CHASING A 2020 VISION

Internal to Wipro
 TIMELINE
1949 Timeline
• Founded by Kihachiro Onitsuka

• ASICS entered US Markets after 47 athletes won medals while wearing the Tiger shoes in 1964
Tokyo Olympics.
1977

• First Jogging Shoes with Gel Technology

1986

• Started Sponsoring Marathons

1999

• Relaunch of Onitsuka Tiger brand

2002

• Relaunch of ASICS Tiger Brand with high-end fashionable designs and thin soles.
2015

• Announced AGP 2020, targeting 750 billion yen , Acquisition with RunKeeper
2016

Internal to Wipro
 OPERATIONAL BUSINESS SEGMENT

Running Athletics Lifestyle

CURRENTLY SERVED CUSTOMER SEGMENT

Serious Half Marathon and Trendy European Fashion Casual shoes and Clothing
Full Marathon Runners Oriented Customers: High End Adults in 20s and 30s
Internal to Wipro Shoes and Apparel
 BRANDS UNDER ASICS
Onitsuka Tigers
• Lifestyle and luxury brand influenced by European fashion
• About 80%–85% of sales were from shoes, with each pair costing on
average 10,000–12,000 yen.
• Promotion was done through direct store locations and digital
vehicles.

ASICS Tigers
• Lifestyle Brand
• Targeted to young generation
• 75% of sales were from male customers in their 20s and 30s,
• Main sales channel for ASICS Tiger was through wholesale,
reaching big-box retailers such as Foot Locker and Dick’s Sporting
Goods, and placed alongside sneakers from other brands

ASICS
• High Performance Shoes for ‘ Serious Runners’

Internal to Wipro
 COMPETITORS

Internal to Wipro
 UNDER ARMOUR
• Founded in 1996 by Kevin Plank
• “Under Armour Heat Gear” and “ColdGear” fabric for extreme weather conditions.
• 25 global websites and almost 200 directly owned retail stores
• 70 %of sales from apparel and 17% from footwear

PUMA
• Founded in 1652 by Rudolf Dassler
• Developed soccer shoes with the world’s first screw-in studs.
• Brand Ambassador is USAIN Bolt
• Positioned as as “the most fashion-forward global sports brand
• 44.5% of net sales from footwear and 36.7% from apparel

ADIDAS
• Founded in 1924 by Adi Dassler and his brother, Rudolf.
• Brands into two groups: “Adidas Performance,” which is purely sports oriented, and “Adidas Originals,”
which is fashion oriented with premium and stylish designs.8
• Collaboration with with public figures and celebrities to appeal young adults
• 49% of sales from footwear, and 41% from apparel

NIKE
• World’s largest footwear, apparel, and equipment company, was established in 1964.
• Affordable, high-quality running shoes and apparels
• met broader consumer needs
• 60% of sales from footwear, and 28% from apparel.

NEW BALANCE
• Founded in Boston, Massachusetts, in 1906
• Known for offering a wide variety of sizes, like shoes with very narrow or very wide widths
• Company to focus on the athletic business
• Principal partner for the New York City Marathon, replacing ASICS, which had been the partner for 25
years
Internal to Wipro
 Runkeeper Acquisition
• In 2016, ASICS acquired Boston-based FitnessKeeper,
which operated the fitness app Runkeeper for $ 85
Million.
• RUNKEEPER was acquired with idea of getting access to
new customer segment like ‘Fun Run’ segment .
• Also to boost DTC sales and e-commerce purchases

Tracks exercise statistics

5.5 Million Active of activities such as
33 Million Members
Members in a Month running, walking, or
cycling

Main source of revenue

was from users
upgrading to a paid Provides analytics,
User base was mainly
subscription ($9.99 a casual runners coaching, and other
month) to receive advanced functionality
premium functionality

Online store featuring

merchandise from Not yet profitable
various sports brands
Internal to Wipro
 Runkeeer vs MyASICS
Product Target Revenue
App Positioning Strengths Weakness
features Segment source

• High
• Track “sticking’
exercise • Online
statistics Causal store
• Approachable
• Analytics runners Premium • Large user
• Quirky No ASICS
Runkeeper • Coaching (33 subscription base
• Fun brand
• Other million (10$/m) • Open app
advance users) (for any
functionality brand)
• GPS enabled • Global
presence

