This report has examined both Billabong and the competitive environment in which it operates in order to formulate strategic recommendations.
EXECUTIVE SUMMARY 3
INTRODUCTION 4
COMPANY OVERVIEW 4
OPERATIONS 4
FINANCIAL 4
HUMAN RESOURCES 5
CORPORATE GOVERNANCE AND LEADERSHIP 5
MARKETING STRATEGY/POSITION 5
SITUATIONAL ANALYSIS 6
COMPETITIVE ENVIRONMENT 6
SIZE AND GROWTH 6
COMPETITOR REVENUE 7
COMPETITIVE MARKETING STRATEGIES 7
SWOT 7
PESTEL 7
POLITICAL/LEGAL TRENDS 8
ECONOMIC TRENDS 8
SOCIAL/ENVIRONMENTAL TRENDS 8
TECHNOLOGICAL TRENDS 8
STRATEGY ANALYSIS 9
CORE COMPETENCES 9
IDENTIFYING COMPETITIVE ADVANTAGE 10
PROCESSES OF DEVELOPMENT 10
STRATEGIC OPTIONS 11
IDENTIFICATION 11
Strategic Options Ranking 11
STRATEGY SELECTION 12
STAKEHOLDER ANALYSIS 12
RECOMMENDATIONS 14
SHORT TERM STRATEGY 14
LONG TERM STRATEGY 14
CONCLUSIONS 16
APPENDIX 1: OPERATIONS 17
APPENDIX 2: FINANCIAL ANALYSIS 18
APPENDIX 3: BILLABONG INTERNATIONAL HUMAN RESOURCE INITIATIVES 19
APPENDIX 4: MARKET SEGMENTATION AND COMPETITOR ANALYSIS 20
APPENDIX 5: BILLAGONG SWOT ANALYSIS 21
APPENDIX 6: PESTEL 22
APPENDIX 7: COMPETITOR ANALYSIS 23
APPENDIX 8: BILLABONG - STRATEGY DEVELOPMENT DIRECTIONS 24
APPENDIX 9: STRATEGIC OPTIONS RANKING MATRIX 25
APPENDIX 10: BILLABONG (MCKINSEY) GROWTH PYRAMID 26
APPENDIX 11: STAKEHOLDER INTEREST VS POWER MATRIX 27
APPENDIX 12: LEADERSHIP ANALYSIS - BILLABONG'S HISTORICAL PERSPECTIVE 28
APPENDIX 13: REFERENCES USED 30
APPENDIX 14: ENDNOTES 32
EXECUTIVE SUMMARY
Billabong International is a major competitor in the niche, highly competitive market of surfwear, worth $4.5billion and growing 10-12% annually. With Billabong seeking to achieve annual revenue growth of 20-25%, the organisation is challenged to find ways to meet these revenue targets within the current confines of its competitive environment. To enable the organisation to achieve its growth goals, new strategies must be identified and implemented.
This report has examined both Billabong and the competitive environment in which it operates in order to formulate strategic recommendations. An internal analysis covering the company's operations, finances, human resources, corporate governance and marketing strategy provides the framework to identify the core competences and areas of competitive advantage for Billabong. An external analysis of the competitive environment sets the framework for identifying strategic opportunities for Billabong in the market place.
Once a set of strategic options were identified, analytical tools including but not limited to options ranking, stakeholder analysis and competitive strength grid were used to ascertain the attractiveness of each option. The strategic options were reduced to two options that could be implemented over a short-term and long-term time frame.
The short-term strategic option is one of increasing market share and revenue through market and product diversification. By adopting this strategy, Billabong will stretch their existing core competences into new market areas thus creating greater opportunity for revenue growth. Billabong's corporate culture has been influential in the success of the organisation thus far and in implementing a stretch strategy, Billabong should look for new markets that have synergies with their current culture. The current core competences of Billabong result from a number of processes of development. Billabong must continue to invest in the development of these processes with specific consideration given to an enterprise wide customer-centric focus.
The recommended long-term strategy for Billabong is one which addresses the broader issue of an aging population. Billabong's target market is the 10 to 24 year age bracket. The fact that the developed countries have a diminishing birth rate, the size of Billabong's target market will subsequently diminish. Through careful brand acquisition and marketing modified to an older audience, Billabong has the opportunity to take advantage of an aging consumer population.
Whilst a strategy will generally fall into either a stretch or fit category, it should be noted that to define a strategy in isolation is inappropriate. All organisations will have some melding between a stretch and fit strategy. Going forward, Billabong must not only answer questions regarding strategies for revenue growth but also address issues regarding appropriate leadership for the organisation and determine whether the values of the organisation are sustainable.
.0
INTRODUCTION
This study provides a comprehensive and critical strategic analysis of Billabong International Limited's operations, stakeholders and leadership structure, and the efforts taken to grow its market share since its inception in the early 1970s. Strategic tools including SWOT analysis, PEST analysis, McKinsey Growth Pyramid, leadership analysis and stakeholder mapping have been used to highlight factors that have contributed to Billabong's success and to identify and assess strategic options.
