BSG Presentation

Block AMay 1st, 2015

Final Presentation

Our Team

Jaewon BackChief Marketing

Officer

Mario BalabanChief Officer

Lexi ZafonteChief Executive

Officer

Shane O’BrienChief Finance

Officer

Ashley LamoreauxChief Accounting

Officer

Mission Statement

Decerto is a multinational corporation that strives to deliver the greatest value for the most competitive price.

Agenda

Where We Were

Where We Are

LessonsLearned

Where WeAre Going

IntegratedMarketing

A look into our past and why we were

there

Our current standing and how we got to be here

What we have learned throughout

the semester

Our plans for upcoming

years

Market strategy for entering a

new market

Where We Have Been

Where we have been

• Prices were as low as 12.0% less than industry average, often selling over $2 less than Team A

• Cost of Pairs Sold growing

Where we have been

• Ex: manufacturing costs• Not following low cost strategy

• Above industry average expenses

Where we have been

Why we were there

Strengths• Average Global

market share 16.73%

• Advertising• Retailer Support

Weaknesses• High costs• Low profit margin• Did not follow

strategy• Forecasting demand

Where We Are

How We Have Developed

• Best Value Strategy• Integrated cost-differentiation strategy• Best value for competitive price

• Plant Upgrades• A & C• Decrease reject rate costs and increase S/Q rating

Decerto increased its net profits by 161% in 10 years 161

%We also increased market capitalization by 196% in the same time 196

%

Increase in net profits

Increase market cap

Current Standings

Category StandingGame-To-Date Score 91

Net Revenue $421,841,000

Net Profit $109,377,000

Stock Price $299.54

EPS $14.58

Image Rating 60

Where We Are

• Consist growth after Y15• Better cost management strategy

Where We Are

• Increased revenue• Better overall performance

Where We Are

• Close with competitors• 50% of net revenues

• Steady decline since Y14

• Learned from past• Decreased marketing costs

• Advertising• Retail

Where We Are

• Declining costs and increasing revenue

Where We Are

• Highly correlated with net profit margin• Equity multiplier decreased• Total Asset Turnover increased

simultaneously

Where We Are

• Decerto was not highly leveraged• Always maintained an A- credit rating or better• Chose not to capitalize on low interest rate loans• Our long-term loans were paid-off by year 15

Why we are here

Strengths• Credit Rating• Competitive prices,

good quality products

• Model availability• Wholesale

Weaknesses• Low image rating• Low corporate social

responsibility• Private label• Relative high labor

costs• Stock-outs

Lessons Learned

Lessons Learned

• Defining and following a strategy

• Cannot rely heavily on advertising in order to grow a company

• Could have taken more risks in terms of loans and financial leverage

Lessons Learned

• Y15-20: Dividend Payout Ratio declining

• Y15-20: Stock price increased, but undervalued

Lessons Learned

• Y15-20: Decline in market share• Y15-17: Block in LA internet sales

Where We Are Heading

The Future

• Plans to increase capacity to combat stockouts• Increase Asia-Pacific capacity• Low labor costs

• Raise dividends to align to increase in stock

• Move into differentiation strategy

Integrated Marketing Plan

Country Industry Growth Potential

Economic Stability

Political Stability (risk of long-term investments)

Competition Feasibility Total

Germany 4 5 5 1 4 19

France 2 2 4 4 1 13

Russia 3 1 2 5 5 16

UK 5 5 5 2 3 20

Italy 2 2 3 3 2 12

United Kingdom•United Kingdom accounted for 14.1% of Europe’s footwear market value•$10.0bn, 72.1% of the market's overall value

Market Selection

• Multi-Segment Marketing Approach• Life-line of professional athletes

• Positioning• High-performance products

• loved by professionals• accessible to all sports enthusiasts

• Competition Pricing• Running Shoes (Top 10 UK)• £15 less

• Distribution• Exporting• Independent Retailers

• already existing distribution channels & loyal customer base

Segmentation, Positioning, & Pricing