Global strategy and leadership

Reading GoGear case carefully

Chris Thomas MBA

Process of analysing a case

You build your analysis from the ground up

Process of analysing a case

You build your analysis from the ground up

Rather than taking blocks out, you are trying to fill the gaps with blocks of insight from the case

GSL subject map

External analysis

Industry

PESTEL

5 Forces

Competitor drivers

GSL subject map

Internal analysis

Stakeholders

Strategic drivers

Operational drivers

People and Org drivers

Strategic capabilities

External analysis

Industry

PESTEL

5 Forces

Competitor drivers

GSL subject map

Internal analysis

Stakeholders

Strategic drivers

Operational drivers

People and Org drivers

Strategic capabilities

Product and market

development

Ansoff’s matrix

Product development

Developing markets

Modes of market entry

External analysis

Industry

PESTEL

5 Forces

Competitor drivers

GSL subject map

Internal analysis

Stakeholders

Strategic drivers

Operational drivers

People and Org drivers

Strategic capabilities

Strategic options

Operational levers

Organisation levers

Evaluating options

Risk

Rumelt’s evaluation

Product and market

development

Ansoff’s matrix

Product development

Developing markets

Modes of market entry

External analysis

Industry

PESTEL

5 Forces

Competitor drivers

GSL subject map

Internal analysis

Stakeholders

Strategic drivers

Operational drivers

People and Org drivers

Strategic capabilities

Strategic options

Operational levers

Organisation levers

Evaluating options

Risk

Rumelt’s evaluation

Implementation

7-S

Program management

Change management

Monitoring

Leadership and transformation

Product and market

development

Ansoff’s matrix

Product development

Developing markets

Modes of market entry

External analysis

Industry

PESTEL

5 Forces

Competitor drivers

Reading a case – GoGear

Always make sure you define the industry!

Reading a case – GoGear

Industry or Market?

(Module 2)

Where should you focus your

attention?

Always make sure you define the industry!

Be consistent

Always make sure you define the industry!

Be consistent

Consider who the organisation is competing against

Always make sure you define the industry!

Be consistent

Consider who the organisation is competing against

Consider other industry segments

Reading a case – GoGear

Industry or Market?

(Module 2)

Where should you focus your

attention?

Reading a case – GoGear

Industry or Market?

(Module 2)

Where should you focus your

attention?

Reading a case – GoGear

Industry or Market?

(Module 2)

Where should you focus your

attention?

What is the Industry life-cycle?

(Module 2)

Reading a case – GoGear

What is the Industry life-cycle?

(Module 2)

Compression apparel is growing

FAST!

Reading a case – GoGear

What is the generic strategy?

(Module 3)

Cost leadership?Differentiation?

Differentiation-focus?

Low Cost Differentiation

Broad focus Narrow focus

Cost focus Differentiation focus

Reading a case – GoGear

What is the generic strategy?

(Module 3)

Cost leadership?Differentiation?

Differentiation-focus?

Reading a case – GoGear

What is the generic strategy?

(Module 3)

Cost leadership?Differentiation?

Differentiation-focus?

Compression is only 10.9% of 38% of the market…4.1%

early 2007 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2025-26

Sales Started $400,000 $1.28 $1.90 $2.81 $4.16 $6.16 $9.12 $13.50 $20 $200

Growth 48% 48% 48% 48% 48% 48% 48% 25.90%

Profits (%) 8% 32%

Profits ($) $6.39 ?

GoGear…a new, entrepreneurial business

In Australia the athletic apparel and footwear industry is worth $1.2b

Athletic apparel sales are 38% of the athletic apparel and footwear industry ($456m)

Compression wear market is 10.9% of athletic apparel sales ($49.7m)

GoGear has close to 40% market share in Australian market compression wear ($19.88m)

$1.2 billion x 38% x 10.9% x 40% = $19.88

Can it grow sales by 10 times in 10 years?

To get from $20 million to $200 million you need to grow at 25.9% p.a.

$20 million x (1.259)10

Is this possible?

early 2007 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2025-26

Sales Started $400,000 $1.28 $1.90 $2.81 $4.16 $6.16 $9.12 $13.50 $20 $200

Growth 48% 48% 48% 48% 48% 48% 48% 25.90%

Profits (%) 8% 32%

Profits ($) $6.39 ?

Can it grow sales by 10 times in 10 years?

To get from $20 million to $200 million you need to grow at 25.9% p.a.

$20 million x (1.259)10

Is this possible?

early 2007 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2025-26

Sales Started $400,000 $1.28 $1.90 $2.81 $4.16 $6.16 $9.12 $13.50 $20 $200

Growth 48% 48% 48% 48% 48% 48% 48% 25.90%

Profits (%) 8% 32%

Profits ($) $0.33 $6.39 ?

Can it grow sales by 10 times in 10 years?

To get from $20 million to $200 million you need to grow at 25.9% p.a.

$20 million x (1.259)10

Is this possible?

early 2007 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2025-26

Sales Started $400,000 $1.28 $1.90 $2.81 $4.16 $6.16 $9.12 $13.50 $20 $200

Growth 48% 48% 48% 48% 48% 48% 48% 25.90%

Profits (%) 8% 32%

Profits ($) $0.33 $6.39 ?

If they keep market share…it is…but….

2014-15 2015-16 2016-17 2017-18 2018-19 2019-20

Revenues $29.58 $49.70 $77.04 $119.40 $185.08 $286.87

Growth 68% 55% 55% 55% 55% 55%

GoGear Share (40%) $19.88 $30.81 $47.76 $74.03 $114.75

Compression Industry - Australia early 2007 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2025-26

Sales Started $400,000 $1.28 $1.90 $2.81 $4.16 $6.16 $9.12 $13.50 $20 $200

Growth 48% 48% 48% 48% 48% 48% 48% 25.90%

Profits (%) 8% 32%

Profits ($) $0.33 $6.39 ?

Can it grow sales by 10 times in 10 years?

Will the maintain those profits?

What might new entrants or other competitors do to capture market share?

How will they maintain supply if their current manufacturer is at capacity

How will they manage this growth….200 people for $20m….how many for $200m

This growth is just in Australia…but they want an overseas expansion as well…

If they keep market share…it is…but….

Can it grow sales by 10 times in 10 years?

Will the maintain those profits?

What might new entrants or other competitors do to capture market share?

How will they maintain supply if their current manufacturer is at capacity

How will they manage this growth….200 people for $20m….how many for $200m

This growth is just in Australia…but they want an overseas expansion as well…

You need to work through the template and fill in the gaps…

Every paragraph has interesting information

If you can’t find PESTEL or 5-Forces in detail…don’t panic…it might not be there

If they keep market share…it is…but….

There is a lot of analysis to perform…