Analysis of ARB

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 Introduction
• The company was acquired in 2022 to increase production and market share.
• To retain Sneakers Inc.’s existing customers, their stakeholders have decided to
control shoe production in the acquired company, but only under their license.
• ARB’s research and development department has invested tremendous effort in
improving the quality of shoes.
• The rewards from the unique acquisition and competitive strategies deployed in
the company are remarkable.
 Key Competitive Strategy
• ARB has adopted product leadership as the key competitive strategy.
• Its desire is to offer the highest quality shoes in the market.
• The strategy is essential in retaining existing customers and also appealing to
new buyers.
• The research and development team also prioritizes innovation to present the
best and most exclusive shoes in the market.
• As expected, consumers have managed to pay for the improved quality
between 2022 and 2024 financial years.
 Pricing Strategy
• Sincerely, ARB’s prices are not the cheapest in the market.
• However, they are affordable enough based on the quality featured in the products.
• Various products for various customer segments are priced distinctively.
• Men’s shoes fetch for an average price of £ 91.
• Women’s sneakers are sold at an average price of £ 98.
• Lastly, kids’ products can be bought at an average price of £ 87.
• The prices are strategically set to appeal to consumers looking for high-quality
shoes.
 Distribution Strategy
• ARB understands the significance of effective distribution and timely
product delivery in meeting consumer expectations.
• The company utilizes intensive distribution to reach out to potential
buyers.
• Notably, the firm always ensures that its sneakers are available at as many
retail shops as possible.
• Effective distribution ensures the highest possible number of sales, hence
improving ARB’s position in the price-market over time.
 Marketing Strategy
• The business uses various marketing platforms to promote its commodities.
• E-marketing is executed through websites, search engine results, large online social
networks, and online linked business networks.
• The Financial Daily newspaper is also used to provide the most recent economic news
within the last 24 hours.
• ARB also advertises on Business News to give economic news and stock market
performance.
• The Quacker magazine is also utilized to appeal to kid customers.
• Lastly, billboards advertising ARB’s sneakers are erected in major highways.
 Justification of the Competitive
Strategies
• ARB acquired Sneakers Inc. while it was at its lowest after suffering the ultimate price of
operating with medium-quality and medium-priced commodities.
• Consumers’ new preference shifted to the extreme, i.e., buyers either wanted high-quality or
low-priced sneakers.
• ARB had to be aggressive to reverse the situation and turn the business into a profitable
venture.
• The only way to achieve better revenues was through increased production of high-quality
sneakers that were priced relatively higher.
• That way, the firm’s newly distinguishable target customers were individuals who prioritized
quality to price.
 Financial Analysis 2022
• ARB has managed to surpass the breakeven point every financial year since it
acquired Sneakers Inc. in 2022.
• In 2022, the following was realized:
Retained profit = (Gross Margin + Other Costs & Income ) – (Sum of Costs + Net Interest Payable)
Retained profit = (676,503.00 + 17,564.56) – (391,000.00 + 18,000.00)
Retained profit = 694,067.56 – 409,000.00
Retained profit = £285,067.56

• The company made some profit from its first year of operations after acquisition.
 Financial Analysis 2023
• 2023 was the most remarkable financial year in terms of profit generation.
• Precisely, the following was achieved in 2023:
Retained profit = (Gross Margin + Other Costs & Income ) – (Sum of Costs + Net Interest Payable)
Retained profit = (3,245,757.90 + 464,690.18) – (1,520,800.00 + 16,000.00)
Retained profit = 3,710,448.08 – 1,536,800
Retained profit = £2,173,648.08

• Notably, the profit rose by some margin between 2022 and 2023, an indication of
a growing business operation.
 Financial Analysis 2024
• The financial year 2024 was also highly lucrative since the business managed to
achieve high profits.
• The profits for 2024 were obtained as follows:
Retained profit = (Gross Margin + Other Costs & Income ) – (Sum of Costs + Net Interest Payable)
Retained profit = (3,492,353.25 + 358,909.39) – (1,719,643.37 + 14,000.00)
Retained profit = 3,851,262.64 – 1,733,643.37
Retained profit = £2,117,619.27

• ARB has been making commendable profits since acquiring Sneakers Inc. in 2022.
• The results justify the investment put in increase the product quality.
 Moving Forward
• ARB has a huge growth potential that can be tapped through elaborate operations
improvement.
• Firstly, intensive budget will be allocated to online promotion to increase the price
per click and ranking of website on search engines.
• Secondly, ARB will embark on online marketing whereby consumers will be
allowed to order directly from the company and have their purchases delivered to
them directly by the company.
• Besides, the firm will seek loan from commercial institutions to increase
production.