• Advanced
sport
• Serious
theories
running
Serious and
tracking Very low
runners • Premium research
My ASICS • Customized Subscription user base
(1 million • Training guide • Helps user
Training share
users) achieve
programs
targets
based
(70%)

Internal to Wipro
 CURRENT MARKET SCENARIO
Current Market Scenario
Participation in casual
Participation in Full running of 5K and 10K
Marathon and Half distance are on the rise
Marathon is declining ( Fun Run Segment ). This
( Serious Runners ) market has lower margin
due to competitive pricing

ASICS is competing for 3rd

Nike and Adidas two Position is sportswear
dominant players in industry with Puma, New
Sportswear Industry. Balance and Under
Armour

Changing consumer
Athleisure Market behavior as Consumers
estimated to be US $ 97 are incorporating
Million technology in fitness
routines .

Internal to Wipro
 DISTRIBUTION
Brand Distribution Channel Share of sales No of stores
• Asics stores and factory
Asics 674
outlets
• O-Tiger retail shops
O Tiger 80-85% 110
• Select boutique stores
• Wholesale
A Tiger 1
• Big box retailers
• Online sales
All • Own site 1.5%
• Third party sites 17%

Brand ASICS Nike Adidas

US 75 218 0

Non US 710 585 0

Total 785 803 1616

ASICS has relatively low number of stores compared to competition.

Actions required:
1. Increase number of retail outlets, particularly for Tiger brand and in US
2. Enhance online sales – through own site, third part channels, runkeeper app
Internal to Wipro
 COMPARATIVE
Comparative FINANCIAL PERFORMANCE
Financial Performance
Comparative Financial Performance
2015/ mUSD ASICS Nike Adidas Puma UnderArmour
Revenue 3,895 30,601 18,415 3,688 3,963
Operating Income 250 3273 1191 105 409
OI margin 6% 11% 6% 3% 10%

Revenue Share 6% 51% 30% 6% 7%

•ASICS has a low value share in the Industry.

•Operating Income Margin is significantly lower vs Nike

Internal to Wipro
 PRODUCT MARKET
Product-Market
Category Product ASICS Competition Target Challenge ASICS
features Brand segment strengths

• Market de-growing :
Marathon runner
• High dropped by 5% pa in
quality past 2 years • Largest
 Serious • Female share market
• Functiona • Adidas
runners increasing share
Serious lity performance
Mainly Male, • Product matured; • Preferred
runner • Technical ASICS • Puma
35+ yrs limitation to product by majority
shoes innovation • New
Upper development of
• High Balance runners/wi
middle class • Users may be unable
margin to further recognise nners
(50%) improvements/
benefits
 

Internal to Wipro
 PRODUCT MARKET
Product-Market
Product ASICS ASICS
Category Competition Target segment Challenge
features Brand strengths
• Stylish
• Trendy
• Low margin :
• Thin sole • Nike Needs 3 times
• High end sales volumes  Well
Onitsuka • Adidas • Men and
Lifestyle Established
• Lowe Tiger Original women • Confusion brand
price • Puma between two
(than tiger brands
runner)

• Thick gel
• Hip US • Continuous  Known
street •  Young • Youth
ASICS new designs Brand among
Casual sneaker • For walking
tiger and the young
fans around town approachability adults

• Short distance
runners
• More females
 Fun • Running for  No brand
   NA   •  
runners health and available
recreation,
• Price sensitive
Internal to Wipro
 Goal
•2020 vision
• Sales : 750 By; margin : 10% (75 bY)
• Expanding digital footprints
• Being the gold sponsors in the
Olympics

• Strategy
• Shift to DTC mindset
• Expand consumer base
• Communicate consistent brand
• Create differentiated innovation
• Pursue operational excellence
• Develop people and team

Internal to Wipro
 SWOT Analysis
SWOT Analysis
• Orientation towards innovation • Lack of sports culture
(Key Player) in few markets
• Introduced
• Sponsorship of international diversification could
teams and players hurt the focus on the
• Global presence conventional offerings

