORPORATE CITIZENSHIP: The management will continue investing in CSR initiatives and will increase it slowly to become $2 per pair sold in Year 20 compared to $0.81 in Year 15. · FINANCE: The management has decided in Year 15 to limit its long-term liabilities and reduce it every year. Therefore, the company will use its retained earnings every year to self-finance all its operational and marketing activities which will improve tremendously its credit rating and reduce the default risk to low. The company will continue paying generous dividends to its investors every three years but will also introduce a low pay dividend in between to optimize the shareholders’ trust in the company. The stock repurchase will also be every other year depending on the company’s performance and its cash on hand. JUSTIFICATION OF STRATEGIES VS INDUSTRY & RIVALS FORECAST SALES PER SEGMENT INTERNETYEAR 15 ACTUAL YEAR 16 FORECASTYEAR 17 FORECASTYEAR 18 FORECASTYEAR 19 FORECASTYEAR 20 FORECAST24382681.82815.89000000000032956.68450000000033163.65241500000093385.1080840500008WHOLESALESYEAR 15 ACTUAL YEAR 16 FORECASTYEAR 17 FORECASTYEAR 18 FORECASTYEAR 19 FORECASTYEAR 20 FORECAST1076511497.6112241.30110000000213122.16464000000314164.42222680000515505.699545493206PRIVATE LABELSYEAR 15 ACTUAL YEAR 16 FORECASTYEAR 17 FORECASTYEAR 18 FORECASTYEAR 19 FORECASTYEAR 20 FORECAST000500600800TOTALYEAR 15 ACTUAL YEAR 16 FORECASTYEAR 17 FORECASTYEAR 18 FORECASTYEAR 19 FORECASTYEAR 20 FORECAST1320314179.4115057.19110000000416578.84914000000217928.07464180000519690.807629543207 SALES/SEGMENT/'000 PAIRS TOTAL SALES/ '000 PAIRS SALES PER REGION INTERNET NAEAAPLA4301.55511252500043698.47585497500093513.85975572500053489.2442758250008WHOLESALE NAEAAPLA18669.46289510400316486.32434211000517918.02399481120713457.386280268003PRIVATE LABELS NAEAAPLA007001200 TOTAL SALES/ REGION/ '000 PAIRS PRICES TREND INTERNET PRICEYEAR 15 ACTUAL YEAR 16 FORECASTYEAR 17 FORECASTYEAR 18 FORECASTYEAR 19 FORECASTYEAR 20 FORECAST93.687591.7591.259190.590WHOLESALE PRICEYEAR 15 ACTUAL YEAR 16 FORECASTYEAR 17 FORECASTYEAR 18 FORECASTYEAR 19 FORECASTYEAR 20 FORECAST66.27500000000000665.7565.56564.7564.25 INTERNECT PRICE / PAIR / DOLLARS WHOLESALE PRICE