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[>Management homework help](https://www.sweetstudy.com/fields/business-finance-management) **files (2)** – ## Year13ReflectionandSWOT.docx – ## ExmpleYr12.docx **## Year13ReflectionandSWOT.docx** **Year 13 Reflection** **Note:** This year we took a more aggressive approach to try to overtake Company…
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[>Management homework help](https://www.sweetstudy.com/fields/business-finance-management)
**files (2)**
– ## Year13ReflectionandSWOT.docx
– ## ExmpleYr12.docx
**## Year13ReflectionandSWOT.docx**
**Year 13 Reflection**
**Note:** This year we took a more aggressive approach to try to overtake Company A and B with the following decisions.
**1. Compensation and Training**
·
**Decision:** We raised base wages and supervisor pay 1% in NA and AP. Incentive pay is $0.50 NA and $0.25 AP. Fringe benefits are 2,500 NA and 1,250 AP. Best practices training is 800 in each plant, and supervisors are at 30:1.
·
**Results:** Workforce quality and productivity support the higher S/Q, at a modest labor-cost increase.
·
**Cause:** Better pay, training and supervision raise output and quality and cut rejects (NA 6.5%, AP 8.4%), which offsets the added cost.
**2. Branded Production**
·
**Decision:** We run 400 models, $22k styling, $3.50 TQM and about 70% (NA) and 80% (AP) superior materials. We produce 5,470 pairs in NA and 5,900 in AP.
·
**Results:** Projected S/Q is 6.9 NA and 7.0 AP, against rivals' assumed 5.5 to 5.6. Supply covers demand in all four regions.
·
**Cause:** We invested in quality, style and materials to justify premium prices and win share. Production is sized to forecast demand plus required inventory.
**3. Production Facilities**
·
**Decision:** We chose Option B improvements in NA and AP, and added 750 (NA) and 1,000 (AP) pairs of new equipment.
·
**Results:** Capacity, with overtime, covers the production plan with a small surplus.
·
**Cause:** The quality and ad push raised demand, and the extra capacity was needed to avoid a shortfall.
**4. Distribution and Warehouse**
·
**Decision:** The NA plant ships 2,941 to NA and 2,173 to EA. The AP plant ships 574 to EA, 2,186 to AP and 2,644 to LA.
·
**Results:** Every region is supplied, with 0 pairs unallocated.
·
**Cause:** Shipping from the nearest plant keeps freight and tariff costs down. Shipping to LA from AP is about 19% cheaper because of exchange rates.
**5. Internet Marketing**
·
**Decision:** Retail prices are NA 86, EA 88, AP 82 and LA 87. Search ads are 5,500 / 5,500 / 4,500 / 4,500, with no free shipping.
·
**Results:** Internet sales stay profitable at premium prices.
·
**Cause:** Our quality lead lets us price above rivals' assumed $71 to $79 while search ads keep us visible.
**6. Wholesale Marketing**
·
**Decision:** Wholesale prices are 63 / 66 / 63 / 65. Brand ads are 22,000 / 17,000 / 19,000 / 18,000. The rebate is $4 and delivery is 3 weeks. Retailer support is 4,500 / 4,000 / 3,500 / 4,000.
·
**Results:** Projected wholesale share is 28.1% NA, 28.4% EA, 27.5% AP and 32.5% LA, with image at 85.
·
**Cause:** Heavy advertising and retailer support, plus quality, outweigh our higher prices. They also push image above the 72 target.
**7. Private-Label**
·
**Decision:** We offered no private-label pairs.
·
**Results:** All capacity goes to higher-margin branded pairs.
·
**Cause:** Private-label margins are lower and would compete with our branded sales for the same pairs.
**8. Celebrity Endorsements**
·
**Decision:** We bid Billy 2,000 (priority 1), Chef Curry 1,000 (priority 2) and Taylor 1,300 (priority 3), with a 3,500 spending cap. (Confirm the Chef Curry bid is entered.)
·
**Results:** The outcome depends on whether we win; the effect on image and demand likely starts in Y14.
·
**Cause:** Billy has high appeal in NA, and Chef Curry is strongest in LA, where we already have our biggest share.
**9. Corporate Citizenship**
·
**Decision:** We spent about $4.3M, with no charitable contributions.
·
**Results:** It supports image at a controlled cost.
·
**Cause:** We focused spending on sales-driving image levers rather than donations.
**10. Finance and Cash Flow**
·
**Decision:** We took a $40M 5-year loan, set the dividend at $1.50 and repurchased 626 shares.
·
**Results:** EPS $8.27, ROE 57.9%, credit rating A, net profit $154.9M on $827.4M of revenue, and ending cash $25.8M.
·
**Cause:** The dividend and buybacks support the stock price and ROE. Operating profit comes from premium prices and quality. About $1.65 of EPS is a one-time exchange-rate gain in LA, and cash is only about $5.8M above the $20M floor.
**Year 13 SWOT Analysis**
**Strengths**
·
**Profitability:** Projected EPS $8.27 and ROE 57.9%, far above the 3.50 and 23% targets.
·
**Quality:** Projected S/Q of 6.9 (NA) and 7.0 (AP), against rivals' assumed 5.5 to 5.6.
·
**Brand:** Image of 85 versus a target of 72, backed by the heaviest brand advertising and retailer support in the industry.
·
**Balance sheet:** Credit rating A, debt-to-assets 0.31 and interest coverage 27.8.
·
**Supply:** All four regions are supplied, with 0 pairs left unallocated.
·
**Workforce:** Higher pay, incentives and best practices training raise productivity and cut rejects.
**Weaknesses**
·
**Thin cash:** Ending cash of $25.8M is only about $5.8M above the $20M floor, so a sales shortfall could force borrowing.
·
**One-time earnings:** About $1.65 of EPS comes from LA exchange-rate gains, which are not operational.
·
**High costs:** Heavy advertising, premium materials and TQM spending squeeze margins.
·
**Reject rates:** AP at 8.4% and NA at 6.5% add waste.
·
**Image gap:** Our 85 trails the best rival's 87 by about 2 points.
·
**Leverage:** The $40M loan and buybacks inflate ROE and add interest cost.
**Opportunities**
·
**Celebrities:** Chef Curry is strong in LA (appeal 100) and Billy in NA (100), and the effects likely start in Y14.
·
**Credit:** Moving from A to A+ would add about 1 point of score.
·
**Share gains:** We can take more share in regions where rivals cut ads or quality.
·
**Quality lead:** It lets us hold premium prices even if rivals cut theirs.
·
**Capacity:** The new equipment gives room to meet higher demand in Y14.
**Threats**
·
**Rival improvement:** Blueprint Athletics (G-T-D 108) and AKinetix Footwear (105) are expected to improve in Y13.
·
**Exchange rates:** The LA gain may reverse when rates reset in Y14.
·
**Price and ad wars:** Rivals could cut wholesale prices, raise rebates or boost brand advertising.
·
**Weaker sales:** Sales 5% below plan would squeeze cash, and surplus inventory would add carrying costs.
·
**Celebrity risk:** A rival could win Billy, and Taylor and Chef Curry bids may fail.
·
**Stock price cap:** The BSG simulation credit for stock price stops at $91, so extra price gains add nothing.
**## ExmpleYr12.docx**
**Reflection And SWOT Analysis Year 12**
Company: CrossFit Footwear
**Reflection And SWOT Analysis Year 12**
**Mission:** Produce quality, affordable, innovative footwear while improving efficiency, supporting employees, and serving customers worldwide.
