Business Strategy for Footsole

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This document provides a comprehensive analysis of the business strategy for Footsole in the global footwear market. It includes information on major players, vision statement, mission statement, corporate objectives, situational analysis, internal analysis, and more.

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Running head: BUSINENESS STRATEGY
Business Strategy
-Foot Sole
Name of the Student
Name of the University
Author Note

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1BUSINENESS STRATEGY
Contents
1 Introduction.............................................................................................................................4
Global Footwear Market........................................................................................................4
Major players in the market...................................................................................................4
2 Vision Statement, Mission Statement, Corporate Objectives of Footsole..............................5
Vision Statement....................................................................................................................5
Mission Statement..................................................................................................................6
Corporate Objectives..............................................................................................................6
3 Situational Analysis................................................................................................................7
-Macroeconomic Analysis and environment scanning..........................................................7
PESTLE..............................................................................................................................8
Business Life Cycle............................................................................................................8
Exchange Rates..................................................................................................................9
Manufacturing Locations...................................................................................................9
-Industry and Sector Analysis:.............................................................................................10
M.E. Porter’s Five Forces & Generic Strategy................................................................10
Strategic Groups...............................................................................................................11
..............................................................................................................................................11
..............................................................................................................................................11
..............................................................................................................................................11
..............................................................................................................................................11
..............................................................................................................................................11
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2BUSINENESS STRATEGY
..............................................................................................................................................11
4 Internal Analysis...................................................................................................................12
McKinsey 7’s...................................................................................................................12
Johnson’s Cultural Web...................................................................................................13
Handy’s Organisational Culture.......................................................................................13
Competitive Advantage....................................................................................................14
Generic Strategy...............................................................................................................14
Value Chain......................................................................................................................15
Operations Management..................................................................................................15
Strategic Drift...................................................................................................................15
Kaplan and Norton’s Balanced Scorecard.......................................................................16
-SWOT Analysis..................................................................................................................16
Reflection for each year of playing the game......................................................................17
5 Implementation of the Marketing Strategy...........................................................................18
-P’s - Product, Place, Promotion, Price, People, Processes, Physical evidence...................18
-Design, Style and Quality issues; TQM..............................................................................18
-Celebrity endorsement: brand management.......................................................................19
6 Performance Analysis of company operations......................................................................19
-EPS growth of at least 7% annually year 11-15 and at least 5% annually thereafter.........19
-A return on average equity investment (ROE) of 15% or more annually..........................19
-A B+ or higher credit rating................................................................................................19
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3BUSINENESS STRATEGY
-An “image rating” of 70 or higher......................................................................................19
-Stock price gains averaging about 7% annually year 11-15 and 5% annually thereafter...20
-Balanced Scorecard.............................................................................................................20
7 Corporate Social Responsibility and Citizenship..................................................................20
-CSR.................................................................................................................................21
-Work Compensation.......................................................................................................21
-Training...........................................................................................................................22
8. Recommendations for future strategy- Milestones and leadership goals.............................22
Changes required – change management approach strategic direction, alignment and
developments....................................................................................................................22
Company culture – changes required...............................................................................23
Corporate Social Responsibility and Citizenship.............................................................23
9 Conclusion.............................................................................................................................23
References:...............................................................................................................................24

