Driven Athletic Footwear Executive Summary Essay

1156 Words Jun 2nd, 2012 5 Pages
Driven Athletic Footwear Executive Summary

Introduction/Key Issues:

Driven is a key competitor in the footwear industry and we have some pretty impressive results in terms of revenue generated and market share. However, this report will outline some areas where we needed to improve and correct. Specifically, this relates to how to handle supply issues, how to reduce costs and overhead charges and how to continue to increase value to our shareholders.

Recommendations:

In order to counter the above issues we have determined that Driven could have:
1. Retained capacity in our plants to continue to produce and supply the market with our goods and:
a. Over-produce in early years and hold inventory for when demand jumped in
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By year 17, Driven offered the most models in all four regions. By increasing our models, it allowed us to increase the amount of retail outlets utilized. We assumed the more models being offered would create a demand and increase our sales in wholesaling segment. Our wholesale pricing remained competitive and we were careful not to sabotage it by decreasing our pricing of the internet segment. Although, Driven’s management reached goals in this area, we were weak in the amount of rebates offered. In the beginning, our position was that retailers would not used or maybe even lose the rebates; therefore there wasn’t a great need to increase the amount offered, but after further review we decided that the rebate was a great way to lure more sales even if the rebate was never used. Our strategy in this area had proven to be correct and for the majority of time we had the highest level of models available in each region, and our products in the most retailer locations.
Earlier, in the years we took advantage of the low interest rate and obtained a loan to build capacity and restructure the smaller termed debt we had on our books. The A.P. and L.A regions were the most lucrative areas to build capacity. They had cheaper labor and we could decrease operating cost in the long-run. We created efficiencies by upgrading our three plants to reduce rejection rate

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