4.4 Case Four


Nader Ahmed owns the Rex Shoe store. Rex is located in the downtown area in a medium sized Midwestern city and sells a broad line of shoes for all members of the family. Nader, who is 35 years old, had started the business after returning from military service 15 years previously. His success in the business was the result of his ability to anticipate changing shoe style.


In the past three years his sales have held constant although the total sales of shoes in the entire metropolitan area (central city and suburbs) have grown substantially. To stimulate business he tried special sales, staying open occasionally until 9 pm., but results did not improve. Large shoe chains have been taking a greater share of sales in the area and a typical chain shoe store does, in each of its locations, about three times the amount of business that Nader does.


Nader is a good friend of yours and comes to you for advice.

(1)       What strategy might you suggest that he consider?

(2)       What are your reasons for your recommendations?



Shoe sales in metropolitan areas

Average chair store sales per location

Shoe company

Previous year

L.E. 4,100,000

L.E. 600,000

L.E. 179,000

2nd Previous year

L.E. 3,700,000

L.E. 540,000

L.E. 178,000

3rd Previous year

L.E. 3,500,000

L.E. 500,000

L.E. 175,000