The football World Cup is well under way and as well as being the world’s leading football fiesta it’s also one of the top events for sportswear sponsors to showcase their goods.
As an England supporter I haven’t been overly impressed with England’s attempt to save hotel costs by minimizing their stay in Brazil and Luis Suarez showing his favourite food is Italian wasn’t the most sporting action I’ve witnessed.
One area of the event which has been interesting though is the competition between the big sportswear brands.
Perhaps the most eye catching footwear has been Puma’s new evoPOWER Tricks 2014 boots which feature two different colours – pink for the right foot and blue for the left foot.
Ignoring the question as to whether the 2015 version will feature blue for the right foot and pink for the left foot, it certainly has raised awareness of Puma boots during the event.
The Puma company has an interesting history.
In the 1920s in Germany, brothers Adolf and Rudolf Dassler set up a shoe making business but soon fell out with each other and went their separate ways.
Adolf (Adi) Dassler kept the original company but renamed it Adidas (named after his first name and part of his surname) whilst Rudolf left and set up Puma.
Whilst Adidas and Puma were set up by brothers, the other big player at the finals, Nike has an altogether different background.
Nike, was established in 1962 by Phil Knight, who incidentally was an accounting major, and is one of the best companies in the world in terms of getting its marketing just right.
They have a long history of having a certain flair for marketing. After the 1972 Olympic marathon trials for example they proudly announced that 4 of the top 7 finishers had worn Nike shoes. They neatly ignored the fact that the top 3 were wearing Adidas shoes!
Students of strategy papers will be aware of Michael Porter’s generic strategies whereby organisations compete either by way of cost leadership or differentiation (see our ExPress notes for a refresher if you’re unsure about these terms).
It can be argued however that Nike take the best of both of these approaches.
They focus on the differentiation side of things by investing heavily in R&D, design and marketing. As a result they can charge a premium for being “different”.
On the cost leadership side of things then Nike use external manufacturers rather than internal production. This means that they can source their manufacturing via approved suppliers which they will select for each product on the basis of the best price offered by these suppliers. It enables them to shop around for the best price whilst still guaranteeing the quality.
All in all a very smart business model but I’m sure that fans of the World Cup are more interested in the goals that are scored with the football boots rather than the business models behind them.