Dakz Performance Sports Apparel Essay

Q1 – Define Industry and advise about Dakz performance spots apparel Industry Definition (The grouping of similar economic or commercial activities that produce goods or services) Page 2.5 Dakz Performance sports apparel is into global athletic apparel and footwear industry. Dakz started making compression apparel for triathletes, before quickly diversifying into small production runs of cycling and runin clothes for athletes and active Australians. Dakz has expanded its business into broad range of performance,fitness and compression wear. Q2- How would you determine this industry is global ? To determine if te industry is global – We would consider the athletic apparel market goods traded globally. Dakz and other international brands like Nike, Addidas etc trade globally so we would be considered this industry to be in the global industry. Q 3 – Define industry value chain and prepare value chain for Dakz. The Industry Value Chain (Athletic Apparel Industry) –   Comprises the business’ processes, people, organisations, technologies and infrastructure which transform raw materials into finished good or services. Q4 – Define Industry life cycle and at what stage Dakz lies. Ans – Most Industries have a life cycle, similar to a product life cycle but much longer. Different strategies are required at different points in an industry lifecycle phase or stage. Throughout the life cycle, the structure and environmental an competitive forces that influence and industry change, As such, an organization needs to be adaptable. The industry would be considered to be in the mature stage of the industry lifecycle, this can be  determined because at this stage :- Buyer start to have greater power – Buyer have alternative choices and brands and are easily able to compare price due to the availability of information on internet and availability of different brands in market and super markets. Focus is on efficiency, cost control and market segmentation : – Focus of Dakz on cost reduction due to that they have outsourced manufacturing of goods to china to reduce its cost. Industry rivalry is intensified : – Most of International brands like Nike, Addidas has already entered into Australian market and more options are available. Question 5 – PESTEL Remote Environment Analysis (PESTEL) (factors influencing past growth in the industry and what is expected to drive future growth?) Page 2.23 ( Please refer yellow points for bottled water industry) Factor Issue Nature of Impact (=),(+),(-) Political There is no political pressure across world in exporting athletic apparel and footwear (+) Economic Continuous compounded annual growth rate (CAGR) @8% has been observed in this industry in Australia from 2008-2012 and component annual growth rate of @0.8% has been observed in this industry in US. (+) Social Customers had shown goods growth trend Since 2008 (+) Technological Compression apparel is highly specialized category in athletic apparel market, Dakz has already started manufacturing, compression apparel along with broad range of perfumes etc. (+) Environmental Information has not been provided in the case about environmental issues. N/A Legal Some Regulatory barrier has been imposed on wholly foreign owned companies in some Asian countries. (-) Overall – On the basis of analysis – the future growth of athletic apparel market could be expected to increase. Key Factor promoting future growth as as follows :- Strong growth in Demand Continuous growth in demand of compression apparel. Reduction in cost of manufacturing due to outsource of manufacturing in china. Question 6 – How would you apply Porter’s five force model in this case :- Threat of New entrants if high :- Market is big enough to attract new entrants, There is no such barrier imposed by government on new entrants. There is little expertise required to enter into athletic apparel but require highly specialized knowledge for category of compression apparel. Dakz has started business from very small that attract new entrants as well. Buyer Power is high :- Buyer have alternative channels for products and have many brands to choose are easily able to compare price due to the availability of information on internet and in supermarkets. Substitute power is low : – Dakz is making compression apparel for triathletes and other athletic apparel for athletes and active Australians. Usually athletes do not other clothes as substitutes other than athletic apparel so we can easily say substitute power is low. Supplier power is low :- Due to availability of other international brands in market, supplier power is low. Daks has 40% of market share in Australian and can be easily influence suppliers for not increasing raw material price. Industry Rivalry is high:- Due to continuously increase in demand since 2008, Industry rivalry is high. Price competitiveness drive rivalry. Availability of other international brands, no such barriers on new entrants ad continuous growth in demand of athletic goods pushes price competitiveness. So we can easily say that industry rivalry is high. Summary – Overall we can say demand of athletic goods will increase but if Dakz want to maintain or increase its share in Australian and international market, they have to