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Strategic Plan

David Jacobs, Brandon Hayes, Mark Piechalak

The shoe industry right now is not an attractive industry. There is not a long-term profit

for the shoe company at the current outlook. Companies in the industry are having negative

profits. As of right now their is not a potential for abnormal returns. The actual returns are not

meeting the investor’s expectations. The stock price is below want is expected.

Some teams are doing strategies, for example making their wholesale and internet

prices higher. Other teams have higher S/Q ratings and offer more models. Some teams also

seem to be spending more on advertising. Their private label bid prices are all lower than ours.

Our closest competitors right now are Husky Shoes and Athletes Anonymous. They are ranked

right above us.

An environmental factor that is impacting our company is we don't have enough capital

to produce another plant. If we produce another plant it may cost us more money in the

long-term. Another factor is shipping our products across continents can be risky. There could

be a bad storm that could affect our products getting to the destination on time. Also the tariffs

and leasing fees between the countries are costing us money.

We are investing in training our employees, which is giving us a competitive advantage.

We have high incentive pay at our North America and Asia plant. Another advantage is our

low-cost shoes. We are selling our shoes at low prices and hoping that will increase the

demand. Our productivity for the last few years has also increased and is an advantage.

We are going to have a low-cost leadership strategy because that meets our capabilities.

We believe we can take those customers who aren’t willing to pay a high price for shoes away

from our competitors by having the lowest prices in the shoe industry. We plan to set our
private-label and branded shoes at low prices.

For year 20 we plan to have a EPS of 3.35 or above. We also want to have our ROE be

20%. Our goal for our stock price is to be at or above $30.00. We want an image rating of at

least a B+. Our credit rating we want to reach a goal of 80. Our goal for Best-In-Industry is to be

in 1st place but realistically end up 3rd. Eventually we need to start doing a maximum amount of

a ten year loan once the interest rate drops to get a higher credit rating. With that money we

want to buy back as much stock as we can and began selling as much stock allowable.

Continuing to upgrade the Asia plant and Latin America, depending on our cash flow we

will want to increase production in as much as you can without putting our company in danger of

an overdraft (like we have in the past). In the future we may stay out of other countries such as

Europe for the rest of the game, it's seems that it is not cost effective.

We need to pay more attention to the exchange rates as well, try to distribute as many

shoes in each home country as we can. We have also seen that taxes and other cost would be

lower if we ship from North America to Latin America and Asia to Asia. We may have to

eventually sell our North American plant down to no production if it does not start making a

better turn around.

We definitely need to produce the maximum amount (including overtime) every year, and

sell every shoe. We noticed if we have to go into the private label, that we make sure that we

sell the shoes at a little bit above cost, even if it's just a penny to ensure that we beat out

everyone for that particular sale. We only use private label if we have some capacity over after
the production and overtime is maxed to around 100-110% than base a private label amount

decision.

By eventually paying dividends we can increase by a constant specific nominal amount

every year. The final year we will pay out the maximum dividend, which will allow us to get the

most amount of return.

We need to start having a positive EPS so that we can buy back stock every year until

we can’t buy anymore this will lead to our company having a major advantage over the

competition. After studying the sales forecast we figured that we need to make sure we

continue building production for any year. As for our image rating we believe that we should not

worry about it as much,as it will increase with our market share as will your credit rating.

As far as celebrities go we do not want to rely on them so much, we plan on waiting for a

contract that lasts four or more years.We plan to do this because we feel we can gain a great

deal of money so that we are able to bully the competition out of celebrities. Since we hope to

have high production capabilities, by doing this we will be able to meet the demand that more

celebrities will create.

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