Recommendations for BloomingShoes Corporation

1
Recommendations for BloomingShoes Corporation

• Aaron Cohen
• Chris Cox
• Eric Harris
• Kanika Mittal

2
Agenda

• Introduction
• Problem Statement
• Comparison of Nike and Reebok
• Recommendations
• Summary and Conclusions

3
Introduction

• In 1993, Nike (32) and Reebok (21) are the
  industry leaders
• Growth is slowing peaked in 1990
• Consumers are becoming more price sensitive
• Manufacturing subcontractors in Asia
• Worker exploitation and human rights are
  continuing issues

4
Problem Statement

• How can BloomingShoes address human rights issues
  and still remain profitable?

5
Human Rights Statements for Nike and Reebok

• Nike, Inc.
• Memorandum of Understanding (01/1993)
• (Subcontractor/supplier) certifies compliance
  with all applicable local labor government
  regulations
• (Subcontractor/supplier) certifies compliance
  with all applicable laws
• (Subcontractor/supplier) certifies compliance
  with all applicable local environmental
  regulations

• Reebok International, Ltd.
• Human Rights Policy (11/1990)
• Reebok encourages free association
• Reebok will seek to ensure that opportunities
  for advancement
• Reebok will seek to prevent compulsory political
  indoctrination
• Reebok affirms that it deplores the use of force
  against human rights.

Nikes Memorandum of Understanding relies on
the laws, policies and regulations of local
governments, which, according to AAFLIs Jeffrey
Ballinger, do not protect workers. Nikes
Memorandum fails to suggest, emphasize or
reinforce Articles 23 through 25 of the United
Nations Universal Declaration of Human Rights.
Reebok looked to the U.N. Universal Declaration
of Human Rights for guidance however, the
language used in the final version of its Human
Rights Policy is only suggestive. While Reebok
encourages, seeks and affirms to improve working
conditions, they impose no direct requirements or
stipulations on suppliers.
6
Recommendations

• Labor Practices
• Improve Practices
• HR Organizations
• Local Auditors
• Strengthen Human Rights Language
• Marketing
• Branding Fair Trade shoes, upscale brand
• Industry Initiatives to raise awareness
• Public
• Industry
• Financial Implications and Schedule

7
Recommendations

• Labor Practices
• Marketing
• Financial Implications and Schedule

8
Declaration of Human Rights
do or do not there is no try
Yoda, The Empire Strikes Back
9
Suggested Human Rights Statement

• BloomingShoes Human Rights Declaration
• Everyone has the right to employment, and
  BloomingShoes will only work with business
  partners that provide just and favorable working
  conditions and protection for its employees.
• Every worker has the right to equal, fair and
  favorable pay, and BloomingShoes will only work
  with business partners that guarantee equal pay
  for equal work, which provides the worker and
  his/her family a dignified existence.
• Everyone has the right to rest and leisure and
  participation in organizations that project and
  protect their interests, and BloomingShoes will
  only work with business partners that provide
  reasonable limitation of working hours and the
  formation of unions.
• Everyone has the right to an adequate standard of
  living, including the health and well-being of
  the family, and BloomingShoes will only work with
  business partners who protect mothers and
  children and work with local governments to
  continually improve the wage and social services
  available to workers.

BloomingShoes Human Rights Declaration should
enforce and extend the United Nations Universal
Declaration of Human Rights and should
proactively encourage business partners to work
with local governments to improve the lives of
its citizens through favorable working
conditions, favorable and increasing wages, the
betterment of social services and improvements in
human rights and environmental policies.
10
Recommendations

• Labor Practices
• Marketing
• Financial Implications and Schedule

11
Marketing - Branding

• Recommendations
• Launch Liberty brand Fair Trade shoes
• Improve human rights standards for all brands

12
Marketing - Branding

• Liberty Fair Trade Shoes name appeals to
• Pro-American consumers
• International/global minded consumers
• Great quality, price control and great profits
  are not dependent on bad labor conditions.
• Upscale shoes to contribute towards the cause of
  Fair Trade across the globe.
• Feel good about your shoes
• Every shoe bought helps bring a smile somewhere
  in the world.

13
Efforts Towards Our Branding

• Advertise the fact that we have full-time, local
  auditors reporting directly to us at each of our
  suppliers.
• Invite ILRERF, FIA AALFI to participate in our
  addressing the issues of labor exploitation in
  many such situations.
• Offer exclusive, high-quality shoes for those who
  want to help suffering people the world over. A
  percentage of revenues will be spent on workers.
• Have visibility in all government census surveys
  and trade reports.
• Target a specialized niche the semi casual
  work place shoes, since statistics predict a rise
  in this category, as more and more workplaces are
  switching to casual dress codes.
• Invite Human Rights Activists to visit factories
  annually.

Source www.infomat.com/information/
research/industry/Reports/USA_Footwear.html
14
Marketing - Industry Initiatives

• Raise Awareness
• - Encourage public concern
• - Force competitors to meet Human Rights
  standards
• Utilize Organizations
• - Athletic Footwear Association
• - Sporting Goods Manufacturers Association
• - Asian-American Free Labor Institut
• - International Labor Rights Education and
  Research Fund
• - United Nations

15
Marketing - Awareness
16
Marketing - Awareness
17
Marketing - Awareness
This is the type of publicity that we want to
avoid.
18
Recommendations

• Labor Practices
• Marketing
• Financial Implications and Schedule

19
Financial Analysis
20
Financial Analysis
21
Financial Analysis
22
Implementation Schedule
Quarter One
Quarter Three
Testing Market Research
Strategy
Implementation Plan- QTR 3 4

• MR - 1st round to be completed by March 15th 1993
• 1st review of strategy
• May 20th 1993
• TV ads
• August 1993.
• 2nd market survey - September 1993.
• 2nd review - November 1993

• Aggressive push into the markets.
• Increasing the dealer network.
• Advertise about margins to business to business
  world.
• Establish which markets are more responsive than
  others.

• Structure and train sales force towards
  consultative sales.
• Incentive for dealers and sales force.
• Press conferences, towards human rights.
• Human rights activists to visit our factories
  with media coverage.

23
Summary and Conclusions

• Labor Practices
• Improve Practices
• HR Organizations
• Local Auditors
• Strengthen Human Rights Language
• Marketing
• Branding Fair Trade shoes, upscale brand
• Industry Initiatives to raise awareness
• Public
• Industry
• Financial Implications and Schedule

24
24
24
24