IV- Situation Analysis

Alpargatas Group (http://br.havaianas.com/pt-BR/home/) firstdesigned inexpensive cloth shoes for

Brazilian coffee farmersback in 1907. More recently and continuing with its footweartradition, the
Havaianas brand owed by Alpargatas (www.alpargatas.com.br) expanded worldwide, in countries witha
strong beach culture where consumers already wear sandals.Havaianas is entering an unmatched phase
of internationalgrowth since 1994. A comprehensive marketing plan isrequired to reach profitability in
the UK, by Internet selling andother channels, ensuring future success outside Brazil.Sandals are
increasingly popular item generating a turnover of 22.5 million in 2009 for Alpargatas in USA and
Europe alone,up 159% from the previous year. Nevertheless competition isintense, and pricing
pressures squeeze profitability.

A. Opportunities/ Threats Analysis
The industry seems to be immune to recessions. The companyhas the ability to operate
on a low-cost structure relative tocompetitors. There is a low-cost operational structure
within the company, using a lean structure to compete.

The possibility of new competitors entering the sandals marketwith a similar business
model and appealing image. Downwardpressure on pricing and completely misjudging
where shoeswearing fashion is heading.

B. Strengths/ Weaknesses Analysis

Focusing on extremely strong relationships with distributorsand franchisees abroad.
Possibility of giving great discounts.Low-cost strategy combined with a differentiation in
outlook,using strong and vivid colors to enhance the brand. An efficient,and stylish
Internet store and website. Pricing: out product stillbeing priced at the lower end of the
market, which gives us anedge with price-conscious customers.
Struggling to build brand equity abroad with a lack of brandawareness, but the issue will
be addressed with aggressivepromotion. Finally the company needs to understand
thatforecasting fashion is difficult but necessary to profitability.

C. Issues Analysis

Its critical issues are to continue to take a modest internationalexpansion approach,
and expand internationally at a reasonablerate, not for the sake of expansion in itself,
but because it is avalue creation and a prudent approach. Distribution is a criticalissue
and important channel partners will be chosen and theyinclude superstores, shoes
stores, fashion stores, sandalsspecialty stores, online retailers and through its own
website(www.havaianas.com).