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Business Strategy: Individual Reflective report of

Brios and the Kids company

SID: 2039830

Word count: 3100

Academic honesty: [By submitting this assignment, I declare that] I understand

that the piece of work submitted will be considered as the
final and complete version of my assignment of which I am
otherwise the sole author. I understand both the meaning and
consequences of plagiarism and that my work has been
appropriately attributed unless otherwise stated. I have not
knowingly allowed another to copy my work.

Assignment deadline: 14:00 on 26 April 2023

Assignment: 011
Module: MOD003337
Lecturer: Alex Ellinis
Semester/Trimester: 1
Academic year: 2022-23
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Executive Summary

The study is made based on the conclusions drawn from the business strategy game (BSG). The reflective report started with a
reflection on the most important choices made by the company. It then went on to explain the factors that led to those decisions,
followed by the outcomes of the choices given, paired with the lessons learned.

Moreover the reflection part illustrates the theoretical frameworks that are relevant to the nature of the business in the BSG, finally
technologies in the apparel industry will be discussed, with particular emphasis on specific new technology suggestions and how they
will affect the footwear business. The report concludes with a set of recommendations on how the firm might benefit from future
management's embrace of the opportunities presented by emerging technologies.
Since the first two years served as a trial run, we kicked off the BSG Framework with an internal and external industry analysis to
determine the best strategy for gaining a foothold in the market.

We were able to reach our ideal customers, families who share our commitment to providing exceptional personal service and dressing
children in beautiful clothes, by adopting a stakeholder strategy and conducting a stakeholder impact analysis to identify varying
interests.

We tried to compete with the industry's best, but it's tough to get noticed by potential new clients. There could be hundreds of others
working in the same field as you. Competition helps differentiate the best businesses from the rest.
To succeed, we knew we had to employ a number of different tactics.

The anticipated year performance box tallied the hopes and fears of everyone involved. Throughout the course of the simulation, we
increased shareholder value and generated revenue, but we fell short of some of their goals on occasion.
We were able to boost the company's reputation over time by emphasising quality over quantity. After the initial phase of analysis we
looked both inward and outward to see where we could improve our chances of gaining a competitive edge. We rapidly learned that
the external evaluation we conducted would change based on where we set up shop. The economy and technology had a role in our
simulations.

The economy was highly sensitive to interest and exchange rates, but even so we were able to provide internet marketing in all regions.

High tariffs, corporations aiming for cost leadership, and weak currency exchange rates are all external concerns that are mitigated by
these factors. Because of our reliance on a single facility in the Asia-Pacific region, one of our internal shortcomings was a lack of private
sales in North America.
We were able to win the game through strategic use of celebrity endorsements and online promotion.
Our organisation made the proper decision to prioritise difference after a careful revision of the performance and outcomes. Through
this strategy, we were able to provide the focused difference and cost leadership that our investors required. By implementing value
innovation, we were able to save expenses by doing away with free shipping and by adding models.

By consistently improving the quality of our materials and introducing a new line of footwear that placed a focus on tradition and
durability, we were able to raise the value consumers placed on our products.
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Table of Contents

Page

Executive Summary 1

Table of Contents 2
List of figures 3

Introduction Mission, vision and values, corporate objectives (Group business statements) 4

1.
Consider your time in the BSG and how the many theoretical frameworks you were exposed to helped you perform better in the BSG's
internal, external, and competitive settings. Decisions, their justifications, and the most important lessons learned should all be included
in your reflections.
1.2 Introduction to the Brios and the Kids Footwear Industry 5
1.2 Thorough the company Environment factors and theoretical frameworks applied 6
1.2.1 A PESTLE analysis 7
1.2.2 Porters’ 5 Forces Framework 8
1.3 Key internal evaluations & decisions timeline and Competitors Performance analysis 9
1.3.1 E-commerce footwear industry evaluation 9
1.3.2 Additional Key evaluations linked to the Internet sales segment 10-11

2.
Provide insightful advice to future management by doing a critical analysis of the influence of ONE specific emerging technology on the
future of your firm.
2.1.Intro recommendations
2.2 Re ccomendations 12

3.0 Conclusions 14

4.0 References 15
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List of figures

Figure 1 Brios and the Kids Company Logo

Figure 2 Porter’s Five Forces
Figure 3 Brios and the kids decision and goals timeline
Figure 4 E-commerce Footwear Market Size, Share & Trends Analysis
Figure 5 Revenue in the North America segment
Figure 6 Image Rating trend
Figure 7 Brand Advertising and Model Availability trend
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Introduction

Figure 1: Brios and the Kids Company Logo

(Source: Student work)

Mission, vision and values, corporate objectives (Group business statements)

Mission
Our mission is to provide exceptional service that exceeds the expectations of our customers by maintaining a team that is both highly
motivated and completely fulfilled.

