Dearn Limited – Shoe

Manufacturing & Retailing

Pre-seen Mock – June attempt summary and expected questions –
Manufacturing & Retailing Industry – Stage 3 & 5

Dearn Limited – Shoe Manufacturing & Retailing

 100 year old company
 Manufacture and sells 4 types - handicraft & mass
production
 4th largest mfc & retailer
 Lucland – Developed and politically stable country
 Reasonably priced well made shoes – adult & children
– rep.

Implication of summary
• A well-established company – depth set of ethics &
values
• Brand image – existing customer base – market
share
• Stable country – enables to grow more & less
political effects

Industry Overview
 Factories & smaller Workshops
 Sales via retail outlets & online, export via
distributor
 Online sales – 25% (potential to grow more)
 Offline sales – 60%
 Export sales – 15% (potential to grow more)
Dearn Limited – Shoe
Manufacturing & Retailing
 Traditionally – made with leather –
Environment??
 Industry shift to cheaper man-made fabric –
now-a-days used extensively
 Total industry revenue 20x4- $3750 million
 Average annual growth since 20x0 – 1.71%
 Annual growth for next 5 years – 1.06%
MARKET Share
 5 largest companies in industry 45%
 200 small companies – 55%

Implication of summary
• 3 modes of sales – more opportunities
• Dearn has not made any online sales and
industry does not provide online sales in other
countries, hence there is better opportunity.
• Risk – Dearn
• Gain more market share & customers across
border – economies of scales – first mover
advantage available in case of online sales
across border
• First mover advantage – handicraft shoes across
border – no one does.
• Involvement of distributer – risk, high cost , less
control.
• Opportunity to related horizontal expend –
remove distributer – competitive advantage –
Dearn Limited – Shoe
Manufacturing & Retailing
better price – more customer – increase market
share – brand visibility – long sustainable growth.

• What other different kinds of fabric available to

dearn , is Dearn’s research center finds any new
man – made fabric – is it cheaper and quick –
enhanced quality and more environment friendly
– might led to competitive advantage. – need
finance?

• Ethical issues attach to use of leather – how

Dearn is dealing with them – any gov
certification or prohibition on such uses – aligns
with environment values with mission statement
of company – consider to the pov wider
stakeholder group – customer and government
are more environmentally friendly and aware
now?? (: as always just aware not practical :p)

• Comparing industry revenue to Dearn revenue,

any increased?

• Decrease in annual growth rate – industry life

cycle? - Shakeout stage, post growth stage
where rate slows down and rivalry increases,
Dearn Limited – Shoe
Manufacturing & Retailing
and new entries have started to enter the
market.
• Notable = slower growth rate – market size
will grow slowly till maturity then no
growth and then decline? should new
investment benefits company in long run?
Yes, It will benefit them if they moves out
of the lucland shoe industry , diversify it
geographically hence they expand their
business life and will continue to grow
even post decline stage of lucland industry.

• Recommended Dearn company to move in

by start exporting online and offline – to
expand their market to overcome the risk
of decline stage of lucland shoe industry –
move in a developing nation – where
growth rate is high – rivalry is low – enjoy
economies of scale – supply at low price
and enjoy 😊

• No fear from 200 small companies as they have

too small market share main focus just 5 large
companies – Dearn needs overcomes challenges
with them.
Dearn Limited – Shoe
Manufacturing & Retailing
Models Expected and types of questions
- Porter 5 forces – industry
selection(competion , substitutes ,
bargaining power ) with industry analysis
with lifcycle – shake-out
- Portor diamond – nation wise (if
expending in new country choose
developing one – )
- Explain the importance of strategy within
org
- Analyze the customer market – which
market to enter – product dev &
penetration, diversification etc
- Industry shift , evaluate the new fabric
found by the research dept and prepare SAF
report for CEO (plzz bhagvan ke vaste
aajana :) sceptics skill
- PESTEL analysis (Slow industry grow –
economic, stable political condition –
political, tech – introduction big data, new
fabric etc, environment – leather, social –
stakeholder group, trade union, legal – new
laws if any expected)
- Chances of Skeptism skill – ethical &
environment trade off
Dearn Limited – Shoe
Manufacturing & Retailing

