Strategic Management



Strategic Management

B. Steps taken

The footwear company mentioned within the online simulation has numerous strength. However, the most anticipated strength is its strong market presence and brand recognition. The strength was not building in a single day rather it included a number of actions which were undertook for making the footwear venture a story of success. The first step was to diversify the product lines. The company offers a broad division of two product lines; comprising of private-labelled and branded footwear products. Aside from that the length of these two product lines consists of a number of designs and features thereby allowing the company to deliver a competitive edge to its rivals. Another core implication was connected to the online presence of the footwear business which enables it to advertise the products online, allowing the company to reduce the tariff costs. There are three distribution centres for the footwear; including Milan (Italy), Bangkok (Thailand), Rio De Janeiro (Mexico) and Memphis (Tennessee) covering Europe-Africa, Asia-Pacific, Latin America, and North America regions respectively. The plant operate at 20% extra capacity in the conditions of worker's overtime; therefore the overtime is adjusted as per the market demand of footwear. During the last year, the company has produced 4.5 million pairs fo branded shoes to different individuals and retailers. Additionally, 740,000 pairs of private-labelled shoes were also sold to huge multi-outlet retailers of the athletic shoes. As the demand is quite high, this makes the selling price of the footwears reduced thereby enabling attractive pricing and subsequent advertisements.

The most significant factor related to gaining competitive advantage includes the use of S/Q ratings. It is quite significant and a total game changer. Consider the scenario when two competing brands have the same price, in that condition the customers will be more inclined to that footwear firm having enhanced S/Q rating. Another valid technique, which is being followed by the company, is a mail-in rebate. This has also enabled the company to advertise itself and make its appearance more prominent within the market. Aside from that the time required for processing and delivery of the order is also vital role as short retail times greatly helps the company to boost their sales. Other implications make use of the efficient online sales, customer loyalty and most importantly the differentiation strategy which is backed by sound celebrity appeal, enhanced advertisements, higher mail-in-rebates and most importantly the S/Q rating.

Potential Weaknesses

As evident from the company branded and privately-labeled footwear projected growth rate, it is quite evident that the projected growth rates are quite susceptible to be affected due to intense competition together with the implications of enhanced footwear quality and declining prices of footwear. Also, the weaker competition will give rise to the decline in estimated market rate increase.

Competitively Powerful Strategies

A number of strategies were present to satisfy the needs of survival and to make up the deficiencies. To gain competitive dominance over other footwear companies, the company should have to look ways to introduce new performance ...