This report looks inward at Billabong's distinctive capabilities and assets that have contributed to the organisation's continued revenue growth over the past three years. It also looks outward, providing a strategic analysis of the industry and its competitors in which Billabong operates and the potential opportunity of markets in which its core competences may yield competitive advantage. The stretch perspective - the strategy theory of identifying and developing one's core competences which can then be stretched across several dimensions to achieve growth from a number of sources1 - figures prominently throughout this analysis.
.1 COMPANY OVERVIEW
Billabong International, a leading surfwear apparel and accessories company, was established in 1973 by Gordon and Rena Merchant in Queensland, Australia. It has grown from a single-branded private company to a multi-branded publicly listed company with global operations extending to 60 countries with revenues in excess of $600 million2. The founders' passion for improving the sport of surfing provided the foundation for the company to build credibility and grow. 3
During the 1970s and 1980s surfing evolved from an amateur leisure pastime into an international professional sport, and Billabong capitalised on this by establishing a reputation as a supplier of quality surfwear. It combined innovative products "made by surfers for surfers" with targeted distribution.
In the early 1980s, Billabong began selling products in Japan, the United States and Europe, through third party licensing. This, according to management, helped establish the foundations for the brand's future global penetration. Billabong leveraged its brand strength to expand into broader youth-oriented categories, including snowboarding and skateboarding.
In 1998, a consortium of investors, including current chairman Gary Pemberton and former CEO Matthew Perrin, acquired founder Rena Merchant's 49% stake in the Billabong business for $25 million. Billabong's licensed US operation was subsequently converted to direct ownership. In August 2000 the company made a public offering on the Australian Stock Exchange and immediately raised US$171 million. As of June 2004 Billabong's market capitalization was estimated at close to $2 billion4.
Billabong targets the youth market (10 - 24 years) with the current core product range which includes:
Board Shorts
T-Shirts
Swimwear
Fleece Tops
Jumpers
Walk Shorts
Pants and Jeans
Backpacks
.2 OPERATIONS
Billabong International is the holding company of a global group employing over a thousand people involved in the design, production and distribution of surf and extreme sports apparel and accessories for male and female markets. Billabong's products are sold by its directly controlled operations in Australia, New Zealand, North America and Europe and through licensed operations and distributors in other regions. 5(see appendix 1)
.3 FINANCIAL
In the financial year to 30 June 2003, sales increased 27 per cent in the US and 11 per cent in Australia while global sales increased 6 per cent to $305 million, with total revenues exceeding $600 million6. The company is predicting consistent, long-term growth7. Analysis of Billabong's statement of cash flows (see Appendix 2) for 2002 and 2003 indicates the company is prosperous and growing, buoyed by its acquisitions of Element and Von Zipper. However, there was a noticeable decline in cash flow from operating activities and investing activities in 20038, and a net decrease in cash held of $4.4 million. Still, with close to $31 million in the bank and no net debt, the organisation is on a strong footing to take advantage of future growth opportunities.
.4 HUMAN RESOURCES
"We have a company culture that is quite free. Its not as corporate as some other companies that we deal within the market."9 - Billabong CEO Derek O'Neill
Billabong employs people who use its products, particularly surfers as they believe this strategy supports the knowledge acquisition process and allows the organisation to understand its customers. Most of its designers are under 23 years old and are "designing products for themselves and marketing to themselves."10
The company aims to "ensure that our employees are motivated, happy, challenged, rewarded and given opportunities and work security."11 Employee growth averaged 14.3 per cent from 200312. Billabong has identified the link between training and development of employees with its overall business objectives as a key strength. Some of Billabong's key employee development initiatives are described in Appendix 3.
.5 CORPORATE GOVERNANCE AND LEADERSHIP
Billabong's internal leadership and composition attempts to maintain a connection to the surf culture and its roots. Many senior positions are held by men who have been promoted from within and at one time or another, surfed competitively. Breaking this tradition was the appointment of non-surfers Matthew Perrin as chief executive and Gary Pemberton as chairman in 1998. Perrin later left the organisation in 2002.
The board consists of eight directors including Qantas chair Margaret Jackson and Ted Kunkel, former-chair of Fosters' Group. Founder Gordon Merchant is the largest single shareholder with 22% of company stock13. He continues to be active in the company, "but he spends a lot of time going around the world surfing."14 CEO Derek O'Neill is the former General Manager, Billabong Europe, a one-time competitive surfer and has been with the company for more than 15 years.
2.0 MARKETING STRATEGY/POSITION
Billabong has a highly integrated and diverse, niche-oriented marketing strategy aimed at 10 to 24-year-olds who "have money, are brand obsessed, anti-mainstream and are very fickle consumers."15 Maintaining their credibility in this market is essential for Billabong and its competitors.16 Billabong achieves this through creating "contemporary, relevant, innovative products of consistent quality"17, ensuring product innovation by maintaining close contact with the surf community and fashion developments.
Some companies, particularly Mambo, have struggled to "remain youthful" and attractive to younger consumers, a market "where tone of voice is crucial"18 Companies that attempt to cultivate a broader market for its products may see this strategy backfire, as proven by Mambo which has lost touch with the teen and early-20s market and faces a "split personality" brand19
In 2003 Billabong adopted a multi-brand strategy "to ensure that one brand does not become too mass market and lose credibility with customers."20
Product
Billabong's product range covers more than 2200 product lines in Australia, 1300 in North America and 1200 in Europe. Its snowboarding and skate-apparel lines are developing their own brand image, while action sports participants represent 50 per cent of clothing sales. The women's market has been identified as a growth area in North America and Europe, and the company has responded with a product range dubbed "Billabong Girls" and billabonggirls.com channel.
