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Bold Athletics Strategy Plan

Rockford University

Business Planning and Strategy

Spring 2020

Agenda

Strategic Vision & Mission

Highlights

Agenda

Competitive Strategy

Financial Strategy

Competition

Lessons Learned

Bold Athletics

MISSION & VISION

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

  • Slowly increase

  • Drop in Y19. Revenue not as high as expected

Return on Equity

  • Stable, though difficult to meet the industry average

  • Decrease in Y16 and Y17

  • Decrease in Y19

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

  • Volatile 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

Strategic Evolution

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

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

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

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