History Development And Growth Of The Apex Adelchi Footwear Limited Company

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In 1990, the chairman of Apex group Mr. Sayed Manzur Elahi started a new business venture known as Apex footwear. Later in 2006, they collaborated with Adelchi - an Italian leather footwear company. They renamed their company as Apex Adelchi Footwear Limited and initiated a new joint venture with new business spirit. Currently Apex Adelchi Footwear Limited is the leading leather footwear manufacturer in Bangladesh. They are also exporting a huge number of leather shoes in the Western European, japan and North American market.

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They are also engaged in the local footwear trade business and the second largest shoe retail network in the country. Apex is renowned for providing high quality and fashion trendy footwear to the Bangladeshi consumers. In 2017, the company earned revenues of approximately 150 million. Apex Footwear Limited is a public listed company since 1993. The local footwear has 21% of growth rate over last year’s sale. But the leather export business has faced 18% of decrease in compared to the last year’s export value.

Currently they have over 200 own retail stores and 390 authorised reseller in Bangladesh. Apart from retail stores they have other associates company in the leather industry- Apex Tanney, Adelchi Footwear Bangladesh Limited & Gallerie Apex. Their head office is situated in Gulshan -1. Currently Apex has a market share of 8% whereas the market leader Bata is acquiring almost 22%. 50% market share is owned by the local shop owners and rest 20% is foreign imported shoes. The main competitors of Apex are Bata, Jennys, Bay Emporium, Fortuna Footwears, Dhaka Boot Barn.

Identification and analysis of company’s Internal Environment:

Companies Profile:

Name Of the Company Apex Footwear Limited

Date of origination of the Business 4th January 1990

Date of starting foreign Joint venture 27th December 2006

Type of company Public Limited Company

Current Manpower Approximately 20000

Date of change name to Apex Footwear 15th December 2013

Production Capacity 15000 pairs per day

Associates Companies:

Apex Tannery Limited.
Adelchi Footwear Bangladesh Limited.
Apex Pharma Limited.
Grey Advertising Bangladesh Limited.
Quantum Marketing Research BD Limited.
Mutual Trust Bank limited.
Pioneer Insurance Company Limited.
Gallerie Apex.

Values:

Honesty
Walk the talk Sense of Urgency
Strive for speed and simplicity in everything we do
Demonstrate respect by developing our people and helping them to achieve high performance standards
Treat all people with dignity

Mission:

To ensure sustainable growth
To be a vendor of choice for our customers
To create value for our shareholders
To be proactively compliant with
Global best practices & standards
To be a responsible corporate citizen

Apex Footwear Limited has a very vast manufacturing plant of 149,000 sq. ft. located in Nakhalpara. They have variety of latest machineries to produce high quality of shoes. They have capability of producing 20000 pairs of shoes per day. Their high tech machines are imported from Germany, Taiwan and Italy. The internal power of their business is the main raw material which is leather is directly bought from the market and then process them in their own tannery factory. It ensures the quality of their leather. In the process of shoe manufacturing they have created the chain of their own.

Identification and analysis of company’s External Environment

Porters Five Forces Model:

v Rivalry among existing firms: In Bangladesh, the footwear industry is a very competitive market. Existing big brands are already in an established state and also their profitability increasing over time. The existing brands which are direct competitors of Apex are Bata, Fortuna, Jennys, Bay emporium. Bata has a larger number of market share than Apex because of Bata always tried to define their consumers need. These competitors also create pressure for Apex to form a pricing strategy of their own.

v Threats of New Entrants: as the industry is growing day by day, so there is a lot of potential for the new brands to get enter into the market. As the fashion industry has a very dynamic changeable demand, new entrants have a great chance of success if they come up with the product which is satisfactory to the consumers. Recently, a local brand called Dhaka Boot Barn is growing rapidly. Their exclusive designs and quality shoes are highly accepted by the consumers. Their market share is also increasing. Now a day, they are the biggest threats for all of the companies in the footwear industry.

v Threats of Substitute: As any kind of substitute product of shoes or sandals has not invented yet, therefore there is no threat exist in the industry.

v Bargaining power of the buyers: In the footwear industry of Bangladesh there is very few brands are available for producing good quality of shoes, sandals and other leather accessories. And most of the time these brands follow each other’s competitive pricing strategy for selling it to the customers. In this case, consumers have pay more or less similar amount of money for same quality of products. So the consumers differentiate different brands looking at their product design, specification and availability. Hereby, switching costs are nominal. As a result, bargaining power of buyers is limited.

v Bargaining power of suppliers: Supplier, distributor, retailer is highly associated with the betterment of the product. Bargaining power of the suppliers is very high in Bangladesh. Because Apex is very much concentrated while choosing their suppliers. They go for further investigation to the supplier for ensuring better quality of raw materials. I these case very limited number of supplier are supplying best quality of raw materials which cannot fulfil the demand of the brand like BATA, Apex, Jennys.

v Threats of complementary product: Complementary products of shoes are sole, nylon reel, color polish, lack shiner, brush, socks. Though these kinds of products cannot be produced in Bangladesh as raw materials are not available. But still Apex sell these complementary products at their shops. These complementary products are mostly imported from other countries.

Competitors

As the footwear industry has several number of large brands so there remains some competition among these brands. Here are few competitors of Apex Footwear Limited following below:

v BATA: BATA is currently the market leader in the footwear industry having 25% of the overall market share. Bata concentrates on volume sales to capture the mass market. Bata has a very long term experience in the footwear industry and have satisfied very large number of people in Bangladesh. Their signature blue and white converse is the largest selling unit in Bangladesh. this particular model has a very large student segment as it is chosen as part of uniforms of schools and colleges.

v Bay Emporium: Bay Emporium Limited was established back in 2006. It is a footwear company having a wide range of products for both male, female and children. The target customer of this company are higher and medium income group of people. The growth of the company is very high and the shop locations are also very convenient.

v Jennys: The brand Jennys was established in 1990. This brand ensures better quality of product at lower price than its competitor. This brand has potential to take over Apex’s market share as it creates pressure others for decreasing price. Recently they have started producing leather bags, belts and wallets.

Industry Life Cycle Analysis:

SWOT analysis:

The SWOT analysis shows the external and internal factors which are affecting the business directly. The SWOT analysis we created for Apex Footwear Limited is solely based on the secondary resources found in the web and investigation of their business structure.

Strength:

As Apex is the second largest footwear retailer of Bangladesh, it has great potential to increase their overall market share.
Convenient locations of their showrooms make them visible to the customers whenever they go in a shopping mall.
They are known for providing satisfactory quality of shoe provider
As they are operating their business in Bangladesh for long time, they have earned positive brand recognition in the customer’s perception

Weakness

They have a very weak distribution channel strategy and logistic support
Their pricing is little bit high compared to the competitor’s and local shops
They have 9 in house brands like Venturini, Sprint etc. Their diversified products are often difficult to manage.

Opportunity:

Bangladesh has a very good economic growth for the last past years. So the financial capability of the citizen is also increasing.
Large Potential Market
Product necessity (shoe) for all aged and gender group
Here in Bangladesh collecting raw materials for leather products is easier
Chance to create new demand

Threats: