Individual AOL
Footwear Industry Report Overview
Key Company Performance Indices
Scoreboard Year 16 (by Company):
1. APEX
Investor Expectation Score: 115
Best-In-Industry Score: 92
Weighted Average Score: 104
Change from Year 15: +5
1. C Cloudfoam Shoes
Investor Expectation Score: 116
Best-In-Industry Score: 91
Weighted Average Score: 104
Change from Year 15: +13
1. Fast and Furious Foo
Investor Expectation Score: 115
Best-In-Industry Score: 93
Weighted Average Score: 104
Change from Year 15: +43
4. Davance
Investor Expectation Score: 108
Best-In-Industry Score: 76
Weighted Average Score: 92
Change from Year 15: +12
5. Bolt Shoes
Investor Expectation Score: 85
Best-In-Industry Score: 60
Weighted Average Score: 73
Change from Year 15: +11
6. Everyday Stride
Investor Expectation Score: 23
Best-In-Industry Score: 20
Weighted Average Score: 22
Change from Year 15: -21
Game-To-Date Scoreboard (Year 16):
Scoreboard Overview:
1. APEX
Investor Expectation Score: 112
Best-In-Industry Score: 96
Weighted Average Score: 104
Bonus Points: 1
Overall Score: 105
2. C Cloudfoam Shoes
Investor Expectation Score: 105
Best-In-Industry Score: 90
Weighted Average Score: 98
Bonus Points: 4
Overall Score: 102
3. Fast and Furious Foo
Investor Expectation Score: 106
Best-In-Industry Score: 87
Weighted Average Score: 97
Bonus Points: 4
Overall Score: 101
4. Davance
Investor Expectation Score: 99
Best-In-Industry Score: 79
Weighted Average Score: 89
Bonus Points: 2
Overall Score: 91
5. Bolt Shoes
Investor Expectation Score: 87
Best-In-Industry Score: 71
Weighted Average Score: 79
Bonus Points: 2
Overall Score: 81
6. Everyday Stride
Investor Expectation Score: 36
Best-In-Industry Score: 31
Weighted Average Score: 34
Bonus Points: 2
Overall Score: 36
Definitions of Critical Performance Scores
Investor Expectation Score (I.E.):
Ranges from 0 to 120. Achieves 120 if all targets are exceeded by 40% or more.
Targets established by investors and company boards based on key scoring measures.
Best-In-Industry Score (B-I-I):
Measures company performance against the best performer in each scoring measure, ranging from 0 to 100.
A score of 100 indicates the company is the best performer across all measures.
Weighted Average Score:
Combination of I.E. and B-I-I scores with a 50%-50% weighting dictated by the course instructor.
Detailed Year 16 Earnings Per Share Scores
Scoring Breakdown per Company:
Company A:
I.E. Score (2016): 24
B-I-I Score: 18
Year 16 Score: 22
Company B:
I.E. Score: 20
B-I-I Score: 10
Year 16 Score: 20
Company C:
I.E. Score: 24
B-I-I Score: 16
Year 16 Score: 18
Company D:
I.E. Score: 24
B-I-I Score: 14
Year 16 Score: 19
Company E:
I.E. Score: 0
B-I-I Score: 0
Year 16 Score: 5
Company F:
I.E. Score: 24
B-I-I Score: 20
Year 16 Score: 19
Return on Equity (ROE) Scores Year 16
Scoring Breakdown:
Company A:
I.E. Score: 18.9
B-I-I Score: 23.7
Year 16 Score: 25.8
Company B:
I.E. Score: 21.0
B-I-I Score: 29.5
Year 16 Score: 19.2
Company C:
I.E. Score: 13.1
B-I-I Score: 15.7
Year 16 Score: 21.1
Company D:
I.E. Score: 15.2
B-I-I Score: 17.3
Year 16 Score: 17.7
Company E:
I.E. Score: 11.9
B-I-I Score: 15.5
Year 16 Score: 6.7
Company F:
I.E. Score: 20.9
B-I-I Score: 19.7
Year 16 Score: 19.0
Stock Price Scores Year 16
Company Breakdown:
Company A:
I.E. Score: 23.81
B-I-I Score: 62.31
Year 16 Score: 24
Company B:
I.E. Score: 30.03
B-I-I Score: 81.86
Year 16 Score: 10
Company C:
I.E. Score: 12.66
B-I-I Score: 14.80
Year 16 Score: 24
Company D:
I.E. Score: 14.30
B-I-I Score: 33.52
Year 16 Score: 22
Company E:
I.E. Score: 11.99
B-I-I Score: 13.60
Year 16 Score: 1
Company F:
I.E. Score: 27.13
B-I-I Score: 23.86
Year 16 Score: 23
Credit Rating and Image Rating Scores
Credit Rating Year 16:
Company A: A–
Company B: A–
Company C: B
Company D: A–
Company E: B
Company F: A–
Image Rating Year 16:
Company A: 76
Company B: 68