Challenges within industry –

 Historically based on price, product, quality – brand,
marketing
 Speed of market – fast fashion, changing fashion
trends & price conscious – last 5 year
 Flamigo leading – new style – 2 weeks – retail store
 Key driver – household disposable income – economy
already slowing down
 Economy Growth rate – 5.1 – 1.6 – 1.1%
 Mid-price shoes sold is decreasing and low price
increasing
That’s why also flamingo leading
3rd party mfc country -
 Poor labor legislation & negative impact on
environment
 Cost effective in production
Implications -
 More Customer chooses Parrish , expensive shoes
due to above negative impacts of manufacturing in
such country
 This leads to a need of skilled labor in lucland
 Attracting New Entrants to industry

Environmental Impact
 Large amount of co2 throughout mfc process
 1.4% global green-house gas emission
Dearn Limited – Shoe
Manufacturing & Retailing
 1000 shoes disposed in lucland alone -land fill sites –
fast fashion
 Non-biodegradables - Years to be biodegradable
 Increase no. of orders (uncertain about size) and
returns of shoes (due to lack of universal foot sizing
std and free shipping & return) – impact environment
too – online industry

Implication of summary
- Evaluate the reasons behind the fact that
Flamingo, despite selling low quality
products, is leading the market ?
Because of fast change and less income of
customers.

- How can Dearn company adapt the fast –

moving industry? evaluate its environment
and ethical considerations.

- Dearn company has faced less customer

demand for it outsources mfc types of shoes
in the first quarter of the current year,
analyses the reason behind this and its
implications too
Also analyses the pros and cons of the
outsourcing manufacturing process and if
Dearn Limited – Shoe
Manufacturing & Retailing
company chooses to opt out what will be the
implications?

- Suggest a way that can facilities the

effective opt out of 3rd party outsource
manufactures and the potential challenges
that Dearn can face?

- Dearn Company is planning to increase their

online orders for shoes, both in-out of
country, discuss its SAF and its environment
ethics implications and how dearn company
can reduce them?

- Dearn Company is planning to obtain

external funding either equity or debt to
funds one of investment / expansion plan of
its suggest its follow things

- What is better equity or debt keeping in

mind financial and risk included currently in
company

- Recommend measures to the management

or identify the weaknesses of the current
annual report and suggest some financial
and non-financial measures that can be
Dearn Limited – Shoe
Manufacturing & Retailing
included in the annual report to enhance
potential investor trust in the company

- Currently Company lacks when its

integrated reporting , suggest what is this
and how dearn can achieve a good
integrated reporting – excellence in non-
measure as well as – ways in which negative
impact on environment can reduce.

- Types of capital , CSR, integrated reporting ,

reputation risk , low cost achieve ??? ,

Industry body & legislation

 Lucland Shoe Association facilitates the trade by
providing guidance , advice etc
 LSA – has link with government – mandelow
matrix
 Made in Lucland – LSA mark
 LSA mark – comply – employment, health and
safety, consumer protection, competition and
data protection
 Copyright protection– strong
 Test – shoe – material – nonhazardous
 Staff – Nation shoe union – help staff/labor
negotiating pay etc mandelow matrix
Dearn Limited – Shoe
Manufacturing & Retailing
Implications of summary
- Using mandelow matrix identify the
stakeholders of dearn company

- Drawbacks of outsourcing -potential threat

that as labor condition is not good in 3rd
party mfc – MIL mark of Dearn

- Implication of fact Dearn was 1st in the

industry to have MIL mark

- Copyright protection – should we copyright

of this / any consequences of breach ?

- Hazardous materials use – implications –

LSA & NSU

Product Overview
Mass Production

 Expanded industry – mass automation

production
 Machines use at all stages of production
supervise/operated by humans – depending on
their skillset, and human error
Dearn Limited – Shoe
Manufacturing & Retailing
 Traditionally mfc in lucland – geo change in
case of Dearn too move out of lucland 15
years ago leaving 1 factory
 to benefit of lower production cost of
developing countries , companies outsources
their production 3rd party. – Dearn outsources
to X ltd (3rd party)

 4 stages of production

Implication of summary
- Varied industry , automation and
handicraft
Dearn Limited – Shoe
Manufacturing & Retailing
- Automated , High Tech any new technology
req at any level to make the process more
quick or cost effective.
- Human includes then the efficiency of
automation process depends on skill of
human operating it.
- Wastage cost of material at stage 1
- Process matrix Redesign – require
outsource/make/buy , ethical scenarios.
- Dearn company already outsources to 3rd
party X ltd
- Country where outsources – porter
diamond

