Case Study
Profit Maximization
For
Puff Shoes
Introduction
Company Background
Puff shoes is a small enterprise which comes under the MSMEs or the Micro, Small and Medium Enterprises and deals with footwear production under its own ‘Puff’ brand and as third party manufacturers for other prominent brands through the outsourcing of manufacturing by major footwear brands. It has a turnover of about INR 2.78 Cr. Since the commencement of Operations in 1996, Puff shoes has progressed impressively to becoming a reputed footwear manufacturer in the Delhi(India) region where the factory and office are located. Puff shoes is accredited with having processed orders of international footwear brands such as Nike and Fila. It specializes in the manufacturing of the Sports shoes (runners) and the Sneakers. Though they initially produced only 4 sizes of footwear (i.e. sizes 4, 5, 6 and 7), since 2001, Puff shoes has also additionally started manufacturing footwear of sizes 8, 9, 10 and 11.
Factory information
Number of Employees: 10-15(on contract basis)
Number of Machines: 3
Contract Manufacturing: Buyer Label offered
Location: Delhi
Suppliers: All over India
Vendors: All over India
Product information
As had been mentioned earlier, through the factory had commenced with the production of just 4 sizes of footwear, it presently manufactured 8 sizes ranging from size 4 to 11. The shoe sizes were broadly categorized under two headings- the Small size and the Big size.
The ‘Small’ size range encompassed of those footwear ranging from 4 to 7 i.e. sizes 4, 5, 6 and 7 while the ‘Big’ size range had the rest i.e. sizes 8, 9, 10 and 11. The footwear that was created for both these size ranges had their own pricing differentials and t...
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...solidated table it is found that Sports Design shoes are expected to be more profitable at Rs 29 lacs than compared to Sneekers, which stood at Rs 21 lacs.
From the consolidated table it is found that size 11 is expected to be more profitable than the other sizes with a profit of around Rs 10 lacs.
With the Proposed schedule, the Demand of each month can be met
In December 2014, Demand can be met even by Machine 3 not being utilized to its full capacity
Total Profits for the year 2014 is expected to exceed Half a crore
Total Demand for the year 2014 is expected to be around 5 lakhs
It is found that Profit / Shoe is expected to be Rs. 10.45 for the year 2014
Conclusion
Thus, the Company by following the Expected Demand Schedule can be able to achieve the optimum profit along with meeting optimal capacity utilization and maximum number of working hours per day.
An extensive research study will be initiated determining what the male customers want in an athletic shoe. These studies will take place online, by ground mail, and by telephone. Once the information is gathered the various types of men's shoes will then be developed focusing on the most popular needs determined by the survey results, which will include a question regarding price. L.A. Gear will then compare the needs of the customers to the industry leaders and determine how the leaders achieved the needs of the male customers and what opportunities L.A. Gear could use to "one up" the competition. L.A. Gear's shoes already focus on comfort, style, and fashion and will now include high performance.
Just for Feet Inc. was a renowned sportswear and athletic shoes company that was based in Birmingham, Alabama. From a simple start in the year 1977, the firm grew to be one of the largest retail companies in athletic shoes and sportswear for the better part of its existence. The firm grew due to its attractive strategies that it applied. In an attempt to identify with its primary market, the firm had a basketball court located in each of its stores or in a fenced courtyard nearby. To compliment on the basketball effectiveness, the firm occasionally invited professional athletes to appear in these courts and the stores. As a result, the presence of these athletes attracted a large volume of shoppers. Furthermore, the firm played loud rock music in stores and also had a large bank of video monitors that enabled its customers to watch live sporting events which kept the customers entertained. As a result, the entertainment created the necessary link with its customers (Reynolds, 2011: White, 2013). To further enhance its customer experience, the firm had created a
There are numerous costs of production for Nike Company which can be placed into two categories: fixed costs and variable. Fixed costs are those that remain the same for all production and variable costs change with each project. The organization’s manufacturing process, machinery, research and development costs make up the fixed costs. On the other hand, administration, distribution, labor and raw material are the variable costs. All of these are required in the organizations operation to ensure that it remains profitable. Production cost for each shoe is between $30 and $100 and they are sold at $100 to $300. Therefore, the organization stands a good chance of making a profit (Nike, Inc., 2012).