fous on quality and their price must be competitive. Module 3: Understanding the internal environment (Internal Environment – the internal influences and performance of an organization, identifying and focusing on the operational drivers, along with ensuring efficient organizational and people performance) (Objective – understand current performance in order to drive future strategic options; growth, products/services, markets, differentiation, industry position) 1 & 2. Identify stakeholders and align stakeholder needs Key Stakeholders Stakeholders’ Objectives Alignment to objectives; met/not met Will Winsome (CEO and Founder of Dakz) Long-term sustainability Revenue and profit growth Seeks operational excellence. Very much aligned with company strategy due to significant investment in product development and monies in business. Yes, Being a major supplier to the non-alcoholic beverage market has afforded ABL significant power over its customers. It has enabled the company to retain cost reductions achieved through efficiency gains rather than pass them onto the retailers. These efficiency gains have allowed the company to enjoy higher profitability levels than the industry overall, and have supported continuous investment to improve technology and infrastructure. Yes, company is building competitive advantages by process re-engineering to reduce time to market  giving refrigerator and storage machines at retailers place. Introducing  world class manufacturing facilities and automated warehousing facility ABL’s revenue composition changing from 90% CSD based in 2002 to 68% CSD based in 2013. Tom Dwyer (Managing Directors) Sir Rod Fisher (Chairman of the Board) (Qualification: Distinguished Australian businessman and former Olympian). Long-term sustainability Revenue and profit growth Very much aligned with company strategy , he has joined board in 2009 ad be with company till 2013. Yes, Sales of company has been increased from $23.3 million in 2009-10 to $66.5 million in 2013. Profit of company has been increased from $3million in 2009-10 in $21.6 million in 2012-2013. Board of Directors Company growth Market share Prestige Revenue and profit growth Yes , growth has been achieved and Board requested company to accelerate entry into other complementary products to counteract decline in CDS (option bottled water industry) ABL has invested in large-scale recycling projects with major customers, such as shopping centers and fast food retailers, and has moved to improve its  environment image by emphasizing that all of its water is sourced within two-hour drive of bottling facilities. ABL is very conscious of the impact that its packaging has on landfill. It has several projects underway to find out ways to reduce its environment impact. Yes, Being a major supplier to the non-alcoholic beverage market has afforded ABL significant power over its customers. It has enabled the company to retain cost reductions achieved through efficiency gains rather than pass them onto the retailers. These efficiency gains have allowed the company to enjoy higher profitability levels than the industry overall, and have supported continuous investment to improve technology and infrastructure. Shareholders Innovation Revenue and market share growth increase in share price and return Tailoring marketing campaigns to customer groups and to beverages for different times of the day. ABK is exploring a new product idea ready-to-drink, chilled coffee. First Australian beverage manufacturer to introduce sugar-free drinks using Stevia. ABL developed slimmer cans and smaller bottle sizes. ABL prefers to work with experts for improvement in packaging Company identified organic and acquisition growth options within product range. Also acquired several coffee bean businesses to capitalize on growth of the coffee market in Australia. Yes, growth has been achieved due to increase in market share and ABL has enjoyed higher profitability levels than industry average Return on investment and market share are performance measure used in all of ABL’s business unit. Employees Stability of employment Pride of working for an innovative organization. Yes, Focus is on sustainability in employees, workplace and community, therefore areas of concern align with employees and Career prospects such as graduate employment program Significant investment in training and development ABL is focusing on low cost leadership, and has reduced staff levels ABL is second largest manufacture and planning to be largest in new future, hence it’s a matter of pride for the employees who are associated with the company. Community/ Environment No Environment Impact. Healthy and tasty product. Triple bottom line reporting Not much, Impact of bottles on landfill and the carbon output of production and distribution. Not much because CDS’s product are not good for health. However to add healthy drinks to the product portfolio, ABL has acquired fruit juice manufacturer in Victoria and entered into milk drink market with the purchase of manufacturing facilities from a dairy co-operative. The company is proud of the fact that it was the first Australian beverage manufacturer to implement triple bottom line reporting Government Reduce Health Impacts of CDS on society (Obesity &diabetes)