Champion Footwear

“Adapting to change quickly is a key to sustained growth”

Saiteja Venkatapuram
Aderito Campos
Strategic Vision
● Bring best quality footwear to consumers
● Sustainable prices
● Social responsible where People, Profit and Planet and are in balance
 Initial Objectives
Strategy Objectives Results – Year 20

● Provide shoes at low cost at high S/Q rating ● 8 S/Q rating/50 models
● Reliable celebrity appeal ● 255 – Industry leader (25 more than the
● Invest in styling and six sigma next team)
Customer/Employee
● Increase % of superior material ● Maximum styling (50K)

● Invest in best practices training ● Maximum best training ($5000)

● Become industry leader in operating/net profit ● Increase revenues - 27.6% Operating/

● Maximize stock price 19.2% Net (Industry leaders)

● Decrease cost of pairs sold ● Give dividends (192 - Industry leader)

Financial ● Decrease shares outstanding ● 49.2% cost of pairs sold (industry leader)
● Reduce defects ● 7,590 shares outstanding (industry
leader)
● Factory upgrades (Average rate of
rejects - 1.2%)
 Performance Targets
Indicators Year 11 Year 20 % Change Year 21 Year 22 ● EPS always above the
investor expectation
EPS $3.01 $14.04 366.45% $15 $18 ● ROE was average
compared to IE during the
ROE 18% 29.8% 65.56% 32% 36% years 14 & 15 and
increased continuously
Credit A- A+ A+ A+ since then
Rating ● Image rating took a big hit
during the first 4 years and
Image 68 83 22.06% 86 90
was below IE the first 1
year. Steadily improved
Rating
from Year 14
● Stock price was stable for
Global 14.3% 18.1% 26.57% 20% 23%
first 5 years and increased
Market
drastically from year 15
Share
● Global market share
increased steadily
Stock Price $41.93 $192.17 358.31% $250 $350 throughout the stimulation

Net Sales $288,136,000 $556,624,000 93.18% $600,000,000 $620,000,00

Performance Charts
Game Performance Charts 1 of 2
Game Performance Charts 2 of 2
During the weeks of Monday, 6-Nov thru 12-Nov (Y 16)
& 13-Nov thru 19-Nov (Y 17), we were in the top 100.
- 5,444 teams from 278 colleges/universities
participating in a world-wide simulation.
- Overall Game-To-Date Scores were:
Weak Functional Area
 Six Initiatives

● Use of "Green" Footwear Materials

● Use of Recycled Boxing / Packaging
● Energy Efficiency Initiatives
● Charitable Contributions
● Ethics Training / Enforcement
● Workforce Diversity Program
● CSR Actual Results for the last five years
are listed. Based on BSG’s help tutorials,
the first two initiatives on the list did not
provide much of a return in this game.
● BSG Game did not reward investment in
CSR in a clear cause & effect differentiated
manner

● In the future, we would take on more

corporate social responsibility.

● Our investments included the following:

- Recycled Packaging Y 11 - 15
- Energy Efficiency Y 14 - 16, 18
- Charitable Contribution Y 13 - 16, 18
- Workforce Diversity Y 11 - 20
Three Biggest Mistakes

1. Not buying large amounts of company stock early on in the game (i.e. years 11-15)
2. Not trying strategy of high volume lowest price/cost provider position
3. Not buying more Celebrity Endorsements early on in the game

Why?

1. Buying company stock early - We found out later in the game that it helps the metrics of the game
2. Low price cost provider - we think that this was an unexplored area by the teams
3. Celebrity Endorsements - we think buying them early is cheaper and can lead to higher celebrity
appeal numbers
Three Best Decisions
1. Started out with Strategy of High Quality/High Price position - ~200 models (Y 10-14) then switched to
~50 models (Y 15-20)
Why? - We were No 1

2. Buying back company stock with extra proceeds from revenue

Why? - Found out BSG metrics easier to attain i.e. EPS etc.

3. Buying additional plant capacity even though BSG Financial reports said capacity was not needed
Why? - Individual teams extra capacity can be used up with right strategy
One thing to change

● Try Strategy of High Volume Low Price provider. If executed well could of led to much higher
sales as no other team members chose that strategy.

Why?

- Higher EPS, ROE, Net Revenues and Net Profits

Do’s and Don’ts
Do’s
● Look over all the financial & other reports in detail every round especially closest competitors
● Know the demand of the market - Win Private-Label bids
● After all the numbers are entered, look at the over-all again and have a separate managers meeting
to fine tune and try different possibilities
● Manage capacity well - focus on markets where there seems to be the most demand
● Change strategies when market is saturated with same strategy
● Continue with best practice methods that align with strategy

Do Not
● Implement similar strategies to many others in class
● Run operations in-efficiently: “It’s not how much you earn but how much you keep…”
● Buy more plant capacity than your strategy calls at a time
● Presume that others won’t figure out your winning strategy
● Produce in regions with lower profit margins
Thank You - Danke - Obrigado - 谢谢
Merci - Ευχαριστώ - Gracias - Tack -
Grazie