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Business Report on Corporate Lobby Shoes

Paper Type: Free Essay Subject: Business
Wordcount: 2751 words Published: 2nd Aug 2018

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The game of the business strategy is computer based game which is played online by a group of member formed in it. In this business strategy there are lot of industries were there as in the game one would run or imply the decisions of the footwear company which would be given the competition by various other firms like januty footwear, ashuru, corporate lobby shoes, L company, Dynasty, in sprint, Elite footwear ltd., K company, glaxer, CCLEO, and H company. The member of this business strategy game in the company corporate lobby shoes is Afsal Rahmath Parambu, Babatomiwa Ojuri, Fedlis Nwaujukwu, Gholam Oovee. As this one member who would be taken responsible for taking the decisions in the respect to its company and aspects of all the matters which the company operates and manages the necessary decision of the company as each and every company wants to take excellent decision and makes the best as well as sustainable solutions for their strategies as the tools and techniques where well executed and planned out specially to overcome with its competitors.

There are various results from the 11th year to 15th year on the different are like EPS, Return on equity, stock price, inventories, management etc. As this would help to build the wealth of the shareholder and its image rating is high.

This paper reports that the analysis of the corporate lobby shoes is divided in to the three sections the first is mainly the porter five forces as well as competitive strategy in relations to Year 15

Business strategy

The business environment had been analysis by continuously practicing the business strategy game. As in the business game we are allocated on the post of the top executive which is mostly taking the strategic decision regarding the company performance and results in relation to its profits and productions. The influence by the top executive in the developing the strategies of business for any firm in relations to business environment (ham brick and mason, 1984), in strategic management the role and effect of top managers on company performance and importance of this relationship how may be affected by company’s strategy is always recognize as critical issues (Ham brick and Mason (1984), Gupta and Govindarajan (1984), Gunz and Jalland (1996).

There are different strategy which are seen in the market of shoe industry like cost leadership, focus strategy, differentiation etc.

Cost leadership means:

the company is managing its cost, as this effective dealing in prices and profits would coming as to implement low price should have and efficient cost management, so through the cost of prices of product would low as compared to the other company.

Focus strategy:

the focus strategy is also known as niche strategy in simple terms it is considered as the product which is product is for the target group only and the company sets its prices and product efficiency and its policy in relevance to that group and ignore the wider population market.

Differentiation strategy:

this strategy in simple terms can be refers as there should be uniqueness and sound quality which would differ firm from its competitor as this would raise the cost of the company but the value and ethics which are unique is more important than the cost for this kind of business as it would create a higher brand value and in return increase the profits.

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Porter’s five forces:

The Michael porter had given the competitive strategy for analysis the business with the comparison to its competitors through this strategy one would be aware that different strategies should be competitors using for reaching to the success. “The ultimate aim of competitive strategy is to cope with and, ideally, to change those rules in the firm’s behaviour (1985, p. 4).” As with this analysis company hold the proper ideas about the position were it stands in terms of its performance and profits.

The threat of new entrants:

As this market is very saturated and the entry of new firm will be of only the company which is highly capital rich so for the corporate lobby shoe there is no more threat in this area but in future the chance are available for this.

The threat of substitute product:

As there are lot of substitute product available in market, so there are high chance for the threat in this area, to overcome with threat the corporate lobby shoe has imply the combination of generic strategy that is having low cost with the quality and unique product design.

The bargaining power of buyer:

As due to highly competitive market in shoe, the power of buyer had been raised as they have an option left from their decision so to create some friendly environment and better scheme for customer would encourage the customer towards the corporate lobby shoe.

The bargaining power of suppliers:

As for the suppliers the bargaining power is low because in market lot of suppliers available which would make the corporate lobby shoe to maintained its low cost supplies.

Intensity of competition:

A shoe industry is one of the wide spread industry with the no. of players in this business. Corporate lobby shoe is having a high intensity with its competitors as because of large no of competitors in market available. Through the innovative and sustainable strategic technique the corporate lobby shoe have survive by achieve its mission.