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4BUSINENESS STRATEGY
1 Introduction
Global Footwear Market
The global footwear market comprises of a wide range of footwear products such as athletic
footwear, non-athletic footwear, professional footwear and casual footwear. The types of
materials plastic, rubber, synthetic, leather and cloth based. The industry is valued to be
worth 224.5 billion USD as of 2017 and has a fast growth rate at 3.1% per annum and y 2026
it is expected to double its revenue. The global footwear market therefore shows an
incremental growth with approximately 34.23 billion USD growth in revenue every year
(Müller 2017; Sellitto et al. 2015). According to Moktadir et al. (2018), the market share of
the global footwear market will reach 320.44 billion USD by 2023. The significant growth of
the footwear market is supported by product innovations and product differentiation which
have led to premuimization of the products and further market capture. From professional to
casual wears the footwear market has shown its prominence and market capture thereby
leading to its growth (Angela 2019).
Major players in the market
The global footwear market is significantly fragmented with a large number of market
players that occupy fragments of the market. The global footwear market has several
important players such as:
Nike Inc: Nike is an American footwear Company and is considered one of the largest
supplier of athletic shoes as well as sports apparels.
Adidas AG: Adidas is a German footwear company that specializes in shoes especially
professional sporting shoes and is one of the largest manufacturers of sportswear in Europe
and Second largest in the world.
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5BUSINENESS STRATEGY
Puma: Puma is a German footwear company that specializes in casual footwear and sports
accessories and is the third largest manufacturer of sportswear in the world.
Geox: GEOX is an Italian shoe manufacturing company that specializes in breathable and
waterproof fabric and is the sponsor of the National football League.
Converse: Converse is an American shoe company that specializes in skating shoes and
lifestyle brand shoes. IT has been a subsidiary of Nike since 2003 and its products like Chuck
Taylor, All-Star have significant market capture and branch loyalty.
Crocs Retails: Crocs is an American footwear company that produces foam clog shoes and
have a significant popularity in the market with a significant market capture for its unique
product design and durability.
Reebok: Reebok is an English footwear company and a subsidiary of Adidas and focus on
fitness and sports footwear and is also a significant market player in global footwear industry.
(Müller 2017)
2 Vision Statement, Mission Statement, Corporate Objectives of Footsole
Vision Statement
To be the best company in footwear in the world in terms of product quality and market
recognition an provide safe and ergonomic footwear for the customers. Our vision is to
deliver to a wide range of customer needs including professional as well as casual needs. We
realize that footwear has a diverse set of purposes, each requiring specifications in terms of
the product design, quality, length of use, durability and materials. Our vision therefore is to
establish ourselves as the leaders in global footwear market by providing footwear solutions
that can engage every customer segments and every type of customer needs.
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6BUSINENESS STRATEGY
Mission Statement
The mission of Footsole is to provide products and services that are not only of superior
quality and durability but also serves to maintain the health of the customers’ feet. We thrive
to develop pour products continually through rigorous research and development and
implementing innovation and creativity for new product designs. Our mission is to drive
further growth in the industry by developing positive relationships with the customer and the
society and showing corporate social responsibility by giving back some of the resources of
the organization to support social development and achieve environmental sustainability. The
company therefore has the mission of both becoming a market leader as well as showing
responsiveness and mindfulness towards the organization’s social duties.
Corporate Objectives
Following are the outlined corporate objectives of Footsole:
Increasing the values for shareholders
Increasing earnings on each share
Increasing organizational revenue
Managing operational costs
Maintaining effective financial leverages
Support effective bond rating
Maintaining a balanced budget
Focusing on financial sustainability
Maintaining business profitability
Diversification and growth of revenue streams
Offering best values for product cost
Increase the range of products

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7BUSINENESS STRATEGY
Develop reliability in the products and services
Focus on crss selling of products
Increase market share
Facilitate increase purchase from same customers
Develop partnerships with customers for product solutions
Offering best customer service
Developing understanding on customer needs
Maintaining innovation in products and services
Maintaining effective differentiation of products
Investing in innovation
(Ansoff et al. 2018; Dess et al. 2019)
3 Situational Analysis
The situation analysis helps an organization to effectively understand its organizational and
environmental situation, gather intelligence and improve the process of marketing planning.
Within telescopic observation strategic framework, the Step 1 of the framework involves a
situational analysis in order to determine the current situation under which the organization is
operating (Blythe and Martin 2019). Outlined below is the situational analysis as a part of the
first step of Telescopic observation of strategic framework.
-Macroeconomic Analysis and environment scanning
The macro analysis and environment scanning helps to understand the external forces that
affect the organization, Footsole. Outlined below is the macro analysis of the global footwear
market and environment scanning for Footsole:
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PESTLE
Political: Political lobbies and bodies can support Footsole in its market success if it
can effectively gain their confidence and support.
Economical: The global footwear market has a strong economic momentum and
capture which is a significant opportunity for Footsole.
Social: The modern society is more willing to invest on quality foot products for their
day to day as well as special needs which is an opportunity for the company.
Technological: Technological advances in product design and manufacture is a key
driver towards market growth and product differentiation and is also a key
opportunity.
Legal: Legal factors needs to be maintained regarding manufacturing, marketing,
sales and distribution of products which can be both challenge and barrier for the
company.
Environmental: Environmental awareness and focus on environmental sensitivity and
sustainability through better product design and packaging can be both a challenge as
well as an opportunity for the business.
(Gheibi et al. 2018)
Business Life Cycle
Launch phase: This is the first phase in the lifecycle in which the company launches
the new footwear in the market.
Growth phase: In this phase the usage of the product and market penetration increase
leading to growth in company profits and performance.
Shakeout phase: This is the third phase where the rate increase in the profitability and
market growth starts to decline. In this phase the costs of the business meets the
profit.
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Maturity phase: This is the phase where the business is at its optimum stage and is no
longer growing, having known to have reached its maturity level
Decline phase: This is the final phase where the sales and revenues starts to decline
and the profits of the business no longer support the costs.
(Koschmider et al. 2018)
Figure: Business Life Cycle Stages. Source: Koschmider et al. 2018
The Footsole company is current is currently at the launch phase of the business as it plans to
launch a multitude of footwear products to boom its market share.
Exchange Rates
The exchange rate of currencies between some major economies is outlined below:
AUD-USD= 0.7-1.41
AUD- EURO=0.62-1.58
AUD- GBP= 0.54-1.84
Manufacturing Locations
Footsole is a global footwear company that has its manufacturing units spread across the
following locations:

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10BUSINENESS STRATEGY
Sydney Australia,
Munich, Germany
Florence, Italy
Madrid, Spain
New York, USA
Dhaka, Bangladesh
London, England
-Industry and Sector Analysis:
M.E. Porter’s Five Forces & Generic Strategy
Threat of new entries: The threats of new participants entering into the global
footwear market are high because of the significant growth the market is still
experiencing.
Threat of substitutes: because of the high competition it is easy for footwear
companies to lose their market position and be substituted by a rival.
Bargaining power of buyers: This is an important factor that can influence Footsole as
it can influence brand loyalty as well as company’s market share
Bargaining power of suppliers: This can significantly affect the cost of raw materials
and the finished goods and thereby the pricing of the products.
Rivalry among existing competitors: The high level of competition from market
leaders such as Nike, Puma, and Adidas is another significant challenge that the
organization needs to deal with.
(Gerard 2018)
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Figure: Porter’s Five Forces Model. Source: Gerard 2018
Strategic Groups
The organization aims to focus on the aspects of high added value and high market coverage
thereby positioning itself amongst the leaders in the global footwear market.
Footsole
Nike
Converse
Adidas
High
LowLow
High
Added Value
Market Coverage
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Figure: Market Strategy Map for Footsole. Source: Self work
4 Internal Analysis
The internal analysis can be represent the second step of the Telescopic Observations
Strategic framework that can help an organization to evaluate its internal environment and
develop better understanding of its organization’s competencies and capabilities (Bashir and
Verma 2019). This analysis/evaluation can be done using various approaches as given below:
McKinsey 7’s
Structure: Global business structure, corporate structure
Systems: Total quality control, continuous product development
Style: Creativity and Innovation, modernistic
Staffs: Skilled, competent and culturally diverse
Skills: Technical skills, inter personal skills, design thinking
Strategy: Effective pricing, product innovation and excellence
Shared value: Ethics, customer satisfaction
(Cox et al. 2018)
Figure: 7s Model. Source: Cox et al. 2018