STRENGHTS WEAKNESS

• Increasing competition • Opportunity to

from key players Nike, explore the emerging
THREATS OPPORTUNITIES
Puma, Adidas, etc. markets
• Availability of the • Explore some changes
substitutes at the cheaper in the brand image –
rates currently only focused
on the sports shoes
• Continuous focus on
the innovation

Internal to Wipro
 MARKET CHANGES
• Market for marathon shoes degrowing
: average 5% pa degrowth between
2013-15
• Reduction in male runners, growth in
female runners
• Growth/Shift to for health and
recreational running, short distance.
Users do not want high cost serious
running shoes
• Competition intensifying – with clear
positioning

Internal to Wipro
 INTERNAL ISSUES
• Brands overlapping or under-
represented
• Positioning not very clear (except for
serious runner shoes)
• No product/position for fun runners
• Too frequent changes in
messages/communication
• Dilemma between promoting Global
vs Japanese identity (for Tokyo
Olympics)
• Distribution : Own shops, online etc
not very strong

Internal to Wipro
 PROBLEM AREA/DECISION POINTS

• Whether to introduce new mid-tier

footwear line under ASICS brand
• How to manage two lifestyle brands
– Onitsuka Tiger and ASICS Tiger
• How to reorganise / rationalise the
three brands
• Whether Runkeeper and My ASICS
apps should be merged or kept
separate?

Internal to Wipro
 MARKETING STRATEGY
Target Segment : Differentiated target segments by
product category

Product : Distinct products for each segment

Place : Direct to Consumers

Price : Maintain premium pricing in each product

category

Brand / Positioning : Brand consistency

Internal to Wipro
 SEGMENT/TARGET
Segment Product
• Serious runners
• Male & female, 35+ yrs ASICS performance shoes
• Upper middle income class

• Short distance runners

• More females
• Running for health and recreation, New product- Fun shoes
• Price sensitive

• Casual/lifestyle shoes users

• Young
Tiger
• Middle-Upper middle income
Internal to Wipro
 ACHIEVING
Achieving Vision 2020VISION 2020

Strategy Strategy Strategy

1 2 3

Runkeeper Launch a Brand

and Asics Mid-Tier Consistency
App Product

Internal to Wipro
 RUNKEEPER AND ASICS

-Larger Customer base -Maintain Individual

App
- Runners use it for
their progress
- People want to use
a brand free neutral
app

Internal to Wipro
 LAUNCH
Launch a Mid – A MID-TIER
Tier Product PRODUCT

- Entry into a new market - Brand Dilution in

segment Serious runners category
- Increase in Revenue - Low margins, hence
and Profits high sales volumes are
- The current market is required
declining - High competition
- Risk of cannibalization

Internal to Wipro
 BrandBRAND CONSISTENCY
: Consistency

- Credibility and - Re-Branding Cost will

Emotional Connect be very high

- The brand - Risk of losing existing

customers
consistency with help
reach the global
presence

Internal to Wipro
 Place PLACE

• Increase own retail stores numbers

• Increase presence in US and Europe
• Increase online sales – through own sites, third
party sites and runkeeper app
• Consider offers/discounts on own online cannel
• Use data analytics to track and analyse consumer
preferences

Internal to Wipro
 PROMOTION

• Tokyo Olympics sponsorship event to get high visibility

• Own showrooms to promote brand and customer interaction
• Sponsorship of short marathons and other sports events

Internal to Wipro
 FINANCIAL
Financial Goals GOALS
ASICS
Financials 2015 2020 CAGR
Revenue
Running 2,46,200 4,00,000 10%
Core performance 90,600 1,00,000 2%
Sport Lifestyle 44,900 90,000 15%
Training 70,000
health comfort 32,000
Others 46,700 58,000 4%

Total 4,28,400 7,50,000 12%

Gross Profit 1,82,154 3,52,500

GP margin 43% 47%

SGA 1,54,705 2,72,643 12%

as % sales 36% 36%

Operating Income 27,449 75,000 22%

OI margin 6% 10%
Internal to Wipro
 CONCLUSION
Conclusion
Asics Should merge the app with Runkeeper
and upgrade the existing Acis customer to
premium customers on Runkeeper.

Asics should launch a new Mid-tier brand, but

it should give a new name and give Asics
endorsement.

ASICS should re-brand, after analyzing the

change management efforts and financial
implications

Internal to Wipro