Kuttas is a sportswear and equipment supplier based in the Africa. It is one of Africa's leading supplier of athletic shoes and apparel and a major manufacturer of sports equipment. In the competitive world, innovation is a crucial determinant of sustainability. Kuttas has always been successful and is regarded as one of the pioneers to introduce various products. With the constantly evolving and innovative product range, it has solidified its position as one of the leading brands in the apparel and footwear industry. Due to the complicated supply chain management, Kuttas started focusing on creating such products which would be better for the athletes and business. Kuttas has always followed an effective business strategy which helps it to reduce the cost of manufacturing. Most of their factories and production units are located in various countries which are emerging economies as well as involve low production cost. Shareholders of Kuttas always earn a healthy dividend which keeps their reputation high. It also enjoys high valuation on the countries stock exchange and trust among all the investors. Kuttas also maintains a steady cash flow which is used for aggressive marketing strategy and to allocate sufficient amount for Research and Development budget. The success of any company depends on their leadership and executives who manage the company in good and bad times. As it explains Kuttas has one of the brightest team of leaders who not only devise the corporate and business strategies but they also inspire others to do the best work. Kuttas is in an industry that is highly competitive. While the industry is highly competitive, the customers always have the option to substitute a product with a similar one of other company if they are not satisfied with the quality or service. Furthermore, since the last decade, the international market is fluctuating creating a major impact on the standard currency. Most of the products manufactured by Kuttas are conduct in foreign transactions in various currencies. This increases their vulnerability towards fluctuations in foreign currency exchange rates. It also increases the cost, affects the operations and disrupts business. Finally, the global economic conditions and the financial stability of the potential consumers are necessary for the growth of this company. Kuttas has a diversified range of products which includes apparels, equipment and footwear. If in any circumstances, the footwear segment experience an erosion then the whole organization would be affected adversely. As Kuttas enjoys good reputation, almost all the products are expensive and this strategy of higher margins of profitability has significantly reduces the number of prospective customers. The high prices of their products also encourage the competitors of Kuttas to keep their prices low giving them an opportunity to increase their market share. As the company is expected to continue with their price hiking strategy, it will probably result in the loss of key market share in some countries. In addition, Kuttas spends highly on advertising and this creates a substantial impact on the profit margins. Kuttas’s company imagine has also received a severe blow when the unfair labour practices were performed in various factories of especially in the less developed countries. This tarnished the company’s image and hurt sales. Poor working conditions, low wage rates and using children as labourers were the main complaints against the company. In the 21st century, some countries where Kuttas is located have exhibited high economic growth. These countries can turn into potential markets for Kuttas. Hence exploring these markets can boost up the sales of Kuttas by manifolds and hence increase the profit margins. Also, the online business now allows every customer to buy their selected product. The marketing strategists projects that by 2020, online sales will be responsible for one-third of overall growth and that the total sales will increase. Required: a. From the case study, outline the key strategies which have helped Kuttas achieve its competitive advantage in the sportswear market. b. There are a number of strategic issues arising from the case study which can affect Kuttas competitive position. Describe these issues and outline strategies which Kuttas can adopt to address them.
case study
Kuttas is a sportswear and equipment supplier based in the Africa. It is one of Africa's
leading supplier of athletic shoes and apparel and a major manufacturer of sports
equipment. In the competitive world, innovation is a crucial determinant of
sustainability. Kuttas has always been successful and is regarded as one of the pioneers
to introduce various products. With the constantly evolving and innovative product
range, it has solidified its position as one of the leading brands in the apparel and
footwear industry.
Due to the complicated supply chain management, Kuttas started focusing on creating
such products which would be better for the athletes and business. Kuttas has always
followed an effective business strategy which helps it to reduce the cost of
manufacturing. Most of their factories and production units are located in various
countries which are emerging economies as well as involve low production cost.
Shareholders of Kuttas always earn a healthy dividend which keeps their reputation
high. It also enjoys high valuation on the countries stock exchange and trust among all
the investors. Kuttas also maintains a steady cash flow which is used for aggressive
marketing strategy and to allocate sufficient amount for Research and Development
budget. The success of any company depends on their leadership and executives who
manage the company in good and bad times. As it explains Kuttas has one of the
brightest team of leaders who not only devise the corporate and business strategies but
they also inspire others to do the best work.
Kuttas is in an industry that is highly competitive. While the industry is highly
competitive, the customers always have the option to substitute a product with a similar
one of other company if they are not satisfied with the quality or service. Furthermore,
since the last decade, the international market is fluctuating creating a major impact on
the standard currency. Most of the products manufactured by Kuttas are conduct in
foreign transactions in various currencies. This increases their vulnerability towards
fluctuations in foreign currency exchange rates. It also increases the cost, affects the
operations and disrupts business. Finally, the global economic conditions and the
financial stability of the potential consumers are necessary for the growth of this
company.
Kuttas has a diversified range of products which includes apparels, equipment and
footwear. If in any circumstances, the footwear segment experience an erosion then the
whole organization would be affected adversely. As Kuttas enjoys good reputation,
almost all the products are expensive and this strategy of higher margins of profitability
has significantly reduces the number of prospective customers. The high prices of their
products also encourage the competitors of Kuttas to keep their prices low giving them
an opportunity to increase their market share. As the company is expected to continue
with their price hiking strategy, it will probably result in the loss of key market share in
some countries.
In addition, Kuttas spends highly on advertising and this creates a substantial impact
on the profit margins. Kuttas’s company imagine has also received a severe blow when
the unfair labour practices were performed in various factories of especially in the less
developed countries. This tarnished the company’s image and hurt sales. Poor working
conditions, low wage rates and using children as labourers were the main complaints
against the company.
In the 21st century, some countries where Kuttas is located have exhibited high
exploring these markets can boost up the sales of Kuttas by manifolds and hence
increase the profit margins. Also, the online business now allows every customer to buy
their selected product. The marketing strategists projects that by 2020, online sales will
be responsible for one-third of overall growth and that the total sales will increase.
Required:
a. From the case study, outline the key strategies which have helped Kuttas
achieve its competitive advantage in the sportswear market.
b. There are a number of strategic issues arising from the case study which can
affect Kuttas competitive position. Describe these issues and outline strategies
which Kuttas can adopt to address them.
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