JHT Task 1 Karen Means

Topics: Value chain, Marketing, Strategic management Pages: 18 (3758 words) Published: June 9, 2015
JHT Task 1
Karen Means

A. Company J (Javelin Shoes) Final Cumulative Balanced Scorecard, Income Statement, and Balance Sheet Attached

B. Competitive Strategy
I chose a multi-regional, focused differentiation strategy tailored to match the differing competitive conditions and actions of rivals in the North America, Europe-Africa, Asia-Pacific, and Latin America regions. In years 11 through 16, my strategy focused on “upscale buyers wanting products…with world class attributes.” (Thompson, Peteraf, Gamble, & Strickland, 2012) I chose this strategy because the cultures represented in my demographic are radically different, thus I believed we needed a strategy that catered to those differences. This focused strategy concentrates on Internet sales to online end-use customers, and wholesale sales to footwear retailers, in each of our regions. We differentiated our product based on exclusivity, with a higher price point both at the internet/retail and the wholesale level, until year 17. I’ll discuss that decision, and the consequences, a bit later. I built the following actions into my strategic plan to achieve competitive and financial success with my chosen strategy. I sought to develop “a specialized ability to offer niche buyers an appealingly differentiated offering that meets their needs better than (my) rival brands” did. I offered features “tailored to the tastes and requirements” of my market segments. (Thompson, Peteraf, Gamble, & Strickland, 2012) I provided support to my wholesale market to enable them to better market my shoes. I hired celebrity representation to broaden the appeal of our product line. The results are as follows: As we can see in the following graphic, overall this strategy was effective from year 11 through year 16. With the exception of year 14, EPS increased every year through year 16. ROE and stock prices yo-yoed in years 11 through 16, but remained higher than investor expectations. Credit rating increased to A+ in year 13, and with the exception of year 17 that rating was maintained. Image rating exceeded investor expectations in all years except 11 and 13.

Javelin
Shoes
Results

Year 11
% +/- Year 12
% +/- Year 13
% +/- Year 14
% +/- Year 15
% +/- Year 16
% +/- Year 17
% +/- Year 18
Revenue
$299,145
$311,117
$334,440
$390,830
$420,944
$495,376
$361,930

$489,679

EPS
3.37

3.4
0.9%+
5.4
58.8%+
5.1
-5.5%
6.26
22.7%+
7.31
16.8%+
3.82
-47.7
4.34
13.6%+
ROE
20.0
16.8
16%-
22.0
31%+
17.5
-20.5%
18
2.9%+
17.2
-4.4%
8.8
-48.8%
10.1
14.8%+
Credit
A
A
A+
A+
A+
A+
A
A+
Image
68
70
2.9%+
69
1.4%-
73
5.8%+
78
6.8%+
79
1.3%+
71
-10.1%
73
2.8%+
Stock
56.58
47.35
16.3%-
91.90
94%+
87.50
-4.8%
104.17
19.1%+
117.74
13%+
47.32
-59.8%
47.31
-0.02%
At the end of year 16, I lost my mind, and my competitive advantage. Two companies consistently out-sold me, and I decided I wanted to increase market share and catch up with them. I decreased my retail price to $70 in year 16, from a high of $81 in year 14 for all markets. Market share increased in all markets in year 16 after my price lowered. I decreased my wholesale price in the Asia/Pacific market to $50 in year 17, from a high of $55 in year 15, yet I lost wholesale market share in this market from then on. I think, however, that two decisions led to the tanking of my EPS/ROE/Stock prices in years 17 and 18. In year 17, I decided to enter the private label market. I committed 312,000 pairs to this market that I could have, and in retrospect should have, sold in the wholesale/retail markets. I priced these pairs too high for private label, and did not sell any. At the same time, I underbid celebrity endorsements and lost all but one. Due in large part to these two decisions, I lost exclusivity, market share, and financial standing. I corrected those decisions in year 18 in that I did not bid in the...

Bibliography: Cheng, A. (2014, April 17). Nike was awarded 540 patents in 2013: Here 's what that means for investors. Retrieved April 22, 2014, from Behind the Storefront: www.blogs.marketwatch.com/behindthestorefront/2014/04/17/nike-was-awarded-540-patent-in-2013-heres-what-that-means-for-investors/
Ingram, D. (2015, April 28). Retrieved April 28, 2015, from Small Business by Demand Media: www.smallbusiness.chron.com/key-components-competitive-success-business-604.html
Jurevicius, O. (2013, April 25). Value Chain Analysis. Retrieved April 25, 2015, from Strategic Management Insight: www.strategicmanagementinsight.com/tools/value-chain-analysis.html
Olsen, E. (2015, April 22). Strategic Planning: How to Test Your Competitive Advantage. Retrieved April 22, 2015, from For Dummies: www.dummies.com/how-to/strategic-planning-how-to-test-your-competitive-ad.html
Thompson, A. A., Peteraf, M. A., Gamble, J. E., & Strickland, A. J. (2012). Crafting and Executing Strategy. NY: McGraw-Hill Irwin.
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