Place
Billabong products are sold to roughly 3000 specialty surf shops and boutiques in 60 countries through two channels: directly controlled operations and licensed operations and distributors. Billabong has 18 retail outlets in the United States and products are sold only through 'authentic', specialist surf and sports stores; it does not sell through department stores.
Price
Billabong prides itself in trying to get low prices and consistent supply from its manufacturers. Its distribution strategy prevents discounting, and Billabong charges a premium price to its customers that supports its brand image.
Promotion
Intense competition among the top three surfwear companies has required Billabong to allocate considerable spending on advertising and promotion to maintain brand and product awareness:
* Has signed the number one, two and four surfers in the world to sponsorship agreements and dedicated signature lines of boardshorts to each21
* Sponsors major sporting events; tapping into the growing trend of "advertainment" - the combination of high-energy surf movies and product placement - by releasing 'Billabong Odyssey', a documentary inspired by a fund of the same name that sends surfers anywhere in the world in pursuit of a 100-ft wave
* Product placements in Hollywood surf films including "Blue Crush" which targeted the women's market.
3.0 SITUATIONAL ANALYSIS
Billabong competes in the market of surf and extreme sport apparel and accessories. Areas of business are surfing, snowboarding and skating.
3.1 COMPETITIVE ENVIRONMENT
The micro competitive environment in which Billabong operates is the lucrative and niche surfwear industry. At the macro competitive environment level, Billabong operates within the clothing and sports industries. It is important to consider both the micro and macro environments when seeking new opportunities for growth.
The Australian surfwear industry developed in the 1970's and gained significant momentum throughout the 1980's and 1990's. Today the market is well defined with three main players in the industry, Billabong, Quiksilver and Rip Curl, all three originating in Australia. There are numerous smaller competitors including Mambo, Globe, Hang Ten and ...
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The micro competitive environment in which Billabong operates is the lucrative and niche surfwear industry. At the macro competitive environment level, Billabong operates within the clothing and sports industries. It is important to consider both the micro and macro environments when seeking new opportunities for growth.
The Australian surfwear industry developed in the 1970's and gained significant momentum throughout the 1980's and 1990's. Today the market is well defined with three main players in the industry, Billabong, Quiksilver and Rip Curl, all three originating in Australia. There are numerous smaller competitors including Mambo, Globe, Hang Ten and Gotcha. Ownership of the major players is mixed between private and public. Billabong, Globe and Mambo are publicly listed companies. Quiksilver is privately owned in Australia but is publicly listed in the US, whilst Rip Curl is wholly privately owned. The three main competitors face the challenge of developing international strategies for delivering profits and shareholder value.
3.1.1 SIZE AND GROWTH
The surfwear industry is valued at $4.5 billion22 and in 2002 growth was forecast at 10-12% per annum. Surfwear is now a well-established global industry, with the three major players having operations in Australia, the US and Europe. Billabong, Quiksilver and Rip Curl all began solely in the surf industry, however there has been a general expansion into the extreme sports, skating and snowboarding. These markets complement the summer seasonality of the surf industry (see appendix 1).
3.1.2 COMPETITOR REVENUE
Revenue and ownership details of Billabong and its main competitors are given in the table below.
Company
Revenue
Ownership
Target Market
Quiksilver
$975M (2003)
Private - Australia
Public - US
0-24
Billabong
$628M (2003)
Public
0-24 years
Rip Curl
$340M (Est. - 2002)
Private
0-24
Mambo
N/A
Public
0-40+
3.1.3 COMPETITIVE MARKETING STRATEGIES
Quiksilver has multiple brands that focus on the surf industry including: clothing, accessories, eyewear, watches and wetsuits. They develop new products and license their brands in other regions or make acquisitions that are consistent with their business strategy. Recent acquisitions include snowboard manufacturer Mervin, Hawk Clothing, and DC Shoes Inc. Like Billabong, Quiksilver promotes its brand through event and athlete sponsorship.
In addition to surfwear, Quiksilver's product line includes snowwear, snowboards and golfing products. All products try to build an image of an outdoor sports lifestyle.
Rip Curl's strategy focuses on brand management rather than manufacturing23, as well as event and athlete sponsorship. Rip Curl uses major surfing events to raise the profile of its brand and align itself with "the vanguard of surfing"24. Rip Curl has used technology such as the Internet to extend its brand image and provide services such as surf weather service25.
Rip Curl's product lines include surfwear, footwear, wetsuits, mountainwear, watches, backpacks and surfboards. They have a network of 1000 stores within Australia and New Zealand and 2000 stores throughout the rest of the world.
From the Competitor Analysis (Appendix 4), critical success factors (CSF's) have been identified for the industry:
* Marketing and promotions
* Distribution channels
* Design
* Supply chain efficiencies
* Brand recognition
It is these CSFs which the organisation must continue to foster, as they are particularly valued by Billabong's customers. Analysis suggests that Billabong trails the industry leader Quiksilver across three dimension: supply chain efficiencies, market share and financial resources, but is 'above average' in marketing and promotion, distribution channels and design.
