This Powerpoint presentation was completed in partial satisfaction of course requirements for BUSA 4980 - Strategic Management at Georgia State University during the Spring 2008 semester. It represents the culmination of a semester long project in which my group members and myself were co-owners of a fictitious shoe company that we took over after 10 years of operating poorly. By the end of the semester, our company ranked 2nd in the 10 firm industry. We made strategic decisions that positioned our company to grow and eventually be number one in the industry. We believed that if we had a few more "years" (weeks) we would have been able to do so. Our goal was to employ an integrated differentiation/cost leadership business strategy that would enable us to differentiate ourselves from our competitors by provided the highest quality product at the lowest possible cost to the consumer. This presentation shows the "year-by-year" (week-by-week) results of our company from Year 11 - Year 18, as well as projections for years 19-21, and how we were able to position ourselves to become number 1 in the industry.

1. DESIGNER FOOTWEAR
Annual Shareholder’s Meeting
April 23, 2008
Executives:
Cierra Crowder
Kesha Haley
Justin Hearon
Vien Nqyuen
Andre Pardue
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2. Mission Statement
Designer Footwear strives to focus on the needs of
the modern day consumer when selecting materials,
introducing designs, and manufacturing its quality
footwear.
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3. Designer Footwear Overall Goals
• Maintain credit rating of A-
– Debt payoffs with each debt issuance
– Year 12: Borrowed $100,000K, Paid off Y7 $112,000K loan and Y9 $24,000K loan
– Year 13: Borrowed $130,000K, Paid off Y12 $100,000K loan
• EPS 20% higher than investor expectation every year
• ROE 5% higher than investor expectation every year
• Reach and maintain at least 80 image rating
– Price
– Branded Distribution
– Revenues
– Private Label
• Steadily gain market share while maintaining a positive profit margin per shoe
• Maintain celebrity appeal of at least 100 in each region
• Higher S/Q rating than industry average
– Implement Plant Upgrade Option C
– Right combination of:
• Superior Materials
• TQM / Six Sigma Quality Program
• Enhanced Styling Features
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4. S/Q Rating:
Designer Footwear vs. Industry
Average
10
9 Designer Footwear
Industry Average
8
7
S/Q Rating
6
5
4
3
2
1
0
Y11 Y12 Y13 Y14 Y15 Y16 Y17 Y18 Y19 Y20
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Proj. Proj.

5. Implementation Strategies
• Focus on direct competitors
– Best Brand Footwear
– Innovative Footwear
• Indirect competitors
– Happy Feet Footwear
– Gains Shoe Footwear
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6. Strategic Group Maps
YEAR 11 YEAR 18
W SEGMENT
HOLESALE WHOLESALESEGMENT
Strategic Group Map Strategic Group Map
High High
End End
Price and S/Q Rating
Price and S/Q Rating
Low Low
End End
Few Many Few Many
Models Product Line Breadth Models Models Product Line Breadth Models
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7. Year 11 “The Beginning”
• Differentiation • Designer footwear
Strategy focused on
• Designer Footwear – Pricing
value-chain activities – Quality
– HR Management – Advertising/Celebrity
– Inbound/Outbound Endorsement
logistics – S/Q rating
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8. Year 12
• Goal: Build Capacity for use in Year 14
• Actions
– Implemented Plant Upgrade option A in North
America and Asia-Pacific
– Issued $.10 dividend
– Took advantage of exchange rates
• NAFTA
• Shift production to L.A
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9. Year 12
• Took out a loan $100 million
– Took advantage of lower interest rates
• Consolidated debt
– Opened plant in L.A
• 1,000,000 pairs self-construction
• Inventory clearance 50%
9

10. Year 13 Initiatives
• Increased S/Q rating by 1 star in each region
– 10 Star S/Q rating/Competitive Advantage
• Reduced Asia-Pacific production run set-up cost
by 50%
• Additional Construction L.A. and A.P.
– Increased capacity by 700K to meet demand
• 130 Million to Finance Construction and pay off
existing loan 10

11. Year 14 Initiatives
• Reduced production set-up costs by 50%
– $8 Million capital outlay to Latin America
• Significant celebrity endorsement
– Highest market share in each region
– 13.1% N.A, E.A., A.P. and 13.9% in L.A.
– Highest celebrity appeal in each region
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12. Y14 Celebrity Appeal
Designer Footwear vs. Industry Average
180
160
140
120
100 Designer
Footwear
80
Industry
60 Average
40
20
0
N.A. E.A. A.P. L.A.
• North America • Asia-Pacific
– Designer Footwear: 155 – Designer Footwear: 160
– Industry Average: 71 – Industry Average: 67
• Europe-Africa • Latin America
– Designer Footwear: 130 – Designer Footwear: 165
– Industry Average: 73 – Industry Average: 73
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13. Year 15 Strategies
• Constructed additional 1.2 million capacity
- 700,000 in Latin America
- 500,000 in Asia Pacific
• Increase superior materials to 90 percent
- Achieve 9 S/Q rating
13

14. Year 16
• Huge increase in spending for celebrity
endorsements
• First in Industry to achieve 10 S/Q rating
• Increase models available from 250 to 350
14

15. Year 17 – Building More Capacity
• Past Results and Goals Met/Achieved.
– Increase in product demand.
– Meeting demand.
• Goal – Building and buying capacity at a discount.
– Based on 13-15% market share of wholesale segment in year
16
• Increased capacity in AP (800,000 pairs) and LA (1,000,000 pairs)
• Result - Competitive Intelligence Report for Y17 showed
loss of sales for all regions (as expected).
– Bought 2,000,000 pairs in LA at a discount.
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16. Year 18 – Continue to Reduce
Production Cost
• Main goal
– to stay competitive in our strategic group
– gain back some market share lost in Year 17 due to
lack of capacity.
• To reduce cost
– sold NA plant (2,000,000 pairs) and produce solely
out of LA and AP (total capacity including overtime =
13,080 pairs)
• Stock Repurchase of 1,900,000 shares.
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17. Pro Forma Income Statement
• Refer to Shareholder’s guide
• Expect Net Sales
– Year 19: $607,000,000
– Year 20: $634,000,000
– Year 21: $656,000,000
• Estimated net profit will be $86,000, $92,000, and
$96,000 in years 19, 20, and 21 respectively
• Net profit Margin
– 14% in years 19-21
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18. Projected Income Statement
Projected Income Statement
Year 19 Year 20 Year 21
Net
Revenues $ 608,238 $ 637,545 $ 661,759
Operating
Expenses $ 479,376 $ 499,494 $ 516,461
Operating
Profit $ 128,862 $ 138,051 $ 145,298
Taxes and
Interests. $ 41,294 $ 43,639 $ 45,400
Net Profit $ 87,568 $ 94,412 $ 99,898
Outstanding
Stocks 7900 7900 7900
Earnings Per
Share $ 11.08 $ 11.95 $ 12.65
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19. Going Forward
“In the future, we plan to continually implement
our differentiated strategy through TQM,
enhanced styling and features, S/Q rating and
reduced production costs.”
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20. THANK YOU.
Questions?
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