IV. EXTERNAL ANALYSIS
A. General Environment
Macro environment factors are the one who affects the way of operating the business. There are uncontrollable external factors that are out of control on the business and sometimes needed some changes in managing, directing, producing, and marketing stuffs for the company business.
4.1 Economic Development
GDP will increase from 5,236.41 in 2014 to 5,664.40 in 2015.
Table 4.1
Gross Domestic Product Forecast
Year Gross Domestic Product
(In Billion Pesos) Annual Percentage Change
2011 5,910.2 3.7
2012 6,312.17 6.8
2013 6,765.45 7.2
2014 (Projected) 5,236.41 5.8
2015 (Projected) 5,664.04 7.55
2016 (Projected) 5,507.23 8.22
2017 (Projected) 5,350.43 8.89
2018 (Projected) 5,193.61 9.56
Increase in GDP can help the company to grow more because this may project a nation
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For example, leather and other engineered segments utilized within footwear preparation. Currently, the floundering nearby footwear industry will be even now subject to the local business sector to survival despite from its preparation yield. Furthermore, relating offers in the secret word decade have dramatically contracted energetic about less expensive imports primarily from china.
Makers about shoes, slippers, and sandals also different footwear vigorously depend on foreign crude materials not best due to the wider plan varieties accessible abroad as well as to the less expensive costs and more superior stock accessibility.
Particularly to the medium of extensive scale footwear manufacturers, import perks need to be permitted them to stay with their operations starting with setting off under as they stay with end watch of their market vicinity against foreign unique brands and also of the
CIMA is facing stiff competition from foreign competitors. Foreign bootmakers are providing outstanding performance and attractive priced boots to customers.
The factories around the world (China, Asia, and Vietnam) assist in manufacturing and distribution of the products. (Mahdi et al., 2015). The globalization and technology have impacted competition and larger expansion of the corporation around the world. The Nike brand is nearly in every culture of the world from the result of globalization and technology impact. The technology has grown on the quality of the research and innovation the company is performing that is resulting in great volumes of customer cares and choices. The globalization and technology have also helped stabilize the prices of the products and avail them all year round so that there are no experiences of low supply and thus raise in the products prices. (Mahdi et al., 2015). The market is always satisfied with the quality and volume of supply that meets all the fluctuation like the sudden increase in demand or its fall. The impacts of globalization have made the company produce high quality, durable and limited the production impact on the environmental pollution and degradation. It is playing a global roll in the management and conservation of the environment worldwide by taking part in community participation and charitable organizations that serve the society in community issues alongside environment (Mahdi et al.,
Nike's Lance Armstrong, LaDainian Tomlinson, Brandi Chastain and Freddy Adu Share Thoughts on Revolutionary Nike FREE Shoes PR Newswire US
It is found that there was not a common approach utilized in managing company’s lineup of sporting goods prior to restructuring started in 2005. Although Adidas has diversified in the sporting industry, the company still failed to realize resources fit within the business segments. Furthermore, there are integration problems between Adidas athletic footwear business unit with Salomon’s business units. As the business segments are too diverse, different raw materials and labors as well as processes are required to develop products that did not allow company to capitalize on any value chain. In serving different needs throughout the diversification, the three business segments made with different product mix has faced problems to cross promote the merchandise. In addition, through the varied demands of each business segment, there are no economie...
During a trip to Japan, they found a great athletic shoe with a new design
Compared with those two competitors, Chipman-Union was not known well to consumers. To attract consumers' attention to their products, first of all, physically prominent features of the product should be introduced. For them, it seemed impossible for CU's brand to compete with competitors' established brands without unique product characteristics. For this purpose, deodorizing socks could be a reasonable physical feature for differentiating the product from other competitors' products. In addition to this deodorizing feature, various types of socks should be developed.
The strengths of the book come from its’ accessibility. The book is easy to follow and provides readers with a great deal of information about the production of mass-manufactured clothing. As well as brings awareness to its’ many issues which we inadvertently take part in when we purchase such products. The book is well written and thoroughly researched but does have its’ share of weaknesses.
Investing or venturing into the international market involves critical analysis of the internal and external environment in which the company operates. Usually, a company will decide to venture internationally due to a saturated market or fierce competition in the current country of operation. The demand for a company’s products may have diminished as a result of an economic crisis thus the company will target a foreign market to sustain its sales. In other words, the firms expand internationally to seek new customers for its products. For example, the current Euro zone crisis led to low demand in Europe and many companies extended their businesses to emerging markets where demand was high. A company may also venture in the international market to enhance the cost-effectiveness of its operations especially for manufacturing companies that will benefit from low costs of production in developing world. Global expansion is a long term project as it involves demanding logistics to be successful. Thorough research must be undertaken to ensure that the expansion will create value for share...
The Shoe Industry consists of a multitude of footwear categories, varying in utility, style and occasion. When overseeing the market for the shoe industry, we must look at the influence of all shoe trades universally to comprehensively understand how the disparities in sales relate to the needs of specific regions. The global retail market within the shoe industry currently represents $185 billion, driven primarily by Asian and Latin American economies and is expected to reach $211.5 billion by 2018. The growth rate globally was 6% between 2004 and 2008, contrasting to the 2% compound annual growth from 2008 to 2012. The United States holds over 24% of the overall industry size it projected over $48 billion in annual revenue in 2012. Domestically, the growth rate has been flat at 0.3%. On a unit volume basis, global footwear consumption for 2012 is approximately 11,421.3 million (in pairs), where the United States makes up roughly 2,741.1 million (in pairs). By 2018 the U.S. Census Bureau has forecasted a steady decline within demand domestically of 3% and an increase of 1% globally.
They point out that awareness and understanding of these causes assist companies in avoiding the growth stalls. In addition, the article demonstrates few practices that some companies use to predict and prevent the problem.
the shoe industry has are making shoes that all people wear such as setting a
Executive Summary Introduction Kimi Ford, a portfolio manager at NorthPoint Group, a mutual-fund management firm, was considering buying shares in the fund she manages, the NorthPoint Large-Cap Fund, with an emphasis on value investing. Ford held an analysts’ meeting to disclose its fiscal-year 2001 results and, most importantly, to communicate a strategy for revitalizing the company. Nike has maintained revenue of about $9 billion since 1997. However, its net income had fallen from almost $800 million to $580 million. Moreover, Nike’s market share in U.S. athletic shoes has fallen from 48% in 1997 to 42% in 2000.
Economic factors affecting negative or positive way the companies. The inflation and currencies rates have big influence.
From 2005 the textile segment has been made up of 2 companies, transforming raw materials into fabrics, from spinning to finishing and ennobling. Handicraft product quality and technological research development characterize this business segment which works with internationally recognized names of the apparel and fashion industry.
...enture into overseas market comes with expectations as well as uncertainties due to unfamiliarity. Charles and Keith, the fashion retailer, has to understand clearly that what appeals in one market might not be accepted in the others and this is almost the same for all industries. Thus, a thorough research on cultural background has to be done before entering an unfamiliar ground.