Vision
We plan to achieve our mission of being the footwear industry leader by consistently providing products that are both high-quality
and cost-effective.
To set the standard in the market with respected and preferred brands.

Values
We exude success, we embrace loyalty, we build team work and we exist for our customers

Corporate objectives
Brios and the Kids Corporate objectives’ are to achieve by Year 16 a Market share of 19% in the wholesale segment, alongside with an
S/Q Rating of 9.5 stars and a Net profit of $200k . Our aim was to gain an EPS of $11 and a stock price of $250 with a Return on Equity
of not less than 30%
1.0 Task

Consider your time in the BSG and how the many theoretical frameworks you were exposed to helped you perform better
in the BSG's internal, external, and competitive settings. Decisions, their justifications, and the most important lessons
learned should all be included in your reflections.

1. 1 Introduction to the Brios and the Kids Footwear Industry

Eight companies are currently vying for a share of the worldwide footwear business, creating a highly competitive
environment. In order to keep up with the ever-growing demands of the market, businesses of all sizes need to raise their
bottom line profitability, stock value, earnings per share (EPS), image and credit rating.
Brios and the kids footwear is a specialist in athletic children's shoes, and the industry operates in North America, Europe,
Africa, Asia-Pacific, and Latin America. The comfort and design elements of each pair of sporting shoes set them apart from
the others. There is a market for both high-end and budget athletic shoes since there are people who are willing to spend
more money in exchange for better quality and a more recognisable brand name, and there is an palpable fraction of trades
who are more interested in the price and is willing to pay a lower amount for a pleasing quality pair of shoes. Focused
Differentiation, Cost Leadership, or Focused Low Cost are three approaches our organisation used to strike the correct
balance between reducing costs and increasing profits.
The company occasionally creates hybrid strategies to address business and market needs.

1. 2 Thorough the company Environment factors and theoretical frameworks applied

1.2.1 A PESTLE analysis

A pestle analysis was conducted to better understand the elements of the global athletic footwear industry's
economic environment during the first round of the BSG :

 Political:
The global footwear industry sees different government policies in different countries hence the duties, tariffs and
taxes vary from location to location. The trade policies in North America are quite liberal when compared to the
other areas of operation such as Latin America and Europe.

 Economical
Capital market values, stock market fluctuations, currency exchange rates, interest rates from banks, and other
monetary variables all have an impact on how our industry sector operates (Tracy, 2015).
Because of their importance, the aforementioned considerations must be thoroughly understood by the industry
before any financial decisions are made.

 Socio-Cultural
As a result, it is impossible to create a single style of athletic shoe that will fit everyone. We figured out that our
shoes had to stand out by catering to specific age ranges or niches of consumers.

 Technological
The function of technology in this sector is essential. Each company constantly searches for innovative technology
options to develop a one-of-a-kind offering, without mentioning the production and advertising in this sector, which
are both affected by technological developments. AI and business analytics have influenced the use of the digital
gateway for sales order processing (Atria Innovations website, 2023). Brios and the Kids promote technology in
their business by investing more in online order processing.

 Legal
Legal factors have shaped the architecture of corporate protocols

 Environmental:
The overall cost per unit or product quality is determined by the location of suitable locations of manufacturing
however to protect the environment, the worldwide footwear sector must always prioritise efficient power
consumption. The global footwear industry has to be always concerned about optimal utilization of energy
resources.

1.2.2 Porter’s 5 Forces Framework

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Student ID: 2039830

In addition to the PESTEL Analysis we applied a Porter's Five Forces of Competition framework, to identify the
following elements of competition in the global sports footwear industry as shown in Figure 2

 Threat of New Entrants :

According to Calori et al. (2000) due to the high cost of entering the market, new competitors are unlikely to
emerge, however despite the high difficulty of entering this market, Brios and the Kids is cautious and for the sake
of meeting the stakeholders expectation should therefore considered this scenario as the least risky option.

