Leah's LoafersMarie HoladaLeah Klacko

Dean RowbothamMakenzie Schwartz

Mission Statement

"We are committed to delivering the highest quality shoes to our customers that are made

responsibly in an ethical, diverse setting."

Strategy Formulation

Initial Broad Differentiation Strategy

● High Quality Shoes at a High Price Point

● Higher S/Q Rating than competitors

● More models and more advertising

● Retain loyal customer base with rebates and more retailers carrying the products

● Best practices training to employees to provide excellent customer service

Financial Objectives Short Term:

● Maintain a credit rating of B+ through the first two years

● Maintain a return on equity investment of 15% or more annually.

Long term:

● Grow earnings per share 7% annually through first five years, and 5% annually after.

● Achieve stock price gains of 7% through the first five years, and 5% annually after.

Strategic Objectives

Short Term● Construct an upscale brand that was the leader for its quality product offering and

use of superior materials.

● Consistently be the leader in advertising and marketing as well as recognized in the global shoe industry.

Long Term● Achieve an image rating of 70+ within the first 5 years.

● Incrementally increase prices for our products to remaincompetitive.

Strategy & Tactics● Invest in environmentally responsible practices to improve our CSR.

● Achieve maximum capacity in plants as well

as invest in upgrade options A and D for the

North American Plant.

● Free shipping as well as a mail-in rebate.

Adjustments

● Corporate Citizenship○ Use of Recycled Boxing and Packaging○ Energy Efficiency Initiatives○ Charitable Contributions○ Ethics Training and Enforcement○ Workforce Diversity Program

Year 18 Corporate Citizenship

Adjustments

● Sales Forecast○ Inventory Clearance

● Plant Capacity○ Purchase/ Sale of Capacity○ Upgrade Option A and C at N.A. Plant and Asia Plant

Adjustments

● Branded Production○ Achieve highest S/Q rating○ TQM/ Six Sigma Quality Program○ Compensation

Adjustments

● Branded Distribution○ North America○ Asia

Adjustments

● Internet Marketing○ Competitive Pricing○ Increased Models Offered○ Achieved highest S/Q rating○ Free Shipping○ Increased advertising

Adjustments

● Wholesale Marketing○ 200 models offered in the market

○ Competitive Pricing○ Rebates offered

○ Support Retail Outlets

● Celebrity Appeal○ Tiger Green

○ Oprah Letterman

● Private-Label Operations

Year 18 Wholesale Marketing

Finance & Cash Flow

● Paid $1.50 Dividend● Repurchase 2000 shares @ $39.05 a share● Allowed Leah's Loafers to significantly raise

Return on Equity

Assessment - EPS● Board of Directors Expectations

○ 7% annually through Year 15○ 5% annually Year 16 on

● Competition○ Company F EPS○ Industry Overall

Assessment - ROE● Expected to have an annual return on equity a 15% or higher.

● Struggled year 11 at 4.6%

● Significantly better performance for years 12, 13, 14 and 18. All above 15%.

● Company F competition

● Overall industry

Assessment - Credit Rating

Assessment - Image Rating

Assessment - Stock Prices

● Beginning Stock Price○ Year 11, $16.65

● Ending Stock Price○ Year 18, $101.02

Industry Stock Prices

Year 18 Performance

Key Learnings

● Adapting Strategy to changing market○ product offering, pricing

● Celebrity behind Leah's Loafers○ Tiger Green

● Private-Label Operations

Advice

● Know the demand for the market● Private-Label Operations

○ Worth it for Leah's Loafers?● Bomb.com Product Offering

● Hard working Workforce● Whose reppin' us?