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 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. Kuttas’s 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 company’s 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. Required: a. From the case study, outline the key strategies which have helped Kuttas achieve its competitive advantage in the sportswear market.  b. There are a number of strategic issues arising from the case study which can  affect Kuttas competitive position. Describe these issues and outline strategies  which Kuttas can adopt to address them.

Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
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case study

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 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. Kuttas’s 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 company’s 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.


Required:
a. From the case study, outline the key strategies which have helped Kuttas
achieve its competitive advantage in the sportswear market. 
b. There are a number of strategic issues arising from the case study which can 
affect Kuttas competitive position. Describe these issues and outline strategies 
which Kuttas can adopt to address them.

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