CASE STUDY 1

FIBOS has persistently been ranked at the top position because of its uniqueness in electronics manufacturing. FIBOS is regarded as a leader for innovating products in the market and has now become one of the biggest online retailers for electronics solutions. The electrical business is influenced by macro-environment forces and the economy as a whole. It is pertinent to know that FIBOS receives a major portion of its sales from outside the European market. Sales contribution of FIBOS sales from outside the Europe is of more than $113.8, whereas, the sales income from the Europe is $68.8 billion. In FIBOS case study, it is important to understand the amount of negative impact of any political disturbance or revolution on the company in its operating countries. 2 China being a low labor cost country, manufacturing of FIBOS electronics is enormously dependent on China. However, the troubled political scenario of China affects and disrupts its manufacturing every now and then. In addition, the Chinese imports have imposed restrictions. One of the major concerns of FIBOS is that if it tries to get an alternative to production in China, it will increase the cost of production, resulting in an increase in prices of FIBOS products. In addition to it, FIBOS may face a major loss of market share in China, due to growing nationalism amongst the Chinese. Due to the Covid pandemic which is likely to lead to a situation like recession and other economic issues, the income of the company can adversely get affected. While in comparison with other businesses, FIBOS is likely to get affected badly, because of its premium class products and huge pricing. However, FIBOS is amongst those companies, who were the most affected during the Covid pandemic and this has led to a downfall in its revenues to 16%, during the second quarter of 2020, as compared to its revenue in the same period of the last year. In addition, there is a rise in exchange rates, because of increasing value of the US dollar. Thus, the price of the products of FIBOS gets affected due to this increase in the exchange rates. The most significant factors in the electronics industry is the increasing international trade agreements and new governmental guidelines. FIBOS has a variety of intellectual property that are produced by its brands and lately, it entered the highly regulated financial sector, which can take the company to increased regulation level. For rendering such financial services, it could lead the company to various litigations. The companys revenue has also been affected badly because of factors such as disposal of used or non-working electronic equipment. FIBOS is facing huge issues while disposing of all the electronic junk that is not required anymore or not in the condition of usage. Because of these factors, FIBOS has to incur all the cost. In addition, revenues are affected because the company needs to carry out more expenses in the manufacturing processes because of its dependability on the usage of electricity. When it is about earning revenues, innovation costs are higher than any other industries. FIBOS is one of those rising industries who has grown with innovation. It is proven that any company who wishes to earn well must innovate from time to time. As per the report of 2015, FIBOS spent $8.7 billion in its Research & Development that cost it for around 3% of the total companys net sales. The purpose of these researchers is to understand the approach of customers by having the short product life cycle of the industry. 3 Due to globalization, various factors have contributed and marked a massive impact on FIBOS like the rapid increase in wages, labour costs and customer tastes. It is desirable and wishes by the customers because of its unique selling proportion, innovative design, simple and straight marketing strategies of its products and high pricing of its products. Eventually, FIBOS electronic brands have attained a status symbol in the society across the world, due to its exceptionally high prices, making it affordable to the high class of the society. Some customers have argued that FIBOS lacks social- consciousness and responsibility, as it carries out its manufacturing process in China, while it can be a job-creator for the home country. Still, it is attracted to China to get lowcost labor for its manufacturing. This factor may limit its appeal to some people.

Required;

Using an appropriate strategic analysis tool, You are required to analyse the macro-environmental factors that may significantly influence the strategic position of FIBOS in their electronic industry (30 marks).

Case Study 2

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 4 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. Kuttass 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 companys 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. 5

Required:

From the case study, there are a number of strategic issues that require Kuttas to develop strategic capabilities/ strategic options to address them. Using the TWOS Matrix, You are required to Discuss these issues and Generate strategic options that can help Kuttas to stay competitive in the sportswear market. (30 m