3.2 SWOT
Appendix 5 contains the SWOT analysis that was conducted on Billabong. It assists in identifying the key areas of consideration in both the external environment and internally26. The key features of the SWOT are used to develop an understanding of the core capabilities of Billabong and where it may falter in comparison to its competitors.
3.3 PESTEL
From the PESTEL analysis (Appendix 6), the following critical issues were identified:
3.3.1 POLITICAL/LEGAL TRENDS
In an organisation that operates on a global scale, political and legal trends will potentially have significant impact upon its ability to operate in a particular market and may affect its profitability and sustainability.
Billabong operates within a globalised market. Although Billabong has the processes in place to meet the challenges derived from operating in this environment, it requires the structural flexibility to capitalise on ongoing opportunities and new threats that arise. New market opportunities from manufacturing and marketing result from globalisation.
As globalisation increases, the risk that political instability has on business also increases. With operations spread throughout both the developed and developing world, Billabong is reasonably well covered in the event if one key country (or geographic region) suffers from political instability. This said, it should have established contingency plans to respond to potential threats in specific markets.
3.3.2 ECONOMIC TRENDS
In terms of economic trends, there are a number of factors that could affect Billabong's performance. In the broadest of scales, Billabong relies on the consumer to purchase its products. Therefore interest rates and resulting disposable income in the consumer market, are directly related to the company's performance. The generation in the target market is a "now generation", where credit is easily obtained and there are high levels of personal debt. Increasingly this young market is realizing the consequences of easy credit with bankruptcy rates increasing in the young consumer market.27
For the consumers not old enough to obtain credit (10-17yrs), part time jobs and parents provide the financial resources. The exponential growth in mobile phone use is also providing competition for the spending dollar.
On a macro-economic level, Billabong is exposed to a number of factors such as currency shifts and interest rate rises. However these are factors that can be managed through financial policy.
3.3.3 SOCIAL/ENVIRONMENTAL TRENDS
To date, this is where Billabong and the other surfwear companies have excelled. They have stayed in touch with their market and the surfing culture and are attuned to emerging social trends. This is demonstrated by Billabong's move into other extreme sports.
Increasingly, extreme sports, such as snowboarding and skateboarding, are being accepted into mainstream culture. Snowboarding is now rivaling skiing in popularity and is being taken up not just by the traditional youth market, but increasingly by an older market, particularly men, who see it as an opportunity to participate in this activity with their children.28
The surf culture is based on a laid back attitude that bucks convention. In its dress standards, society is becoming increasingly relaxed. Whilst our clothes are now casual, there is a major focus of concern on the work/life balance, as in many countries people are working longer. Women are increasingly participating in extreme sports and represent great opportunities for surfwear industry.
Some small competitors have begun to work on eco-friendly products using new eco-textiles to make their surfwear, and there is a general trend towards an increased environmental consciousness.
3.3.4 TECHNOLOGICAL TRENDS
Technological trends could affect any part of the Billabong business. The challenge for Billabong is to be flexible enough to recognize the trends and the opportunities that technological changes could have for the business.
In considering technological trends on the business, the three areas most likely to be affected are operations, manufacturing and marketing. Technological developments in operations, such as the use of nanotechnology may reduce the cost of goods, increase productivity and increase logistical efficiency. Marketing potential that arises from technology trends is broad. The Internet has changed the way companies market their products and provide an additional channel to market. As technology progresses and communications become more mobile and more compact, there are many opportunities for companies to capitalize on these trends.
4.0 STRATEGY ANALYSIS
Surfwear is a niche market, experiencing growth; however the environment in which it operates is extremely competitive. Competitors have expanded into product ranges outside their core business of surfing, but into those that provide a close fit to the surfing culture. The growth strategy that Billabong has pursued to date has been a 'fit' strategy; that is they have identified opportunities in the extreme sports market and adapted their resources and capabilities to capitalize on these opportunities.
At a macro business level, the sportswear/outdoor apparel industry is far larger than just the surfwear/extreme sports wear market. The total value of the athletic apparel and footwear market is estimated at over $58 billion US dollars (29% for athletic footwear and 71% for athletic apparel).29 Billabong has already put in place a multi brand strategy for different market segments; however it is still confined to surf snow and skate sports apparel and accessories. In determining a strategy for future growth, Billabong must consider its core competences and capacity to grow to ensure that it is in a position to implement the agreed strategy.
4.1 CORE COMPETENCES
From the internal analysis of Billabong and a comparison of its assets and competences against its major competitors (Appendix 7), five core competences have been identified:
* Marketing and Promotion
Billabong's investment in marketing has successfully tapped the youth market through unique and creative promotional programmes and has subsequently created brand affinity.
* Product Design
Billabong's products are characterized by their innovative design and quality workmanship. The company states that it recognizes the crucial importance of new designs to the continued success of the Billabong label. It implements this strategy by using design teams that are attuned to the consumer's wants, needs, expectations and industry trends.
