Business plan

Converse Hy-Custom Business Plan

BUS10- Intro to Business

Maria Jaramillo

Ashley Mendoza

Amaya Lopez

Conner Inman

Table of Contents

Letter to the CEO.…..….………………………………………………………….. 3

Executive Summary...…......…...…………………………………………………. 4

Product/Service Extension..………………………………………………………. 5

Strategic Analysis..………………………………………………………………… 6-7

Production Strategy..………………………………………………………………. 8

Marketing Strategy……………………………………………………………….... 9

Organizational Strategy………………………………………………………….... 10-12

Management Strategy…………………………………………………………...... 13

References.…………………………………………………………...................... 14

Letter to the CEO

Dear Scott Uzzell,

Our team would like to introduce a new line of shoes designs to Converse , called Hy-Custom. Converse is known for its variety of colorful shoes, with the white low top being the most popular. We want to continue to expand the “custom shoes” that Converse currently has, which is not as diverse as its competitors. We want to print cartoons, then hydro dip the white low top converse shoes. The rising interest of customizable products among young children will attract them to the idea that we are proposing to you. Hydro dipping has become the new trend, however no other shoe company has used it as part of their designs. It would be a great opportunity for your company to gain momentum by adopting this fun idea as it would increase competition by product differentiation.

Executive Summary

Converse is a shoe company that initially only sold shoes in the color brown. It is constantly looking out for trends to keep up with its competitors. Converse has created a variety of custom shoes, as they are popular amongst the youth. Since this type of customization is well known, the shoe design will be available everywhere Converse currently has brick-and-mortar stores and where it ships to online. For this reason we want a section on the Converse website dedicated to the line “Hy-Custom”.

The extension of cartoon design hydro dipped shoes will allow Converse to target children and adolescents. The goal is to bring to the market a design that no other shoe company offers and to bring out the creative side of children and adolescents. Acquiring this design will allow the company to gain popularity as the idea of hydro dipping items is trending. Not only will the shoes be different than our competitors, our logos, additional promotion, and packaging will be aesthetic to appeal to the target market.

The production process will require more employees as the hydro dipping step will need more inspection. The organizational structure will not change as minor employee tasks will be adjusted.

Product/Service Extension

The product are street shoes, common shoes. Also introducing running shoes.

Both shoes will be chosen by the customer and will be light and flexible, the running shoes will be able to stabilize feet. Benefits are for people to express their inner creativity and choose shoes that speak to them. The demand for this product came from shoe fanatics and to a society that is losing creativity. Our product is to express that creativity is people and to be able to express themselves more through what they wear. This type of product mix will attract more children and those who desire designs and comfort. The uniqueness of this product is to introduce a new way to create shoes and another feature towards designs

Strategic Analysis

Our hydro dip extension is a form of customization that no other brand has out on the market. It will allow Converse to be more competitive in the marketplace due to the rising interest in custom products.

Our competitors offer custom shoes, but our packaging and aesthetic will attract more children and adolescents.

Social factors, such as new trends allow our company to come out with new designs, which will be highly profitable due to society’s buying habits. Labor would be influential because we will need a surplus of employees due to the different stages of the production process, such as inspection, putting the soles together, etc. Competitive factors also affect the company since there is a large amount of shoe companies. Those companies compete with each other by being the first to introduce a design.

SWOT Analysis:

Strengths: One strength is the high demand for shoes that will always exist. This will lead to an assurance of profit for all shoes produced and an even bigger profit for desired shoes. Another strength for the extension is the popularity of Converse, which will play a role in a high amount of sales.

Weaknesses: The turn over time involved in shoe production slows down the process, causing lower profits. The introduction of the hydro dip design will increase the price of production since spray paint will be an additional product for Converse to purchase.

Opportunities: Social media will be the most efficient way to advertise the shoes. These designs are popular on social media, which is where the target market can be reached. Sponsorships with DIY content creators on YouTube will allow us to catch the attention of children and teenagers.

Threats: Other shoe companies such as Vans offer custom shoes, who can catch the attention of shoe fanatics if they offer better designs. The cartoon themes we plan to use can face copyright claims and land the company into legal issue.

Production Strategy

The factors of production that will be used are land, labor, and capital. Land is required for the many warehouses that Converse has. An extensive amount of labor goes into the production process. A combination of machine and manual labor are necessary. Capital is needed for the company to continue running to stay in the green and to prevent loss of profits.