Hand-crafted – high quality &

craftmanship
 Skilled labor is required to manually
perform all/some of 4 steps.
 Made out of leather
 More expensive – more price
 Produce in-house in lucland (not
outsourced)
Implication of summary
- Highly skilled labor req – difficult ,
costly ,training cost – social , people
implication
Dearn Limited – Shoe
Manufacturing & Retailing
- Leather use – environment ?
- Enhance brand image ?
- Price strategy – high margins
- Financial ratio – revenue , cost , margin
distribution between both products
- Value adding activity analysis
- Dearn ltd already outsources to X limited ,
but there is new article in business times
that highlight a new country – Y , which is
currently developing and a high growth is
expected and labour rates are low , also
there are skilled labour available which can
use for handicraft , should be out all our
productions , or just handicraft or nothing ,
please advice?
- Discuss drawbacks and advantages of
outsourcing in context of Dearn limited

Types of Shoes –
 4 types
 Formal Shoes – handcrafted – adults
 Semi formal – mass produced – mixed fabric
 Casual – mass produced - synthetic
 Children - mass produced – synthetic
Dearn Limited – Shoe
Manufacturing & Retailing
Implication of summary
- Commercial Acumen – link to financial –
which product earn higher margin.
- Analyze the profitability of dearn industry by
assessing reasons and implications of
financial and non-financial measures in
overall evaluation?
- Compare mfc cost of each product
- Compare the demands of each product
- Analyses by the composition of pop – adult ,
child
- Which product company excel
- Higher customer satisfaction
- More complaints?
- Product focus, branding and globalization
- Opportunities & threats – SWOT
- Market segmentation
- Understand the margin value of niche
products
Dearn Limited – Shoe
Manufacturing & Retailing

Market Structure – Competitors –

5 large firms

Dearn – all 4 , price medium , quality - good

Shoe type Competitor Qualit price Market Leader
y
formal Parrish – 8.9% high High Parrish
Semi f Betterby-5% High Medium Dearn
casual Rigo 11% High High Rigo
Flamigo-10.8% Low Low
children Flamigo 10.8% Low Low Dearn(**)
Betterby – 5% High Medium
Tiptoe - small
Dearn Limited – Shoe
Manufacturing & Retailing
Implication of summary
- Benchmarking , growth estimates,
competitive strategy
- Why our share is lower than Rigo and
flamingo , where are we lack bro ?
- Despite producing all 4 shoes of good
quality and charging medium price why still
have less share?
- Do we lack specialization?
- Volume driven strategy > cost leader
- Flamigo has a fast fashion always ready for
new generation new taste & preference – do
we lack here?
- How can we overcome

Sales Channels
 Mode – online (25%) , offline(60%) and distributor -
EXPORT(15%)
 SALES IN LUCLAND – 85% (ONLINE & OFFLINE)
 Online sales likely to grow – ** opportunities
 Online export sales -- **opportunities –hu hu ray ray
 Already excellent historical reputations of shoes – hu hu
ray
Dearn Limited – Shoe
Manufacturing & Retailing
 Inc disposable income – inc demand of handicraft –
oppo
 Exposure of exporting handicraft shoes – already
industry doing
 Available –
 Online selling over export – handicraft and other shoes
– still available.
Implications of summary
- There is a new expansion opportunity to
export to a particular country – our sales
manager suggests us two ways for
exporting to other countries via distributes
or via online channels, contracting with a
delivery company x-cart, he requests assist
him with a brief note on commenting
whether the company should expand into
different countries or if yes then
recommended the method of exporting?

