Riley Wentzel Jake Gilstorff Jordan Frayer

Introductions

Carter Shoe Company“Giving you the performance technology you need and the style that you want”

Riley Wentzel, Jacob Gilstorff, Jordan Frayer

Who are we?

● NBA Star

● Signature Shoe

● Our results

Agenda● Mission Statements (Initial and Final)● SWOT Analysis (Initial and Final)● Five Forces Model (Initial and Final)● Objectives● Year by Year analysis● Key financial data● Awards● Future recommendations● Business lessons learned

Mission Statement

Initial statement:

“We are committed to providing a shoe that is both cost efficient and high quality while being produced in an ethical, responsible, and diverse setting.”

Final statement:

“Our goal is to provide a shoe that is both affordable and stylish that will allow our users to compete at the highest level of performance with the perfect blend of function and fashion.”

Initial SWOT Final SWOT

SWOT Analysis

5 Force Model of Competition Initial Model Final Model

Carter Shoe Company Objectives:

1. EPS growth of at least 7% annually through Year 15 and at least 5% annually

thereafter.

2. A return on average equity investment (ROE) of 15% or more annually.

3. A B+ or higher credit rating.

4. An “image rating” of 70 or higher.

5. Stock price gains averaging about 7% annually through Year 15 and about

5% annually thereafter.

Initial Strategy

Focused Differentiation Strategy

● High quality materials

● Small target market

● Premium price

● Number one supplier

Year 11

Carter Shoe Company

● Earnings Per Share - $1.76● Return on Equity - 11.0%● Stock Price - $17.10● Credit Rating - B● Image Rating - 80

Decisions Made

● High Price● High Quality ● Low model availability● Average advertising spending● No celebrity appeal● Targeted wholesale market● High Corporate Social Responsibility and

Citizenship.

North America Europe

Africa

Asia-Pacific

Latin America

North America

Europe Africa

Latin America

Wholesale Segment Internet Segment

Asia-Pacific

Year 12

Carter Shoe Company

● Earnings Per Share - $1.76● Return on Equity - 10.7%● Stock Price - $18.3● Credit Rating - B+● Image Rating - 88

Decisions Made

● Lowered price very little● Signed Payton Manyon.● Increase internet market share● Maintained high S/Q rating● Lowered advertising spending● Maintained high Corporate Social

Responsibility and Citizenship.

North America

Asia Pacific

Europe Africa

Latin America

North America

Asia Pacific

Europe Africa

Latin America

Wholesale Segment Internet Segment

Year 13

Carter Shoe Company

● Earnings Per Share - $2.81 ● Return on Equity - 13.9%● Stock Price - $30.95● Credit Rating - A● Image Rating - 77

Decisions Made

● Maintain high price● Maintain high S/Q rating● Increase wholesale market share in Asia-

Pacific region● Spent less on Corporate Social

Responsibility and citizenship

North America

Asia Pacific

Europe Africa

Latin America

North America Europe Africa

Asia Pacific Latin America

Wholesale Segment Internet Segment

Strategy Reformation

Things that worked

● Stable High S/Q Rating ● Celebrity Appeal

Things that didn’t work

● High Price ● Being the only supplier in the high-end

shoe industry

Broad Differentiation Strategy

● Move closer to niche market ● Outcompeting Competitor’s ● Offer Customized Attributes ● Out perform rivals’ products

Year 14Carter Shoe Company

● Earnings Per Share -$ 0.89● Return on Equity - 4.0%● Stock Price - $17.33● Credit Rating - B● Image Rating - 62● Runner-Up Corporate Responsibility Award

Decisions Made

● Low Price● Maintain High S/Q Rating ● Limited Models Available ● Limited Retail Outlets● Charged a Shipping Fee ● Upgraded Plant in Asia Pacific● Didn’t sell to Latin America Internet

Segment

North America

Europe Africa

Asia-Pacific Latin America

North America Europe Africa

Asia-Pacific Latin America

Wholesale Segment Internet Segment

Year 15 Carter Shoe Company

● Earnings Per Share - $0.83● Return on Equity - 5.2%● Stock Price - $9.9● Credit Rating - C+● Image Rating - 83● Corporate Responsibility Award

