BUSI42115 Postgraduate Programmes 2023/24

Strategy

2023/2024 Masters Programmes

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Module: Strategy (BUSI42115_2023)

Z0 code Z0200461

Deadline date 8/12/2023

Word count 2027

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Strategy

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The Strategy of Kombi Sports Inc.

1. External analysis

A. The PESTEL Model can be used to analyse the macro environment of Kombi Sports
Inc.

Political Factors: - A Non-Profit Canadian organisation decided to promote ski racers

and make Canadian ski racers the top athletes. Canadian government also made efforts
to promote skiing to kids and Canada’s increasing urban and multicultural population.

Economic Factors: - In 2016 one in five Canadians were foreign born and majority were
from Philippines, China and India which are all developing nations so they joined and
increased the labour workforce there.

Sociocultural Factors: - From 1930’s Europeans have been driving Canada’s

immigrations and many tourists have been coming in for climbing, skiing and hiking. There
was 14% active adult participation in 1992.which had fallen to 6% by 2010 while children
participated more than the adults with numbers for participation rates were 75% for
children and 26% for adults. But only 5% children actively tool participation in skiing
downhill.
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Strategy

Technological Factors: - Retailers and wholesalers had to come online too in order to
compete with e- retailers While they had a huge traffic because of access to multiple
brands and the ability to sell the products at a discount, this gave wholesalers a chance to
sell online direct to consumers which increased their margins on those sales as they by
passed middlemen.

Environmental Factors: - Nothing has been mentioned that directly affect Kombi inc.

Legal Factors: - There are no laws that affected Kombi Inc. sales.

Overall, all macro factors helped Kombi Sports amongst increasing popularity of ski racing
they had many patented products which help them a lot in growing. While Canadian
government also made efforts to promote athletes so they can increase the sport’s
popularity.

B. The Five forces plus Complementors can be used to analyse external industry
environment of Kombi Sports Inc. The industry here is the Sporting Goods Industry.

Threat of New Entrants - Moderate

 The Threat is moderate as it is a really competitive markets and it’s hard to

penetrate the market without a good amount of capital
 A company can innovate and use new entrant tactics but existing companies have
expertise in their products and it is hard to compete with that and many of them
have their unique patents and designs which consumers like.

Bargaining power of buyers - High

 No switching costs as there are so many other products available in each category
there is practically no switching costs for buyers
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Strategy

 Buyers now have access to market information so they know the prices for
products and therefore would go for the best price and quality product in that
category.
 There are so many competitors fulfilling similar buyer’s requirements and needs.
This gives buyers a leverage because of so many choices to choose from.

Bargaining power of suppliers- Low

 As they are a lot of suppliers who can manufacture special materials required, they
have low bargaining power as they can easily be replaced because of the
availability of manufacturers.

Threat of new substitutes- Medium

 Low switching costs allow customers to switch easily and potentially other lifestyle
apparel brands can enter this space.
 But only a few players have the expertise and design like Kombi sports which
provides utility and comfort to the customers and it will take time for a new player to
enter this segment.

Competitive rivalry - High

 There are lot of competitors in the market as shown to us and there is high
competition to get higher market share and there many new players entering too as
there is no barrier to entry.
 They are many different product qualities and everyone has some differentiator for
their product for identity
 There is a moderate level of customer loyalty as customers get comfortable with
the brands quality and design.

In conclusion Sports Apparel Industry doesn’t seem like an attractive option as there is
high competitive rivalry and high bargaining power to buyers but still for existing players
like Kombi it’s good as there is medium threat of new substitutes, Low bargaining
power to supplier and only moderate treat of new entrants these complementors
certainly balances the forces but don’t make this an ideal industry for business.
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Strategy

2. Internal Analysis

We have chosen VRINE Model to analyse the internal environment of Kombi Sports Inc.
this will help us find out resources and capabilities of the company. They have 2 important
resources and capabilities which are key i.e., Innovative Patents & Brand Identity.

Value- Both these Resources are valuable as they have always come up with unique
innovations and patented them as well which helped them create a brand for them. They
have created a brand identity for themselves since they came into limelight when Nancy
Greene legendary racer won a gold medal at 1967 World Cup while wearing Kombi
gloves. Then in 2013 they shifted focus towards quality of families, Canadian Heritage and
warmth which has been really valuable to them.

Rarity- Both of these are Rare as it’s not easy to come up with innovations that have utility
and patent them and creating a brand identity in such an industry which has a lot of
competition is a task Kombi sports has achieved and maintained over the decades.

Inimitability- While the innovations and patents are Inimitable as a company will have to
spend a lot of time on creating a team and research which may not necessarily result in
good yield. But the Brand Identity part is not necessarily Inimitable as any company with
right vision and marketing can somewhat achieve similar results of brand differentiation.