- Use SAF (sustanbility , acceptability and

feasibility)
- Porter Generic strategy – price –
differentiation or what? – expanding to new
market, what will be the price,
horizontal/vertical expansions
- Which market to expend – marketing mix
Dearn Limited – Shoe
Manufacturing & Retailing
- Evaluate the opportunities and threats
available from competitive market

- Evaluate how development in tech affects

customer behaviors & preferences
- Value network
- Lucland mfc still rely on physical store
- Online is growing but only in lucland
- Export is small & limited to handicraft shoes
through distributors

Innovation and
development
o Ethical shoes – sustainability sourced products
o Launched by kind shoes Co
o Main Alternative??
o (More expensive eco traced materials unlike cheaper
unsustainable man-made material?
o Recycling initiatives – scope – not yet dev – eco-
friendly – can gain competitive advantage in future?
o Intelligent Shoes – tech enabled – athlete, measure
like smart watch, and provide feedback directly to
phone via Bluetooth
o Customizable Shoes – design and personalized
o Online Technology – try shoes via camera – website
Dearn Limited – Shoe
Manufacturing & Retailing
Implication of summary
- There is a new column introduced in
business times “innovations – that can
shock and change you”, you are product
developers responsible for innovation in
Dearn, you are instructed by your senior
manager to prepare a report for board
informing them about the innovation in shoe
industry and assess whether we can go with
them or not?
Also includes their pros and cons and
implications that it causes to company?

- There is article published in Business times,

about the recycling technique successfully
use in country R, largest shoe company
You are R&D manager and currently
preparing slides for presenting the benefits
that Dearn can gain If they start developing
that technique
Prepare 2 slides – one for benefits and other
for SAF analysis of the strategy.
Persuading manners.

- Your Sales – Manager has asked you to find

some techniques that can use in order to
increase online sales in and out country – as
it identifies as an opportunity by the board
Dearn Limited – Shoe
Manufacturing & Retailing
Prepare a report outlining the benefits of
online sales and some of the techniques
that can lead to increased sales via website.
Also consider environmental factors and
how the impact can reduce?
(include that they should start a home
delivery service too , automated picking
process, standard size etc.)

Dearn Shoe Limited

 MIL mark
 15 years ago – Dearn mfc – Layne – south-
west lucland
 As industry moves its factory outside
lucland for better production cost
 Dearn also outsourced all of its production
to Totland largest shoe producer, X ltd – 3rd
party mfc
 1 small factory & warehouse – still layne –
main employer of this area – handcrafted
formal shoes
 DT Global transport – shipping
 75 retail outlets & online website
 No export yet – huge opportunity*****

Implication of summary
Dearn Limited – Shoe
Manufacturing & Retailing
- From all stakeholders point of view and
pristine capitalist pov , elucidate whether
outsourcing all production is ethically wrong
or not and potential implication of both
options – if Dearn limited continue to
outsource and if Dearn limit take back all of
its operations back in lucland.

- Consider , Dearn will able to generate more

employment in its own area , implication on
MIL mark , environment negative impact ,
decrease customer sales prefer eco
product , degrade labor laws in totland ,
efficient production cost and other exhibit
info , risk of only 1 mfc supplier – heavy
reliance , risk of only one shipping DT global
transport.

- Dearn limited consideration to shifting on

on-line mode to decrease its reliability on
physical store sale – consider whether Dearn
also start online export sales with
justification – highlighting benefits (first
mover advantage , globality, expansion in
diverse geography developing countries for
high growth rate , less involvement of
distributers, historically high reputation) and
its potential environmental considerations
Dearn Limited – Shoe
Manufacturing & Retailing

- From pre-seen, its highlighted that major of

industry export sales are most of only hand-
crafted shoes , recommended the board
what Dearn should export that differentiate
it from other Luc land companies?

Dearn Shoe Limited –

Ownership
 Founder Family Shoe – 70%
 They have no involvement in operations
/ board of company
 Directors – 15%
 Empl – 10%
 Other – 5%
 Not listed – still good governance
 No audit, risk, nomination and
remuneration committee
 Internal Audit Team reports to CFO
 Centralisation, hierarchy – exhibit

Implication of summary
- Employees have share – motivation – sense
of belongingness – will work for betterment
long term growth
Dearn Limited – Shoe
Manufacturing & Retailing
- While director have share can lead to
several integrity issues or insider trading – if
company got listed – pref short term growth
– better price listing -sold their shares first ,
any constraint on director on selling of share
if company got listed ?

- HH type q, Dearn decides to get listed to

obtain some funding to fund expansion of
company current holders of share will sale
share in this proportion
family – 20% , director – 10% , employees –
2% apart from these 10 million new share
issues – Dearn will be listed and biding
share price will be issue , in-case if
undersubscribed existing share will be sold
first

The issue is undersubscribed and below is

the result due to bad results of recent
quarters.
Advice board whether they should allot the
share at lower price that result In company
will get enough funds and issue will be fully
subscribed and existing shareholders will
get less.
Or issue at a higher price that result in
Dearn will get less money and issue will
Dearn Limited – Shoe
Manufacturing & Retailing
undersubscribe existing shareholders get
more.

