Payless Shoe
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Industry segment analysis
Competitive Industry with low growth opportunities
Matured industry but low entry barriers
Sensitive to fashion trends and typical cyclical (Easter, early summer, back-to-school and winter season)
Price Sensitive, Price War. Highly influenced by the level of disposable income: interest rates, energy costs, and consumer household debt service obligation.
Principal factors
Price is one of the most important factors, so it is important to have a cost advantage.
Advancing in fashion trend
Brand image
Supply chain analysis
Fragmented industry
Companies take care of design and marketing
Manufacturing and distribution are outsourced
It is fragmented by functions
Capital and Technology
Labor intensive industry (No capital intensive)
Design and Marketing are important
Industry in not highly subjective to technology change
Regulation analysis
Industry in not highly exposed to regulation
Company Competitive position
Company has limited resources, so it is not at advantage in terms of price
Company is targeting certain segment such as fashion oriented female who are less sensitive to price and put priorities on trend and design
Company sustain reasonable price and focus on brand image, design and quality
Market position
Company experiencing decrease in market share
However, it is due to companyÐŽ¦s differentiation strategy
Company has been trying to build-up brand image to protect its profit margin in an exchange of market share
Performance
Completed restructuring in 2004
Redirected its strategy in 2005 (Changing its target customer)
Experienced decrease in revenue, but increased operating income and profit margin
Despite its increase in operation income and EBIT, still below the industry average
Management & Strategy
The strategy of the company is well-articulated and realistic.
Despite its limited resource, management