**Vision:** Become a trusted, competitive global footwear company known for product quality, customer satisfaction, responsible business practices, and strong financial performance.
**1. Compensation and Training**
**Decisions Made**
In Year 12, CrossFit Footwear focused on employee pay, bonuses, and training at its North American and Asia-Pacific factories. The company kept a 40:1 supervisor-to-worker ratio and provided training to help employees work more efficiently and produce better-quality shoes.
**Results of the Decisions**
The company continued production without major changes, but its overall performance remained behind its two main competitors.
**What Caused the Result**
The training and bonus program aimed to improve performance and reduce production problems. These efforts helped keep operations running smoothly, but other business decisions also affected the company's results.
**2. Branded Production**
**Decisions Made**
In Year 12, CrossFit Footwear produced its branded shoes in North America and Asia-Pacific. The company used both standard and premium materials, offered 200 shoe models, and focused on improving shoe designs and quality through TQM.
**Results of the Decisions** The company offered a good variety of shoes and worked to maintain product quality. Still, its overall results were behind Blueprint Athletics and AKinetix Footwear.
**What Caused the Results** More styles and improved quality made the company's products more attractive to customers. At the same time, higher production costs and pressure to keep prices competitive may have reduced the benefits of these improvements.
**3. Production Facilities**
**Decisions Made**
During Year 12, CrossFit Footwear chose to continue manufacturing shoes at its current locations in North America and Asia-Pacific. Instead of building new facilities, the company focused on managing its existing equipment and ensuring production could meet business needs without overspending.
**Results of the Decisions:** The company kept its factories running while avoiding the extra expenses of opening new facilities. This approach helped management keep spending under control and continue normal production.
**What Caused the Results:** By using its existing facilities, CrossFit Footwear avoided the added costs of construction, new equipment, and facility maintenance. This was a practical way to manage its budget without making a large financial commitment. However, if sales increased significantly, the company might need to invest in additional equipment or expand its production capacity in the future.
**4. Distribution and Warehouse Operations**
**Decisions Made:** In Year 12, CrossFit Footwear worked to move shoes from factories to customers across regions. The company focused on keeping enough products in stock, delivering orders on time, and managing warehouse and shipping costs.
**Results of the Decisions:** The company continued to supply its regional markets and manage inventory. However, its overall performance was still lower than that of its two main competitors.
**What Caused the Results:** Shipping expenses, inventory levels, and changes in customer demand affected the company's operations. CrossFit Footwear needed to make sure customers could find the products they wanted without spending too much on storage and distribution.
**5. Internet Marketing**
**Decisions Made:** CrossFit Footwear set online prices by region and spent money on advertising to attract more customers. The company aimed to increase online sales while keeping prices competitive and maintaining profitability.
**Results of the Decisions:** The company's earnings per share increased from $2.77 in Year 11 to $2.84 in Year 12. Even with this improvement, Blueprint Athletics earned $4.39 per share, while AKinetix Footwear earned $3.99.
**What Caused the Results:** Online prices, advertising costs, product quality, and competition all affected the company's results. Although earnings increased slightly, CrossFit Footwear still needed to improve its online marketing and compete more effectively.
**6. Wholesale Marketing**
**Decisions Made:** In Year 12, CrossFit Footwear set wholesale prices, planned advertising spending, and offered mail-in rebates in its regional markets. These decisions were intended to attract retailers, maintain business relationships, and make its shoes more appealing to buyers.
**Results of the Decisions:** Wholesale sales remained an important part of the company's business. However, CrossFit Footwear finished the year behind Blueprint Athletics and AKinetix Footwear in the industry rankings.
**What Caused the Results:** Retailers consider several factors when choosing which products to sell, including prices, product quality, advertising support, and customer demand. CrossFit Footwear needed to improve its wholesale strategy while making sure its marketing expenses did not reduce profits too much.
**7. Private-Label Operations**
**Decisions Made:** CrossFit Footwear used its factories in North America and Asia-Pacific for private-label production. The company focused on setting competitive contract prices, meeting customer requirements, and using its available production capacity effectively.
**Results of the Decisions:** Private-label production gave the company another way to generate revenue beyond selling its own branded shoes.
**What Caused the Results:** Producing private-label shoes allowed CrossFit Footwear to make use of its manufacturing resources and reach additional business customers. However, the company needed to control production costs and meet contract requirements to earn a reasonable profit from these orders.
**8. Celebrity Endorsements**
**Decisions Made:** CrossFit Footwear considered celebrity endorsements to make its brand more recognizable and attract customer attention. The goal was to improve the company's image and help it stand out from competing footwear brands.
**Results of the Decisions:** The company's image rating dropped from 77 in Year 11 to 68 in Year 12. Blueprint Athletics had a rating of 87, while AKinetix Footwear scored 75.
**What Caused the Results:** The decline showed that CrossFit Footwear struggled to maintain its previous brand image. Advertising, product quality, customer satisfaction, and corporate responsibility can all affect how customers view a company. The available results do not show whether celebrity endorsements directly caused the decline.
**9. Corporate Citizenship**
**Decisions Made:** CrossFit Footwear considered ways to improve its social and environmental responsibility. These efforts included improving workplace conditions, supporting employees, adopting environmental practices, and making ethical business decisions.
**Results of the Decisions:** The company's image rating fell to 68, which was below the investor expectation of 72. This showed that the company needed to pay more attention to improving its reputation.
**What Caused the Results:** A company's public image can be influenced by how it treats employees, protects the environment, and supports responsible business practices. CrossFit Footwear's lower rating suggested that its overall efforts were not enough to maintain its previous score. Improving these areas could help strengthen its reputation in future years.
**10. Finance and Cash Flow**
**Decisions Made:** During Year 12, CrossFit Footwear focused on managing cash, controlling expenses, and making financial decisions that supported operations. Management also worked to maintain the company's credit rating and provide value to shareholders.
**Results of the Decisions:** The company reported earnings per share of $2.84, a return on equity of 23.8%, a stock price of $60.52, and an A credit rating. Earnings per share increased from $2.77 in Year 11, while return on equity fell to 23.8%.
**What Caused the Results:** Sales revenue, manufacturing costs, advertising expenses, and other business decisions affected the company's financial performance. Maintaining an A credit rating was positive, but the lower return on equity and stock price compared with leading competitors showed room for improvement.
**Year 12 Overall Performance**
CrossFit Footwear finished Year 12 in third place in Industry 14, with a weighted average score of 91. Blueprint Athletics scored 109, while AKinetix Footwear earned 101. The company's game-to-date score was 93, compared with 108 for Blueprint Athletics and 105 for AKinetix Footwear.
The company made some progress during the year, particularly in earnings per share, and maintained an A credit rating. However, its image rating declined, and its return on equity fell slightly. Overall, the results showed that maintaining financial stability was not enough to catch up with competitors.
Going forward, CrossFit Footwear needs to improve its brand image, control costs, and make better marketing decisions. Improving product quality and customer satisfaction while increasing profitability could help the company achieve stronger results in future years.
**SWOT Analysis Year 12**
**Strengths**
·
**Good Credit Rating:** The company maintained an A credit rating, showing that it was in a relatively strong position to meet its financial obligations.
·
**Higher Earnings per Share:** EPS increased from $2.77 in Year 11 to $2.84 in Year 12.
·
**Established Production Facilities:** Its factories in North America and Asia-Pacific supported the production of branded and private-label shoes.
