Bold Athletics Strategy Plan
Rockford University
Business Planning and Strategy
Spring 2020
Agenda
Strategic Vision & Mission
Agenda
Bold Athletics
Bold Athletics
Desire to provide the largest variety at the most reasonable price
Wide range of affordable and functional shoes
Providing the most available shoe globally
Highlights
- Constant increase in Net Revenue from 2012
- Net Revenue 2020: $ 1 320 489
Strategy
Highlights
Earnings per Share
Earning per Share
- Drop in Y19. Revenue not as high as expected
Return on Equity
- Stable, though difficult to meet the industry average
Stock Price
- Decrease on Y17 and Y19 with a sharp increase in Y20
Stock Price
Credit Rating
- Drop in credit rating due to long-term loan. Loan $ 175 millions.
- Increasing credit rating each year from Y12 until Y14
- Strong A+ credit rating since Y16
Credit Rating
Image Rating
- Vision, mission and strategy did not align with a high image rating
- More focus on availability of numerous models, expansion and price-accessibility for customers.
Image Rating
Branded Global Unit Sales
- Moved to free shipping on internet segment
Branded Global unit sales
Competitive Strategy
Competitive Strategy
Strategy
- Held firm to our initial strategy
- Low cost shoes across all regions
- Giving back
- Hold a firm market share in all regions
- FY 20
- Best market share: LA
- Internet 27.6%
- Wholesale 27.2%
- Worst market share: AP
- Internet 16.8%
- Wholesale 15.8%
Private Label
- Strategy was not to pursue private label
- Lower COGS and lower wholesale/internet prices
- Lower SQ ratings
- Used full capacity plus overtime to support internet and wholesale demand
Production
- Produce at or above 100% capacity every year
- Base wages
- 1% pay increase each year
- Met or exceeded all min. wage requirements in all regions
- Exceeded industry average for total compensation
- incentive pay
- fringe benefits
- Workforce productivity (pairs/worker/year)
- Total production labor cost ($/pair after rejects)
- Total production cost ($/pair produced)
Financial Strategy
- Dividend payout started in year 16
- By year 21, dividend payout to $1.20
- Year 11 took 10-year $175 million loan at 7.3%
- Year 15 took 10-year $180 million loan at 5.8%
- By year 22, will bring shares of stock outstanding to 16.5 million
- EPS of $20 by year 23
- ROE of at least $30 by 23
Competition
- Dream Chasers Footwear and Generations Shoe Co. (Price and quality)
- Between all regions and wholesale/internet segments
- Did not enter private label segment
- CONTI and Heelios (Celebrity endorsements)
- Contract offers almost doubled
Plans
- Continue heavy investment in Latin America region
- Production capacity and prioritize celebrity negotiations
- Increase search engine advertising in all regions to $17 million
- Increase brand advertising to $20 million in all regions
- Start Six-Sigma Quality Program
- Decrease reject rate and increase productivity rate
- Start at $0.25 per shoe and increase by $0.25 per shoe per facility each year for the next 5 years
- Continue focusing on celebrity endorsements in all regions
Lessons Learned
- Importance of forecasting
- Recognizing trends within competition and computing potential averages that match those trends
- Attention to exchange rates and tariffs
- Slowly increase stocks issued and stock repurchasing overtime
- Should have invested in Latin America production much sooner
- Should have increased price per shoe earlier to better control and meet demand
Lessons Learned