This report is for individual or institutional investors who want to diversify their portfolio by investing in sportswear retail industry. Given the positive announcement of its high profit, it is suggested that JD sports Fashion Plc is undervalued and a final justification will be made in this report. The report will provide in-depth analysis of JD sports Plc. that includes the following content:
However this meeting had another purpose other than just providing information about their fiscal results, the meeting was also to communicate a new strategy to revitalize the company by developing more athletic-shoe products at a mid-price range. During the meeting, the company’s representatives stated that Nike’s revenues since 1997 have been around 9 billion dollars and net income had fallen in 2000, 220 million dollars. Nike´s executives believed that with this new strategy, the company would have a revenue-growth targets of 8% to 10% and earnings-growth target above 15%.
Buxey,G.(1993). Production planning and scheduling for seasonal demand. International Journal of Operations and Production Management, 13(7),4-21.
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.
Kinky boots was a film based on a true story and was directed by Julian Jarrold in the year 2005. The film tells the tale of Charlie Price who allegedly inherits his father’s traditional Northampton shoe factory. As he sets up to start managing the business, due to his father’s untimely death, he discovers that the family business is in a lot of trouble and is falling apart. The shoe factory was known as Price & Sons factory and was four generation old (Thesource 2014). . The employees had an advantage over their competitors due to their vast experience and knowledge in the making of excellent top quality shoes but their market shares was negatively affected by the high price tag they placed on their shoes. Due to the economic crisis England was facing then, the shoes, although durable, were not affordable. The factory was greatly being threatened by the East-European shoe factories that were making less durable, cheaper, and low quality shoes (Schmitt,A. 2010). The East-European factories had a boost to their market as the people were in need of cheaper shoes. One night while Charlie was in London, he meet a drag queen by the name of Lola who, due to her weight, had to bear with wearing high-heel broken shoes. Once they met, Lola proposed on the creation of high-heeled shoes for the niche market of cross-dressers (Boots, Jarrold, Deane, Firth, Ejiofor, Edgerton & Potts 2014). .
The market share of Vietnamese shoes in the domestic market is not large with the segment of high quality shoes is apparently in the hands of foreign brands. According to the Vietnam Leather and Footwear Association, there are about 150 million pairs of shoes, slippers,.. consumed in the
The reason for this is they are trying to save costs for producing there shoes
Most people in the world gratefully have the chance to make their own choices and decisions every day. One of those choices and decisions that they make is what they are going to put on their feet for the day. Unknowingly the decision of what type of shoe a person wears for a specific day will affect their entire day. There are also many factors that contribute to what type or style of shoes a person buys or wears such as economic status, design, usefulness, and popularity. As of today, there are various types of shoes which are sandals, heels, boots and athletic and casual shoes.
Nike’s positioning in the market has more of a mass appeal compared to their main competitor Adidas who strive to make products for elite athletes. The positioning strategy for Nike is currently working at a satisfactory level as Nikes global annual sales between 2013-2014 was reported as 27.8 billion (Statista, 2014) compared to Adidas’ 19.95 billion (Statista, 2014). The global market for sports apparel is expected to grow at a compound annual growth rate of 4% between 2012-2019, Nikes compound annual growth rate during 2010-2012 was 12.3% which is an excellent result as the brand’s growth was larger than the market as well as outgrowing Nike’s closest competitors Adidas, Puma and Asics (Forbes,
Production scheduling: create appropriate schedules for all the level on the organization, maximize of efficiency of
Sneakers have now become an art that attracts people like other arts such as photography and fashion. This has turned sneakers into an industry that is fast growing, and a sneaker culture is now on the rise. Like fashion, the sneaker is industry is growing each day with new designs each day from the different brands. When a store acquires a limited edition of sneakers, people camp outside on queues waiting for their time to be served.
Charles & Keith, a well-recognized women’s footwear brand was established in 1996 in Singapore Amara shopping centre by the two young brothers, Charles Wong and Keith Wong. The company began its foreign market venture in 2000. To date, Charles and Keith has a presence in more than 20 major cities around the world. The brand are well-known internationally today with the vision “to be the most admired fashion-forward company” and the mission “to offer high quality products and services, with a commitment to perfection” in mind all the time (Charles & Keith, 2013).