1.0 Introduction:
The global market for athletic footwear market is on the boom because there is a growing awareness of athletic footwear. Eagle Group is going to exploit growth opportunities in the athletic footwear market. Competitors of Eagle Group are well equipped and have experience of doing business in the industry for long. Therefore, the group has to lay out a strategy that is workable and competitive. The industry is a niche industry that only trendy and athletes would wear. However, people from across the globe love to wear fashionable shoes and apparel. Therefore, the athletic footwear industry and the business would be beneficial because of plenty of opportunities there.
Eagle Group can take guidance from the numbers of the industry. By 2023, the industry is poised to grow further, and that would be the result of 3 percent year on year growth. An increase is inevitable in the online footwear industry that is an area of high growth. Therefore, the Eagle Group has to be ready and poised to take its due share of the increase in years to come. The company has to take notice of the strategies and competitiveness in the industry so that it can remain sustainable and growth oriented (Businesswire, 2019).
2.0 Vision and Mission Statements plus Corporate Objectives:
2.1 Vision:
Eagle Group aims to be the leader in the athletic footwear industry in terms of a mix of quality and affordability.
2.2 Mission Statement:
Eagle Group is pleased to offer trendy athletic footwear to a broader market that is perfect in terms of quality and economic value.
2.3 Corporate Objectives:
- To become a global company in the athletic footwear market
- To offer trendy footwear products, those are perfect in terms of quality and price
- To compete with existing brands through penetration strategies
- Gaining maximum share from the 3 percent year on year growth of the footwear market
3.0 Situational Analysis:
3.1 Macroeconomic Analysis – Environmental Scanning
The global athletic footwear industry has been facing an environment that is favourable for growth. However, the environment also presents challenges to the industry, along with many opportunities. PESTEL analysis has shown macroeconomic factors that also help to know SWOT. The political context of the macroeconomic factors globally is not suitable, and it presents threats. It is because of restrictions on full ownership of retail stores in some countries. Tax systems vary at a global level, and there is a high risk of currency exposure. It is a hard time in terms of political factors.
Economic factors present industry-specific opportunities. For instance, the industry is growing because of recovery and people’s interest. However, the high-interest rate and increase in production costs in outsourcing activities are a threat to economic factors(Racz et al., 2018).
Social factors are favourable because physical activity is increasing, and even ordinary people like to wear athletic shoes. A high obesity rate may be a threat. Opportunities in online and mobile e-commerce have raised chances of sustainability and growth for the industry. Environmentally, the sector is favourable because it is health-based. The legal environment has a link with political factors that present a threat because of associated uncertainties. However, the industry is in the growth stage of the business life cycle (Racz et al., 2018).
3.2 Industry and Sector Analysis
Porter’s five forces can help understand the industry and athletic footwear sector. Eagle Group has to know that there are plenty of challenges in the athletic footwear industry and industry for new entrants. The market is growing, but there are many established brands. The industry has a moderate number of competitors those are occupying a majority of market share. Customers may switch between brands easily because of high substitution choices. However, they are limited in the number that forces companies to compete for their choice selection. Suppliers are large in number, but an increase in the cost of raw material may be a challenge on the supply side. Substitution cost is low, that is a challenge while there is moderate availability of substitutes. In this context, there are high entry barriers for new firms because of the high cost and time required for brand development and reaching economies of scale. Therefore, the Eagle Group would choose the generic strategy mixed with differentiation and overall cost leadership to make way through the competition and high barriers of entry(Dobbs, 2014).
3.3 George Panagiotou’s Telescopic Observation
The above elements of PESTEL analysis, strengths, weaknesses, opportunities, and threats within that analysis and Porter’s five forces may help to feed George Panagiotou’s telescopic observation. It shows that the Eagle Group has weaknesses related to competition and legal and regulatory requirements. However, opportunities are present in social factors and low switching costs. The high price of existing brands may be a threat that can be an opportunity if Eagle Group is successful in offering cost-effective products. The company may have plenty of suppliers that may provide affordable products. Due to the low threat of new entrants may help the group in the long run. Presently, it has to face a challenging environment (Panagiotou and van Wijnen, 2005).
4.0 Internal Analysis:
4.1 McKinsey 7’s, Handy’ Organisational Culture, Competitive Advantage, and Value Chain
So far as internal analysis is concerned, some strategic tools are helpful. Some used tools under this head for the internal analysis are McKinsey’s 7’s and Handy’s organisational culture. Competitive advantage and value chain would also be part of this internal analysis.
