AD ALTA
JOURNAL OF INTERDISCIPLINARY RESEARCH
IMPACT OF FINANCIAL PERFORMANCE OF OUTDOOR WEAR PRODUCERS ON BRAND
PERCEPTION OF CONSUMERS
a
FRANTIŠEK MILICHOVSKÝ,
b
PAVEL MRÁČEK
Brno University of Technology, Faculty of Business and
Management, Department of management, Kolejní 2906/4, 612 00
Brno, Czech Republic
email:
a
milichovsky@fbm.vutbr.cz,
b
mracek@fbm.vutbr.cz
Financial performance of company is considered as one of the most crucial area, on
which companies focus on. Similar approach is in field of outdoor wear production.
Contribution is focused on finding, which financial indicators are key for the outdoor
wear producers in connection with perception by final customers in Czech Republic.
According to our findings it is obvious that companies use profit indicators mainly
medium and large size, and in western and northern regions of Europe. Empirical
evidence was realised in two groups: (1) companies, (2) customers. For analysis of
companies there were used data from 4996 subject. For customers’ analysis there was
employed questionnaire survey, on which participated 292 persons. For the analysis of
gained data there was factor analysis and correspondence analysis with validation
technique based on chi-square nonparametric tests and for transparent representation
of the structure of dependence and interpretation is used symmetric correspondence
map.
Keywords: Financial performance indicators, business, consumer perception, outdoor
production
1 Introduction
Outdoor-wear industry has become most popular in past ten
years. Many producers accepted customers’ requirements and
apply them into individual products. All customers want to use
such outdoor wear in day-to-day life in cities, which is
developed mainly for extreme nature environment. Many
producers decrease quality level of own products according to
general use with low requirements of extreme clothes conditions.
Some customers perceive outdoor-wear as kind fashion style, on
which producers have not adapt in past and now they change
own production. Because of wearing of outdoor clothes become
fashion, many producers try to get part of market share in own
region or in global market. Outdoor clothes combine technical
level of material and products, high usage value, fashion trends
and image. In each of these areas could participate customers by
co-creating value and sharing own opinions, which provide
better value perception of final product. Increasing product
values is usually supported by suppliers and material producers,
other clothes producers and of course by sellers.
Financial performance evaluation, including economic results,
constitutes an important part of company management, as the
evaluation figures help us to monitor and evaluate
accomplishment of the basic economic objectives (Zhang,
Lawrence, Anderson, 2015; O'Sullivan, Abela, Hutchinson,
2009; Loeschenbrand, 2016; Hornungová, 2015).
2 Theoretical background
Recently, performance evaluation methods have significantly
changed. Evaluation of performance in company can be defined
as the ability of a company to boost investments, put into
business activities, contributing to continuous self-improvement
and accomplishment of business objectives (Šulák, Vacík, 2005;
Maria, 2009; Muchiri et al., 2010). Performance evaluation is
one of the tools helping the company management to decide how
to do the business activity effectively (Arena, Azzone, Bengo,
2015; Lebas, 1995).
Traditional financial indicators (calculated from accounting data)
are still used today to evaluate performance; this approach to
performance evaluation and comparison has been recognized as
the most appropriate for a long period of time in spite of
different accounting and financial indicators. Since 1980
traditional methods have been facing various views, identifying
contentious issues in the use of these models, resulting in the
search for other opportunities for performance evaluation
(Mohamed et al., 2014; Neely, 2004).
Over the time, the performance has been measured either by the
company size or its productivity and profit. The scientific
literature divides financial indicators of the company
performance into three categories:
Accounting results and derivative indicators – the
accounting result is the result from the financial statement.
The basic indicator, which can be explained by means of the
structural analysis of the profit and loss statement.
Accounting indicators express the company’s performance
in absolute values. The application of these indicators is
recommended for various comparisons: proportion of
personal costs to turnover; productivity rate; proportion of
business margin to turnover, etc. These indicators provide a
clear picture of productivity (Brignall, 2007).
Traditional production indicators (indicators of financial
productivity) – these indicators provide information through
the value of invested assets. The best known indicator is
ROI (return on investment), calculated as the ratio of the
economic result to the cost of investment. Another
traditional productivity indicator is the ratio of the net
economic results to the equity capital (ROE = return on
equity). Ratio indicators of financial productivity provide
information helping the company to compare its
productivity, expected by shareholders, i.e., to evaluate so-
called financial attractiveness.
New category of financial indicators – represented by the
metrics EVA (Economic Value Added); its positive value
indicates that from purely financial point of view the
company has successfully generated value after the payment
of all capital investments, in particular from capital
shareholders (Nicu, 2009).
Recently, researchers have begun to examine firm performance
as a function of alternative managerial orientations such as an
entrepreneurial orientation (Ross, Westgren, 2009), market
orientation (Verhees, Meulenberg, 2004; Sychrová, Šimberová,
2012), and strategic choice. For a firm to achieve success in
implementing orientations different from a production
orientation, the manager must have a willingness to change and
to question current business strategies (Micheels, Gow, 2015).
3 Methodology
The main aim of this paper is to find key indicators in grouped
factor in the field of financial performance for companies in
automotive industry (as one of the most important part of
engineering industry). Partial aim of the paper is to identify
relationship between observed factors and company size and
NACE classification. Main hypothesis suggests dependence
between realization of individual activities and their performance
in connection with outdoor-wear industry.
Data have been gathered from Amadeus database and processed
by the statistical program IBM SPSS Statistics 24; subsequently,
(1) factor analysis, (2) dependency between two nominal
variables by means of contingency tables and Pearson’s chi-
squared test, and (3) correspondence analysis have been studied.
To graphical design complex view on agriculture field there
were used correspondence analysis.
The conditions for choice of companies:
1.
geographical location of Europe (West, East, South, North);
2.
dividing according corporate size;
3.
classification of economic activities according to NACE
classification, reduced to 1413 – Manufacturing of other
outwear.
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