PESTLE analysis

The one of the most renowned external analysis is the pestle as it outlook the whole of environment external with the different factors like political, economic, social, technology, legal and environment.

(P)olitical factors

The all four area like north America, Latin America, Asia pacific and Europe are free from political issues as company could not face any adversities in terms with the labour law, export traffics, trade barriers, tax policy etc. So the policy so the government issues and law not putting restriction

(E)conomic factors

As the corporate lobby shoe is utilizing the technique of cost leadership, so it become economical stable for the company, the factors like exchange rates, interest rate, and inflations rates, affects the company highly but the company have develop the successive tools for managing cost.

(S)ocial factor

As this factor reflectors on the positive side of company because it is creating some value oriented for its customers the CSR of corporate lobby shoe is making advance socializing for the company. The corporate lobby shoes have given the charity and join many clubs and society for societal aspects.

(T)echnology factors

This factor is crucial for modern touch in the corporate lobby shoe is holding the standardized and cost control tool, but the qualities of this never sacrifice. The company introduce private labelling technique as to maintain its cost in relevance with differentiating technique. The private labelling was done in Latin America and Asia as for benefiting this through business environment.

(E)nvironment factors

The surrounding in which company functioning is also important the etc should be focus as different continent would have the environment effects on foot ware so through this trend the corporate lobby shoe sells out or explore its footing products.

(L)egal factors

The corporate lobby shoe is following the rules and regulations of different government. As the policy of consumer law, discrimination law, antitrust law, etc. Are up to date different law like health and safety, employment and company legal law etc. are followed by the company in dealing with its contract to particular government.

Strategy which company acquire

The corporate lobby shoe company has become the cost leader as it had manage its cost very excellently and imply this strategy as the cost cutting would give low price to its customer and customer would satisfied highly through the low price with same quality it has reduce it shipping cost, and import barriers had cut the custom duty and miscellaneous cost reduce. The corporate lobby shoe had been differentiate from its competitors as it focus all the labour oriented market and middle class family can easily purchase the customize shoe with the low price and excellent styles fitting and superb quality.

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The analysis on the basis of the years

Year: 11

In the starting time of the year 11 the corporate lobby shoe plant capacity in relations to the total production was 6 million and mostly this production was target through the North America and Asia pacific areas. The production went higher for this two area but the company managers had for the Latin America and Europe Africa. The corporate lobby shoe plans its total production in particular operation and administration so the corporate lobby shoe had to sale target production like from North America it is 2 million and Asia pacific it is 4 million respectively.

The corporate lobby shoe has making the policy and plan to encourage the production as its implies the policy of free shipping advertisement in internet also the offered the model with attractive price there would be rebate on the model at delivery time granted and as well as customer on internet segment and whole segment at the end of the financial year of the company the profit as much as contrasting from the previous year but as the company holds the 5th position in the market for the industry 27, and through this it jump from credit rating B+ to A- with the financial progress in terms of money would be like net profit is and revenue______ is which are higher than the previous year.

The return on equity and credit rating are very much high as they are beyond the investor’s expectations as ROE the investor’s expectation is 15% but the 15.60% and in credit rating it goes form B+ TO A-

Year 12:

The overall intensions of the corporate lobby is to make the huge profits so they are planning to reduce their cost and covering the market, as they most probably cover the market in the whole sale segment but as they increase the private label sales from the year 12th their market shares fall from 8.50% to 8.10% respectively. The image rating also fall dramatically, as it was constant in the year 11. The stock price went high up to $2 per pair as in the year 11 the stock level was risen up to $34.

Probably the investor’s are not happy in this year because the ROE and EPS were low were falling under the expectation of investors as in year 12 it was 14.39% almost 0.51% lacking and EPS was $2.71 where investors expect the $2.95.

The pairs rejected in the brand were almost 7 to 8% approximately from 5300 pairs the rejection was 329 pairs. The company was not at all facing the inventory clearance in all the three segments with all the four areas.