McKinsey’s 7’s and Handy’s organisational culture can help the Eagle Group collectively. The internal analysis of the group requires knowing what essential elements of the internal culture of the group are. As per McKinsey’s 7’s, shared values are at the centre of the framework. Being a footwear company, it has shared values of manufacturing and marketing stylish and trendy footwear products. Requires skills, systems, and style have to contribute to these shared values. For instance, the organisation has to be committed to the vision and objectives. It would lead everyone to work on a common path (Kirschenboim, 2018).Other elements of the model are staff, structure, and strategy. For discussing these elements, there is Handy’s organisational culture. As Eagle Group is an athletic footwear company and it manufactures and markets athletic footwear, therefore, task culture suits it best. The task culture is a job or project-oriented, where each assignment and project is specific to one job or project (do Carmo Silva and Gomes, 2015).
The project-based and job-based structure is useful because Eagle Group would be able to work on different designs according to fashion simultaneously. Staff, structure, and strategy elements of McKinsey’s seven would work to align with the task culture. As a result, the group can achieve a competitive advantage. It can offer trendy products with high quality and economic value. The value chain is essential, where the company has to work. Porter’s five forces have indicated that suppliers are large in number in the athletic footwear industry. Therefore, it is not an issue for the company to build a competitive value chain (Vesso and Alas, 2016).
McKinsey’s 7’s
4.2 Observations in the SWOT:
In the last section, George Panagiotou’s telescopic observation has talked about SWOT of Eagle Group. The internal analysis gets help from the telescopic observation to know the strong and weak areas of the company in terms of its internal environment and capabilities.
The internal analysis shows that the company has the strength in the technological advancements, suppliers, value chain, organisational structure, and sociological trends. The task culture of the company, along with McKinsey’s 7, is aligned with these two elements of the telescopic observation. However, international issues make the weak area, and PESTEL analysis has also been shown hard times with the global political system. The company has to take care of it(Panagiotou and van Wijnen, 2005).
Opportunities exist in cost-effectiveness and the organisational culture because Eagle Group can increase competitiveness by exploiting these opportunities. However, there is stiff competition in the global athletic footwear market because established players are working well in the industry. It is hard for Eagle Group to compete with them on quality and brand value. Eagle Group has to overcome these threats to make its way into the industry successfully (Panagiotou and van Wijnen, 2005).
5.0 Implementation of the Marketing Strategy:
5.1 7 P’s
The marketing strategy of the Eagle Group Footwear Company shows that the company focuses on 7 P. Elements of 7 P’s are product, place, promotion, price, people, processes, and physical evidence. These elements make sure that every component of marketing is under consideration by the company. The product of the company is a footwear that is fashionable and trendy athletic shoes. The product has a global market, especially in Europe and North America, for marketing activities. These are markets where it would undertake major promotional events. The price of the products would be economical, which would be lower than high priced athletic shoes from other high-end brands. People are the staff of the company that is making the company a successful enterprise in the global footwear market. Processes are an essential part of marketing as they develop amazing and competitive products. They have to relate to marketing standards. The physical evidence of the Eagle Group is in the form of its stores and its product that is athletic footwear for its consumers (Taderera et al., 2014).
7 P’s
5.2 Design, Style, and Quality Issues
The processes of the company and staff contribution are necessary for ensuring design, style, and quality issues. In the athletic footwear industry, the role of design, style, and quality is very high because companies develop products that are highly stylish and quality intensive. Total Quality Management is there for implementation in the company so that it can ensure principles of overall quality. The consistent process of implementation of quality standards is present in the company that would keep yielding favourable results for the company and its products. The total quality management concept is quite comprehensive and detailed that it can address quality issues effectively. Marketing strategy’s 7 P’s have elements of processes, people, and products. These elements have to display these elements of design, style, and quality. In different tools used above for analysis of the company and its products, it is clear that the company has to work hard in the domain of quality and style. Successful brands in the industry put pressure on the Eagle Group to work towards quality intensive work (Honarpour, Jusoh and Long, 2017).
5.3 Celebrity Endorsement, Brand Management
This marketing strategy implementation domain is the most important for the company because the company has to work hard in brand management. Celebrity endorsement can play a crucial role because of its effectiveness. Celebrities add an image to an existing brand because of their strong influence on consumers. People follow them, and their endorsement for any brand leads to better results of that brand. The global athletic footwear industry seems highly dependent on celebrity endorsement, where the company takes endorsements of sports stars usually. The sports industry is a billion-dollar industry, and many people are fans of sports stars (MacMillan, 2016). Therefore, Eagle Company looks at it as a way to brand its product. It may be challenging to attract celebrity endorsement, but the company has to make this decision. Effective brand management is the need for the company, and marketing strategy has to employ celebrity endorsement as a tool to make this happen (Mittal, 2017).
6.0 Performance Analysis: Financing of Company Operations
6.1 Earning per share (EPS) Growth of the Company:
In year 11, Eagle Group recorded the earning per share at 2.03 that was below investor’s expectations. In the year 12, the EPS was 2.94, in the year 13, the EPS was 4.95, in the year 14, the EPS was 4.25, and in the year 15, the EPS was 4.60. The EPS growth of the company is as desired. It has been growing more than 7 percent, although there was a decline in the year 14. Overall, the EPS has achieved the 7 percent standard for years 11 to 15 and 5 percent after these years(Gajdka and Pietraszewski, 2016).