- Evaluate the current governance culture &

consider the governance changes that
Dearn is required to get listed on stock
exchange

- Highlight the issue that without audit

committee, it will be ambiguous for internal
control of internal audit team and benefits
of having other committee as well (need for
risk committee and risk manager to manage
risk and risk averse approach – is it right)

- Dearn has been facing some conflict of

interest and agency issues recently ,
highlight and recommended the ways in
which dearn can enhance trust of existing
stakeholders

- Ans can include benefits of non-executive

directors & committees , integrate reporting
etc

- Dearn has to recruit some NED for board,

hence request to evaluate you the potential
Dearn Limited – Shoe
Manufacturing & Retailing
CVs using sceptism and recommend best
one

Dearn Shoe Limited – Key

stakeholder
 shareholders,
 staff (head office, factory, warehouse,
retail outlets) – turnover is low
 customers,
 third-party manufacturer (X Co),
 distribution partner (DT Global
Transport ),
 suppliers,
 bank,
 trade union (NSU),
 Lucland Shoe Association.
 High level loyalty , commitment –
Dearn staff , also have shares ,
generation of one working.
 Relation with X company was good ,
but facing issues of quality output from
factory has increased recently --- **risk
– high reliable , quality reduced**
 Lucland quality checks – poor quality –
MIL mark???, customer numbers???
**risk
Dearn Limited – Shoe
Manufacturing & Retailing
 Increased no. of customer returns-
faulty shoes – 3rd party outsource
 Delayed in dispatch to orders from X -
increasing
 Totland – layne warehouse – DT global
transport – excellent
 Who is responsible for delayed in
dispatch from X – is it DT or X ?

Implication of summary
- Stakeholder matrix – power and interest ,
consider various stakeholder view questions
such as ethical and environmental issues
alongside customers and cost cutting align
with mission statement
- Staff qualities – like loyalty, employees hold
share, layne factory worforce – align with
social , people capital – mission statement

- Drawbacks of outsourcing to 3rd party

manufacture

- A lot of implications is here to consider can

make answer better analytical rather then
descriptive
Dearn Limited – Shoe
Manufacturing & Retailing

Dearn Shoe Limited –

Board & organizational
structure

CEO and Chairmen is different, but is Chairmen

Is executive? it should be non-executive
Dearn Limited – Shoe
Manufacturing & Retailing

Executive Chair – Chairman – should be non-

executive
 CEO – Deal with strategic issues, direction,
governance change – committees, NED’s,
agency issues, below issues, risk management
Dearn Limited – Shoe
Manufacturing & Retailing
issue – need of risk committee or Chief risk
manager

 CFO – Finance – will lead stock market listing of

Dearn

 COO – Whether to outsource or to enhance

factory – Deal with the X limited Totland & DT
global, environment consequences, MIL mark-
LSU, handcraft factory in Layne, cost issue,
specialization not , should we opt for that?.

 CCO – Deal with online sales – website – how to

increase & expansion by export - distributors,
decrease sales reason, Deal with increasing
return orders etc

 CPO - Deal with research of any new material –

Mil mark, recycling tech, fast fashion – how to
compete with flamingo, 20 product style –
annual review to update fashion change- is it too
late?

 CIO – online website development – feature like

try shoe online, make It enable to out of country
Dearn Limited – Shoe
Manufacturing & Retailing
sales, how to make it environment friendly,
distributors, new inventory systems.

 CHRO – Deal with skilled labor issues in lucland

& layne potential social issue as we are the only
employer provider in that area, NSU -Trade
union, employees share, governance change,
recruitment etc.

 No chief risk manager

 Independence of NED – most of them worked

with Directors more than 20 years – positive
relation

 Risk Averse approach – potential losses of

this, need to change this by incorporating risk
committee, audit committee and chief risk
manager

 Current Organizational Structure

(paradigm)- functional, top-down, hierarchical
structure

 Current Power & organizational

assumptions-
Clear chains of command and formal lines of
communication and resp & authority
Dearn Limited – Shoe
Manufacturing & Retailing

 More Autocratic/ Directive Approach

Process are well defined (lack innovation)
focus only on ensuring day-to-day operations run
effectively – no motivation for high growth or
become larger in future

 Headoffice and dept structure – sales ,

production ,hr , IT, finance, R&D and customer
service

 Retail outlets, warehouse and factory – 3 dept

etc

 Department consist – senior mgt team –

members of board.

