Strategic Analysis Instructions

Complete an individual strategic analysis using your simulation company covering the following areas:

 

Company Background

Who is your company? What do you sell? Where do you sell it?

Business Strategy

What business level strategy does your company follow? Provide evidence from the simulation results.

Industry Overview

What is the industry? How many competitors? How many customers in the industry? Projected industry growth?

PESTEL Framework

political, economical, social, technological, environment, legal

Porter’s Five Forces Analysis

threat of new entrants, threat of substitute products, supplier power, buyer power, and rivalry intensity

Internal Analysis

core competencies

competitive advantage(s)

marketing mix

Financial Analysis

three-year analysis of liquidity ratios, asset management ratios, debt management ratios, profitability ratios, and market value ratios.

SWOT Analysis

strengths, weaknesses, opportunities, and threats

Future Recommendations

make recommendations for the future using TOWS matrix

Risks and Responses

What are the potential risks associated with your recommendations? How would you respond to them as a manager?

Your submission should adhere to APA standards.

 

E – Exeleas Footwear

Mission

Exeleas Footwear’s (Exeleas) mission is to become a global leader in athletic footwear, with a passion for quality and style. Our focus is providing consumers with excellent craftsmanship, competitive prices, great customer service, and fast delivery. We strive to consistently provide quality products and services that will keep us ahead in the industry.

Vision Statement

Our vision is to deliver products that surpass competitors and provide savings to consumers; while being the global leader in athletic footwear.

 

 

 

 

The company is in the athletic footwear industry called Exeleas Footwear . The company used a differentiated approach for the sale of its sports footwear

 

 

 

Strategic Analysis: Exeleas Footwear

Company Background

Exeleas Footwear is a footwear business that specializes in selling of high quality and superior athletic footwear worldwide. Our vision is to deliver products that surpass competitors and provide savings to consumers; while being the global leader in athletic footwear. As a result, we provide top notch along with state-of-the-art athletic shoes to our clients. Our customers are startled by our exemplary and outstanding experience in making state of the art shoes.

Business Strategy

Exeleas Footwear’s mission is to become a global leader in athletic footwear, with a passion for quality and style. Our focus is providing consumers with excellent craftsmanship, competitive prices, great customer service, and fast delivery. We strive to consistently provide quality products and services that will keep us ahead in the industry. We satisfy the dreams of our clients, their expectations and desires, with our happy and motivated employees, producing returns with sustainability, increasing shareholder’s wealth whilst being aware of our general responsibilities. Exeleas Footwear used differentiation strategy for developing and producing quality athletic footwear at high SQ rate of eight. The company used this strategy for targeting rich or high income clients at premiums prices (Islami, Mustafa & Latkovikj, 2020). Our product strategy involves providing projected demand of +110% with the goal of preventing production scarcity in the marketplace and enabling us into achieving our mission and becoming a luxurious brand of footwear that is loved by everyone.

Industry Overview

The athletic footwear sector is huge and very competitive which has over 60 marketplace competitors. They competitors in this industry are Puma, Nike, Adidas, New Balance, Asics, and Reebok. Nike is the leading brand and it has a market share of 31 percent followed by Adidas and Reebok with market shares of 16 percent and 7 percent, respectively. Small rivals like Asics, Puma, and New Balance, all command a market share of 6 percent (Nabduan 2015). The following pie chart provides a summary of the key rivals and their market share.

 

Source: (Nabduan 2015).

Athletic footwear sector is valued at 478B as of 2021, a 40 percent increase from last year (Statista, 2020). According to findings by Statista (2020), year-over-year revenues of athletic sector are $59.487M with projected yearly growth of 5.4 percent (CAGR 2020-2025).

Such figures denote that the worldwide athletic footwear sector is buoyant and very promising. Nonetheless, as clearly seen the industry is full of well-established competitors. Consequently, to continue existing in this industry, our company will require being strategic, formidable, innovative, as well as challenging. 

PESTEL Framework

The macro-environment of Exeleas Footwear includes factors which dictate the success of the organization. Such forces are evaluated best using PESTEL analysis. Being the footwear sector player, Exeleas carries on withstanding the prospective adverse impacts of the threats in political, economic, socio-cultural, technological, as well as legal elements of their business. But, such success necessitates sustained assessment of athletic footwear environment. Such PESTEL forces as well change in due course, consequently imposing the problems for Exeleas. Exeleas requires exploiting opportunities and protecting itself from the threats. The following section provides a summary of PESEL Analysis of Exeleas.

