Apex Adelchi Footwear limited one of the oldest footwear industries in Bangladesh. It starts its journey in January 04, 1990 as Apex Footwear limited; Later on in December 27, 2006 it changed its name in to Apex Adelchi Footwear Limited.
4.1 COMPANY OVERVIEW
Apex Adelchi Footwear Limited is a fully export oriented company. Now-a-days it is leading manufacturer and exporter of leather footwear from Bangladesh to major shoe retailers in Western Europe, North America and Japan. AAFL has equity, technical and marketing participation from La Nuova Adelchi one of the largest footwear manufacturers of Italy.
4.2 MANUFACTURING
Apex Adelchi Footwear Bangladesh Ltd has total 304,545 square feet of factory area complied with Global Standards of Footwear Production and imported machinery from Germany, Italy and Taiwan. In the year 2012, Apex Adelchi Footwear Bangladesh Ltd utilized its 92.03% of the whole production capacity. It manufactures 5000 pairs of leather shoes everyday while its competitor Bata produces only 4000 pairs.
4.3 SUPPLIES
Role of suppliers in the Competitive Strategy
The level of efficiency and responsiveness the supply chain can achieve is affected by the sourcing decisions taken, which makes it crucial to the production process. Most of the leather is procured from Apex Tannery Ltd. to ensure best quality and increase responsiveness. When located within Dhaka City, Apex uses private carrier to deliver product from central distribution center (CDC) to Gallerie Apex. On the other hand if it is located outside of Dhaka city, it uses package carriers or rent transports from third party.
For export, it also uses third party, like Cost and Freight Forwarding Agents, to achieve economies of scale.
Purchasing Strategies
A firm’s competitive advantage no longer depends solely on its competency in providing a competitive range of offerings. It also depends on the firm’s skill to establish superior purchasing strategies in complex inter- organizational settings of numerous suppliers.
Firms are no longer able to develop major product or service innovations alone because of the dispersion of knowledge and technological resources driven by organizational specialization. In addition, the growing need for greater effectiveness to focus on its core competencies leads to the externalization of the activities to partners.
Apex Adelchi Footwear maintains both single and multiple sourcing strategies. It looks for single sourcing strategies when it has only one supplier for each product and service.
It seeks scale advantages through lower cost products in a dyadic relationship. Multiple sourcing strategies are adopted when the buyer systematically utilizes several suppliers for each product and service. Apex considers quality foremost here. Those who maintain quality gets most of the business from Apex.
Apex Adelchi Footwear procures its raw materials from both local and foreign sources. It collects leather from Apex Tannery Ltd. It imports soles, line lather, stickers or ornaments, glue, shoelace, and yarn from China and India. It import directly from the manufacturers of raw materials who meets quality and its requirements. It also imports by using local third parties. In case of procurement of raw materials, it only focuses on the quality. It does not maintain partnering, relationship buying or collaborative network with its suppliers. It maintains transactional exchange through the following strategies:
Single purchase
Quality is always prioritized, and Apex Adelchi Footwear is ready to procure leather from suppliers at a relatively higher cost if the high quality is assured. When suppliers maintain their reliability in ensuring high quality over a long time, then it repurchases from these suppliers for a longer duration.
Apex Adelchi Footwear always maintains its relationship strategy through the following terms:
It takes two months to get raw materials arrived its factory from any country since it was ordered. It uses both air and ocean for importing raw materials.
Eid ul Adha provides a high amount of the leather used in the production of Apex Adelchi Footwear. Most of the leather used during the year is obtained during this period, and it is absolutely essential to utilize all the available resources in gathering leather from as many sources as possible.
4.4 PRODUCT OFFERINGS
Apex Adelchi Footwear Bangladesh Ltd has a wide a range of collection of shoes / sandals available for selling. Currently, the company has around 2500 different types of designs of products at its disposal. This products are mainly classified into two categories; laced and without lace. There are some other types of designs and they are;
Back Belt, Slippers, Sandal, and Sports. Apex Adelchi Footwear Bangladesh Ltd manufactures all of its leather products in Bangladesh. But the sports shoes are imported from China and India and then marketed here in Bangladesh under the Brand name.