 Bargaining Power of Buyers:

Several well-known companies are active in this market, giving consumers a diverse range of options. Some buyers
demonstrate brand loyalty by continuing to buy from the same company year after year. Considering the buyer has
a broader supply picture to weigh, this element carries a significant degree of uncertainty.

 Bargaining power of suppliers

There is a high demand for sports shoes, and numerous well-known brands are already present in the market, so
retailers can easily switch between them. This is a potential source of moderate risk, as suppliers do have some
leverage to secure the pricing they seek in the sports footwear industry.

 Threat of substitute products:

Locally made, visually comparable, and inexpensive products may not appeal to brand-conscious consumers, but
they do present a threat in this industry.

 Intensity of Rivalry:
The level of competition is really high in this field. Each company strives to achieve a dominant market position by
offering either competitive pricing or superior quality.

Figure 2: Porter’s Five Forces

(Source: created by student SID 2039830)

1.3 Key internal evaluations & decisions timeline and Competitors Performance analysis
Student ID: 2039830

1.3.1E-commerce footwear industry evaluation

Figure 3: Brios and the kids decision and goals timeline

(Source: created by student SID 2039830)

As shown in the Chart above, Figure 3 we have made extensive and comprehensive goals and key decisions , but the one that
I want to bring the attention on is the final step in our Timeline of set Goals: which is to invest in the expansion and increase
of the Online sales as we have found reports that proofs how the worldwide e-commerce footwear market was worth USD
99.1 billion in 2021 and is predicted to rise nearly 7 percent during the next seven years from 2022,due to rising footwear
demand on e-commerce platforms in industrialised nations like the U.K. and the U.S. the findings also shows how the more
comfortable, convenient footwear drives market expansion.
Student ID: 2039830

Furthermore, it is anticipated that the thriving e-commerce sector will contribute to the expansion of the market. Please
refer to Figure 4

Figure 4 : E-commerce Footwear Market Size, Share & Trends Analysis

(Source Grand View research website, 2022)

During year 13 and 14 of the simulation we found that wholesale and retail pricing from the rivals have remained high, while
we struggled to compete with the North America private label, therefore we have noted a few key insights from Statista 2022
Because of what just mentioned above the prices have been kept relatively low in order to gain market leadership and draw
in a larger customer base.
However, it has been agreed that prices will go up in the years to come and this suggests that the price of footwear will go up
as soon as it becomes popular again.
This chart illustrates the company's planned use of a penetration pricing strategy to increase its share of the Brios and Kids
market. As highlighted in the Statista reports , in 2023, North America global footwear market is expected to be worth
$100.20 billion revenue in the year 2023.
In 2023, the textile and other footwear subsegment will account for US$29.18bn of the whole market.

When compared on a global scale, the United States generates the most income US$89 billion in the current year from its
exports. (Statista, 2023) -Figure 5

Figure 5 :Revenue in the North America segment

(Source Statista website report , 2023)

1.3.2 Additional Key evaluations linked to the Internet sales segment

Student ID: 2039830

Based on what we saw and learned in Year 11, we decided to pursue a Focused differentiation strategy as we noticed
that when compared to those of our competitors, the outcome was clear: we could grab a reasonable market share while
offering an expensive and quite luxury star shoe with a good range or models than them.
The outcome was unbelievable (please refer to Figure 6 ) : we managed to stand out from the other 7 rivals and gain our own
market and segmentation reaching in some countries the best Image Rating for three years in a row (Year 14 to Year 16) with
a final Year 16 ending with
- 9.5 S/Q Rating in NA
- 9.6 S/Q Rating in Europe
- 10 S/Q Rating in Asia
- 9.5 S/Q Rating in LA

Figure 6 : Image Rating trend

(Source BSG report, FIR Page 3,2023)

