Reflective Report on Footsole's Business Strategy Game Performance

This report provides a comprehensive analysis of Footsole's performance within the Business Strategy Game (BSG) simulation. It begins with an introduction to the global athletic footwear market, identifying key players and Footsole's positioning. The report outlines Footsole's vision, mission, and corporate objectives, followed by a situational analysis, including macroeconomic factors, PESTLE analysis, and an examination of the business lifecycle. Industry and sector analysis utilizes Porter's Five Forces and strategic group mapping to assess the competitive landscape. Internal analysis employs models such as McKinsey 7-S, Johnson's Cultural Web, and Handy's organizational culture to evaluate Footsole's internal strengths and weaknesses, competitive advantage, and value chain. The report then delves into the implementation of marketing strategies, covering the marketing mix (7Ps), design and quality issues, and brand management. Performance analysis assesses key metrics like EPS growth, ROE, credit rating, and stock price gains. The report also addresses corporate social responsibility and citizenship, and concludes with recommendations for future strategy, including milestones and leadership goals. Finally, the report includes a reflection for each year of playing the game and a SWOT analysis.

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

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
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..............................................................................................................................................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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-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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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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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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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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 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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 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