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Overview

Overview. As senior managers, you run an athletic footwear company that produces and markets shoes worldwide. Your management team will make the strategic decisions to produce, distribute, market, and sell shoes in a global market.

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Overview

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  1. Overview • As senior managers, you run an athletic footwear company that produces and markets shoes worldwide. • Your management team will make the strategic decisions to produce, distribute, market, and sell shoes in a global market. • You will compete head-to-head against the other companies in the class. • Your sales, costs, and profits are determined by comparing your decisions with the decisions of all the other teams in the class.

  2. World Markets The ‘World’ is divided into four regions Europe/Africa North America Asia/ Pacific South America Production, marketing, and sales can take place in any of the regions and shoes can be shipped between the regions. There are tariffs, shipping charges, and foreign exchange adjustments for shipments between regions

  3. Your Company • 10 year-old company • Public Corp; 10 million shares outstanding @ $30; B+ credit rating • Two existing factories; 2M pair/year in NA, 4M pair/year in A/P • Sales of 5.2M pairs worldwide, revenue of $238M, net earnings of $25M

  4. Decisions You and your co-managers will make decisions each period relating to • Factory locations and facilities (up to 6 decisions per plant) • Production (up to 10 decisions per plant) • Worker compensation and training (3 decisions per plant) • Distribution (up to 8 decisions each plant) • Pricing and marketing (up to 10 decisions in 4 geographic regions) • Bids to sign celebrities to endorse your company’s footwear (up to 3 decision entries per bid) • Financing of company operations (up to 8 decisions) • Corporate Social Responsibility Spending • Plus there is a screen for making annual sales forecasts and deciding whether to have inventory clearance sales

  5. How It Works Company Decisions Company Decisions Company Decisions Company Decisions Simulation Decisions Yearly Results Annual Reports

  6. How it Works Regional Market Market Share Market Share Branded Retail Sales Branded Internet Sales Private Label Sales Revenue Costs Adjustments Profits

  7. Market Share Determinants Demand: Expect steady long-term growth Price Mail-in Rebates Retail Sales: Style/Quality Rating Number of Models/Styles Advertising Celebrity Endorsements Retailer Network Retailer Support Timely Delivery Internet Sales: Price Models Shipping Charge Style/Quality Rating Advertising Celebrity Endorsements

  8. Private Label Sales Shoes produced by your company but sold under someone else’s name Must produce specifically for PL market Must meet minimum SQ Rating Contract awarded by retailer strictly on price

  9. Performance Measures Earnings Per Share Return On Equity Credit Rating Stock Price Image Rating Score each round is based on • Investor Expectation Standard • Best in Industry Standard

  10. NA Asia EU LA BL PL BL PL BL PL BL PL NA AS EU LA WWW Stores WWW WWW Stores WWW Stores Stores Retailers Support Celebrities Marketing Retailers Support Celebrities Marketing Retailers Support Celebrities Marketing Retailers Support Celebrities Marketing

  11. Production Decisions Location Capacity Upgrades Financing Wages Incentives Training Quantity Models Quality Control Materials Styling Features TQM/Six Sigma

  12. Distribution Decisions Shipping Delivery Time Retail Network Retail Support

  13. Marketing Decisions Private Label Internet Price Rebates Advertising Endorsements

  14. Financial Decisions Bonds Stocks Dividends

  15. NA Asia EU LA BL PL BL PL BL PL BL PL NA AS EU LA Strategy WWW Stores WWW WWW Stores WWW Stores Stores Retailers Support Celebrities Marketing Retailers Support Celebrities Marketing Retailers Support Celebrities Marketing Retailers Support Celebrities Marketing STRATEGY!! Sales Revenue STRATEGY!! STRATEGY!! Production Costs Distribution Costs Marketing Costs Financial Costs

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