It all started in year 12 when we suffer a fall, this year, we've decided to increase our advertising efforts while also expanding
our selection of available models. We also chose to increase our retailer assistance because doing so will boost our S/Q ratio.
Not offering free shipping and raising retail and wholesale prices was done to cut costs and maintain profit margins.
According to Jager (2010) profitable operations require financial management, the mission the is to avoid running out of
money, cash flows and revenues but to do so we must managed it properly. Free delivery will cost the company money in
transportation and taxes, reducing its revenue and Brios and the Kids will also lose profit due to lower commodity prices.
Brios and the Kids will not be able to create profits or provide acceptable financial returns to stakeholders, hence why as
group we also used SWOT analysis to perform some of the internal decision-making.
SWOT examines internal strengths, weaknesses, opportunities, and threats (Anon1992) .
Based on the SWOT analysis, the manufacturing team's competence and innovation led me to expand the footwear line.
SWOT analysis showed me that I have a poor financial base and should avoid superfluous investments like customer rewards
and free shipping. SWOT revealed footwear market growth opportunities so footwear product market share statistics
showed us its potential expansion.
We therefore increased models and did company brand advertising as Listed in figure 7.
These initiatives enhanced the internet sales positively so we kept the Brand Adv between $23k/Year to £25k/Year as shown
in Figure 7
Student ID: 2039830

Figure 7 : Brand Advertising and Model Availability trend

(Source BSG report, Time Series Comparative efforts,2023)

2.0
Student ID: 2039830

Provide insightful advice to future management by doing a critical analysis of the influence of ONE specific emerging
technology on the future of your firm.

2.1. Introduction to recommendations

We have previously highlighted the increase in our Online sale as a result of our findings throughout report overview made
by Grand View research (2022), according to whom in order to increase product sales, businesses are focusing on a few key
factors, such as cutting-edge technical fabrications, new product advancements, and ground-breaking designs. During the
forecast period, the demand for footwear on e-commerce portals is expected to grow due to rising awareness and passion
among people about the health advantages of fitness & sports activities.

2.2 The effect of a new technology on the operations of the company

Enhanced by the theories exposed by Aragon- Correa (2016), technology's influence resides in its ability to improve the
buying experience for consumers. Brios and the Kids has a natural connection to the promising new field of virtual reality
technology, therefore it can provide more authentic experiences for internet shoppers by using virtual try-on tools,
nevertheless it is important to recognise the fitness of the acquired footwear items, especially for performance athletes who
buy the footwear products online (The conversation website , 2022).

Therefore, including VR into order taking and selling processes will lead to happier clients. Customers are able to more
effectively interact with technological applications because to virtual reality (Gorian et al., 2020) but it is worth to mention
that the app's interface must be practical enough to provide users a good time interacting with it.
However, fast internet is necessary for the virtual try-on function according to Arderiu and Fondeville, 2022, as customers in
more remote locations or those with stippled service may have a less than ideal experience as a result. High amounts of time
and energy are needed for training and upkeep of virtual reality applications. Furthermore, users may have their purchasing
experience negatively impacted if the app is not compatible with their smartphone devices.
According to Atria innovations(2022), the textile sector as a whole, not just footwear, stands to benefit greatly from another
promising technology: Collaborative robots. Even though Collaborative robots have struggled to create high quality shoe.,
due to the variety of materials and designs, setting up and tuning. Cheaper and more precise sensors have made this work
easier, and such robots can now work in manufacturing lines alongside human assembly workers.
Because footwear manufacturing requires precision, collaborative robots alone cannot guarantee a good result. Computer
Vision locates objects for precise robot action and sensors that measure force are also essential for appropriate material
handling.
To implement this virtual technology, Brios and the Kids will need to hire specialised IT personnel or contract out the
technology administration functions to a third party and it will cost the organisation more money because it would require it
to pay the salaries of highly qualified technical staff. In addition, Brios and the Kids will need to staff a customer service
department again, the team's infrastructure needs improvement, which could lead to cash flow problems for the business.

Because of its low wholesale and retail prices, Brios and the Kids is likely making less money than its rivals. Therefore, in the
midst of low revenue creation, taking up such an investment strategy can weaken the organization's financial foundation. The
technology helps the company's customer care department in several ways. However, this also presents a financial challenge
because Brios and the Kids will have to pay for infrastructure costs associated with developing and integrating the necessary
software.
It is therefore recommended :
Student ID: 2039830

1. A third-party technological service provider which designs and maintain the virtual try-on app. Investigating the
source before choosing it for technology operations eliminates privacy theft risk. Before hiring third-party IT firms,
do your research. Background checks before selecting a supplier can eliminate privacy theft threats like cyber
attacks.
2. After a few years of income and profit, the virtual try-on service should be launched. The company's footwear prices
are lower than competitors', indicating smaller profitability. After the brand enters the market and gains market
share, footwear prices will rise. After saving enough earnings and earning successfully, the company should invest in
technology.
3. Future senior managers should train new hires in developing technologies to keep them current.
This updates organisational practises to current trends.
Student ID: 2039830

Conclusions

While acknowledging areas for improvement, our group believed we had met our aims.