Company C: 59
Company D: 70
Company E: 72
Company F: 66
Cash Outlays for Corporate Social Responsibility and Citizenship
Yearly Expenditures:
Year 11:
High: $10,404
Average: $3,207
Low: $0
Year 12:
High: $10,505
Average: $4,949
Low: $0
Year 16:
High: $16,337
Average: $5,305
Low: $0
Bonus Point Awards Year 16
Bull's Eye Award: Accurately forecasted performance metrics subject to specific variances:
Company A:
Revenues within ±5%: 8.7%
EPS within ±10¢: 16.1%
Image Rating: 3 pts
Company B:
Revenues within ±5%: 30.1%
EPS within ±10¢: 67.1%
Image Rating: 9 pts
Company C:
Revenues within ±5%: 7.2%
EPS within ±10¢: 24.8%
Image Rating: 2 pts
Company D:
Revenues within ±5%: 4.8%
EPS within ±10¢: 10.2%
Image Rating: 2 pts
Company E:
Revenues within ±5%: 0.2%
EPS within ±10¢: -1.6%
Image Rating: 1 pt
Industry Trends Overview
Materials Prices:
Standard Base Price: $6.00 (materials prices in Year 16: $5.77)
Superior Base Price: $12.00 (materials prices in Year 16: $15.32)
Industry-wide Materials Usage: 52.6%
Production Capacity Utilization: Above 110% leading to material price increases of 2.5%.
Global Demand and Supply
Projected Growth Rates:
Global demand for years 11-15: 7%-9% annually, slowing to 5%-7% during years 16-20.
Branded Demand Forecast by Region:
Year 17 for North America: 19,957
Year 18 for North America: 20,755
Private-Label Demand Forecast by Region:
Year 17 for North America: 2,394
Year 18 for North America: 2,610
Financial Performance Summary
Year 16 Income Statements (in $000s):
Company A:
Total Net Sales Revenues: 902,420
Net Profit: 167,879
Company B:
Total Net Sales Revenues: 729,449
Net Profit: 106,793
Company C:
Total Net Sales Revenues: 1,042,340
Net Profit: 156,141
Company D:
Total Net Sales Revenues: 669,891
Net Profit: 136,886
Company E:
Total Net Sales Revenues: 135,832
Net Profit: -48,861
Company F:
Total Net Sales Revenues: 925,163
Net Profit: 194,428
Performance Benchmarks
Labor Statistics and Productivity Metrics:
Regular compensation, workforce productivity, and production labor cost across regions.
North America: Total Regular Compensation: $37,539, Workforce Productivity: 4,889 pairs/worker/year.
Asia-Pacific: Total Regular Compensation: $32,008, Workforce Productivity: 4,299 pairs/worker/year.
Celebrity Endorsements Year 16
Company Spotlight:
Davance has signed major endorsements with Lady HaHa, Billy Eyelash, and Bronko Mars.
Fast and Furious Foo prominent with Chef Curry.
Pricing Trends and S/Q Ratings
Overview of internet prices, wholesale prices, and S/Q ratings over the years, illustrating market adjustments and competitive standing.
Pricing for 2020 anticipated to maintain or exceed current trends, with S/Q Ratings improving year-on-year as consumer preferences evolve.
Company C: Strategy to Increase Return on Sales (ROS) Director's Briefing
1. Identification of ROS Problem (Year 16 Data)
ROS Calculation:
Company C: Net Profit k / Total Net Sales Revenues k = approximately %
Comparative ROS (Year 16):
Company A: %
Company B: %
Company D: %
Company F: %
Problem Statement: Despite having the highest Total Net Sales Revenues (k) among all companies, Company C's Net Profit (k) is not proportionally the highest, resulting in an ROS of % that is significantly lower than leading competitors like Company F (%), Company D (%), and Company A (%). This indicates an issue with converting revenue into profit, suggesting that our cost structure relative to sales, or our pricing strategy, is suboptimal compared to industry bests.
2. Analysis of Company Situation for Possible Directions (Year 16 Data)
Profitability Metrics:
Earnings Per Share (EPS) - Best-In-Industry Score (B-I-I): Company C's B-I-I Score for EPS is 16, which is lower than Company A (18), Company D (14), and Company F (20). This suggests that our earnings generation efficiency is not on par with top performers.