Apex Adelchi Footwear Bangladesh Ltd concentrates on producing various designs of leather products and they are listed below:
Men’s dress and formals
Men’s Casual
Men’s Dress and Casual Boots
Ladies’ Boots
Men’s and Ladies Hand stitched Moccasins
In the recent times, Apex Adelchi Footwear Bangladesh Ltd is concentrating on designing new and innovative products. As a result, it has come up with a new athletic shoe named Aetrex Performance Footwear. This sports shoe is very comfortable and at the same time uses top class design performance using state-of-the-art technology and materials.
Apex Adelchi Footwear Bangladesh Ltd designs its products based on the following categories;
Category “A”: The best
Category “B”: Better
Category “C”: Good
Category “D”: Moderately good
Apex Adelchi Footwear Bangladesh Ltd also sells some high end footwear products representing the brand. Some of these products are; IT (Italian) Project, ID Shoe, Franco and HW (hardy worker).
4.5 DISTRIBUTION
Ordering System
Gallerie Apex orders its required products to the Central Distribution Center (CDC), situated at Tejgoan in Dhaka City, by completing a Special Requirement Form. Store manager fill up this form mentioning the code of the product, quantity and other things.
The order is made on a weekly basis and placed early enough to avoid running out of stock. This form is sent to CDC either by the sales force or a courier service. CDC accumulates several requirement forms of Gallerie Apex and sends it to the factory. The lead time varies from one month to two months depending on the situation and nature of the product. If the required products are available in the CDC or factory, the products are sent within a very short time. In order to digitize its process through electronic medium, Apex Adelchi Footwear is going to start internal online ordering system within a few days.
Distribution System
Apex Adelchi Footwear distributes its products to Gallerie Apex by using own distribution channels with in the Dhaka City. For distributing its products outside the Dhaka City it uses Courier services or rented truck. Its products come to CDC from the factory, and then they are delivered to Gallerie Apex from CDC.
Distribution strategy
Apex Adelchi Footwear follows selective and Intensive distribution.
Selective Distribution: When a new product is introduced in the market, it first appears in the divisional outlet only.
Intensive Distribution: If the new product best fits with the customer demand and if the sales growth of the new product is high enough in the divisional outlets, then Apex decides to go for intensive distribution. It then makes the product available in all the Gallerie Apex.
Value Creation Stages in the Supply Chain
When marketing to local consumers, a 2 level Marketing Channel is maintained. In the primary stage, value creation begins with new product development, which creates
design and specifications for the product. Marketing and Sales generate demand by publicizing the customer priorities that the product will satisfy. Marketing and Sales also brings customer input back to new product development. Using these new product specifications, the manufacturing unit transforms inputs to outputs to create the product.
On the first level, the Central Distribution Center delivers the product to various sales centers (Gallerie Apex) to make the product available to the customers.
Gallerie Apex then displays the product and sells it to the customers. It also provides after sales services.
4.6 EXPORTS
Apex Adelchi Footwear started exporting in 2000. Below is the list of the major countries where Apex Adelchi Footwear Bangladesh Ltd exports its products.
Japan
Germany
Italy
France
Austria
Scandinavian region and Switzerland
Other EU countries
USA
Canada
On an average, 75% of its total revenue generated from export mainly to EU (Internatinal Leasing Securities Limited, 2013). Below is a graph representing export of Apex Adelchi Footwear Ltd.
In the year 2008, Apex Adelchi Footwear Bangladesh Ltd exported shoes worth Bdt. 5.07 billion (Choudhury, 2010). The export of Apex Adelchi Footwear Bangladesh Ltd got a new dimension after the affiliation with the Italian footwear producer La Nuova Adelchi Footwear. The primary joint venture capital provided by La Nuova Adelchi Footwear was Bdt. 150 million. So, it is evident that the capital contribution was not that significant.
But the main benefit of the affiliation was that Apex Adelchi Footwear Bangladesh Ltd got recognition in the European countries and its export has boosted since then. Apex Adelchi Footwear Bangladesh Ltd now designs its products using Italian product development & technology. At the very first year of operation (after the affiliation), the annual export was expected to be Bdt. 900 million and later on Bdt. 2 billion. Currently, Apex Adelchi Footwear Bangladesh Ltd is responsible for exporting almost two-third of the country’s whole footwear export.