QUESTION 1

Speedo was first established in the year of 1914 as a manufacturer of sports trend wear, which later evolved into fashionable and fitness swimwear, swimsuits for kids, energetic wear, water shorts, other fitness and water accessories. The Olympic medals haul by the athletes using Speedo when compared to any other apparel brands makes it stand out. This innovative design and the technologies used made the athletes use Speedo swimsuits. The pursuit of Sustainable Competitive Advantage is an idea that is at the heart of much of the strategic management and marketing literature [See for example, Coyne (1986), Day and Wensley (1988), Ghemawat (1986), Porter (1985) and Williams (1992)]. Gaining a competitive advantage through the provision of greater value to customers can be expected to lead to superior performance measured in conventional terms such as market-based performance (e.g., market share, customer satisfaction) and financial based performance (e.g., return on investment, shareholder wealth creation; Bharadwaj, Varadarajan and Fahy 1993; Hunt and Morgan 1995).

In order to maintain its supremacy, Speedo adopted strategies which will be evaluated in the following section.

Strategies adopted by Speedo

The first strategy adopted was of diversification of its swimwear into sports and fashion segments. This will help Speedo to hedge against any future risk arising due to fall of its sports market share, which is currently the highest grosser for Speedo. But addition to that, Speedo has adop ted extensive marketing strategies like sponsorships and advertisements to maintain its brand equity. Currently, Speedo is associated with the official swimming teams of many countries like the USA and UK. They also sponsor the other branches like water polo and diving. These sponsorships help Speedo in greater visibility among the target audiences. The strategies adopted by Speedo over the years can be explained by Mintzburg s 5P model provided below .

Plan To diversify into the luxury swimwear section. Position market dominant power in the sports segment. Ploy The initial opportunity to develop into a premium swimwear brand from the hosiery Pattern Innovative and quality products resulting in superior performance Perspective Regular change and innovation is the key to competitive advantage

The Ansoff Growth matrix is a tool that helps businesses decide their product and market growth strategy. Ansoffs product/market growth matrix suggests that a business attempts to grow depend on whether it marketsnew or existing products in new or existing markets.

The output from the Ansoff product/market matrix is a series of suggested growth strategies that set the direction for the business strategy. These are described below: Market penetration Market penetration is the name given to a growth strategy where the business focuses on selling existing products into existing markets. Market penetration seeks to achieve four main objectives: Maintain or increase the market share of current products this can be achieved by a combination of competitive pricing strategies, advertising, sales promotion and perhaps more resources dedicated to personal selling Secure dominance of growth markets Restructure a mature market by driving out competitors; this would require a much more aggressive promotional campaign, supported by a pricing strategy designed to make the market unattractive for competitors Increase usage by existing customers for example by introducing loyalty schemes A market penetration marketing strategy is very much about business as usual. The business is focusing on markets and products it knows well. It is likely to have good information on competitors and on customer needs. It is unlikely, therefore, that this strategy will requi e r much investment in new market research.

But as it has been highlighted in the theories of Strategic Management, marketing alone is not enough for maintaining competitive advantage. In order to establish a sustained competitive advantage Speedo needs to focus on the aspect of value creation through the better utilisation of its available resources.

QUESTION 2 These can be explained better with the models like resource based View (RBV) and Porter s theory of 5 forces as discussed below. 1. Resource based View The resource-based view (RBV) is a business management tool used to determine the strategic resources available to a company. The fundamental principle of the RBV is that the basis for a competitive advantage of a firm lies primarily in the application of the bundle of valuable resources at the firm's disposal (Wernerfelt, 1984, p172; Rumelt, 1984, p557-558). This can be best described by making use of the VRIN framework. 1.1. Valuability This property enables an organisation to conceive or implement strategies for

improving its effectiveness and efficiency. Speedo, achieved this by implementing value chain and creating high level of perceived value among the consumers. 1.1.1.Value Chain Speedo is a leading international swimwear manufacturing company based in the UK. In order to manage its customer base, Speedo has set up different, parallel supply chain to supply its distributors. It can be classified broadly on three ways: First, the field sales force for dealing with the small independent sports stores. Second, is the portion dealing with the major high street retailers and sports multiples with the potential of growth pegged at 80% and third is the partnership model with the sports retail giants like s Sports Division. In order to manage such huge and diverse network, communication and cooperation plays a major role which in turn helps both the suppliers like Speedo and the outlets to derive value out of the system by enriching the customer focus and in turn profitability. 1.1.2.Perceived Value Perceived value is the customer s opinion of a product's value. Given the large medal hauls by the sports person in the various Olympic Games, the perceived value of

Speedo products are very high. This advantage is utilised by Speedo to enhance its market presence and dominance.