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13BUSINENESS STRATEGY
Johnson’s Cultural Web
Stories: Success, growth and professional competency
Symbols: Equality and opportunity
Power structures: Hierarchical
Organizational structures: Top to bottom
Control systems: Centralized
Rituals and routines: Celebration of diversity, success of co-workers
Paradigm: Expanding with market trends
(Cooper et al. 2019)
Figure: Cultural Web. Source: Cooper et al. 2019
Handy’s Organisational Culture
Handy’s Organizational culture differentiates organizational culture into four groups based
the rate of change and uniqueness or complexity of the working process. These groups
include power, task, role and person each having different gradient of the rate of change and
work process uniqueness/complexity. Footsole has the culture of “Task” category in which
the organization is high paced and has unique production processes (Nightingale 2018).
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Figure: Handys Four Classes of Culture. Source: Nightingale 2018
Figure: Handy’s Task Culture which is followed in Footsole. Source: Nightingale 2018
Competitive Advantage
The company aims to utilize both differentiation and cost leadership to gain competitive
advantage and increase its competitive scope in the market. This can allow the company to
address a broad target market and thereby achieve better market success.
Generic Strategy
Using cost leadership: Using this the organization aims to provide the products at
better costs and maintaining the production costs of goods.
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Differentiation: This can allow the organization to create a wider diversity in the
products through product differentiating and also facilitate the implementation of
innovative ideas.
Product focus: This can ensure maintenance of product quality and standards.
Customer service: Through this approach the company can maintain a positive
relation with the customers and develop brand loyalty.
Value Chain
Using Porter’s Value chain model the organization can design and direct its primary activities
(Such as inbound logistics, operations, out bound logistics, marketing sales, and service) and
support activities (such as firm infrastructure, procurement, technology and human resource
management) towards organizational profitability (Ferdous and Ikeda 2018).
Figure: Value Chain Model. Source: Ferdous and Ikeda 2018
Operations Management
The operations management of Footsole would include managing an controlling the resources
, strategies, plans, monitoring, profitability, control processes, deliverable and the
input/output of the business.
Strategic Drift
The readiness for strategic drift can be incorporated within the organization through
supporting diversification of the product range to overcome gradual deterioration of

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16BUSINENESS STRATEGY
competitive advantage. Moreover, implementing creative and innovative ideas to design new
products can further protect the organization from strategic drift.
Kaplan and Norton’s Balanced Scorecard
The Balanced scorecard model by Kaplan and Norton can help Footsole to measure its
performance using financial and non-financial data which can include the following
categories:
Financial: The Company has strong financial strength and profit margin that can
support its success.
Internal processes: The inter processes are clear and well-defined with strong
coordination and team work.
Organizational capacity: The organization has strong creative and innovative
capacities as well as negotiating skills.
Customer: The Company has a strong customer base and strong approaches to
maintain positive relationships with the customers.
Figure: Balanced Scorecard Components. Source: Akkermans and Van Oorschot 2018
-SWOT Analysis
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Reflection for each year of playing the game
The company has a gradual financial increase from 432646 as of 2010 to 647202 as of 2014.
However the performances dropped in 2015-16 reaching to 401,024 by the end of 2016. The
brand production also saw an increase by the year 2014 at 5104 and the brand operations
achieved a higher rating during 2013 at 5.3. The reduction in revenues was also associated
with a reduced brand production of 5,044 by 2016 and a reduce in brand operations rating at
4.0 by 2016.
Strengths
1. Financial strengths
2. Customer loyalty
3. Brand loyalty
4. Experince
Threats
1. Competition
2. Changing market
3. Financial instability
4. Change in Government policies
Weaknesses
1. Resistance to change
2. Poor communication
3. Employee retention
4. Interpersonal conflicts
Opportunities
1. Focus on prouct quality
2. Customner service
3. Innovation and creativity
4. Technological advances
SWOT
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Figure: Table showing financial performance for FootSole between 2010 and 2016. Source:
Self work
5 Implementation of the Marketing Strategy
-P’s - Product, Place, Promotion, Price, People, Processes, Physical evidence
Product: Quality excellence, durable and comfortable
Place: Globally (urban and semi urban areas)
Promotion: Advertisements, product discounts, introductory offers
Price: Psychological pricing strategy, pull strategy
People: athletes, professionals, students, elderly, children, travellers
Processes: quality management, research and design
Physical Evidence: market growth, product quality
Figure: 7P Model of Marketing Strategy. Source: Mirzaei et al. 2018
-Design, Style and Quality issues; TQM
Design: Ergonomic, sustainable, healthy, comfortable and durable
Style: modern and trendy, aesthetically pleasing
Quality Issues: Quality of soles, waterproofing and durability

