Business Strategy Game Report

Topics: Revenue, Marketing, Generally Accepted Accounting Principles Pages: 25 (6894 words) Published: March 20, 2012
Business strategy game|
Extreme Kicks|
Year 12 Report|
Brandon Morgado, Manufacturing
Khalid Mahmoud, Finance
Nick Stott, Marketing
Michelle Poirier, Human Resource
Administrator: Judith BirzeDecember 1, 2011|
Devin Noble, Accounting

Table of Contents
I Executive Summary
II Finance
Situation Analysis:
Past financial results globally
Past financial results by region
Situation Analysis:
Global sales and market share
Sales and market share by region
IVPrivate-Label Operations
Situation analysis
(a) Plant Capacity and Production
Situation Analysis:
By region
(b) Manufacturing Costs per pair
Situation Analysis:
By plant
(c)Labour costs and performance
Situation Analysis, by plant

I. Executive Summary
Extreme Kicks is a leading manufacturer in the branded footwear market worldwide. We currently have manufacturing plants operating in North America and Asia-Pacific. The North American plant currently services all market and does not make any private-label shoes. The Asia-Pacific plant services North America, Asia-Pacific and Europe- Africa. Extreme Kicks takes great pride in producing shoes, which are quality shoes at a fair price. Our Senior Project managers ensure that the quality, quantities, and style are made available every single year. We also have a marketing staff that will ensure that distribution and marketing is set to maximize profits, and that they will manage the image of the company through celebrity endorsements, and retail support. In year 12, Extreme Kicks had sales revenue of $275 million and were the lowest in the industry. Extreme Kicks market share was also average. On a positive note, Extreme Kick’s private-label segment had 100% sales and market share in the Europe-Africa zone. In the future, Extreme Kick’s project managers will continue to improve their decision-making procedures, which will lead to a more robust organization that will excel in future markets. Extreme Kicks sales income was sixth place in the industry and was 8.4 percent below the industry average. Net Profits also ranked sixth in the industry, sitting at 60 percent lower than the industry average. With the expected growth of the market in coming years, Extreme Kicks looks to build a European manufacturing plant that will produce branded products and private label products for the Europe- Africa market. This will allow for higher economies of scale and a more robust ability to service our proliferating customer base. SWOT Analysis

* High quality of branded shoes (high S/Q rating)
* Strong marketing, through a high budgeted in advertising * Fast delivery times to retailers (2 weeks)
* High number of outlets utilized
* High manufacturing costs per pair (both materials and labour) * High amount of reject rates
* Only one plant producing private label shoes
* Low Credit rating of C+, because of high debt from loans due to inventory and expansion * No celebrity appeal

* Forecasted strong growth of the world market
* Forecasted very rapid growth of the internet market in some areas * Celebrities who will be available in the next 2-3 years * Forecasted growth in branded demand and sales
* Competition from all other companies in celebrity appeal, price, retail demand, market share and private label. * Trend toward higher prices for the superior materials used to improve the quality of the company’s products

The company’s objectives for the next three years are stated in the following Pro Forma income statement. |
| ActualYear 12| Forecasted|
| | Year 13| Year 15|
| $000| %| $000| %| $000| %|
Sales Revenue|...
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