* Product Sourcing
Billabong's use of central sourcing provides a number of benefits:
. reduces costs by coordinating Billabong's global product requirements and economies of scale through global purchasing;
2. improved consistency of product quality;
3. ability to ensure that delivery windows are met;
* Distribution/Licensee agreements
Extensive distribution and license agreements have minimised reliance on wholly-owned retail outlets. By opting to distribute products through specialty retail chains, Billabong maintains a sizeable hold on a large niche market. Licensee agreements provide lower cost access to a wide variety of markets.
* Culture
The foundation and its reason for being is based around the surf culture and lifestyle. This is reflected in the compositional make up of the organisation in both style and structure.
4.2 IDENTIFYING COMPETITIVE ADVANTAGE
Having identified Billabong's core competences, the organisation has competitive advantage in four areas:
* Distribution/Licensee Agreements
* Product design
* Product sourcing
* Brand equity
Areas of competitive advantage provide Billabong with prominent positioning and differentiation within a highly competitive environment.
4.3 PROCESSES OF DEVELOPMENT
Having identified the core competences and areas of competitive advantage for Billabong, it is believed that the organisation's future strategy would be best defined by a 'stretch' approach. This consideration applies solely to short term tactical processes of development. The following processes of development are linked to Billabong's core competences; possible growth strategies have been derived from the application of the Strategy Development Directions matrix (Appendix 8).
Processes of Development
What is Required (Core Competences)
Actioned By
(i)
Product Innovation
Product Design
Marketing
Market Penetration
New Products in Existing Markets
New Products in New Markets
(ii)
Supply Chain Management
Product Sourcing
Distribution
Market Penetration
New Products in Existing Markets
New Products in New Markets
(iii)
Partner Relationship Management
Distribution/licensee agreements
Market Penetration
New Products in Existing Markets
New Products in New Markets
(iv)
Enterprise-Wide Customer Focus
Product Design
Marketing
Senior Management Support
Adapt Business Strategy to reflect CRM strategy
(v)
Leadership
Culture
Senior Management Support
Strategic HR approach for knowledge sharing environment
Product Innovation
There must be continued investment towards product design and innovation to establish new trends in the market and organically grow the product portfolio, thereby presenting the company with new points of differentiation and revenue opportunities.
Supply Chain Management
To improve its competence in product sourcing and distribution, Billabong must align the four key stakeholders in the supply chain: suppliers, distributors, customers and employees. Aligning these stakeholders will enable Billabong to better understand the individual needs/interests of its stakeholders, thus leading to the creation of supply chain efficiencies and the development of new products and potentially new market segments. For example, the power of distributors can be used to deliver their existing products to other market segments.
Partner Relationship Management
Partner relationship management involves not only identifying organisations with suitable infrastructure, mapping out mutual objectives and needs, and agreeing on how to achieve these, but also ongoing compliance monitoring and adjustments where necessary. By continuing to refine their competence and performance in this area, Billabong will build a competitive advantage to help it achieve its ongoing growth targets.
Enterprise-Wide Customer Focus
Billabong must revise its business strategy to reflect an enterprise-wide customer-centric focus. In many ways the organisation has developed core components necessary to create synergies between its brand and its customers. However, a customer-focused organisation requires top-down, bottom-up commitment to make the customer central to all business decisions. The end goal being a holistic approach to knowing, understanding and defining customers' wants in shaping deliverables.
This is supported through continued investments in marketing solutions such as customer relationship management. As Billabong expands into new territories and develops new products in new markets it will need a much more disciplined approach in order to enhance its customer focus. A customer-centric focus will allow Billabong to tap into short term fads and shifts in market trends.
Leadership
Leadership sets the agenda for an organisation. Future growth strategies will be defined through acceptance by senior management across the organisation. The importance of a knowledge-sharing environment is supported by ongoing training and development programs which stretch across the organisation, help to remove divisional silos, increases employee skill set to improve promotion from within and promote the cultural imperative of the company.
Future leadership should continue to maintain its original vision and values of promoting healthy outdoor lifestyle.
4.4 STRATEGIC OPTIONS
4.4.1 IDENTIFICATION
Having identified the processes of development and what is required, there are a number of strategic options available to the organisation:
* Increase market share
* Maintain market share
* Product/market diversification
* Acquisition: complimentary brand/competitor
* Backward integration: manufacture products, acquire more of the supply chain
* Strategic Alliance
* Forward Integration: acquire/open new stores, expand SBU and subsidiaries portfolio
* Overseas market expansion
* Do nothing
4.4.2 STRATEGIC OPTIONS RANKING
Ranking the identified strategic options against key strategic factors derived from the SWOT analysis suggests that increasing market share and product/market diversification strategies would be most suitable as a short term strategy (Appendix 9). Increasing market share through product/market diversification would be supported by Billabong's existing distribution and licensee agreements and success in product sourcing, as would its strength in marketing and financial resources. When measured against these key strategic factors, backward integration, forward integration and entering into a strategic alliance with a competing firm would be deemed unsuitable. These strategies, particularly forward integration involving the opening of additional wholly-owned retail outlets, would likely present unfavourable results for the organisation's financial resources and obstruct its distribution and licensee agreements.