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TQM: Process thinking, customer satisfaction, total employee commitment, strategic
thinking, integrated system, decision based on facts, continuous improvement and
effective communications
-Celebrity endorsement: brand management
Celebrity Endorsement: Endorsement given to athletes, native entertainers and movie
stars, native environmentalists and social activists, children from top schools,
especially abled athletes, women figures.
Brand Management: brand ambassadors, brand spokesperson, brand representative,
brand leadership, woman representations, child representation
6 Performance Analysis of company operations
-EPS growth of at least 7% annually year 11-15 and at least 5% annually thereafter
This aspect and ensure better economic prospects and long term sustainability for the
business. The 7% initial growth can signify initial market success for the company.
-A return on average equity investment (ROE) of 15% or more annually
This performance can allow the business to achieve the breakeven point within 10 years and
thereby ensure continued success and development for the business. The return on investment
can also help the company to gain more investors.
-A B+ or higher credit rating
A credit rating of A or B+ can help the business to gain trust of more creditors and thereby
improve the financial strength and business capacity. A higher credit rating can also create a
positive brand image for the company among the investors and stakeholders.
-An “image rating” of 70 or higher
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An image rating of 70 and higher can ensure a good reputation for the company and represent
a strong brand image within the market. This can also attract customer loyalty and repeated
purchase.
-Stock price gains averaging about 7% annually year 11-15 and 5% annually thereafter
This increase in stock price can help Footsole to gain better traction in the market and support
further growth and diversification of business in the future.
-Balanced Scorecard
The diagram below represents the balanced score card that can be used by Footsole:
Figure: Balanced Scorecard for Footsole. Source: Self work
7 Corporate Social Responsibility and Citizenship
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-CSR
The business can focus on the development of its brand image through CSR activities such as
environmental activities, social development activities, fair business activates, addressing
customers concerns, using green operation principles, focus on sustainability and sustainable
development and women and child empowerment and welfare. Footsole can also engage in
various activities such as:
Developing with various NGOs
Funding for social causes
Participating in environmental causes
Conducting workshops and fellowship programs
Increasing awareness about social issues
Funding schools for lower income group children
Supporting women health and empowerment programs
Supporting employability among lower income group
Funding health care and hospitals
(Crowther and Seifi 2018)
-Work Compensation
The work compensations can include the salaries, bonuses, increments, performance
appraisals and incentives earned by the employees of Footsole. Furthermore the
compensation should follow the following aspects:
Saving money on the compensation insurance of employees
Following best practices in the claims management for worker’s compensation
Focusing on workplace safety
Having proper procedures to prevent and address incidents of injury

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22BUSINENESS STRATEGY
Having strong incentive programs
Using return to work options
Following the state and national legislatures on workers’ compensation
Ensuring effective classification of employees
Offering safety rewards
(Sellitto et al. 2015)
-Training
Training can be provided in the form of mentorship and on job training programs as well as
classroom based trainings and seminars to develop the competencies of employees. The
training modules should focus on the key needs of the employees towards professional as
well as personal development which can improve their overall competencies and capacity.
Footsole can focus on the providence of raining at various levels through multiple approaches
to biter support the learning process of the employees (Moktadir et al. 2018).
8. Recommendations for future strategy- Milestones and leadership goals
Changes required – change management approach strategic direction, alignment and
developments
The organization requires significant changes within its management approach to focus more
on agility and optimized performance. It should take the strategic direction of differentiating
its products to capture a wider market and align its manufacturing and designing process to
the need of a diverse set of customers. The change management approach should also focus
on the overcoming of resistance to change by clear communications and training that can
support implementation of organizational change.
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Company culture – changes required
Within the organizational culture, Footsole needs an increase in diversity to further increase
inclusiveness in the workplace. This would also require the development of respectful and
professional culture that respects diversity within its workgroup. The culture should also have
effective conflict management approaches through which it can reduce interpersonal conflict
within the organization. Moreover, the organizational culture also has to adapt to a more
flexible and adaptable approach through which it can address changes in market demands.
Corporate Social Responsibility and Citizenship
The organization needs to increase its funding within the CSR programs can increase its
outreach to various non-profit organizations and governmental bodies that focuses on the
same aspects that are identified within the organizations CSR programs. The organization
start its operations in many other Third world Countries as an approach to increase
employment and give its CSR program a new field to work on.
(Ansoff et al. 2018)
9 Conclusion
The reflective report on Footsole helped to understand the major market trends and market
players within the global footwear market. Various tools and frameworks were used to
perform a macro environmental analysis and an internal analysis which provide a better
understanding of the feasibility of the organization. Different management models, concepts
and ideas were also utilized to analyze the strategic approach utilized by the company to
better understand its efficiency and effectiveness. Few recommendations were also made that
can help the company to achieve better success.
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balanced scorecard development using system dynamics. In System Dynamics (pp. 107-132).
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Gerard, H.T., 2018. The Relevance Of Porter’s Five Forces In Today’s Innovative And
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