The production of the hydro dipped cartoon shoes will require outsourcing since Converse outsources for the creation of their shoes. The production process includes gathering the raw materials, putting the shoe together, inspecting it, then shipping it out. Once the shoe is made, the design process will consist of printing the cartoon design, then hydro dipping it. The shoes are not produced in the United States so they will have to be shipped to the U.S. where it will be put out into the market. The inventory control for the product will be strict in the beginning since we don't know how well the sales will be.

Marketing Strategy

Product:Cartoon custom based street shoes, along with athletic custom shoes. Both shoes will include hydro-dip with the characters of cartoons by customer choice. Packing shall include the character(s) of shoes by customer choice and branding will include our name written along the box. The life cycle of these shoes will be year round, certain characters may be promoted more depending what it enjoyed most at the time. By introducing these type of shoes, we will be differentiating the company by being the first one to promoting hydro-dipping shoes and will have longer lasting availability of cartoon characters than other shoe company.

Pricing: Will begin at $55 dollars and with progress the price will reduce between $40-$45.

Promotion:We will include ads within instagram. We would also like to include, while observing Converse website, have a eye-catching symbol to view our line of shoes

Place/distribution: As we are a new line, first, to test the waters, promote locally. As production is successful, we would expand further into different cities in the state and expand the line into different states

Organizational Strategy

Company History:

Converse, originally named “ Converse Rubber Shoe Company was founded in 1908 by Marquis MIller. They began producing natural brown high top shoes with a black sole. In 1920, the Converse basketball shoe was given the name “All Star” after the player Charles Chuck Taylor, who became the new owner. Converse held 80% of shares of the whole shoe industry by 1957. Following the death of Chuck Taylor in 1968 the company went downfall and filed for bankruptcy in 2001. Nike bought Converse in 2003 and transitioned production from basketball shoes to street style. Changes to the design of Converse shoes:

· 1920- renaming of basketball trainers to ”All Star”

· 1936- White with red and blue trim converse were introduced

· 1949- classic black and white high top was introduced

· 1957- low cut All Star introduced

Market/Industry: Converse is in the streetwear sneaker industry. This industry is very competitive as there are many shoe companies that are keeping up with trends while differentiating their products. The current marketing trends of Converse are

· Targeting the youth through social media promotion, such as Ads and sponsoring influencers to talk positively about the company

· Communicating with customers through social media, mainly Twitter and Instagram

· Recognizing customer loyalty through reposts of pictures of satisfied customers with their shoes

· Multi-channel approach to deliver products to customers

· Researching of trends on social media

Organizational Structure:

Converse has an interconnected system, in which everyone can see and manage their work as part of a whole, encouraging empowerment. The organizational structure is a line structure.

Top Management: The president and CEO are the ones making decisions for the company’s operation.

Middle Management: The store managers are the ones who make sure the employees are doing their job so that the stores and overall the company are running efficiently.

Bottom: The employees help the company reach its goals by completing their designated tasks. They report to the manager, which then reports to the top management.

No changes to the organizational structure will be necessary with the extension of this shoe design line. Production of the shoes will be the same, with just a couple of extra steps, which will not require extra management. Additional employees will be necessary because the dying of the shoes will require extra labor.

Employee motivational strategies and rewards systems:

Converse provides their workers with health care by offering insurance and health care packages. Employees are assisted with financial health, help relocating, and by providing summer and holiday hours. Converse allows their employees to have more control over their work to encourage leadership and hope. The production of our extension would encourage employee empowerment by allowing them to vote on designs. They will be given the opportunity to win money by entering a contest for best design. We want employees to be given discounts every time they purchase a Converse product and coupons delivered to them every month.

Management Strategy

Mission: Our mission is to fulfill the wants and needs of a small group of people and give them a wider range of options when it comes to shoe shopping. We want to give our customers a wide range of options so whatever theme or design they want, we have. Our vision is to bring a fun and creative culture to shoe shopping, especially for young kids and adolescents looking to express their love for certain cartoons. Our extension will allow that to happen because nobody else provides this great option.

Culture: This product will fit in the culture because almost everywhere you go, you see people, especially young kids to young adults, expressing their interests through shirts, so now they can do it through shoes. This also fits in with the culture because more and more disney movies are being shown and streamed online, so now all the disney movie lovers can express their love for movies and shows by way of custom shoes that nobody else is able to offer.

Leadership: Minimal leadership will need to be required, as this new technique will be tough with people more experienced in hydro-dipping.

Management Issues: The lack of experience with hydro-dipping will affect the company at the beginning with more training and getting accustomed to a new line of shoes. Once everyone in the converse business is experienced with this, business will go back to usual. The financing will see a boost, and there will also have to be more marketing.

References

“Benefits.” Benefits, 2019, jobs.converse.com/benefits.