1.2. Immitability This can be achieved by virtue of its tradition, customs and culture which are unique to Speedo and cannot be imitated by the competitors. Speedo has been so far successful in creating a image among the consumers as a highly efficient and innovative organisation with the ability to come up with improved solutions to satisfy the consumer needs. This has been achieved by the constant delivery of the quality products over the period of time ensuring consumer satisfaction. This level of v alue cannot be created overnight and helped Speedo consolidate its market presence and keep the competitors at bay.

1.3. Raribilty This is an area which is very difficult to achieve owing the current global market scenario. In order to generate competitive advantage owing to raribility, Speedo needs to make use of the patents and copyrights, to protect its innovative designs and the technologies behind them. Speedo is a topmost manufacturer of swimsuits in the swimwear market and trades its products all over the world by dominating many swimsuit goods and introducing latest swimwear into the market. Innovative measures were undertaken by Speedo in designing the swimwear products in contrast with other competitors. Speedo mostly concentrated on modern technologies and novel designs. The research and development department of the Speedo Company is the Aqualab team that consists of materials professionals, garment engineers, athletes, product manufacturers, and trainers. But in order to maintain sustained competitive advantage in this respect, Speedo needs to constantly keep on innovating and refining its technologies to stay one step ahead of the competition. 1.4. Non-Substitutability This is an area of distinct advantage for Speedo since, the brand

equity it has been able to build over the years owing to its products cannot be substituted. As it is evident from the case study, rivals like NIKE and ADIDAS were unable to compete with Speedo owing to the brand identity of Speedo. Athletes distinctly favoured Speedo over the other brands resulting in higher perceived value among the normal consumers and hence hands over a distinct competitive advantage to Speedo. Even remarks from the rivals seem to help Speedo in building its brand awareness.

2. Porter s 5 forces 2.1. Buyer s power 2.1.1.Buyer volume - 65% of market share 2.1.2.Brand awareness Very High 2.1.3.Availability of existing substitute products 2.1.4.Buyer price sensitivity 2.1.5.Differential advantage (uniqueness) of industry products 2.2. Threats of new entrants 2.2.1.The existence of barriers to entry (patents, rights, etc.) 2.2.2.Brand equity 2.3. Distribution 2.3.1.11000 retail and high-end stores In North America 2.3.2.4000 retail stores in UK 2.3.3.Customer loyalty to established brands 2.4. Threat of substitutes 2.4.1.Buyer propensity to substitute 2.4.2.Relative price performance of substitute 2.4.3.Perceived level of product differentiation 2.4.4.Number of substitute products available in the market 2.5. Supplier Power 2.5.1.Strength of distribution channel 2.5.1.1. 2.5.1.2. 2.6. Competitors 2.6.1.Sustainable competitive advantage through innovation 2.6.2.Competition between companies 2.6.2.1. Nike(15%), Reebok, TYR(20%), Arena, Mizuno and Adidas 11000 retail and high-end stores In North America 4000 retail stores in UK

2.6.3. Level of advertising expense 2.6.4.Powerful competitive strategy 2.6.4.1. Two pronged strategy

Reference

Rumelt, D.P., (1984), Towards a Strategic Theory of the Firm. Alternative theories of the firm; 2002, (2) pp. 286 300, Elgar Reference Collection. International Library of Critical Writings in Economics, vol. 154. Cheltenham, U.K. and Northampton, Mass.: Elgar; distributed by American International Distribution Corporation, Williston, Vt.,

Wernerfelt, B. (1984), The Resource-Based View of the Firm. Strategic Management Journal; 5, (2), pp. 171 180.

Coyne, Kevin P. 1986. "Sustainable competitive advantage-What it is and what it isn t." Business Horizons. 29 (JanuaryFebruary): 54-61.

Day, George S. and Robin Wensley. 1988. "Assessing advantage: A framework for diagnosing competitive superiority." Journal of Marketing. 52 (April): 1-20.

http://www.sciencedirect.com/science/article/pii/S0969701299000386

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http://tutor2u.net/business/strategy/ansoff_matrix.htm