Implications of summary

- Cultural webb

- Need for risk committee and risk manager,

approach to risk-averse is it right and
internal control team- need to report audit
committee– link to scenario and exhibit-
enhance trust of shareholders
Dearn Limited – Shoe
Manufacturing & Retailing
- Independence issue with NED – agency
issues?

- Chairman – nonexecutive?

- Departmental & functional top down &

hierarchical – blame game? accountability,
more complex? Is it a two-tier board?

- Innovation is not promoted, is there needed

to change leadership culture?

Dearn Shoe Limited –

Product

o semi-formal– many years – 3rd party

Rubber used, 55 yrs old, Dearn is Market leader,
(slightly above mkt share than betterby),less costly
then formal

o Casual Shoe – in the last10 years (post moving out of

layne factory – 3rd party
Rubber and man-made, 18-30 yrs old (Rigo lead the
market)
Dearn Limited – Shoe
Manufacturing & Retailing
o Formal shoes – many years – hand-crafted – layne
MIL, skilled labor of machine, leather, most
expensive,30-50 yrs,( Parrish- comp- market
leader, charges high price – might due to economic
of scale)

o Children Shoes - many years – 3rd party

Mass produced, leather shoes, , Dearn is Market
leader , excellent reputation- children fit. (small mfc
tipco is compe)

o 20 diff style of each, when a style is removed a new

style replace it – flamingo is compe ?

o Reviewed on annual basis for change in fashion – too

late??, that’s why we have less market share then
flamingo

o Unusual in industry – produces both mass &

handicraft? , should we focus on specialization? why
we lack economies of scale?

Implications of Summary

- Market leader and competiors

Dearn Limited – Shoe
Manufacturing & Retailing
- Strange flamingo despite having large share
then Dearn does not lead market – just excel
in fast fashion and low price shoes – not
considering environment implications
- Use commercial acumen more to incline this
with exhibhit and other issues

- Use of KPI

Dearn Shoe Limited – Mfc

& Sales

Process

 15 years back move out of the country

– all mfc
 Layne – 1 factory – handicraft shoe and
R&D in lucland too
 Most sales – retail outlets – high
customer service – 88%
 Online selling across lucland but no
export – 12%
 Does not offer delivery services??? –
losing online sales. restricted online
sales volume why??
Risk****
Dearn Limited – Shoe
Manufacturing & Retailing
 No Retail Outlet and no online export –
out of country – losing potential
market share – implications of industry
and economic – slow growth rate
Dearn Limited – Shoe
Manufacturing & Retailing

- Value adding activities, area to improve or

innovate?
Dearn Limited – Shoe
Manufacturing & Retailing
- Time consuming activities – led to more
cost?
- Risk at each level
- Project management & process
management
- Need to be link to question req and exhibit
- Environment, social, cost, MIL, customer
base, online returns etc issues need to
include in implications

Dearn Shoe Limited – Info

system &

Tech
 Finance & human resources – off – shelf – for
numbers of years – not updated/modified***?

 HR is fit for current operations – but there is

need for finance – governance & cultural
changes will be required

 New Inventory System- lacks – transparency

over supply chain – updated weekly basis.

 Advancement – areas do not include skilled

labour – Automated picking process – selects
Dearn Limited – Shoe
Manufacturing & Retailing
inventory for retail outlets – oppo. – expend that
to select for online sales.

 E-commerce platform- relatively limited

functionality. - impact company ability to engage
with digital market – needs to upgrade ,
potential implications

 Intranet – info & resources of staff – can you for

hiring more skilled labour , manage them
effectively – link with exhibit

Implications of summary
- Consider the potential losses that inventory
system can cause to Dearn, effective
measure or alternatives to this system to
overcome this?

- Should include Automated picking process

in online sales too – increase it? benefits

- Potential risk with implications due to E-

commerce platform, evaluate how Dearn
can overcome this – how much money is
required?

