COMM5004 Business Capstone Project

Corporate Strategy

The core strategy that has been chosen for the footwear industry is cost leadership. Cost leadership shall allow the firm to position itself such that it would become cheapest manufacturer and hence the products available shall be available at a price that is much lower compared to the products that are produced by the other firms. Cost leadership shall allow the firm to remain competitive. In the footwear industry, cost leadership shall be helpful since it shall allow the firm in garnering a higher market share by focusing on higher mind share. By allowing more and more products to be priced lower, the strategy shall be helpful for the firm in making sure that it would be able to garner the attention of lower segment of the market, thus gaining higher market share.

Marketing and competitive strategy

The customer needs in the footwear industry are majorly driven by designs, durability and price. These three metrics shall be the key focus of the organization in the footwear industry. Competitiveness can be maintained by pricing the products in such a manner that cost plus strategy is followed and hence the company shall be able to operate majorly on volume instead of operating on profit margin for individual products. The profit margin from each individual product shall be low but bulk or volume purchases shall be helpful in cash flow. The marketing strategy followed by the company shall be based on cost leadership. The company can use bundling strategy wherein two or three pairs of footwear, catering to different customer requirements, could be purchased together at a discounted price. This shall further allow the firm to garner more customers.

Operational Strategy

To ensure that right quality shoes are produced and are delivered right in time, supply chain needs to be enhanced. The role of technology shall become very prominent. The company shall intend to become Walmart for footwear industry. Hence supply chain shall be technology driven so that the firm will be able to focus on making sure that information about different elements in supply chain is easily available. It shall also be helpful for the firm in making sure that the bull whip effect due to sudden changes in demand could be minimized, thus leading to minimal wastage. It shall also allow the company to take care of peak season demand. The use of RFID shall be helpful in allowing the firm to capture real time information.

Human Resource Strategy

To maximize the efficiency of workers, the tasks that are repetitive in nature need to be done by the machines. Job rotation within the organization shall help the organization in making sure that different team members would not get bored of the task that is being done by them and hence the overall efficiency of each of the team members would be improved. It would also be helpful in making sure that the skill set of each individual in the team could be improved.

Finance Strategy

To fund the company, the investors need to be approached. The core business strength is the cost leadership that shall be helpful for the organization in developing a strong competitive advantage. Hence the investors would be approached who would be able to provide capital in exchange of equity. Since equity would be much helpful for the firm compared to debt, due to the high cost of capital associated with debt, equity shall be the route that shall be chosen by the company so that the company will be able to focus much on profitability. This would lead to dilution of certain amount of equity.

Investor Strategy

Since dividends are considered as a fixed income source since the increase in the price of stock may vary depending on the performance of the company, there are many investors that believe in investing in companies that pay out fixed dividend. Thus the company shall pay out fixed dividend each quarter that shall be a fixed percentage of the stock price of the firm. The lucrative dividend policy, in line with a bird in hand being better than two in the bush shall help in getting more investors on board.

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