Return on Equity (ROE) - Investor Expectation (I.E.) and B-I-I Scores: Company C has I.E. Score 13.1 and B-I-I Score 15.7, both among the lowest in the industry (excluding Company E). This indicates an inefficient utilization of equity to generate profits, reinforcing the core ROS problem.
Brand and Market Standing:
Image Rating: Company C's Image Rating is 59, the lowest among all reported companies. A weak brand image can limit pricing power, reduce sales effectiveness, and hinder customer loyalty.
Credit Rating: Company C has a 'B' credit rating, which is lower than most competitors (e.g., A, B, D, F all have A-). A lower credit rating typically incurs higher borrowing costs, directly impacting net profit.
Celebrity Endorsements: Company C is notably absent from the list of companies utilizing celebrity endorsements, unlike key competitors Davance and Fast and Furious Foo. This could contribute to lower brand visibility and perceived market appeal.
Forecasting Accuracy (Bull's Eye Award): Company C's inability to meet revenue (7.2% variance) and EPS (% variance) forecasts suggests deficiencies in strategic planning and operational control that can lead to inefficiencies affecting profit.
Cost Structure Pressures:
Material Prices: The 'Industry Trends Overview' shows that 'Superior Base Price' materials increased from a base of to in Year 16, and overall material prices are projected to rise due to high production capacity utilization. If Company C heavily relies on these materials, it could be facing significant cost pressures.
3. Proposed Solution: Strategic Brand Revitalization and Premium Positioning
Specific Solution: Launch a comprehensive three-year initiative to enhance brand image and S/Q (Superior/Quality) ratings, supported by strategic celebrity endorsements and increased Corporate Social Responsibility (CSR) investments, to enable premium pricing and more profitable sales growth.
Explanation:
Company C's core problem lies in not translating its impressive sales volume into a competitive net profit margin. The lowest-in-industry Image Rating (59) and the absence of celebrity endorsements are crucial factors contributing to this, limiting our ability to command higher prices or efficiently drive sales. A 'B' credit rating further burdens us with higher financing costs.
This proposed solution directly targets these issues:
Elevate Brand Image and S/Q Ratings:
Targeted Marketing: Invest in sophisticated marketing campaigns over the next three years that not only highlight the quality and innovation of our existing products but also emphasize our commitment to sustainability and ethical practices (tying into CSR). The goal is to aggressively improve our Image Rating from 59 to at least match, if not exceed, the industry average (e.g., Company A at 76, D at 70). As 'Pricing Trends and S/Q Ratings' indicate S/Q improvements industry-wide, we must also focus R&D on consistently improving our product S/Q (Superior/Quality) ratings to differentiate and justify premium pricing.
Strategic Celebrity Endorsements:
Following the successful strategies of competitors like Davance and Fast and Furious Foo, Company C will secure one or more high-profile, globally recognized celebrity endorsements that align with our brand values and target demographic. This will significantly boost brand visibility, perceived value, and market appeal, driving both increased sales volume and the ability to charge premium prices.
Increase Corporate Social Responsibility (CSR) Investments:
While specific CSR outlays for Company C aren't detailed, the average in Year 16 was k, with a high of k. We will strategically increase our CSR expenditures, focusing on initiatives that resonate with our consumer base, such as eco-friendly manufacturing or community development. Higher CSR engagement directly contributes to an improved Image Rating (evidenced by 'Bull's Eye Award' bonus points for Image Rating), enhancing brand loyalty and public perception.
How this solution will increase ROS:
Higher Revenues through Premium Pricing: A stronger brand image, verifiable high S/Q products, and celebrity endorsement appeal will enable Company C to move away from volume-driven sales requiring competitive pricing to a strategy allowing for premium pricing. This will increase the average revenue per unit sold, directly boosting Total Net Sales Revenues and, critically, net profit for each sale.
Improved Sales Efficiency: Enhanced brand recognition means more efficient marketing spend, as word-of-mouth and brand loyalty generate organic growth.
Reduced Cost of Capital (Long-term): As profitability and financial health improve due to higher margins, Company C can work towards upgrading its credit rating from 'B' to 'A-', which will reduce borrowing costs and further contribute to net profit.
Enhanced Demand: The improved brand perception will drive higher demand for our products, capturing a larger share of the projected global demand growth (5%-7% annually for years 16-20). This growth, combined with premium pricing, will significantly increase the numerator (Net Profit) of the ROS equation relative to the denominator (Total Net Sales Revenues).