The ware housing operating expenses for the European Africa was very much high and the company was holding a huge amount of production in those areas’ as it was $2.03 per pair in whole sale segment and 0.80 in the internet segment. The operating profits margins where good in the internet sectors as we see overall performance it was 16.9% to 23.3% is due to bearing the advertising cost an imply the low cost branded wear.

Year 13:

This was the fabulous year for the corporate lobby shoes, as the company had not made any changes but the result and decision implied on the year 12 had been very much useful and their reflection is shown as only 0.20% were the expenses which the company sacrifice for the CSR as in terms of money it is $1121. The market share of the company was high as in year 12 the company had increased the private labelling sales as through the high market is covered. The credit rating of the company went high which from A- to A but the image rate fall by 6%.

The value of stock price had huge increase as it shows how from the $36 was the expectation but in year 13 it went to the $64. As this year investors would also be very much happy the ROE and EPS has also shown the drastic changes as 15% was investor’s expectations in ROE but went high on 20.70% and EPS wet to $4.67 per share were as investor’s expectations was only 3.05%.

The price of internet segment were deduce up to 70 so that the market share would increase the company had reduce its quality cost as the TQM or Sig -Sigma expenditures went low. Only 0.33 for the current year. The cost of branded market segment also reduces to 26.85 as it affects the quality and got the S/R rating on 4 stars.

Year 14:

The company increase its production in the North America. By 300 pairs and maintained the good quality control, so the rejection pairs was only 4 to 5% of total production in branded. The company had introduced the green footwear materials which would increase the cost as this time company also does the charitable contributions, so the CSR would be more conscious to crab the costumer, it expenses on CSR raise highly which is $7264.

DUE TO HIGH EXPENDITURES the ROE and EPS falls as the NP reduces .The N.P. is $243(million) approximately. The manager decided to lower the price on internet segment from $ 70 per pair to $69 per pair. The warehousing expenses and other administrative expenses remains the same like for 17107(000) it had 3.65 per pair in ware house.

The exchange rate and the import tariff for the Europe and Africa had increased the cost highly so the return through segment was low. The manger decide no sale the private label brand shoe north America as the production and shipping cost in private label segment went too much high, this would result in the low N.P. The company declare the $0.10 dividend per share for its investors through the previous profits. The firm’s internet segment market share is decreasing as compared to whole sale market share for the year 14.

The Company’s liquidity position is quiet well secured as its net cash balance at the year end is 51,061 which is reasonably good and worthwhile. The company had decided to raise funds as to overcome from this expensive cost from the banks of $23,000(000).

Year 15

The mostly all the strategies and decisions remain the same as the above year but, there some changes occurs in figure only, as the N.P. went very much higher in the year 15 which was approximately 358 (millions) as well as the EPS was higher 5.80$ per share which was beyond the investors expectation.

In this year the manager decided only to the company to work in the internet sector segment where as the private label segments was removed by the firm the company through to concentrate on whole sale segments and internet market segment in those area would give the company makes highest revenue which is Asia pacific and north America. The stock price again had shown the dramatically change by 104$ per stock price and the expectation of investor was 42$ so this credit rating of the company was A+ but the image rating were not up to the mark. In this for the north America area which is the most profitable area for the company manager decide to increase the production of 500(000) pairs which would indirectly reduce the cost of operating and increase the revenue the overall warehousing cost reduce as if the overall 24,037(000)pair kept it had cost 3.29 per pair.

The manager decided to take a higher advertising cost in the whole sale segment as mostly 70% of production were from this sector.

The company had decreased the cash flow as its net balance of cash comes 47,307$(000) as by the firm and this raise the high profits. The managers also agree to raise there were investment done by the firm and this raise the high profits. The manager also agrees to raise their funds in the energy efficiency help to gain the profit over its cost. The forecast the demand in future was high 6 to 7% of the current year sold out.


As we see there were huge and effective decisions were taken by the company which helps to increase the profit, as holding the decisions regarding saving cost, plant implementation and increasing production would led to the high profits.


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