·
**Wide Product Selection:** Offering 200 models gave customers several styles and options to choose from.
·
**Presence in Multiple Markets:** Operating across four regional markets gave the company opportunities to reach customers worldwide.
**Weaknesses**
·
**Third-Place Ranking:** CrossFit Footwear finished behind Blueprint Athletics and AKinetix Footwear.
·
**Lower Image Rating:** Its image rating dropped from 77 to 68, indicating a decline in its overall reputation.
·
**Lower Stock Price:** The company's stock price was $60.52, compared with $101.63 for Blueprint Athletics and $74.09 for AKinetix Footwear.
·
**Profitability Challenges:** Its earnings per share and return on equity were lower than those of its leading competitors.
·
**Lower Best-in-Industry Score:** CrossFit Footwear scored 77, while Blueprint Athletics scored 100 and AKinetix Footwear scored 89.
**Opportunities**
·
**Build a Better Brand Image:** Improving advertising, product quality, and corporate responsibility could help customers view the company more positively.
·
**Increase Profits:** Review production expenses and pricing decisions to improve earnings and return on equity.
·
**Improve Online Sales:** Better digital advertising and competitive online prices could attract more customers.
·
**Strengthen Retailer Relationships:** Better support for retailers and adjusted marketing strategies could help increase sales.
·
**Make Production More Efficient:** Reducing waste, improving employee productivity, and using factory equipment effectively could help lower costs
**Threats**
·
**Strong Competition:** Blueprint Athletics and AKinetix Footwear performed better in several important areas, making it harder for CrossFit Footwear to improve its ranking.
·
**Pressure to Keep Prices Low:** Competitors offering lower prices could force the company to reduce its prices and accept smaller profit margins.
·
**Increasing Business Costs:** Higher labor, material, shipping, and advertising expenses could affect profitability.
·
**Changing Customer Preferences:** Customers may choose other brands if they offer better styles, quality, or value for money.
·
**Declining Brand Image:** If the company's image rating continues to fall, it could become more difficult to attract customers and compete with other brands.
**## ExmpleYr12.docx**
**Reflection And SWOT Analysis Year 12**
Company: CrossFit Footwear
**Reflection And SWOT Analysis Year 12**
**Mission:** Produce quality, affordable, innovative footwear while improving efficiency, supporting employees, and serving customers worldwide.
**Vision:** Become a trusted, competitive global footwear company known for product quality, customer satisfaction, responsible business practices, and strong financial performance.
**1. Compensation and Training**
**Decisions Made**
In Year 12, CrossFit Footwear focused on employee pay, bonuses, and training at its North American and Asia-Pacific factories. The company kept a 40:1 supervisor-to-worker ratio and provided training to help employees work more efficiently and produce better-quality shoes.
**Results of the Decisions**
The company continued production without major changes, but its overall performance remained behind its two main competitors.
**What Caused the Result**
The training and bonus program aimed to improve performance and reduce production problems. These efforts helped keep operations running smoothly, but other business decisions also affected the company's results.
**2. Branded Production**
**Decisions Made**
In Year 12, CrossFit Footwear produced its branded shoes in North America and Asia-Pacific. The company used both standard and premium materials, offered 200 shoe models, and focused on improving shoe designs and quality through TQM.
**Results of the Decisions** The company offered a good variety of shoes and worked to maintain product quality. Still, its overall results were behind Blueprint Athletics and AKinetix Footwear.
**What Caused the Results** More styles and improved quality made the company's products more attractive to customers. At the same time, higher production costs and pressure to keep prices competitive may have reduced the benefits of these improvements.
**3. Production Facilities**
**Decisions Made**
During Year 12, CrossFit Footwear chose to continue manufacturing shoes at its current locations in North America and Asia-Pacific. Instead of building new facilities, the company focused on managing its existing equipment and ensuring production could meet business needs without overspending.
**Results of the Decisions:** The company kept its factories running while avoiding the extra expenses of opening new facilities. This approach helped management keep spending under control and continue normal production.
**What Caused the Results:** By using its existing facilities, CrossFit Footwear avoided the added costs of construction, new equipment, and facility maintenance. This was a practical way to manage its budget without making a large financial commitment. However, if sales increased significantly, the company might need to invest in additional equipment or expand its production capacity in the future.
**4. Distribution and Warehouse Operations**
**Decisions Made:** In Year 12, CrossFit Footwear worked to move shoes from factories to customers across regions. The company focused on keeping enough products in stock, delivering orders on time, and managing warehouse and shipping costs.
**Results of the Decisions:** The company continued to supply its regional markets and manage inventory. However, its overall performance was still lower than that of its two main competitors.
**What Caused the Results:** Shipping expenses, inventory levels, and changes in customer demand affected the company's operations. CrossFit Footwear needed to make sure customers could find the products they wanted without spending too much on storage and distribution.
**5. Internet Marketing**
**Decisions Made:** CrossFit Footwear set online prices by region and spent money on advertising to attract more customers. The company aimed to increase online sales while keeping prices competitive and maintaining profitability.
**Results of the Decisions:** The company's earnings per share increased from $2.77 in Year 11 to $2.84 in Year 12. Even with this improvement, Blueprint Athletics earned $4.39 per share, while AKinetix Footwear earned $3.99.
**What Caused the Results:** Online prices, advertising costs, product quality, and competition all affected the company's results. Although earnings increased slightly, CrossFit Footwear still needed to improve its online marketing and compete more effectively.
**6. Wholesale Marketing**
**Decisions Made:** In Year 12, CrossFit Footwear set wholesale prices, planned advertising spending, and offered mail-in rebates in its regional markets. These decisions were intended to attract retailers, maintain business relationships, and make its shoes more appealing to buyers.
**Results of the Decisions:** Wholesale sales remained an important part of the company's business. However, CrossFit Footwear finished the year behind Blueprint Athletics and AKinetix Footwear in the industry rankings.
**What Caused the Results:** Retailers consider several factors when choosing which products to sell, including prices, product quality, advertising support, and customer demand. CrossFit Footwear needed to improve its wholesale strategy while making sure its marketing expenses did not reduce profits too much.
**7. Private-Label Operations**
**Decisions Made:** CrossFit Footwear used its factories in North America and Asia-Pacific for private-label production. The company focused on setting competitive contract prices, meeting customer requirements, and using its available production capacity effectively.
**Results of the Decisions:** Private-label production gave the company another way to generate revenue beyond selling its own branded shoes.
**What Caused the Results:** Producing private-label shoes allowed CrossFit Footwear to make use of its manufacturing resources and reach additional business customers. However, the company needed to control production costs and meet contract requirements to earn a reasonable profit from these orders.
**8. Celebrity Endorsements**
**Decisions Made:** CrossFit Footwear considered celebrity endorsements to make its brand more recognizable and attract customer attention. The goal was to improve the company's image and help it stand out from competing footwear brands.
**Results of the Decisions:** The company's image rating dropped from 77 in Year 11 to 68 in Year 12. Blueprint Athletics had a rating of 87, while AKinetix Footwear scored 75.
**What Caused the Results:** The decline showed that CrossFit Footwear struggled to maintain its previous brand image. Advertising, product quality, customer satisfaction, and corporate responsibility can all affect how customers view a company. The available results do not show whether celebrity endorsements directly caused the decline.