Were Billabong to seek to increase market share and/or product/market diversification, a number of options within this growth strategy are available, as illustrated by the Billabong (McKinsey) Growth Pyramid (Appendix 10). For each option there is a degree of risk to be considered; the lowest-risk option is to increase sales to the existing customer base through organic investment, which may entail more creative marketing, event sponsorship and tactics to maintain customer loyalty. Vertical integration would seemingly pose the greater risk, as the organisation would likely struggle to stretch its core competences across other unfamiliar industries. Likewise, growth through consolidation and acquisition of lesser brands carries equal risk, as this tactic may taint the parent organisation or present the threat of strategic drift across the organisation. Developing new products would be yield 'medium risk', with support derived from the leveraging, or 'stretching', of existing core competences (e.g. brand equity) and value chain activities (e.g. procurement). The risk derived from this option would occur at various levels (e.g. distribution, marketing) however, Billabong's brand equity - identified as a competitive advantage - would likely provide reduced risk.
4.4.3 STRATEGY SELECTION
The Billabong (McKinsey) Growth Pyramid and strategy ranking analysis identified the attractiveness of each strategic option. From this, two strategic options have been deemed suitable for further consideration. These have been applied against stakeholder mapping analysis.
. Grow market share through product/market diversification
2. Target new market segments to reflect changing demographics (i.e. aging population)
4.5 STAKEHOLDER ANALYSIS
Stakeholders are vital in strategy execution as they largely determine the levels of success that can be achieved with the strategy.
Applying Stakeholder Interest vs Power analysis (Appendix 11) to Billabong's strategic options for growth has identified a number of key stakeholders. 'Players', stakeholders with both an interest and significant power in the organisation, will affect the success of the strategies of the organisation. For example, 'stretching' the company's existing competences across other product markets or categories would draw high interest from shareholders, who are deemed to hold the greatest power among stakeholders based on their financial investment in the organisation. This scenario would also apply to financiers, whose support may be required depending on the extent of the strategy and financing requirements.
This strategy would require Billabong to seek a coalition of support among these stakeholders. Diversification and market expansion strategies will create additional stresses on internal operations and produce change management issues. The organisation will need to recognise the needs and expectations of its employees, the respective trade unions involved if any, and product suppliers. Likewise, any strategy that pursues the development of new products and/or services will need to be aligned with customer wants, needs and expectations. Although they may not be part of the initial coalition of support, eventual buy-in from customers will be required to support the business strategy. It is believed that continuous information flows to these stakeholders would provide an opportunity to build a healthy coalition of support.
Over time, the organisation would need to seek the support of Subjects, players who have interest but little power, and Context Setters, players who have power but little interest. If Billabong adopts a growth or diversification by acquisition strategy, it must assess the influence of government and media if any tactic associated with this strategy was deemed anticompetitive.
If Billabong chooses to diversify its product offering through acquisition of a competing or complementary brand, it must further identify which stakeholders will have the highest influence of power on strategy implementation. Applying Problem-frame Stakeholder Mapping will define the positioning of key stakeholders in this equation, and assist in the adoption of tactical solutions associated with Billabong's strategic alternatives.
The two strategies as previously are complementary but cannot be implemented simultaneously. They also have conflicting perspectives and, as such, Billabong should consider implementing them over different time periods.
Growing market share through product/market diversification is a suitable short-term strategy as it addresses revenue growth issues and the need to satisfy specific stakeholders (ie. shareholders) whilst leveraging its core competences. As identified through macro-environmental analysis, Billabong faces the threat of an aging population in its main markets of distribution: Europe, North America and Australia. Long-term strategic planning must account for this, as it poses a potential loss of customer base and declining revenues. It is assumed that as its target market matures, the organisation will need to consider options on how to retain these consumers while potentially seeking opportunities outside of that target market. Potential tactical solutions include:
* Acquiring an existing brand that markets to an older consumer segment
* Developing new products for new customer segments.
As illustrated, Billabong will need to devote greater attention to its shareholders and financiers as it contemplates a long-term strategy of diversification through acquisition, and acknowledge the potential hurdles presented by government and competitors in the event that the acquisition is deemed anticompetitive. Likewise, Billabong will require the support of its distributors and licensees, employees and trade unions will assist in strategy implementation, and proposals on how to appeal each stakeholder group must be developed.
Problem-Frame Stakeholder Map
5.0
RECOMMENDATIONS
Since the company's inception, Billabong International has had to develop competences to meet the environment in which it operates, essentially a fit strategy. Thirty-one years later, with these competences in place, Billabong is now faced with strategy decisions about how they move forward to achieve corporate goals of increasing revenue by 20-25% per annum. With the surfwear industry forecast to grow by 10-12% per annum, Billabong can only generate additional revenue growth in the surfwear industry by taking market share from Quiksilver or Rip Curl. The preceding analysis of Billabong's external and internal environment has identified appropriate short- and long-term strategies.
