Billabong must continue to fill stores with new, innovative product that shows leadership in the field. This can come from in-house development or from the purchase of smaller brands. The brand equity of Billabong also comes into play with respect to their reputation. They must be able to maintain their reputation, which can be done in part by retaining some credibility within the surfing community. This will require the ongoing development of products specific to that market, as opposed to just general athletic apparel.
Classification of other Competitors
There are two types of competitors that Billabong faces. In the surfwear segment, the company typically faces competition that operates a focus strategy - differentiation. These firms are more focused than Billabong, being specifically surfwear firms. The other type of competitor is the differentiation strategy and the low-cost strategy. Billabong faces this as a result of their move into the broader activewear category. This puts them in competition with larger firms such as Nike, Adidas and others than have cost, distribution and product line advantages.
Classifying Billabong Using the Miles & Snow Typology
The Miles & Snow typology places firms into one of four categories - prospector, reactor, analyzer and defender (Heil & Walters, 2007). Under this categorization, Billabong would be considered an analyzer organization. Because of their growth trajectory, Billabong continues to seek out new opportunities for growth and innovation. Yet, they do not rely on growth and innovation to drive the business, as a prospector would. They work hard to defend their existing market position and brand equity, and have a somewhat conservative approach to growth as a result. Their slow, but steady growth trajectory and approach to business strategy clearly places Billabong in the analyzer typology.
The smaller niche competitors lie more in the prospector category. They are seeking new business opportunities to drive their growth. This comes from both new products and new markets. They make their name with innovation in both design and marketing, but they have no turf to defend. Billabong was once a peer to this class of competitor...
The larger competitors in the activewear field are typically defenders. They often lack true innovations (some firms excepted) but they work hard in the marketing arena to defend existing market share and to develop new markets.
Product Life Cycle at Billabong
Billabong's core offering of surfwear can be considered a growth market. While areas with a strong surfing culture are saturated, there is considerable untapped potential in the world for surfwear if the right marketing approaches are developed. As a growth market, there are new opportunities for firms willing to innovate.
By moving into activewear in general, Billabong is moving into a product that is further along the life cycle. The world's major activewear marketers have saturated most markets, including developing markets. As a result, the product is nearing maturity. Firms in this industry are competing for incremental market share, rather than new growth. This means that by moving into this category, Billabong is moving into a line of business where the nature of the competition is different as a result of the product being at a different stage of the life cycle.
Works Cited
Billabong financials courtesy of Reuters. Retrieved March 25, 2009 at http://www.reuters.com/finance/stocks/incomeStatement?stmtType=INC&perType=ANN&symbol=BBG.AX
Billabong 07-08 Full Financial Report. Retrieved March 25, 2009 at http://www.billabongbiz.com/documents/20080926_FullFinancialReport30June2008Website_Version.pdf
No author. (2007). Porter's Generic Strategies. QuickMBA. Retrieved March 25, 2009 at http://www.quickmba.com/strategy/generic.shtml
Heil, Karl & Walters, Bruce. (2007). Miles and Snow Typology. Reference for Business. Retrieved March 25, 2009 at http://www.referenceforbusiness.com/management/Mar-No/Miles-and-Snow-Typology.html
Davidson, Paul; Simon, Alan; Woods, Peter & Griffin, Ricky W. (2009). Management: Australasian Edition, 4th Edition. Wiley and Sons Australia, Milton, Qld.
No author. (2007). Product Life Cycle. QuickMBA. Retrieved March 25, 2009 at http://www.quickmba.com/marketing/product/lifecycle