**9. Corporate Citizenship**
**Decisions Made:** CrossFit Footwear considered ways to improve its social and environmental responsibility. These efforts included improving workplace conditions, supporting employees, adopting environmental practices, and making ethical business decisions.
**Results of the Decisions:** The company's image rating fell to 68, which was below the investor expectation of 72. This showed that the company needed to pay more attention to improving its reputation.
**What Caused the Results:** A company's public image can be influenced by how it treats employees, protects the environment, and supports responsible business practices. CrossFit Footwear's lower rating suggested that its overall efforts were not enough to maintain its previous score. Improving these areas could help strengthen its reputation in future years.
**10. Finance and Cash Flow**
**Decisions Made:** During Year 12, CrossFit Footwear focused on managing cash, controlling expenses, and making financial decisions that supported operations. Management also worked to maintain the company's credit rating and provide value to shareholders.
**Results of the Decisions:** The company reported earnings per share of $2.84, a return on equity of 23.8%, a stock price of $60.52, and an A credit rating. Earnings per share increased from $2.77 in Year 11, while return on equity fell to 23.8%.
**What Caused the Results:** Sales revenue, manufacturing costs, advertising expenses, and other business decisions affected the company's financial performance. Maintaining an A credit rating was positive, but the lower return on equity and stock price compared with leading competitors showed room for improvement.
**Year 12 Overall Performance**
CrossFit Footwear finished Year 12 in third place in Industry 14, with a weighted average score of 91. Blueprint Athletics scored 109, while AKinetix Footwear earned 101. The company's game-to-date score was 93, compared with 108 for Blueprint Athletics and 105 for AKinetix Footwear.
The company made some progress during the year, particularly in earnings per share, and maintained an A credit rating. However, its image rating declined, and its return on equity fell slightly. Overall, the results showed that maintaining financial stability was not enough to catch up with competitors.
Going forward, CrossFit Footwear needs to improve its brand image, control costs, and make better marketing decisions. Improving product quality and customer satisfaction while increasing profitability could help the company achieve stronger results in future years.
**SWOT Analysis Year 12**
**Strengths**
·
**Good Credit Rating:** The company maintained an A credit rating, showing that it was in a relatively strong position to meet its financial obligations.
·
**Higher Earnings per Share:** EPS increased from $2.77 in Year 11 to $2.84 in Year 12.
·
**Established Production Facilities:** Its factories in North America and Asia-Pacific supported the production of branded and private-label shoes.
·
**Wide Product Selection:** Offering 200 models gave customers several styles and options to choose from.
·
**Presence in Multiple Markets:** Operating across four regional markets gave the company opportunities to reach customers worldwide.
**Weaknesses**
·
**Third-Place Ranking:** CrossFit Footwear finished behind Blueprint Athletics and AKinetix Footwear.
·
**Lower Image Rating:** Its image rating dropped from 77 to 68, indicating a decline in its overall reputation.
·
**Lower Stock Price:** The company's stock price was $60.52, compared with $101.63 for Blueprint Athletics and $74.09 for AKinetix Footwear.
·
**Profitability Challenges:** Its earnings per share and return on equity were lower than those of its leading competitors.
·
**Lower Best-in-Industry Score:** CrossFit Footwear scored 77, while Blueprint Athletics scored 100 and AKinetix Footwear scored 89.
**Opportunities**
·
**Build a Better Brand Image:** Improving advertising, product quality, and corporate responsibility could help customers view the company more positively.
·
**Increase Profits:** Review production expenses and pricing decisions to improve earnings and return on equity.
·
**Improve Online Sales:** Better digital advertising and competitive online prices could attract more customers.
·
**Strengthen Retailer Relationships:** Better support for retailers and adjusted marketing strategies could help increase sales.
·
**Make Production More Efficient:** Reducing waste, improving employee productivity, and using factory equipment effectively could help lower costs
**Threats**
·
**Strong Competition:** Blueprint Athletics and AKinetix Footwear performed better in several important areas, making it harder for CrossFit Footwear to improve its ranking.
·
**Pressure to Keep Prices Low:** Competitors offering lower prices could force the company to reduce its prices and accept smaller profit margins.
·
**Increasing Business Costs:** Higher labor, material, shipping, and advertising expenses could affect profitability.
·
**Changing Customer Preferences:** Customers may choose other brands if they offer better styles, quality, or value for money.
·
**Declining Brand Image:** If the company's image rating continues to fall, it could become more difficult to attract customers and compete with other brands.
**## Year13ReflectionandSWOT.docx**
**Year 13 Reflection**
**Note:** This year we took a more aggressive approach to try to overtake Company A and B with the following decisions.
**1. Compensation and Training**
·
**Decision:** We raised base wages and supervisor pay 1% in NA and AP. Incentive pay is $0.50 NA and $0.25 AP. Fringe benefits are 2,500 NA and 1,250 AP. Best practices training is 800 in each plant, and supervisors are at 30:1.
·
**Results:** Workforce quality and productivity support the higher S/Q, at a modest labor-cost increase.
·
**Cause:** Better pay, training and supervision raise output and quality and cut rejects (NA 6.5%, AP 8.4%), which offsets the added cost.
**2. Branded Production**
·
**Decision:** We run 400 models, $22k styling, $3.50 TQM and about 70% (NA) and 80% (AP) superior materials. We produce 5,470 pairs in NA and 5,900 in AP.
·
**Results:** Projected S/Q is 6.9 NA and 7.0 AP, against rivals' assumed 5.5 to 5.6. Supply covers demand in all four regions.
·
**Cause:** We invested in quality, style and materials to justify premium prices and win share. Production is sized to forecast demand plus required inventory.
**3. Production Facilities**
·
**Decision:** We chose Option B improvements in NA and AP, and added 750 (NA) and 1,000 (AP) pairs of new equipment.
·
**Results:** Capacity, with overtime, covers the production plan with a small surplus.
·
**Cause:** The quality and ad push raised demand, and the extra capacity was needed to avoid a shortfall.
**4. Distribution and Warehouse**
·
**Decision:** The NA plant ships 2,941 to NA and 2,173 to EA. The AP plant ships 574 to EA, 2,186 to AP and 2,644 to LA.
·
**Results:** Every region is supplied, with 0 pairs unallocated.
·
**Cause:** Shipping from the nearest plant keeps freight and tariff costs down. Shipping to LA from AP is about 19% cheaper because of exchange rates.
**5. Internet Marketing**
·
**Decision:** Retail prices are NA 86, EA 88, AP 82 and LA 87. Search ads are 5,500 / 5,500 / 4,500 / 4,500, with no free shipping.
·
**Results:** Internet sales stay profitable at premium prices.
·
**Cause:** Our quality lead lets us price above rivals' assumed $71 to $79 while search ads keep us visible.
**6. Wholesale Marketing**
·
**Decision:** Wholesale prices are 63 / 66 / 63 / 65. Brand ads are 22,000 / 17,000 / 19,000 / 18,000. The rebate is $4 and delivery is 3 weeks. Retailer support is 4,500 / 4,000 / 3,500 / 4,000.
·
**Results:** Projected wholesale share is 28.1% NA, 28.4% EA, 27.5% AP and 32.5% LA, with image at 85.
·
**Cause:** Heavy advertising and retailer support, plus quality, outweigh our higher prices. They also push image above the 72 target.
