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The highly successful company, which licenses the Hush Puppies brand, has
begun a number of local and international initiatives and must now determine
how best to utilize its resources in the future.

 


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! c


½ To make a recommendation of which alternatives is most appropriate for
expansion, to be completed immediately.
½ To implement the approved recommendation by last quarter of 1992.

 
! +
 


 
‘. The company achievements and recognition:
1. Forus had succeeded in significantly broadening the
market appeal of its Hush Puppies brands.
a. ABC1 men¶s market, Hush Puppies was number
one in market share
b. ABC1 women¶s market, Hush Puppies was number
five in market share.
c. ABC1¶s children¶s market, Hush Puppies was
number four in market share.

2. Hush Puppies of Chile won three annual Wolverine world

wide awards for the quality of its advertising campaign and
marketing strategy
3. Brooks was positioned as the number three brand in the
Chilean athletic shoe market after Diodora and Adidas.
 ‘‘. The company accelerating growth and profits
1. Sales explode by an average of 30% per year since 1983.
2. The successful partnership with wolverine world wide
3. The successful expansion from Men¶ s Shoes to Women¶s
and Children shoes
4. The number of company-owned retail stores in Chile had
increased to 26 with four more planned by year-end
(1992).
5. Success in exports to its neighboring countries (
Uruguay, Paraguay, Bolivia, Argentina, Peru)

‘‘‘. A healthy balance sheet, a portfolio of popular American brand

names, improving manufacturing capabilities, world class design
skills and substantial marketing expertise.
‘ . Excellent styling and product-development skills.

b. ,
‘. Little experience with apparel retailing
‘‘. Less skilled middle manager.

    
‘. Chile¶s Good Economic Standing
1. Many economists were predicting GDP growth of 10% per
annum throughout the remainder of 1992 making Chile
one of the fastest growing economies in the world and an
engine of economic growth in the region.

‘‘. Opportunities to other retailing concepts :

1. The combination of athletic shoe and clothing stores had
proved a major hit in Europe, Japan and North America, it
had yet to be effectively pursued in Chile.
2. Outdoor clothing and accessory market was particularly
attractive because it was a segment that appeared to have
been neglected in Chile.
3. The outdoor clothing and accessory market was
particularly attractive because it was a segment that
appeared to have been neglected in Chile.
‘‘‘. Projections indicated that 1992 would be the best year ever for the
company with after tax profits at over 15% of sales and return on
equity surpassing 35%
 c Estimated that in 1992 in Argentina the company would sell about
32,500 pairs of Brooks shoes, worth approximately $U.S. 1.0
million

 
‘. The exports from Chile were expected to compete with much
lower cost footwear from China, ‘ndia and the Philippines.
‘‘. The depth of Hush Puppies Chile¶s market penetration, particularly
in the ABC1 men¶s casuals would lead to increased competition
from new European and American brands.
‘‘‘. The direct and indirect labor costs represented only about 25% of
total manufacturing costs thus limiting the company¶s ability to
pursue a low cost exporting strategy.

c - 

The recommendation of Ricardo Swett will immediately review and approve by

the key family member and will soon be implemented.

c *
 c
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!& ± Diversify internationally with the current resources.

!( - Diversify domestically into other retailing concepts.

 c  *. 

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Based on the result of the Decision Matrix, it is clearly shows that ACA 1 (to
deployment of its resources internationally) is the most appropriate
recommendation. The desire of the company to expand its resource is best on
branching out internationally which can increased sales, higher profits, new
knowledge and experience.
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