e08 Miebach Competition Stage1

8/3/2019 e08 Miebach Competition Stage1

1/8

THE ANDROID FOOTWEAR CO.Team: e08


2/8

Android Footwear Co.

Biggest footwear manufacturer in India

- Prominent in every part of value chain w.r.t.

footwear

- Distribution and sale channels -

- Buy-and-sell stores, departmental stores,

and an exclusive retail channel of company

owned stores- Brand - Galaxy, Nexus and Wave

- Up-to-date with fashion


3/8

Brands

Galaxy

- Discerning customers and formal shoes

- Second in terms of number of stores and turnover

- Present in all major metros but not prominent in B or C class cities

Wave- Formal and casual footwear at lowest price

- Biggest in terms of number of stores and turnover

- Prominent in all major A and B class cities with presence in some C class

cities as well

Nexus- Casual footwear in middle range

- Second in terms of number of stores and turnover

- Present in all major metros but not prominent in B or C class cities


4/8

Companyownedretailstores

Current Scenario

Required inventory goal

Inventory days Inventory turnover

Average inventory 150 365/150 = 2.43

Maximum inventory 350 365/350 = 1.04Minumum inventory 90 365/90 = 4.04

Inventory Turnover Inventory Days

Short Run 4 365/4 = 91.25

Long Run 6 365/6 = 60.83


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Problem identification

Lock-up ofworkingcapital inthe inventory:

Problem:

To achieve the desired inventory turns for the retail stores in the shortestpossible time

To maintain the inventory turns and improve it in the long run, so that

capital locking is at optimal levels

Average Stock in a retail store = 550 pairs

Average Stock expected to have inventory turnover

(Initial goal) = (550 * 2.43)/4 = 335 pairs

Average Stock expected to have inventory turnover

(Final goal) = (550 * 2.43)/6 = 223 pairs


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Recommendations

Achieve desired inventory turns

Give discounts in the slow seasons, especially

in the months of April and October to jack upsales and reduce inventory to desired levels

Look of opportunities to make the competitor

stores as your affiliates to allow for rapid sales

of current inventory by extra exposure to

customers in the whole country


7/8

Recommendations

Maintain inventory levels in the long run and improve them

Establish a new distribution channel with the help of intermediate

warehouses at distances in between the main warehouse at Delhi and

network of retail stores

Use these warehouses for quick response to customer interest and helpkeep the overall inventories in check, thus directly influencing the

inventory turns

Change the distribution to focus more on Galaxy and Wave, at the

expense of Nexus as its contribution to revenues doesn't justify its share

in sales channels Recalculate the WACC to continuously monitor the effects of these

changes


8/8

thank You

Documents

e08 Miebach Competition Stage1