Decisions Made

● Maintained Low Price● Stable High S/Q Rating ● Free & Quick Shipping● Took out a Loan● Signed Eight Celebrities ● Management Change

North America North America

Latin America

Europe Africa

Asia Pacific Asia Pacific

Europe Africa

Latin America

Wholesale Segment Internet Segment

Year 16 Carter Shoe Company

● Earnings Per Share - ($2.01)● Return on Equity - (18.5%)● Stock Price - $6.15● Credit Rating - C-● Image Rating - 93● Corporate Responsibility Award

Decisions Made

● Industry Average Price● Maintain High S/Q Rating ● Built Factory in Asia-Pacific ● Made Loan Payment ● Had Eight Celebrities Under Contract

Wholesale and Internet Segment (Year 16)

North America

Europe Africa

Asia-Pacific Latin America

North America

Europe Africa

Asia- Pacific Latin America

Strategy Reformation

Things that worked

● Low Price● Found the Niche Market

Things that didn’t work

● High Quality● Customized Attribute’s● Didn’t Outcompete Our Competitor’s

Final Strategy

Low-Cost Provider Strategy

● Achieving a cost-based advantages over competitors● Sell our shoes at the lowest possible price to attract customers● Aim our markets towards broad markets ● Have high-profit margins due to our high-volume sales capacity

Year 17 Carter Shoe Company

● Earnings Per Share - $2.96● Return on Equity - 27.5%● Stock Price - $32.61● Credit Rating - C● Image Rating - 93● Runner-Up Corporate Responsibility Award

Decisions Made

● Reduced the price● Reduced the S/Q● Payed back part of the loan● Increased celebrity appeal● Entered into the private-label market● Increased sales in wholesale market

Wholesale and Internet Segment (Year 17)

North America

Asia Pacific Latin America Asia Pacific

North America Europe Africa

Latin America

Europe Africa

Year 18

Carter Shoe Company

● Earnings Per Share - $4.50● Return on Equity - 31%● Stock Price - $63.79● Credit Rating - B● Image Rating - 82

Decisions Made

● Lowered the price in wholesale market● Payed back outstanding loans● Lowered our spending in CSR● Decreased wages of labor● Increased sales in private-label● Bought more capacity

Wholesale and Internet Segment (Year 18)

NorthAmerica Europe Africa

Asia-Pacific Latin America

North America Europe Africa

Asia-Pacific Latin America

Year 19

Carter Shoe Company

● Earnings Per Share - $8.27 ● Return on Equity - 39.6%● Stock Price - $145.43● Credit Rating - A● Image Rating - 78

Decisions Made

● Raised prices in private-label● Increased our delivery time● Increased retailer outlets● Lowered the amount of superior materials

being used● Paid back loan

Wholesale and Internet Segment (Year 19)

North America

Asia Pacific Latin America

Asia Pacific

North America Europe Africa

Latin America

Europe Africa

Year 20

Carter Shoe Company

● Earnings Per Share - $7.40 ● Return on Equity - 25.8%● Stock Price - $111.75● Credit Rating - A+● Image Rating - 74

Decisions Made

● Halted all manufacturing in North America● Raised price in wholesale market● Reduced all spending in CSR● Paid off final loan payment● Increased sales of private label

Wholesale and Internet Segment (Year 20)

North America

Asia Pacific Latin America

Europe Africa

Asia Pacific

North America

Latin America

Europe Africa

Key Financial Data

Key Financial Data (Cont.)

Awards and Accomplishments

LEAP FROG AWARD

for Most Improved Overall Score (current year to current year)

Future Recommendations

1. Use the low cost low price method (if niche market doesn’t change)2. Spending less on Corporate Social Responsibility can be beneficial in the

long run3. Create a large number of shoes4. Build a factory in every country

Business Lessons Learned

1. The market is a changing place.2. Strategy is based on your market and your product.

3. Must be able to adapt and change your strategy.

4. Using your competitor's weaknesses to your strengths is very effective

5. Teamwork is crucial.

Questions?

Thank you for your time!