Non-substitutability- The patents and innovations might face some competition from
other products as not every consumer might not want it, but it’s not substitutable that
easily and will give them an advantage in market. But the brand identity is substitutable
using right investments, partnerships and marketing campaigns.
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Exploitability- Kombi Sports has exploited both these resources well by patenting new
innovations so no one can copy it and they enjoy benefits for their unique designs. By
2020 they had a team of 40 people in Montreal which focuses on their in house designs.
Their unique brand identity allowed them to develop close partnerships with various
retailers and chains which allowed them to open new opportunities for their different
product lines.

Patents Brand Identity

Valuable Yes Yes

Rare Yes Yes

Inimitable Yes No

Non- Substitutable Yes No

Exploitable Yes Yes

So, their Innovations and patents are seen as a sustained competitive advantage as
meets all things necessary according to VRINE Model but Brand identity can’t be a
sustained competitive advantage as it is not Non substitutable and Inimitable.

3. Strategy Diamond for Kombi Sports Inc.

Arena- Kombi sold their products mainly through 1000 retail stores all across Canada.

Vehicles- They use many channels for distribution like Retail stores, seasonal pop- up
shops, website and multiple brick and mortar stores. To establish Direct to consumer
channels they collaborated with 2 Ski resorts in Canada i.e., Mont Tremblant in Quebec
and Blue Mountain located in Ontario.

Differentiators- Kombi has always been known for their innovative designs and their
unique patented gloves which differentiates it from other competitors in the market. They
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Strategy

also have a brand identity focused around qualities of family, Canadian heritage and
warmth this allowed them to collaborate with other brands which helped them go beyond
from traditional performance skiing towards more family oriented and urban consumer
segment.

Economic Logic- Kombi planned on using pricing and quality of labelling to target high
end consumers as they decided not to produce gloves that cost less than 25 USD. They
also used their quality proprietary textiles which justifies their high end products and gives
them good margins on their products.

Staging- Kombi began as Gold Glove company in 1911 then transitioned into Kombi
sports by 1989. They mainly manufactured gloves in the beginning. Then with
collaborations they changed their customer base from performance skiing towards more
family oriented and urban customers. They opened their first pop up shop in 2017 before
this they mainly distributed through whole retailers then by 2020 Kombi became a
wholesale sporting goods company with that as their primary distribution channel.

In summary Kombi Sports Inc. has strategically planned its product development by
innovation and using proprietary material and establishing appropriate distribution
channels and strategic partnerships ton expand their product lines and their target
customers while maintaining quality and their goal to serve high end consumers. Their in-
house team in Montreal will help continue innovating in future and stay ahead of the
curve.

4. Strategic recommendation for Kombi sports.

For Kombi sports Inc. Bases on our analysis, we would recommend them to: expand in
new markets
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Strategy

Kombi sports can try to expand in new markets and should focus on making global
image for them using their experience and strategically collaborating other brands in
new regions.

Arena- While in their current market they are facing a lot of competition. They still should
go into new markets like UK, Europe and South Asia. These markets will give them
access to a new plethora of customers and allow them to target new target customer
segments. These are regions will large populations and Kombi might need to adjust their
products to people’s lifestyle needs according to region. As in countries like Vietnam, Sri
Lanka, Oman, North Cyprus and Jordan people like to go on treks and they attract a lot of
tourists their as well.

Vehicles- While they are mainly a wholesale sporting goods company now, they will need
add new ways of distribution in order to penetrate new markets. They could collaborate
with lifestyle brands in different regions in order to attract customers and establish their
presence and brand name there. They will have plan and open more pop up shops or
organise events in order to promote their products in these new regions in order spread
awareness and gain a loyal customer base there.

Differentiators- They should add more product categories and more segments while
using their in house team and experience with materials which will help them retain their
brand image of developing quality products and target high end consumers there as well.
They also offer unique events and collaborate with local brands so they connect with local
trends e.g., anime collaborations as they are a big thing particularly in South East Asia.
They could offer unique experiences and hold events in famous holiday resorts. They
could try a different approach like into digital marketing like hiring travel influencers to
promote their new product lines in new regions.

Economic Logic- The strategies I am suggesting are going to increase their sales as they
will be capturing new market segments and don’t have to fight for market share just in
Canada. Although this will be a challenge but marketing cost for event and influencer
marketing are going to be well in the budget so it won’t cut into their budget and help
maintain good margins.
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Staging- First should start with south east Asian countries as they have high population
and Kombi sports should research the culture and lifestyle needs of people so they can
develop relevant products for people’s needs. They should maybe collaborate with a local
apparel sports brand there in order to mitigate risk and then hold events to spread
awareness and get feedback on their products.

In conclusion the strategy that I have suggested will help them expand into new markets
with lowest costs possible and in order to enter new market they will have to establish a
global brand name for themselves this can be done if they plan their strategic
collaborations properly and events to promote new products that should developed after
researching people needs and if they face competition they can use their resources like
designing new and innovative products combined with their knowledge of developing
proprietary materials which will help maintain quality and something unique to offer to new
consumers which will make it appealing for them to switch. This strategy will help them
establish a global brand name for themselves and increase their to different consumer
and market segments in the world.