Usaflex footwear has grown due to its comfort-oriented positioning. The company stands out for its product differentiation entailing its technology and design. Since 2016, the new management has been investing in accelerated expansion in the domestic market, seeking to expand the market for its products, attracting younger consumers with greater purchasing power, while continuing to serve traditional consumers. In 2019, two new factories were under construction in Brazil and negotiations had begun to acquire another company in the footwear sector. Starting from a loyal store system, the new management implemented a franchise system, developing an architectural standard for its stores. It created three types of franchise (premium, standard and light) so that partners could tailor the stores and products to their locality. An e-commerce platform was also created. Internationally, Usaflex had been an exporter for many years, but the international licensing strategy allowed it to develop partners abroad, giving more visibility to the companys products. This strategy, however, was still at a very preliminary stage, with only ten stores established abroad. Regarding its international operations, Usaflex initially used the least compromised mode of entry and operation, exportation. However, the new management decided to use the licensing of stores abroad, in addition to exportation.

a. Critically evaluate based on your real actual scenario, the challenges faced by Usaflex at the time of the case. (25 Marks)

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