5.1 SHORT TERM STRATEGY
Applying a 'stretch' strategy will leverage Billabong's existing core competences to enter new markets. In adopting this strategy, senior management must exploit the organisation's product marketing and design skills and distribution arrangements, thereby effectively identifying and exploiting "the inter-linkages across units that could potentially add value to the corporate whole."30
The greater sportswear market is ten fold the surfwear market. By diversifying into other products and/or markets beyond the surfwear market, Billabong has the opportunity to grow market share in a larger market (ie. sportswear) and thus achieve the 20-25% revenue growth desired by management. A short-term stretch strategy allows for the "hidden value" in the business to be identified. As illustrated by Hamel-Prahalad (1994). "this value is realized when units identify and jointly explore white space opportunities, when competences are redeployed from one unit to another or combined in new ways across units, when units cooperate in building strong banner brands service multiunit customers and the like."31
To implement a stretch strategy, Billabong would need to develop an enterprise-wide customer-centric focus, whilst continuing to concentrate on product design, management of the supply chain, and partner relationship management. At the strategic business unit level, Billabong should stretch its core competences to other extreme sportswear opportunities as part of a product-market diversification strategy. Its leadership should also reflect the growing trend and acceptance of globalisation, through international representation at the board level.
5.2 LONG TERM STRATEGY
Whilst an organisation may adopt a long-term strategy, it is imperative that organisation recognize the fact that today's competitive environment can and will change, and consumer behaviours are continually shifting. However, in recommending a long -term strategy, a broader outlook of population trends has been considered, specifically encompassing the aging population in the geographic regions in which Billabong operates. Billabong's current target market is the 10-24 year age bracket. This is a diminishing group and a strategy for addressing the aging demographic is required for Billabong to ensure that revenue and profit does not correspondingly diminish.
In recommending this long-term strategy, it has been recognized that the competitive environment will change over the next 5 to 10 years. A long-term strategy can be adopted in the present but will need to be tweaked and manipulated over time to ensure that it remains relevant for the prevailing competitive environment. This strategy can be implemented through brand/company acquisition, and new product development for new market segments. As Billabong continues to grow they will need to continue to acquire new key competences.
To implement strategy, an organisation requires appropriate leadership. Johnson & Scholes categorise strategic leaders as either visionary/charismatic or instrumental/transactional.32 Billabong has benefited from the influence of both forms of strategic leadership at different points of its organisational life cycle. During its formative years Gordon and Rena Merchant led the company from a visionary/transformational paradigm33, providing the organisation with a clear and unique vision around living the life of a surfer. Through the use of personal style, strength and charisma, they were able to emotionally inspire stakeholders to buy into and share their vision for Billabong.34 Subsequently, the transactional leadership style of Gary Pemberton aided the company to add growth by bringing in more ideas and abilities at a global level and negotiating outcomes to the company's advantage (Appendix 12).
Going forward, given the challenging nature of strategic objectives of the company, it is probable that it will be benefit most from a transformational style of leadership. Vision will be the key to setting new strategic directions and to galvanize the human capital of the company to pursue those directions.
6.0
CONCLUSIONS
In seeking to achieve target revenue growth of 20-25% annually, Billabong is challenged to find new ways to overcome the confines of competitive environment in which it operates. To enable the organisation to achieve its growth goals, new strategies must be identified and implemented.
The recommended short-term strategy is one of increasing market share and revenue through market and product diversification. By adopting this strategy, Billabong will stretch their existing core competences into new market areas thus creating greater opportunity for revenue growth. The recommended long-term strategy addresses the broader issue of an aging population which may be addressed through careful brand acquisition and product development and marketing for an older audience.
Whilst a strategy will generally fall into either a stretch or fit category, it should be noted that to define a strategy in isolation is inappropriate. All organisations will have some melding between a stretch and fit strategy. Going forward, Billabong must not only answer questions regarding strategies for revenue growth, but also addresses issues regarding appropriate leadership for the organisation and determine whether the values of the organisation are sustainable.
APPENDIX 1: OPERATIONS
The company does not own factories; operations focus on design, sourcing and marketing. Roughly 80% of clothing manufacturing is outsourced to factories in China, and the remaining to India, Taiwan, South Korea, Thailand, Fiji, Indonesia, and Vietnam. The company operates Billabong branded stores and in-store, shop-in-shops in Australia, Europe, Hawaii, the United States and Japan. The company has a central sourcing division in Hong Kong that provides most products to Australia and New Zealand. It limits the number and quality of their stock lists to prevent discounting of prices during peak selling times35.
Operating Region
Comments
Australia
* Leading surfwear brand
* Over 320 staff
* Revenue primarily derived from wholesaling to independent retailers
* Local design team
North America
* Operations based in the United States and employs over 320 staff
* Operates through fully owned and controlled entities
* North America also supports operations in Canada, Mexico and Central America
Europe
* Established in 1992 as a directly controlled operation
* HQ in France with offices in Spain, the UK and France
* Distribution is through licensing
* Licensees purchase at discounts to wholesale prices and are responsible for marketing and distribution in their territories
* This expansion policy does not place large demands on Billabong's capital and management resources
Other Regions
* Operates through directly controlled entities and under license in Japan, South Africa, Indonesia, Brazil, Singapore, Peru, Chile, Israel and Venezuela
In the three major regions that Billabong operates, there are various seasonal ranges.
