Billabong (surf clothing company) Case Study
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Founded in 1973 by Gordon and Rita Merchant, Billabong is a company known all over the world in making of clothes, surfboards and other variety of related products in the surfer lifestyle. The products of this company have been sold in more than 11000 chain stores located at all corners of the world. This paper thus aims to explain the strategy used by the company as it tries to competitively sustain itself in the industry. Billabong rose to become a publicly listed company and one of Australiaâ€™s giant companies in 2000. During the year 2003/04, the surf wear manufacturer was worth $ 680 million with its core business being distribution and retail of clothes and other accessories such as the eyewear. Products of this company are sold under different brand names such as skate wear, Von Zipper or sunglasses and Honolua Surf Company (Mullet, K. K, 2011).
The surf wear company ran retail o/s chain stores and manufacturers in East Asia with over 70% sales in the o/s markets. The business was bread and butter for the company until it went on acquisition spree of more chains and stores such as the Von Zipper eye wear brand, Custom surf shoe brand, Wetsuit water spot accessories brand, Dakin board spot accessories brand, Two seasons Chain in the UK et al. The company had earlier expected to benefit from the economic recoup of 2012 but when the strategy failed, they were forced to sell out their strongest and a reliable asset the Nixon Watch brand and that marked the downturn of Billabong Surf Company. In order to battle out takeover Altamont Capital partners, the company developed a strategy to renegotiate its debts (Bryant, N. O, 2011)
Companyâ€™s analytic diagram
Porter five forces analysis
In order to understand the strategy employed by Billabong in its market research, porter five forces analysis was used to determine the competitiveness and attractiveness of the strategy employed by the company to revert back to profitability. These are the framework for the general surf industry analysis and Billabong business strategy. The five forces include competitive rivalry within the industry, Suppliers bargaining power, Customers bargaining power, new entrantâ€™s threats and product substitute threats (The bulletin, 1880)
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