**7. Private-Label**
·
**Decision:** We offered no private-label pairs.
·
**Results:** All capacity goes to higher-margin branded pairs.
·
**Cause:** Private-label margins are lower and would compete with our branded sales for the same pairs.
**8. Celebrity Endorsements**
·
**Decision:** We bid Billy 2,000 (priority 1), Chef Curry 1,000 (priority 2) and Taylor 1,300 (priority 3), with a 3,500 spending cap. (Confirm the Chef Curry bid is entered.)
·
**Results:** The outcome depends on whether we win; the effect on image and demand likely starts in Y14.
·
**Cause:** Billy has high appeal in NA, and Chef Curry is strongest in LA, where we already have our biggest share.
**9. Corporate Citizenship**
·
**Decision:** We spent about $4.3M, with no charitable contributions.
·
**Results:** It supports image at a controlled cost.
·
**Cause:** We focused spending on sales-driving image levers rather than donations.
**10. Finance and Cash Flow**
·
**Decision:** We took a $40M 5-year loan, set the dividend at $1.50 and repurchased 626 shares.
·
**Results:** EPS $8.27, ROE 57.9%, credit rating A, net profit $154.9M on $827.4M of revenue, and ending cash $25.8M.
·
**Cause:** The dividend and buybacks support the stock price and ROE. Operating profit comes from premium prices and quality. About $1.65 of EPS is a one-time exchange-rate gain in LA, and cash is only about $5.8M above the $20M floor.
**Year 13 SWOT Analysis**
**Strengths**
·
**Profitability:** Projected EPS $8.27 and ROE 57.9%, far above the 3.50 and 23% targets.
·
**Quality:** Projected S/Q of 6.9 (NA) and 7.0 (AP), against rivals' assumed 5.5 to 5.6.
·
**Brand:** Image of 85 versus a target of 72, backed by the heaviest brand advertising and retailer support in the industry.
·
**Balance sheet:** Credit rating A, debt-to-assets 0.31 and interest coverage 27.8.
·
**Supply:** All four regions are supplied, with 0 pairs left unallocated.
·
**Workforce:** Higher pay, incentives and best practices training raise productivity and cut rejects.
**Weaknesses**
·
**Thin cash:** Ending cash of $25.8M is only about $5.8M above the $20M floor, so a sales shortfall could force borrowing.
·
**One-time earnings:** About $1.65 of EPS comes from LA exchange-rate gains, which are not operational.
·
**High costs:** Heavy advertising, premium materials and TQM spending squeeze margins.
·
**Reject rates:** AP at 8.4% and NA at 6.5% add waste.
·
**Image gap:** Our 85 trails the best rival's 87 by about 2 points.
·
**Leverage:** The $40M loan and buybacks inflate ROE and add interest cost.
**Opportunities**
·
**Celebrities:** Chef Curry is strong in LA (appeal 100) and Billy in NA (100), and the effects likely start in Y14.
·
**Credit:** Moving from A to A+ would add about 1 point of score.
·
**Share gains:** We can take more share in regions where rivals cut ads or quality.
·
**Quality lead:** It lets us hold premium prices even if rivals cut theirs.
·
**Capacity:** The new equipment gives room to meet higher demand in Y14.
**Threats**
·
**Rival improvement:** Blueprint Athletics (G-T-D 108) and AKinetix Footwear (105) are expected to improve in Y13.
·
**Exchange rates:** The LA gain may reverse when rates reset in Y14.
·
**Price and ad wars:** Rivals could cut wholesale prices, raise rebates or boost brand advertising.
·
**Weaker sales:** Sales 5% below plan would squeeze cash, and surplus inventory would add carrying costs.
·
**Celebrity risk:** A rival could win Billy, and Taylor and Chef Curry bids may fail.
·
**Stock price cap:** The BSG simulation credit for stock price stops at $91, so extra price gains add nothing.
**## ExmpleYr12.docx**
**Reflection And SWOT Analysis Year 12**
Company: CrossFit Footwear
**Reflection And SWOT Analysis Year 12**
**Mission:** Produce quality, affordable, innovative footwear while improving efficiency, supporting employees, and serving customers worldwide.
**Vision:** Become a trusted, competitive global footwear company known for product quality, customer satisfaction, responsible business practices, and strong financial performance.
**1. Compensation and Training**
**Decisions Made**
In Year 12, CrossFit Footwear focused on employee pay, bonuses, and training at its North American and Asia-Pacific factories. The company kept a 40:1 supervisor-to-worker ratio and provided training to help employees work more efficiently and produce better-quality shoes.
**Results of the Decisions**
The company continued production without major changes, but its overall performance remained behind its two main competitors.
**What Caused the Result**
The training and bonus program aimed to improve performance and reduce production problems. These efforts helped keep operations running smoothly, but other business decisions also affected the company's results.
**2. Branded Production**
**Decisions Made**
In Year 12, CrossFit Footwear produced its branded shoes in North America and Asia-Pacific. The company used both standard and premium materials, offered 200 shoe models, and focused on improving shoe designs and quality through TQM.
**Results of the Decisions** The company offered a good variety of shoes and worked to maintain product quality. Still, its overall results were behind Blueprint Athletics and AKinetix Footwear.
**What Caused the Results** More styles and improved quality made the company's products more attractive to customers. At the same time, higher production costs and pressure to keep prices competitive may have reduced the benefits of these improvements.
**3. Production Facilities**
**Decisions Made**
During Year 12, CrossFit Footwear chose to continue manufacturing shoes at its current locations in North America and Asia-Pacific. Instead of building new facilities, the company focused on managing its existing equipment and ensuring production could meet business needs without overspending.
**Results of the Decisions:** The company kept its factories running while avoiding the extra expenses of opening new facilities. This approach helped management keep spending under control and continue normal production.
**What Caused the Results:** By using its existing facilities, CrossFit Footwear avoided the added costs of construction, new equipment, and facility maintenance. This was a practical way to manage its budget without making a large financial commitment. However, if sales increased significantly, the company might need to invest in additional equipment or expand its production capacity in the future.
**4. Distribution and Warehouse Operations**
**Decisions Made:** In Year 12, CrossFit Footwear worked to move shoes from factories to customers across regions. The company focused on keeping enough products in stock, delivering orders on time, and managing warehouse and shipping costs.
**Results of the Decisions:** The company continued to supply its regional markets and manage inventory. However, its overall performance was still lower than that of its two main competitors.
**What Caused the Results:** Shipping expenses, inventory levels, and changes in customer demand affected the company's operations. CrossFit Footwear needed to make sure customers could find the products they wanted without spending too much on storage and distribution.
**5. Internet Marketing**
**Decisions Made:** CrossFit Footwear set online prices by region and spent money on advertising to attract more customers. The company aimed to increase online sales while keeping prices competitive and maintaining profitability.
**Results of the Decisions:** The company's earnings per share increased from $2.77 in Year 11 to $2.84 in Year 12. Even with this improvement, Blueprint Athletics earned $4.39 per share, while AKinetix Footwear earned $3.99.
**What Caused the Results:** Online prices, advertising costs, product quality, and competition all affected the company's results. Although earnings increased slightly, CrossFit Footwear still needed to improve its online marketing and compete more effectively.
**6. Wholesale Marketing**
**Decisions Made:** In Year 12, CrossFit Footwear set wholesale prices, planned advertising spending, and offered mail-in rebates in its regional markets. These decisions were intended to attract retailers, maintain business relationships, and make its shoes more appealing to buyers.
**Results of the Decisions:** Wholesale sales remained an important part of the company's business. However, CrossFit Footwear finished the year behind Blueprint Athletics and AKinetix Footwear in the industry rankings.