While assessing our shortcomings and comparing ourselves to industry standards, we may have been overly careful
throughout the planning and implementation phases, which led to a celebrity scarcity and an exponential Marketplace bid in
year 11.

Our reluctance to take on debt limited us to Asia and the Pacific. If we had gone global, we would have had several revenue
potential. Now that it's too late, we realise we should have taken out short-term loans to raise capacity and invest more in
the North American private label. However, doing so would have required a large capital commitment with too little time for
an acceptable return on investment. Instead of endorsements, we could have grown our North American business.

Among other things, we failed to increase prices during year 11 to keep up with inflation, which contributed to our first big
loss in the past five weeks of BSG. There are many expenses to think about if you want to expand and differentiate yourself
in the market, therefore we should have done that before making this decision. Both of these decisions may have stymied
our efforts to expand and improve the company. After finishing, I feel that my team and I learned some valuable insights that
will guide our decisions moving forward. By focusing on Image Rating, we were able to get a leg up on the competition
despite our limited means.

By Year 16, Brios and the Kids aimed to have 20% of the wholesale market share, a perfect Image Rating of 100, a perfect S/Q
of 10 across all nations, and an A+ Credit Rating. We made it to Year 16 with an Image rating score of 100 and a $200k annual
Net profit. We aimed for an EPS of $11 and a stock price of $250 after 5 years of BSG play, with a return on equity of at least
30%.

We also concluded that advertising has value, but only up to a point, because it is only effective if it strikes an emotional
chord with the target audience. We've learned the importance of considering stakeholder value while setting corporate
objectives. If something isn't working out, don't feel obligated to double down on a terrible decision. Having operational,
social, and strategic performance goals is essential for any business.
Student ID: 2039830

Reference

 Anon. 1992. Business strategy and the environment (Online). New York: J. Wiley.

 Aragon-Correa, J.A. and Leyva-de la Hiz, D.I., 2016. The Influence of Technology Differences on
Corporate Environmental Patents: A Resource-Based Versus an Institutional View of Green
Innovations. Business strategy and the environment, 25(6), pp.421–434.
https://doi.org/10.1002/bse.1885.
Student ID: 2039830

 Arderiu, A. and de Fondeville, R., 2022. Influence of advanced footwear technology on sub-2 hour
marathon and other top running performances. Journal of quantitative analysis in sports, 18(1),
pp.73–86. https://doi.org/10.1515/jqas-2021-0043.

 Atria Innovation, . New 4.0 technologies in the footwear industry. Atria [online]. Available from
https://www.atriainnovation.com/en/new-4-0-technologies-in-the-footwear-industry/ [Accessed 26 April 2023].

 Calori, R., Atamer, T. and Nunes, P., 2000. The dynamics of international competition from practice to
theory. Thousand Oaks, Calif: SAGE.

 Gorjanc, D.Š., Bras, A. and Novak, B., 2020. Influence of Technology Process on Responsiveness of
Footwear Nonwovens. AUTEX Research Journal, 20(4), pp.539–551. https://doi.org/10.2478/aut-2019-
0053.
 Grand View Research, . GVR Report coverE-commerce Footwear Market Size, Share & Trends Report E-commerce
Footwear Market Size, Share & Trends Analysis Report By Type (Leather Footwear, Athletic Footwear, Athleisure
Footwear) GVR [online]. Available from https://www.grandviewresearch.com/industry-analysis/e-commerce-
footwear-market-report [Accessed 26 April 2023].

 Jäger, U., 2010. Managing social businesses : mission, governance, strategy and accountability.
Basingstoke: Palgrave Macmillan.

 Tracy, B., 2015. Business strategy. 1st edition ed. New York, New York: American Management
Association.
 The conversation, Super shoes: Explaining athletics’ new technological arms race, Tyler, Atria [online]. Available
from https://theconversation.com/super-shoes-explaining-athletics-new-technological-arms-race-156265
[Accessed 26 April 2023].