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Pumped Up Kicks Team F
- 1. PUMPED UP KICKS INDUSTRY 2 TEAM F Belia Becerra Robert Escamilla Diana Rodriguez This Photo by Unknown Author islicensed under CC BY-SA-NC
- 2. STRATEGIC VISION Here at F Pumped Up Kicks Co. we will provide customers with an enhanced quality product and produce breadth than any of our competitors. We strive to maintain an industry leading customer rating and an S/Q rating that is competitive with industry leaders. With these standards we will exceed customers expectations by providing the best shoes globally at the best cost. We promise to keep our quality and styles enhanced year after year. Pump up your style with our kicks!
- 3. STRATEGIC GROUP MAP NORTH AMERICAN WHOLESALE YEAR 11 Best Cost Provider Strategy • Satisfying buyers on S/Q rating while simultaneously beating expectation on price • 4.7 Star Rating • Brand Advertising/Retailer Support • Industry Leaders Company H&I • Internet Segment
- 4. STRATEGIC GROUP MAP NORTH AMERICAN WHOLESALE YEAR 17 Broad Differentiation Strategy • Offer unique product that a wide range of buyers would find appealing and worth paying for • 7.6 Star Rating • Model Availability • Pricing below industry leaders • 3 Companies dropped to a low-cost provider strategy • Company K invested more into Private label
- 5. NET REVENUES • 3 Year Strategic Plan • Compare against industry averages • Pay close attention to what same strategy companies were doing
- 6. EARNINGS PER SHARE (EPS)• Earnings Per Share fluctuated between 0.53 and 1.92. • Low net income due to low production of shoes and the need for additional space to produce more. • Low shares outstanding/common stock. • Unable to repurchase shares of stock in order to boost earnings per share. • Unable to raise net income to boost earnings per share.
- 7. STOCK PRICE • Unable to achieve price gains to meet investor expectations. • Prices fluctuated between $5.11 and $12.54. • Some years we did not supply enough for consumer demand. • Construction of new/additional space was lacking to meet consumer demand. • Operating at low profit margins in some years.
- 8. COMPETITOR ANALYSIS Herald Shoe Company • Market Share - Internet Segment in all regions • Market Share - Wholesale Segment in all regions • High S/Q Ratings in all regions from year 13 – 17 • High Models offered in all regions from years 12 – 17 • Celebrity Bids • Brand Advertising • Earnings Per Share (EPS) • Stock Price This Photo by Unknown Author is licensed under CC BY- SA
- 9. COMPETITOR STRATEGY • Internet Segment: (Company H) • Offered a competitive price while having a high S/Q rating. • Spent a lot on Brand Advertising • What we need to do: • Higher S/Q Rating • More models • Spend more on Advertising • Spend less on Superior Materials right away • Invest more in celebrity endorsements
- 10. COMPETITOR STRATEGY- CONTINUED Wholesale Segment: (Company H) • Offered highest price shoes • Spent a lot on brand advertising • Spent a lot of retail support What we need to do: • More competitive price • Spend more retail support • Spend more on brand advertising
- 11. COMPETITIVE STRATEGY-CONTINUED • Private Label: • Only a few groups are in this sector • The lowest pricing shoes, have the offer accepted. • What we need to do: • Offer some pairs in the Private Label, and STAY • This brought our S/Q rating for Asia Pacific from Y15 to Y16
- 12. LESSONS LEARNED • Where to ship from • Get more celebrity endorsements, raise image rating • Build in certain markets, building in the same regions. • Low cost provider, this area was not occupied. • Spilt between Branded and Private label. • Focused niche market strategy, only 2 teams occupied. This Photo by Unknown Author is licensed under CC BY-NC-ND
Editor's Notes
- Originally our group decided to go with a Best Cost Provider strategy where we would satisfy consumers on S/Q Rating while simultaneously beating their expectation on price We started out with a 4.7 star rating which we noticed at the end of year 11 was actually below the industry average of a 5.3 so we knew that we would have to invest more in the following year to stay competitive as we already behind. To make sure that our shoes would get attention we did increase both brand advertising and retailer support which most other companies did not so we were over the industry average After reviewing the first year we noticed all but 2 groups went with a similar year 11 strategy making it very competitive and noticed that both Company I & H were the industry leaders so we made sure to use them as a competitive basis for the following year in trying to predict in what they would try to accomplish and how we were going to beat them at it We did notice in the North American market in year 11 was we had strong internet sales taking 3rd in market share behind only to company I & K
- By year 15 when deciding our companies 3 year strategic plan we then decided to go with a broad differentiation strategy by providing shoes that a wide range of consumers would find appealing and worth paying for, as we felt that it would be most cost effective since any other alternative strategy might be too expensive to implement. We ended with a 7.6 star rating which was the exact industry average And we attempted to increase our model availability to go along with our strategy of being a broad differentiator as well as we saw that this is what Company H&I were doing and it was ultimately helping them win more market share We knew that based on our star rating we would not be able to compete with Top companies like H&I so we decided to price below them to attract consumers that may have though their prices were too high and go with ours as we were close enough in quality with a better price. By Year 17, 3 companies had dropped out of the broad differentiation strategy and went with a low cost provider one Company K would end up winning using this strategy and separating itself from the highly competitive broad differentiation group.
- As you can see from the graph in years 15, 16, & 17 our net revenues increased significantly this is due to our group taking a serious look at our strategic plan and what we could do better. When deciding that we would go with the broad differentiation strategy we noticed that our numbers were all below industry averages so we knew that we had to invest more so that at a minimum be able to match them. To do this we then invested in all areas such as S/Q rating, model availability, brand advertising, and celebrity appeal We also played close attention what leading competitors that were conducting a similar strategy on a year to year basis in order to see what allowed them to generate revenue.
- If were go back and conduct the BSG strategy game over one of the first things that we would do differently is bring our warehouse and distributing cost down by shipping between our North American and Latin American warehouses. And ship between Asia pacific to Europe Africa to decrease costs. In essence to, ship to facilities that are located in the same regions as the warehouses and distribution centers. We would increase our brand image through celebrity endorsements by bidding more often and more aggressively to ensure that we were able to get celebrities under Contract. This would increase exposure and popularity. To expand or build construction in Europe Africa just to avoid any exchange rates and tariffs. This would reduce our total distribution and warehouse costs and increases profit margin. We would build as much capacity in Latin American due to the high exchange rates and tariffs. Based on how the company was performing, we could have done one of these strategies, an area that was not being highly occupied: We could have attempted a low-cost provider strategy as this area was not utilized and was left unoccupied for a majority of the game. Focus on branded production the first few years of the game and invest into private label after brand image is established. Or possibly gone into the market niche strategy like groups A and J as the competition was very low in that area. Due to changing market conditions and competitive strategies during the seven years, we could focus on niche market of high price and low number of models.