**What Caused the Results:** Retailers consider several factors when choosing which products to sell, including prices, product quality, advertising support, and customer demand. CrossFit Footwear needed to improve its wholesale strategy while making sure its marketing expenses did not reduce profits too much.
**7. Private-Label Operations**
**Decisions Made:** CrossFit Footwear used its factories in North America and Asia-Pacific for private-label production. The company focused on setting competitive contract prices, meeting customer requirements, and using its available production capacity effectively.
**Results of the Decisions:** Private-label production gave the company another way to generate revenue beyond selling its own branded shoes.
**What Caused the Results:** Producing private-label shoes allowed CrossFit Footwear to make use of its manufacturing resources and reach additional business customers. However, the company needed to control production costs and meet contract requirements to earn a reasonable profit from these orders.
**8. Celebrity Endorsements**
**Decisions Made:** CrossFit Footwear considered celebrity endorsements to make its brand more recognizable and attract customer attention. The goal was to improve the company's image and help it stand out from competing footwear brands.
**Results of the Decisions:** The company's image rating dropped from 77 in Year 11 to 68 in Year 12. Blueprint Athletics had a rating of 87, while AKinetix Footwear scored 75.
**What Caused the Results:** The decline showed that CrossFit Footwear struggled to maintain its previous brand image. Advertising, product quality, customer satisfaction, and corporate responsibility can all affect how customers view a company. The available results do not show whether celebrity endorsements directly caused the decline.
**9. Corporate Citizenship**
**Decisions Made:** CrossFit Footwear considered ways to improve its social and environmental responsibility. These efforts included improving workplace conditions, supporting employees, adopting environmental practices, and making ethical business decisions.
**Results of the Decisions:** The company's image rating fell to 68, which was below the investor expectation of 72. This showed that the company needed to pay more attention to improving its reputation.
**What Caused the Results:** A company's public image can be influenced by how it treats employees, protects the environment, and supports responsible business practices. CrossFit Footwear's lower rating suggested that its overall efforts were not enough to maintain its previous score. Improving these areas could help strengthen its reputation in future years.
**10. Finance and Cash Flow**
**Decisions Made:** During Year 12, CrossFit Footwear focused on managing cash, controlling expenses, and making financial decisions that supported operations. Management also worked to maintain the company's credit rating and provide value to shareholders.
**Results of the Decisions:** The company reported earnings per share of $2.84, a return on equity of 23.8%, a stock price of $60.52, and an A credit rating. Earnings per share increased from $2.77 in Year 11, while return on equity fell to 23.8%.
**What Caused the Results:** Sales revenue, manufacturing costs, advertising expenses, and other business decisions affected the company's financial performance. Maintaining an A credit rating was positive, but the lower return on equity and stock price compared with leading competitors showed room for improvement.
**Year 12 Overall Performance**
CrossFit Footwear finished Year 12 in third place in Industry 14, with a weighted average score of 91. Blueprint Athletics scored 109, while AKinetix Footwear earned 101. The company's game-to-date score was 93, compared with 108 for Blueprint Athletics and 105 for AKinetix Footwear.
The company made some progress during the year, particularly in earnings per share, and maintained an A credit rating. However, its image rating declined, and its return on equity fell slightly. Overall, the results showed that maintaining financial stability was not enough to catch up with competitors.
Going forward, CrossFit Footwear needs to improve its brand image, control costs, and make better marketing decisions. Improving product quality and customer satisfaction while increasing profitability could help the company achieve stronger results in future years.
**SWOT Analysis Year 12**
**Strengths**
·
**Good Credit Rating:** The company maintained an A credit rating, showing that it was in a relatively strong position to meet its financial obligations.
·
**Higher Earnings per Share:** EPS increased from $2.77 in Year 11 to $2.84 in Year 12.
·
**Established Production Facilities:** Its factories in North America and Asia-Pacific supported the production of branded and private-label shoes.
·
**Wide Product Selection:** Offering 200 models gave customers several styles and options to choose from.
·
**Presence in Multiple Markets:** Operating across four regional markets gave the company opportunities to reach customers worldwide.
**Weaknesses**
·
**Third-Place Ranking:** CrossFit Footwear finished behind Blueprint Athletics and AKinetix Footwear.
·
**Lower Image Rating:** Its image rating dropped from 77 to 68, indicating a decline in its overall reputation.
·
**Lower Stock Price:** The company's stock price was $60.52, compared with $101.63 for Blueprint Athletics and $74.09 for AKinetix Footwear.
·
**Profitability Challenges:** Its earnings per share and return on equity were lower than those of its leading competitors.
·
**Lower Best-in-Industry Score:** CrossFit Footwear scored 77, while Blueprint Athletics scored 100 and AKinetix Footwear scored 89.
**Opportunities**
·
**Build a Better Brand Image:** Improving advertising, product quality, and corporate responsibility could help customers view the company more positively.
·
**Increase Profits:** Review production expenses and pricing decisions to improve earnings and return on equity.
·
**Improve Online Sales:** Better digital advertising and competitive online prices could attract more customers.
·
**Strengthen Retailer Relationships:** Better support for retailers and adjusted marketing strategies could help increase sales.
·
**Make Production More Efficient:** Reducing waste, improving employee productivity, and using factory equipment effectively could help lower costs
**Threats**
·
**Strong Competition:** Blueprint Athletics and AKinetix Footwear performed better in several important areas, making it harder for CrossFit Footwear to improve its ranking.
·
**Pressure to Keep Prices Low:** Competitors offering lower prices could force the company to reduce its prices and accept smaller profit margins.
·
**Increasing Business Costs:** Higher labor, material, shipping, and advertising expenses could affect profitability.
·
**Changing Customer Preferences:** Customers may choose other brands if they offer better styles, quality, or value for money.
·
**Declining Brand Image:** If the company's image rating continues to fall, it could become more difficult to attract customers and compete with other brands.
**## Year13ReflectionandSWOT.docx**
**Year 13 Reflection**
**Note:** This year we took a more aggressive approach to try to overtake Company A and B with the following decisions.
**1. Compensation and Training**
·
**Decision:** We raised base wages and supervisor pay 1% in NA and AP. Incentive pay is $0.50 NA and $0.25 AP. Fringe benefits are 2,500 NA and 1,250 AP. Best practices training is 800 in each plant, and supervisors are at 30:1.
·
**Results:** Workforce quality and productivity support the higher S/Q, at a modest labor-cost increase.
·
**Cause:** Better pay, training and supervision raise output and quality and cut rejects (NA 6.5%, AP 8.4%), which offsets the added cost.
**2. Branded Production**
·
**Decision:** We run 400 models, $22k styling, $3.50 TQM and about 70% (NA) and 80% (AP) superior materials. We produce 5,470 pairs in NA and 5,900 in AP.
·
**Results:** Projected S/Q is 6.9 NA and 7.0 AP, against rivals' assumed 5.5 to 5.6. Supply covers demand in all four regions.
·
**Cause:** We invested in quality, style and materials to justify premium prices and win share. Production is sized to forecast demand plus required inventory.