- How intranet can you – exhibit

Dearn Limited – Shoe
Manufacturing & Retailing

Dearn Shoe Limited – Risk

Need for Risk committee / Manager/ team/
internal control monitoring/ audit
committee/ shareholders trust/
implications/cause/recommendation –

- Supply Chain Disruption – 3rd party

- Potential Economic Downturn
- Dearn’s Limited Online Offering
- Product recalls
- Product quality issues
- Environmental impact – customer
& govt , LSA reaction

Implication of summary

- Identify each potential recent risk faced

by Dearn limited and its cause /
reasons and recommend measure that
company can take with implications.

- Consider Environment impact caused

by Dearn limited and its future
Dearn Limited – Shoe
Manufacturing & Retailing

implication on long term growth ? what

measures can Dearn take in respective
of these risk and how Dearn can
include it in annual report to enhance
trust of stakeholders.

Dearn Shoe Limited - Mission

Statement

- link environment issues with values – that

this measure is align with value
- link border stakeholders views with mission
statement
- Long term growth – vision – choice for whole
family
Dearn Limited – Shoe
Manufacturing & Retailing

- Consider employment opp with values

Dearn Shoe Limited – Financial

- Compare industry with Dearn shoe ltd

- Compare Dearn ltd year on year

Customer satisfaction
- Reduce by 0.5 / 7% during the year
- Customer Satisfaction has reduced by 20%
during past 5 years.
Dearn Limited – Shoe
Manufacturing & Retailing
- Customer satisfaction is decreasing year
over year – it is below industry average –
result due to faulty quality goods produce
by 3rd party – future implications – lost
customer share and potential new
customers –less online sales and more
returns- damage reputation- MIL mark –
decreased revenue – low profits – liquidity,
Decrease rapidly

- Align with mission – its not aligning

with it

- Potential delays to listing – reputation

damage?

- Try to include more KPI’s – both

financial and non-financial – link the
decrease customer satisfaction with
exhibit- no home delivery link it to
negative technology in and its future
implications

- Staff Satisfaction -

- Reduce by 0.1 / 1% during the year

Dearn Limited – Shoe
Manufacturing & Retailing
- It was increased till 20x2 and start reducing
post this.
- Decreasing slowly year on year – find
reasons – potential implication – measures-
such as finding diff with skilled labour

- Use intranet data – for measure, like it

includes anonymous comments from staff.

- Link with their mission and values

- Staff has power and int both – NSU, link it

with innovation

- MIL mark implications etc.

- Still above industry ratio.

- Include turnover rate and Kpi in annual

report

- Revenue -

 Revenue has decreased by 0.09% /0.3

million during the year
Dearn Limited – Shoe
Manufacturing & Retailing

 Revenue has decreased by 2.87% and

lost 8% of its market share since 20x2

 Potential market share – reducing post

20x2

 Dearn has loose 8% of its market share

since 20x2 – that’s considering

 Consider its implications and link it to

environment, customer satisfaction,
lower quality of shoes, increase online
returns, less innovation in types of
shoes, less online sales, no export, less
tech & innovation from exhibit,
economic downturn, no fast fashion
shoes.

 Consider reputational damage –

implication of future company –
difficulty in listing and expansion.
Dearn Limited – Shoe
Manufacturing & Retailing

 Advise potential measure – such as

promoting in-house manufacturing
and automate simple process or
outsourcing some.

 And other solution available in

exhbhit

 Link kpi – with customer

satisfaction reduction

 Commercial acumen

- Gross Profit –

- Above industry margin, continually

fallen

- GP has decreased by 2% /0.4 million

during the year

- GP has decreased by 3% and lost 8% of

its market share since 20x2
Dearn Limited – Shoe
Manufacturing & Retailing

- Link the fall with kpi and revenue

- And link It with increased cost –

not efficient mgt of cost – state
that the eco downturn lead to
more demand of low price and
hence need to manage cost
more effectively.

- Link the cost analysis with kpi

and exhibit

- Consider its implications such as –

bad result – risk of listing – bad
reputations

- Reputation damage

- Liquidity issues
Dearn Limited – Shoe
Manufacturing & Retailing

- Link with kpi , analyse any

other fact discussed exhibit

- Potential future finance costs

and taxes

Try to find an answer to what happened post

20x2, why everything Is falling?
Link more kpi and non-financial performance.