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Strategic Management, Task1

Foundational study of strategic management principles and frameworks.

Ava Martinez
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Strategic Management, Task1Subject: Strategic Management, Task1A.FinalCumulativeBalancedScorecard,Income Statement, andBalance SheetCumulative Balanced Scorecard based on performance Evaluation:Cumulative Balanced scorecard of Excellent Footwearbased on Industry Report:Cumulative industry results for last fouryears ending in year 18MinimumMaximumAverageExcellent FootwearTotal Overall0.001.680.240.00Financial Performance26.3230.9428.9528.95Market Performance0.010.380.200.20Marketing Effectiveness0.160.720.550.16Investment in Future1.0098.8716.9998.87Wealth0.010.330.180.07Asset Management0.044.541.590.04Manufacturing Productivity0.170.540.380.17Financial Risk0.481.000.841.00Cumulative industry report of Excellent Footwear for year 18

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Income Statement:Particulars of Cumulative Balanced Scorecardbased on Industry ReportInvestorsExpectationScoreBest IndustryScoreOverall ScoreEarnings Per Share ($)24.0012.004.77Return on Equity (%)16.0013.0015.93Stock Price ($ per share)24.009.009.00Credit Rating242000Image Rating15.0010.0055.00Corporate Social Responsibility and CitizenshipN/AN/AN/ATotal Overall Balanced scorecard1036484Income StatementConsolidated Income StatementYear-18Gross Revenues:$000sInternet65120Wholesale230903Private-Label0Gross Revenues from Footwear Sales296023Exchange Rate Adjustment-10764Net Revenues from Footwear Sales285259Operating Cost:Cost of pairs sold134447Warehouse expenses20761Marketing Expenses43297Administrative Expenses8830Operating Profit (Loss)77924

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Balance Sheet:Balance SheetBalance SheetYear-18Assets$000sCash on hand343171Accounts Receivable71315Footwear Inventories19945Total Current Assets434431Net Plant Investment120074Construction WIP0Total Fixed Assets120074Total Assets554505Liabilities$000sAccounts Payable11195Overdraft Loan Payable01-year Bank LoanPayable0Current portion of LT loan10000Total Current Liabilities21195Long Term Bank Loan Outstanding40000InterestIncome (Expenses)909Other Income (Expenses)-779Pre-Tax Profit (Loss)78054IncomeTaxes23416Net Profit (Loss)54638

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Total Liabilities61195Shareholders’ Equity$000sCommon Stock9400Additional Capital75493Retained Earnings408417TotalShareholders’ Equity493310B.Generic Competitive Strategyof the Excellent Footwear CompanyLow price and product differentiation are the two factors that drive the customers.Based on the idea, cost leadership or product differentiationisthe two basic competitiveadvantages that a firm can possess(Porter's Generic Strategies, 1996).Figure: Competitive Strategies available to the companyThe Excellent Footwear Company employeda combination of both the cost leadershipstrategy and product differentiation strategy. Cost Leadership plus the productdifferentiation strategy helpedthe company to concentrate on the low cost offering but atthe same time not compromising the quality of the product. The cost leadership strategyhelpsto attract thecustomers who searchfor good quality footwear with low cost. On the

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other side, the productdifferentiationstrategyhelpsto attract thecustomers who searchfor distinct and fashionable footwear.Themain strategic goalof the‘Excellent FootwearCompany’wastoprovide customers the best value for their money.Itattempted toensuresomuch performance as possible, within thegiven price that the customers arewilling to pay.Figure: Competitive Strategies pursued by the Excellent Footwear CompanyStrategic plan (actions) to achieve competitive advantages & financial successGame Plan# 1Choosing Target MarketAt first the companychoseits target market to which the company will offeritsproducts.The companyoffereditsfootwear goodsforall the men, women and children.In onetale, the company chosethe ‘cost cutter’customersegments to design & offer itslow cost product.The ‘cost cutter’ segment includedthe bargain based customers whomake demand forcost-effective footwear products instead ofbranded and stylishfootwear products.On the other tail, the companychose the ‘Innovators’ market segmentto design & offer its low cost product. The ‘innovator’ segment includedcustomerswhoare less cost concern andmake demand for branded and stylish footwear products.Both

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of the target markets better align with the company’s generic strategy of offeringcustomers the best value for their money.Available Market SegmentsFigure: Pursued market segments of theExcellent Footwear CompanyGame Plan # 2Designing the brand for each of the target marketsThe company initially served to the ‘Cost cutter’ and ‘Innovator’ marketsegments. Thenit beganto designitsbrands for eachtargetmarketby considering thePricePerformanceMercedesInnovatorTravelerCost CutterWork Horse
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