**3. Production Facilities**
·
**Decision:** We chose Option B improvements in NA and AP, and added 750 (NA) and 1,000 (AP) pairs of new equipment.
·
**Results:** Capacity, with overtime, covers the production plan with a small surplus.
·
**Cause:** The quality and ad push raised demand, and the extra capacity was needed to avoid a shortfall.
**4. Distribution and Warehouse**
·
**Decision:** The NA plant ships 2,941 to NA and 2,173 to EA. The AP plant ships 574 to EA, 2,186 to AP and 2,644 to LA.
·
**Results:** Every region is supplied, with 0 pairs unallocated.
·
**Cause:** Shipping from the nearest plant keeps freight and tariff costs down. Shipping to LA from AP is about 19% cheaper because of exchange rates.
**5. Internet Marketing**
·
**Decision:** Retail prices are NA 86, EA 88, AP 82 and LA 87. Search ads are 5,500 / 5,500 / 4,500 / 4,500, with no free shipping.
·
**Results:** Internet sales stay profitable at premium prices.
·
**Cause:** Our quality lead lets us price above rivals' assumed $71 to $79 while search ads keep us visible.
**6. Wholesale Marketing**
·
**Decision:** Wholesale prices are 63 / 66 / 63 / 65. Brand ads are 22,000 / 17,000 / 19,000 / 18,000. The rebate is $4 and delivery is 3 weeks. Retailer support is 4,500 / 4,000 / 3,500 / 4,000.
·
**Results:** Projected wholesale share is 28.1% NA, 28.4% EA, 27.5% AP and 32.5% LA, with image at 85.
·
**Cause:** Heavy advertising and retailer support, plus quality, outweigh our higher prices. They also push image above the 72 target.
**7. Private-Label**
·
**Decision:** We offered no private-label pairs.
·
**Results:** All capacity goes to higher-margin branded pairs.
·
**Cause:** Private-label margins are lower and would compete with our branded sales for the same pairs.
**8. Celebrity Endorsements**
·
**Decision:** We bid Billy 2,000 (priority 1), Chef Curry 1,000 (priority 2) and Taylor 1,300 (priority 3), with a 3,500 spending cap. (Confirm the Chef Curry bid is entered.)
·
**Results:** The outcome depends on whether we win; the effect on image and demand likely starts in Y14.
·
**Cause:** Billy has high appeal in NA, and Chef Curry is strongest in LA, where we already have our biggest share.
**9. Corporate Citizenship**
·
**Decision:** We spent about $4.3M, with no charitable contributions.
·
**Results:** It supports image at a controlled cost.
·
**Cause:** We focused spending on sales-driving image levers rather than donations.
**10. Finance and Cash Flow**
·
**Decision:** We took a $40M 5-year loan, set the dividend at $1.50 and repurchased 626 shares.
·
**Results:** EPS $8.27, ROE 57.9%, credit rating A, net profit $154.9M on $827.4M of revenue, and ending cash $25.8M.
·
**Cause:** The dividend and buybacks support the stock price and ROE. Operating profit comes from premium prices and quality. About $1.65 of EPS is a one-time exchange-rate gain in LA, and cash is only about $5.8M above the $20M floor.
**Year 13 SWOT Analysis**
**Strengths**
·
**Profitability:** Projected EPS $8.27 and ROE 57.9%, far above the 3.50 and 23% targets.
·
**Quality:** Projected S/Q of 6.9 (NA) and 7.0 (AP), against rivals' assumed 5.5 to 5.6.
·
**Brand:** Image of 85 versus a target of 72, backed by the heaviest brand advertising and retailer support in the industry.
·
**Balance sheet:** Credit rating A, debt-to-assets 0.31 and interest coverage 27.8.
·
**Supply:** All four regions are supplied, with 0 pairs left unallocated.
·
**Workforce:** Higher pay, incentives and best practices training raise productivity and cut rejects.
**Weaknesses**
·
**Thin cash:** Ending cash of $25.8M is only about $5.8M above the $20M floor, so a sales shortfall could force borrowing.
·
**One-time earnings:** About $1.65 of EPS comes from LA exchange-rate gains, which are not operational.
·
**High costs:** Heavy advertising, premium materials and TQM spending squeeze margins.
·
**Reject rates:** AP at 8.4% and NA at 6.5% add waste.
·
**Image gap:** Our 85 trails the best rival's 87 by about 2 points.
·
**Leverage:** The $40M loan and buybacks inflate ROE and add interest cost.
**Opportunities**
·
**Celebrities:** Chef Curry is strong in LA (appeal 100) and Billy in NA (100), and the effects likely start in Y14.
·
**Credit:** Moving from A to A+ would add about 1 point of score.
·
**Share gains:** We can take more share in regions where rivals cut ads or quality.
·
**Quality lead:** It lets us hold premium prices even if rivals cut theirs.
·
**Capacity:** The new equipment gives room to meet higher demand in Y14.
**Threats**
·
**Rival improvement:** Blueprint Athletics (G-T-D 108) and AKinetix Footwear (105) are expected to improve in Y13.
·
**Exchange rates:** The LA gain may reverse when rates reset in Y14.
·
**Price and ad wars:** Rivals could cut wholesale prices, raise rebates or boost brand advertising.
·
**Weaker sales:** Sales 5% below plan would squeeze cash, and surplus inventory would add carrying costs.
·
**Celebrity risk:** A rival could win Billy, and Taylor and Chef Curry bids may fail.
·
**Stock price cap:** The BSG simulation credit for stock price stops at $91, so extra price gains add nothing.
**## ExmpleYr12.docx**
**Reflection And SWOT Analysis Year 12**
Company: CrossFit Footwear
**Reflection And SWOT Analysis Year 12**
**Mission:** Produce quality, affordable, innovative footwear while improving efficiency, supporting employees, and serving customers worldwide.
**Vision:** Become a trusted, competitive global footwear company known for product quality, customer satisfaction, responsible business practices, and strong financial performance.
**1. Compensation and Training**
**Decisions Made**
In Year 12, CrossFit Footwear focused on employee pay, bonuses, and training at its North American and Asia-Pacific factories. The company kept a 40:1 supervisor-to-worker ratio and provided training to help employees work more efficiently and produce better-quality shoes.
**Results of the Decisions**
The company continued production without major changes, but its overall performance remained behind its two main competitors.
**What Caused the Result**
The training and bonus program aimed to improve performance and reduce production problems. These efforts helped keep operations running smoothly, but other business decisions also affected the company's results.
**2. Branded Production**
**Decisions Made**
In Year 12, CrossFit Footwear produced its branded shoes in North America and Asia-Pacific. The company used both standard and premium materials, offered 200 shoe models, and focused on improving shoe designs and quality through TQM.
**Results of the Decisions** The company offered a good variety of shoes and worked to maintain product quality. Still, its overall results were behind Blueprint Athletics and AKinetix Footwear.
**What Caused the Results** More styles and improved quality made the company's products more attractive to customers. At the same time, higher production costs and pressure to keep prices competitive may have reduced the benefits of these improvements.
**3. Production Facilities**
**Decisions Made**
During Year 12, CrossFit Footwear chose to continue manufacturing shoes at its current locations in North America and Asia-Pacific. Instead of building new facilities, the company focused on managing its existing equipment and ensuring production could meet business needs without overspending.
**Results of the Decisions:** The company kept its factories running while avoiding the extra expenses of opening new facilities. This approach helped management keep spending under control and continue normal production.
**What Caused the Results:** By using its existing facilities, CrossFit Footwear avoided the added costs of construction, new equipment, and facility maintenance. This was a practical way to manage its budget without making a large financial commitment. However, if sales increased significantly, the company might need to invest in additional equipment or expand its production capacity in the future.