Political Forces	Economic Forces
·       High political stability- opportunity ·       Political assistance for the globalization- an opportunity ·       Political pressures for high wages- a threat (Dumon, McDonald & Schmitz, 2015).	·       Stability of leading economies-an opportunity ·       Sustained growth of emergent nations-an opportunity ·       Reducing unemployment in the U.S- an opportunity (Dumon, McDonald & Schmitz, 2015).
Social Forces	Technological Forces
·       Healthy life styles trend- an opportunity ·       Cultural diversity trends- an opportunity ·       Urban migration-an opportunity (Dumon, McDonald & Schmitz, 2015).	·       Growing business automation, an opportunity. ·       Big data and business analytics- an opportunity ·       Growing mobile phone utilization amongst clients-an opportunity (Dumon, McDonald & Schmitz, 2015).
Ecological	Legal Forces
·       The business sustainability trends-an opportunity ·       The eco-friendly goods trends-an opportunity (Dumon, McDonald & Schmitz, 2015).	·       Employment laws- an opportunity ·       Taxation law reforms- a threat (Dumon, McDonald & Schmitz, 2015).

Porter’s Five Forces Analysis

Competitive rivalry or competition – a strong force

The reasons why competition is a strong force in Exeleas Footwear’s industry include:

·       Large number of corporations in Athletic footwear marketplace- a strong force

·       Huge array of the Athletic footwear businesses- a strong force

·       Higher aggressiveness of the Athletic footwear businesses- a strong force (Banerjee, 2015).

Based on the above analysis Exeleas Footwear has to keep on growing with the aim of remaining it its status as the leading world retailer.

Bargaining power of buyers – a weak force                          

The bargaining power of buyers is a weak force in the Athletic footwear sector due to:

·       Large populace of clients- a weak force

·       High customer diversity- a weak force

·       Smaller size of individual purchases- a weak force (Banerjee, 2015).

Bargaining power of suppliers – a weak force

Suppliers’ bargaining power is a weak force in Exeleas Footwear’s industry because:

·       Large supplier population-a weak force

·       Stiff rivalry amongst suppliers-a weak force

·       High accessibility of supply-a weak force (Banerjee, 2015).

Threat of substitutes or substitution – a weak force

Threat of substitutes or substitution is a weak force in Exeleas Footwear’s industry due to:

·       Moderate accessibility of substitute products ( a moderate factor)

·       Low assortment of substitute products (weak factor)

·       Higher costs of substitute products (weak factor) (Banerjee, 2015).

Threat of new entrants – a strong force

Threat of new entrants is a strong force in the Athletic footwear industry due to:

·       High costs for brand development (a strong force)

·       Low costs of doing business (a strong factor)

·       Reasonable capital cost (a strong force) (Banerjee, 2015).

Internal Analysis

• Core competencies

Some of our company’s core competencies include

·       Worldwide brand recognition

·       Achievement with diverse teams

·       Robust R&D

·       High manufacturing standards

·       Efficient channels of distribution.

• Competitive advantages

Competition within the athletic footwear sector has drastically increased. But However, Exeleas Footwear has got an advantage over many of our competitors thanks to numerous factors. The distinct designs, high product quality, process and product innovation, along with marketing- all have assisted our corporation in achieving strong competitive advantages.

• marketing mix

Product Strategy

Shoes are Exeleas Footwear’s flagship merchandise. We manufacture diverse shoes for an extensive assortment of sports, like football, basketball, soccer, golf, baseball, hockey, snowboarding, volleyball, and tennis. Such goods are sold in diverse sizes and packing. They’ve a substantial share in the marketplace and produce huge amounts of profits for Exeleas Footwear. 

Pricing Strategy

Our organization used premium pricing strategy because our products are associated with high quality. Our shoes are made from high quality materials and this is reflected in its high price. Our customers are willing to pay the high price because they know our shoes are long lasting and fulfill all their needs and demands.  

Place Strategy

We operate worldwide and thus we have an extensive distribution network. Our products trade in over 200 nations. We have 6 operating regions which include Africa, Latin America, Eurasia, North America, and Europe. Exeleas Footwear relies on our partners as well as for packaging along with distribution. These partners are involved in manufacturing, packing, as well as transporting to the agents, and then shipped by road to the stockiest, and then the distributed to the retailers, and finally to the end user. Our products are accessible in nearly all supermarkets, retail outlets, grocery stores, et cetera.

Promotion Strategy

Because of rivalry in the marketplace, the organization concentrates on diverse marketing and promotional strategies. It majorly concentrates on the aggressive marketing. Exeleas Footwear expends over 4B dollars on promoting and advertising its brand. The organization uses international and traditional mediums to advertise its products and brand. This includes social networks sites like Facebook, Twitter, and Instagram. Other channels of advertising include web site, YouTube, TV, radio, billboards, newspapers, and road shows. 

Financial Analysis

Liquidity Ratios

Table one: Tesla’s short term solvency/liquidity ratios

Liquidity Ratios	Year 1	Year 2	Year 2
Current Ratio	1.03	1.45	2
Quick Ratio	1.1	1.4	1.7
Cash Ratio	2.1	0.4	4.7

At present, Exeleas Footwear has a strong liquidity position which is expected to increase in the coming three years.