6.2 A Return on Average Equity Investment (ROE):
The return on average equity investment should be more than 15 percent that is below the target in year 11at 14.7 percent. Later, it remained well above 15 percent as it was 30.8 percent in year 12, 28.8 percent in year 13, 23.9 percent in year 14, and 27.7 percent in the year 15. It shows the ROE has declined in the year14 considerably, but overall, it remained well above the required 15 percent. It shows that the company has efficiently financed equity to yield returns for the company (Araújo and Machado, 2018).
6.3 Credit Rating:
A credit rating indicates that the company has paid back its loans successfully. The acceptable standard for the Eagle Group is B+. It shows that the company could not achieve this rating in year 11, where it had a B rating. However, in the next years, it has made the required score as it remained A in year 12 and A+ in the year 13, 14, and 15(Viskovic, 2014).
6.4 Image Rating:
Eagle Group wants to be an alternative for consumers in terms of economic value and quality. Image rating increase when a company is cost-effective and activities like social responsibility also lead a company to a higher rank in image rating. Eagle Group should achieve 70 in this rating. It shows that the company could not make it in the year 11 with a 65image rating. Later, it got 73 in year 12, 77 in year 13, 84 in year 14, and 80 in the year 15. Thus, the image rating of the company is at an acceptable level.
6.5 Stock Price Gains:
The stock price gain should be more than 7 percent from year 11 to year 15, and it should be 5 percent over this period. Eagle Group has remained below the acceptable limit by having this growth rate in the stock price gain. The stock price was 12.23 in year 11, 95.89 in year 12, 118.37 in year 13, 102.49 in year 14, and 116.62 in the year15. Although the growth declined in the year 14 on average, the stock price gains remained well over a 7 percent acceptable gain limit (Adam, Marcet and Beutel, 2017).
6.6 Balance Scorecard:
Eagle Group has to work in the area of the balance-scorecard. It has been fluctuating in terms of values on it. The score was 82 in the year 11, 102 in the year 12, 99 in the year 13, 94 in the year 14, and 89 in the year 15. It shows that the company gained in year 12, but later, its score has declined with each passing year. It depicts it as an area for improvement(Roussas and McCaskill, 2015).
7.0 Corporate Social Responsibility and Citizenship:
The Eagle Group can establish its brand and high recognition in the market with the help of corporate social responsibility or CSR measures. Corporate social responsibility or CSR measures are helpful for the company to be responsible for society. However, it has to work in line with the compensation and training as well, so that employees can remain competitive, committed and motivated towards the business objectives(Guo, Jiménez and Zuo, 2015).
Corporate social responsibility is helpful and is relevant to the stakeholder theory. The company has to work in line with both concepts so that every stakeholder can achieve a win-win situation. The athletic footwear industry is not a directly anti – environment. It is for health-conscious people, and they use athletic footwear to be active and physically fit. It is a trend in the athletic footwear industry to market products through celebrity endorsements and PR. Therefore, the Eagle Group has to consider corporate social responsibility by following this perspective. As a result, the group may achieve high recognition or status in the market.
Worker compensation and training invite another test for the group. The company would consider worker compensation on a priority basis because a competitive salary to employees would increase the value of the company in the market. Competitors in the athletic footwear industry have some iconic brands, and their business practices are unique. Nike, Reebok, Adidas, and other brands have higher appeal among customers and employees. The Eagle Group has to ensure it. For this purpose, training for employees is a critical test case. Worker compensation would keep them motivated while training would make them competitive after having the required knowledge, skills, and abilities. These strategies collectively would benefit the company by offering a win-win situation for employees and customers.
8.0 Recommendations for Future Strategy – Milestones and Leadership
8.1 Changes Required
Eagle Group has to work on bringing changes that are considered to streamline its business. The vision statement and objectives of the company show that the company has the goal of being the top footwear company. It has to work on its performance as it has been in the fluctuating phase. The company has to work on standard practice so that it does not have to concern over quality. The athletic footwear industry does business with high standards, and the company has to meet with those standards.
8.2 Company Culture/Leadership:
The company’s culture is a task culture, and it believes in working with employees. Some weaknesses and threats may exist, and these represent the area to work. The report recommends that it should focus on professional and collaborative culture so that it remains competitive. Quality, style, and design of products from the company depend on collaboration very much. It has to move towards this direction so that maximum cooperation may take place.
8.3 Corporate Social Responsibility and Stakeholder Theory:
Image building and brand management need corporate social responsibility by the company because it provides consumer trust in the company. It would develop an image and prestige of the company that is very much needed. Moreover, the company has to introduce the stakeholder theory to involve every stakeholder of the business. This area is crucial, and it requires to work upon by the company.
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