**4. Distribution and Warehouse Operations**
**Decisions Made:** In Year 12, CrossFit Footwear worked to move shoes from factories to customers across regions. The company focused on keeping enough products in stock, delivering orders on time, and managing warehouse and shipping costs.
**Results of the Decisions:** The company continued to supply its regional markets and manage inventory. However, its overall performance was still lower than that of its two main competitors.
**What Caused the Results:** Shipping expenses, inventory levels, and changes in customer demand affected the company's operations. CrossFit Footwear needed to make sure customers could find the products they wanted without spending too much on storage and distribution.
**5. Internet Marketing**
**Decisions Made:** CrossFit Footwear set online prices by region and spent money on advertising to attract more customers. The company aimed to increase online sales while keeping prices competitive and maintaining profitability.
**Results of the Decisions:** The company's earnings per share increased from $2.77 in Year 11 to $2.84 in Year 12. Even with this improvement, Blueprint Athletics earned $4.39 per share, while AKinetix Footwear earned $3.99.
**What Caused the Results:** Online prices, advertising costs, product quality, and competition all affected the company's results. Although earnings increased slightly, CrossFit Footwear still needed to improve its online marketing and compete more effectively.
**6. Wholesale Marketing**
**Decisions Made:** In Year 12, CrossFit Footwear set wholesale prices, planned advertising spending, and offered mail-in rebates in its regional markets. These decisions were intended to attract retailers, maintain business relationships, and make its shoes more appealing to buyers.
**Results of the Decisions:** Wholesale sales remained an important part of the company's business. However, CrossFit Footwear finished the year behind Blueprint Athletics and AKinetix Footwear in the industry rankings.
**What Caused the Results:** Retailers consider several factors when choosing which products to sell, including prices, product quality, advertising support, and customer demand. CrossFit Footwear needed to improve its wholesale strategy while making sure its marketing expenses did not reduce profits too much.
**7. Private-Label Operations**
**Decisions Made:** CrossFit Footwear used its factories in North America and Asia-Pacific for private-label production. The company focused on setting competitive contract prices, meeting customer requirements, and using its available production capacity effectively.
**Results of the Decisions:** Private-label production gave the company another way to generate revenue beyond selling its own branded shoes.
**What Caused the Results:** Producing private-label shoes allowed CrossFit Footwear to make use of its manufacturing resources and reach additional business customers. However, the company needed to control production costs and meet contract requirements to earn a reasonable profit from these orders.
**8. Celebrity Endorsements**
**Decisions Made:** CrossFit Footwear considered celebrity endorsements to make its brand more recognizable and attract customer attention. The goal was to improve the company's image and help it stand out from competing footwear brands.
**Results of the Decisions:** The company's image rating dropped from 77 in Year 11 to 68 in Year 12. Blueprint Athletics had a rating of 87, while AKinetix Footwear scored 75.
**What Caused the Results:** The decline showed that CrossFit Footwear struggled to maintain its previous brand image. Advertising, product quality, customer satisfaction, and corporate responsibility can all affect how customers view a company. The available results do not show whether celebrity endorsements directly caused the decline.
**9. Corporate Citizenship**
**Decisions Made:** CrossFit Footwear considered ways to improve its social and environmental responsibility. These efforts included improving workplace conditions, supporting employees, adopting environmental practices, and making ethical business decisions.
**Results of the Decisions:** The company's image rating fell to 68, which was below the investor expectation of 72. This showed that the company needed to pay more attention to improving its reputation.
**What Caused the Results:** A company's public image can be influenced by how it treats employees, protects the environment, and supports responsible business practices. CrossFit Footwear's lower rating suggested that its overall efforts were not enough to maintain its previous score. Improving these areas could help strengthen its reputation in future years.
**10. Finance and Cash Flow**
**Decisions Made:** During Year 12, CrossFit Footwear focused on managing cash, controlling expenses, and making financial decisions that supported operations. Management also worked to maintain the company's credit rating and provide value to shareholders.
**Results of the Decisions:** The company reported earnings per share of $2.84, a return on equity of 23.8%, a stock price of $60.52, and an A credit rating. Earnings per share increased from $2.77 in Year 11, while return on equity fell to 23.8%.
**What Caused the Results:** Sales revenue, manufacturing costs, advertising expenses, and other business decisions affected the company's financial performance. Maintaining an A credit rating was positive, but the lower return on equity and stock price compared with leading competitors showed room for improvement.
**Year 12 Overall Performance**
CrossFit Footwear finished Year 12 in third place in Industry 14, with a weighted average score of 91. Blueprint Athletics scored 109, while AKinetix Footwear earned 101. The company's game-to-date score was 93, compared with 108 for Blueprint Athletics and 105 for AKinetix Footwear.
The company made some progress during the year, particularly in earnings per share, and maintained an A credit rating. However, its image rating declined, and its return on equity fell slightly. Overall, the results showed that maintaining financial stability was not enough to catch up with competitors.
Going forward, CrossFit Footwear needs to improve its brand image, control costs, and make better marketing decisions. Improving product quality and customer satisfaction while increasing profitability could help the company achieve stronger results in future years.
**SWOT Analysis Year 12**
**Strengths**
·
**Good Credit Rating:** The company maintained an A credit rating, showing that it was in a relatively strong position to meet its financial obligations.
·
**Higher Earnings per Share:** EPS increased from $2.77 in Year 11 to $2.84 in Year 12.
·
**Established Production Facilities:** Its factories in North America and Asia-Pacific supported the production of branded and private-label shoes.
·
**Wide Product Selection:** Offering 200 models gave customers several styles and options to choose from.
·
**Presence in Multiple Markets:** Operating across four regional markets gave the company opportunities to reach customers worldwide.
**Weaknesses**
·
**Third-Place Ranking:** CrossFit Footwear finished behind Blueprint Athletics and AKinetix Footwear.
·
**Lower Image Rating:** Its image rating dropped from 77 to 68, indicating a decline in its overall reputation.
·
**Lower Stock Price:** The company's stock price was $60.52, compared with $101.63 for Blueprint Athletics and $74.09 for AKinetix Footwear.
·
**Profitability Challenges:** Its earnings per share and return on equity were lower than those of its leading competitors.
·
**Lower Best-in-Industry Score:** CrossFit Footwear scored 77, while Blueprint Athletics scored 100 and AKinetix Footwear scored 89.
**Opportunities**
·
**Build a Better Brand Image:** Improving advertising, product quality, and corporate responsibility could help customers view the company more positively.
·
**Increase Profits:** Review production expenses and pricing decisions to improve earnings and return on equity.
·
**Improve Online Sales:** Better digital advertising and competitive online prices could attract more customers.
·
**Strengthen Retailer Relationships:** Better support for retailers and adjusted marketing strategies could help increase sales.
·
**Make Production More Efficient:** Reducing waste, improving employee productivity, and using factory equipment effectively could help lower costs
**Threats**
·
**Strong Competition:** Blueprint Athletics and AKinetix Footwear performed better in several important areas, making it harder for CrossFit Footwear to improve its ranking.
·
**Pressure to Keep Prices Low:** Competitors offering lower prices could force the company to reduce its prices and accept smaller profit margins.
·
**Increasing Business Costs:** Higher labor, material, shipping, and advertising expenses could affect profitability.
·
**Changing Customer Preferences:** Customers may choose other brands if they offer better styles, quality, or value for money.
·
**Declining Brand Image:** If the company's image rating continues to fall, it could become more difficult to attract customers and compete with other brands.