Asset Management Ratios

	Year 1	Year 2	Year 3
Inventory Turnover	6.07	10.8	17.5
Day´s sales Inventory	35.7	45.3	81.43
Total Assets Turnover	0.6	1.7	13.6

Overall, turnover ratios show that Exeleas Footwear has a strong position because its management is efficiently managing assets to generate profits.

Debt Management Ratios

	Year 1	Year 2	Year 3
Total Debt Ratio	0.50	0.39	0.21
Debt-Equity Ratio	0.31	0.32	0.15

Overall, Tesla has better debt management ratios and within the next three years, the company’s overall debt will be almost to zero. Our organization is thus not at risk of high debt burden.

Profitability Ratios

Profitability Ratios	Year 1	Year 2	Year 3
Profit Margin	5.21%	13.43%	21.67%
Return on Assets (ROA)	4.90%	7.99%	15.52%
Return on Equity (ROE)	12.40%	23.89%	25.59%

Based on the above table, Exeleas Footwear’s overall profitability is expected to increase in the coming three years.

Market Value Ratios

	Year 1	Year 2	Year 3
Price -Earnings Ratio (PE Ratio)	0.92	5.76	14.93
Market to book ratio	4.55	6.56	7.90

Based on this table, price to earnings ratio in combination with a high marketplace to book ratio denotes that Exeleas Footwear carries on creating value for its investors.                                                    

SWOT Analysis

The following table provides a summary of Exeleas Footwear’s SWOT analysis.

Table One: Exeleas Footwear’s SWOT Analysis

Strengths	Weaknesses
·       Worldwide organizational size ·       World supply chain ·       High supply chain efficiency	·       Thin profit margin ·       Easily imitated business model ·       Competitive disadvantages against high end specialty retail firms.
Opportunities	Threats
·       Expansion in emergent nations ·       Improvement in HRM practices for developing competitive edge in labor marketplaces ·       Enhancement in the quality standards	·        Health life style trends ·       Aggressive rivalry ·       Online retail firms of diverse sizes

 

Future Recommendations

	Strengths	Weaknesses
	1.     Powerful brand image	1.     Downsizing
	2.     Vast product portfolio	2.     High dependency on U.S marketplaces
	3.     Strong partnerships	3.     Colossal longer term debt
	4.     Biggest footwear maker	4.     Unsteady shareholder relationships
	5.     Massive sales of over 20 percent	5.     Wide dependence on brand loyalty
	6.     Heavy venture inside R&D	6.     Contracting for minimizing costs
	7.     Strong CSR	7.     Huge CEO bonuses during recession or downsizing
Opportunities	SO Strategies	WO Strategies
1.     Inexpensive footwear	1.     joint publicity in advertisements (s3, O2)	1.Improve marketplace share in emergent states (W2, O5)
2.     Joint venture outside America	2.     Innovative merchandises (s2, O7)	2.Lessen costs thanks to technology advancements (W6, O6)
3.     Ecommerce business growing	3.     Reasonably priced items which are superior (s4, O1)	3.Offer products lines in leading retail outlets (W5, O4)
Threats	ST Strategies	WT Strategies
1.Growing prices of tech merchandises
2.Increasing prices of supplies	1.Sell superior but cheaper products (T4, s2, 11)	1.Monitor added benefits to CEO till suitable economic conditions
3.Snowballing substitutes	2. Create  market development plans (T5, S4)	2. Increase advertising overseas (w2, T4).
4. Quality  and price-responsive clienteles	3.Develop own factory to make products (T2, S7, T1

Risks and Responses

Risks

The contemporary marketing climate is changing drastically. To remain on top of the game, our business requires deploying marketing methodologies and techniques which consider present risks that our business will face. These risks include:

·       Brand risk

·       Miscalculating our target market

·       Changing trends

·       Promotional risk

Responses

By creating a marketing risk management plan, our business will be able to deal with such risks. The risk response plan shoal included the following steps to addres the risks:

      I.         Identify risks

    II.         Analyze risks

  III.         Plan risk responses

  IV.         Monitor risks

 

 

 

 

 

 

References

Dumon, D., McDonald, K., & Schmitz, R. (2015). Innovative offers outside the field of traditional sport. https://www.engso-education.eu/wp-content/uploads/2021/08/Intellectual-output-3.pdf

Islami, X., Mustafa, N., & Latkovikj, M. T. (2020). Linking Porter’s generic strategies to firm performance. Future Business Journal, 6(1), 1-15. https://link.springer.com/article/10.1186/s43093-020-0009-1

Nabduan Duangamanee. (2015). Business Plan for Adidas- Nida, Poland. https//www.slideshare.net/pond/business-plan-for-adidas

 

 

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