TOP MANAGEMENT TEAM OF Industry 43 Team A

Top Management Team Andy Johnson BJ Granack Anna Neugent Business Administration Concentration in Marketing Graduating December 2010 BJ Granack Concentrations in Info. Technology and Marketing Graduating May 2011 Anna Neugent Concentrations in Finance and Marketing

Intensity of Competition in Industry 43 5-Forces Analysis Intensity of Competition in Industry 43 Competitive Forces Power of Force Reasoning Suppliers High Power Threat The Cost of Superior Materials has continually increased in congruency with the demand Buyers Low Power Threat The supply in this industry is not meeting the demand of the customers. Substitutes Customers are unable to substitute the capabilities of athletic shoes with any other type of shoe. Rivalry Moderate Power Threat Customers buy frequently and in small orders. However, as the years have gone by rivalry has increased in our industry. Threat of Entry There is not opportunity for other companies to enter this industry in the BSG industry.

Strategic Group Maps (Year 17) Europe-Africa North America Asia-Pacific Latin America North America Year 15

Key Success Factors In the BSG: In the Footwear Industry: Production Capacity Low Internal Cost S/Q Rating In the Footwear Industry: Production Capacity Low Internal Cost Good Brand Image

Response to Strength Assessment Strength Assessment from TNT (Company 42 A) Inventory Turnover Higher than industry average because of accurate sales forecasting and the production to match in order to not create a large inventory surplus or shortfall Scale of Operations Over the past few years the production capacity of each company in our industry has been growing. We have increased capacity in year 15 and year 16 in order to meet the product demands of our customer and not fall behind our industry rivals Manufacturing Efficiency We have upgraded our 2 main plants with both Option A (Reduce Reject Rate) and Option C (Equipment Upgrade) in order to not only create more shoes our customers can wear, but to create better quality shoes at the same time

Response to Financial Performance Capacity Available for Year 16 Financial Performance chart from TNT (Company 42 A) Factors Contributing to Decreased Performance in Year 15 Use of Superior Materials Over the past 6 years the average cost of superior materials has increased 9% over the base price ($12) 5-Year Loan In year 15 we took out a small loan in order to cover the cost of: Increase in plant capacity in order to meet growing customer demands Increasing cost of superior materials (largest annual increase in Year 15) Allow us to buyback a small portion of our stock to reduce negative effects on EPS and ROE Our credit rating in Year 15 was, and still is, an A+

Response to Recommendations Wholesale Supplier Relationship We currently utilize all of the available retail outlets In order to maintain a favorable relationship we have increased both advertising and retailer support Issuance of Dividends The issuance of dividends is not the top priority for our use of capital. Due to our differentiation strategy, the majority of our funds are tied to ensuring our product is not imitated. We do, however, realize the importance of issuing dividends and will try to allocate more funds to it in the future

Looking Forward.. In order to maintain shareholder value and the continuance of profitable revenues, we will take proper action to sustain our competitive advantage as a differentiator in Industry 43 based on our current strategy and the recommendations from Industries 42 and 44. K-Powers Footwear Inc.