Trends in Annual Total Revenues

Trends in Annual Earnings Per Share (EPS)

Trends in Annual Return on Equity Investment (ROE)

Trends in Credit Rating

Trends in Image Rating

Trends in Year-End Stock Price

Trends in Year-End Global Unit Sales

Trends in Year-End Market Share

Company B s Strategic Vision

Our strategic vision involved differentiating ourselves from our competitors on quality, image, and socially conscious practices. It is our belief that our strength in these areas represented a significant competitive advantage as compared to other industry players.

EPS, ROE, Credit Rating, Image Rating, and Stock Price Performance Targets for next two years
Performanc e Targets EPS ROE Credit Rating Image Rating Stock Price Year 17 5.30 23.1% B+ 76 $77.00 Year18 9.47 37.6% A 73 $194.00 Year 19 $5.45 20% B75 $105.00 Year 20 $5.70 20% B 79 $115.00

Internet Competitive Strategy

Maintain internet market share at 15% or higher Stay price competitive relative to industry benchmarks Maintain at least a 15% profit margin/shoe in every region Pass certain costs to our consumers whenever possible (free shipping)

Internet Market Share

25 20 15 10 5 0 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Market Share Avg. 15.8%

Internet Profit Margin Per Shoe

30 25 Avg. 21.3 20 15 10 5 0 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Overall Profit

Internet Market Competitors

Company E in all markets Companies C,F and D based on market share.

Competitive Strategy for Wholesale Market and How It has Evolved

Stay price competitive overall in early years to retain market share. Maintain 15% or more market share in North America, Asia/Pacific, and Latin America each year Maintain 10% or more market share in Europe/Africa Have highest celebrity appeal in all regions Always be one of top three advertisers Raise prices in latter years

Wholesale Market Competition

Our strongest and most direct competitor in all regions is Company E We view both Company D and Company F as competitors more for the market share and profit that they earn each year than anything else.

Private Label Market Strategy

N.A. Offered Yr 11 Yr 12 Yr 13 Yr 14 Yr 15 Yr 16 Yr 17 Yr 18 280@ $28.75 570@ $31.75 N.A. Sold 280w/ 18%MS 0 E/A Offered 280@ $31.75 470@ $33.00 432@ $45.00 E/A Sold 280w/ 24.8%MS 0 432w/ 24.1%MS AP Offered 200@ $26.00 507@ $31.75 146@ $36.00 161@ $36.00 AP Sold 200w/ 15.5%MS 0 146w/ 9.6%MS 161w/ 8.5%MS LA Offered 289@ $30.99 186@ $33.50 147@ $36.00 233@ $38.90 230@ $40.00 LA Sold 289w/ 37.1%MS 0 147w/ 13.4%MS 233w/ 12.1%MS 230w/ 19.7%MS

Private Label Competitors

Our competitor changes from year to year, depending on how we decide to play the market. We are not trying to compete with any one company on prices, we just hope to pick up the extra demand for a favorable profitability margin.

Production Strategy
Plant Capacity Concentrate most of our production in the most cost effective regions Focus all capacity in the appropriate regions to meet expected demand excess overtime capacity used in Private Label Upgrade facilities and resources as often as finances allow Construction of new plants take place only when absolutely necessary

Production Strategy
Asia Branded Production Use lowest amount of superior materials possible w/o sacrificing our 7 SQ rating Maintain at least 90% production of all expected demand with our Asian plants Balance our workers incentive pay and base wage changes with that of the industry average Pursue Six Sigma and Best Practices only to increase productivity; never sacrifice Profit Margin

Production Strategy
Latin American Branded Production Use lowest amount of superior materials and style w/o sacrificing our 5 SQ Rating Maintain enough capacity to only fulfill the major demand needs of our Latin American customers Keep all other costs as low as possible due to LA s high setup costs Use plant upgrades to bring setup costs down; slowly begin to offer more models

Company B s Finance Strategy

Loans:
Maintain D/A ratio of .5 $200 million 10 yr. loan in year 11 Year 15 $15 million 5 yr. loan Year 16 $150 million 10 yr. loan Year 17 $42 million 5 yr. loan

Dividends:
$1.00 dividends paid in years 12-14, 16 and 17 $2.00 in year 18

Future Actions
Continue to further upgrade plants Build more capacity in Asia plants based on forecasts in global demand Return to our dominance in regard to being socially responsible (Gold Star Awards) Continue to aggressively pursue possible celebrity endorsements (Have at least 3 signed each year)

Strategies/Actions for Out-Competing Rivals

Lessons Learned
Competing year-to-year required constant adjustment to plan Biggest challenge was how to keep production costs low enough to off-set socially conscious activities/celebrity endorsements.