Paper Example on Adix Shoes: Innovation & Market Share Protection in the Shoe Industry

Adix shoes is a company that manufactures and sell shoes and sports apparels. The company operates in the shoe industry. Adix has several strengths, which give it a comparative advantage in the industry over the competitors (Sarsby 2016, p. 24). These strengths help Adix to protect its existing market share and to penetrate new markets. In particular, the company leads when it comes to product innovation. Notably, it manufactures new products to suit the needs of various customers with different needs (Sarsby 2016, p. 24). Besides, it has a reliable dealer community, essential for the company's distribution of products and relationship with its suppliers. Another strength is that it trains the sales team regarding how to obtain maximum benefits from the products. Presence of highly trained employees enables the firm to remain innovative. Further, the company is highly successful in establishing a reliable distribution network that can reach most of its potential markets (Sarsby 2016, p. 24).

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Unfortunately, Adix also faces palpable weaknesses that derail it from gaining a competitive advantage in the market. The firm has untapped areas of improvement due to insufficient research and development resources (Sarsby 2016, p. 24). Besides, the company's model of financial planning is inefficient and improper. The current financial position suggests that the company could use the cash flows more efficiently.

Regardless of the weaknesses, Adix company enjoys several opportunities that it can harness to exploit the market, gain competitiveness, and grow the business. The rise in awareness concerning keeping fit and healthy living has the potential of resulting in more demand for Adix shoe products (Schiavo-Campo, 2017, p. 10). Also, market development could lead to dilution of competitors advantage, hence enabling Adix to increase its competitiveness over its rivals (Schiavo-Campo, 2017, p.11). Another opportunity for Adix shoes is the availability of new technology that could allow the company to retain its innovativeness, which, in turn, could help retain loyal customers.

Nonetheless, Adix faces several threats to its business. The rising costs of raw material is a threat to the company's prospects for growth and profitability (Schiavo-Campo, 2017, p.16). Similarly, intense competition from established industry players and small-holder businesses such as Adidas and Reebok pose a threat to the sustainability of the company's business model and customer base.

For the success of the business, Adix Shoes needs to expand operations to emerging markets to exploit their potential. Besides, it needs to minimize its fixed and variable costs by considering the opportunities offered by the internet of things and innovation (Schiavo-Campo, 2017, p.18). Further, it is essential for the company to increase the capital outlay dedicated to research and development as a way of remaining ahead of the competition and profit from modern technologies.

The budget of Adix shoes depicts a total revenue of $4,334,400 and total expenses amount to $ 3,210,000. The revenues leave the company with a net income of $ 1,124,400 before taxes. The revenues come from products sales to corporates and soccer teams. The unit price is calculated based on the production cost and the prices set by the competitors for similar products. The expenses comprise $1,000,000 costs of raw materials used to manufacture shoes, uniforms, and other sports-related garments. The company is expected to pay occupational rent of $360,000. Also, the firm's consumption of electricity is approximately $ 700,000. Salaries and wages going to employees and management staff would be $1 million. With highly maintained equipment, the firm would expect to incur depreciation on capital of about $ 50,000. Marketing and promotion would cost $100,000. It is the case due to the high usage of the internet and social media, which has helped cut promotional costs tremendously.

List of References

Sarsby, A., 2016. SWOT analysis. Lulu.

Schiavo-Campo, S., 2017. Government budgeting and expenditure management: principles and international practice. Routledge: Abingdon.