Market
Seasons
% of Sales
Australia
Summer (July - Oct)
High Summer (Nov - Jan)
Winter (Feb - June)
52%
7%
41%
USA
Fall (July - Sept)
Holiday (Oct - Dec)
Spring (Jan - Mar)
Summer (April - June)
26%
20%
28%
26%
Europe
Summer (Apr - Oct)
Winter (Nov - Mar)
54%
46%
APPENDIX 2: FINANCIAL ANALYSIS
Cash Flows - Billabong International
2003
2002
Cash Flows from Operating Activities
6,926
47,342
Cash Flows from Investing Activities
(12,278)
(34,814)
Cash Flows from Financing Activities
918
(3,259)
Cash at the end of the financial year
30,835
37,688
Billabong posted a net profit of $76.2 million for the 12 months to June 2003, a 24.9 % increase from 2002, and reported a $40.6 million net profit for the half year to December 2003. In 2002, the company recorded revenues of $281.3 million, a 42.5% increase from the previous year. Sales increased 27 per cent in the US and 11 per cent in Australia while global sales increased 6 per cent to $305 million, with total revenues exceeding $600 million. The company is predicting consistent, long-term growth.
The company reported a 21 per cent increase in net earnings to $35 million for the six months to the end of December 2003; and has a year-on-year growth target of 25 per cent.
The figures above would be important to show the value of Billabong to potential investors, creditors and existing shareholders paving the way towards future profitability and growth. Investors will be looking for the company to make more acquisitions to broaden its product line. It has done well with Element, a skate brand acquired in 2001, and analysts are optimistic it can do well with Honolua Surf, a Hawaiian retailer it bought early this year.
Even though most investors would rejoice at such growth given global economic conditions, Billabong shares nevertheless slumped by 20 per cent. With the state of the economy at the moment, which is particularly important to a company like Billabong as the items sold are luxuries for the most part, not necessities, have a significant impact on the consumer spend.
APPENDIX 3: BILLABONG INTERNATIONAL HUMAN RESOURCE INITIATIVES
Human Resource Initiatives36
* Career planning and development
* Creating a wide pool of "promotable" employees who work for Billabong
* Opportunity for international placements
* Organisation-wide workplace diversity
* Ongoing development and training of personnel
* Review of performance management systems, in consultation with staff, management and consultants, to develop effective action plans for career development
* Commitment to Health and Safety training, implementation of preventative strategies by minimizing risks in the workplace and improving supervisors' and workers' performance and knowledge
* Creation of a Management Development program
* Established the 'Since '73 Club' which recognizes long-serving staff that have a minimum 15 years service to the company
Like many companies, Billabong has faced its share of human resources challenges, particularly when it began expanding into an international organisation. The shift to corporate structure and attitude partially influenced co-founder Rena Merchant's decision to sell her share of the company37
APPENDIX 4: MARKET SEGMENTATION AND COMPETITOR ANALYSIS
The surfwear and active sportswear markets are extremely competitive, with each of the major competitors vying for the fickle youth market. A competitive analysis can be taken from a number of perspectives:
Market
Attributes
Competitors
Surfers
* Traditional market
* Seeks functionality and style in products
* Legitimises product credibility
* Rip Curl
* Quiksilver
* Mambo etc
Snow
* Emerging opportunity with exponential increases in popularity
* Segment requires product credibility
* Synergies between snowboard and surf markets
* K2
* Salomon
* Burtons
* Sims
Youth
* Products required to fit an "image"
* Fad driven, distrusts large companies, looking to make a statement about their individualism
* Easy access to disposable income (either through credit or from their parents)
* Entire clothing market
Women
* Increased number of women taking up surfing and extreme sports
* Highly competitive - consumer either "hardcore" surfer/snowboarder/skater, or wanting to wear clothes for an image
* Rip Curl
* Quiksilver
* Other surfwear manufacturers
* All female clothing retailers
APPENDIX 5: BILLAGONG SWOT ANALYSIS
STRENGTHS
WEAKNESSES
OPPORTUNITIES
THREATS
* Strong product range and design
* Sponsorships of top athletes
* Marketing
* Financial Resources
* Product sourcing
* Growing turnover and profitability
* Distribution and licensee agreements and relationships
* Good reputation and brand name
* Established customer base
* Strong OH&S policies
* Employee training, development and reward programmes
* Global market penetration and positioning
* Experienced leadership team/board of directors
* Online communication channel
* Strong investment in R&D and innovation
* Committed policies toward recycling and minimization of packaging materials
* Committed internal culture
* Limited wholly-owned retail presence
* Lack of an integrated CRM strategy
* Limited target customer segment focus, over-reliance on one customer segment
* Aging management team
* No known succession plan at board levels
* No prominent shoewear brand
* No wholly-owned manufacturing operations
* History of inconsistent corporate governance tracking and policy regulations
* Inconsistent financial track record
* Increasing wealth and leisure time result in higher demand for surfwear (and other sportswear)
* Reach further into non-traditional surf markets, such as Europe
* Further expansion with customers who like the surfing image, but do not live the lifestyle
* Growth of 'Adventure-tainment', films capturing the lifestyles of the surfers and other sports enthusiasts
* Complementary/related markets - mountain biking, rock climbing etc
* Loss of credibility with core surfer market due to targeting of more mainstream market
* Cost of sponsorship of leading surfers may become too high due to competition from mainstream clothing marketers wanting to break into the market (e.g. Nike)
* Loss of margin due to increasing generic competition from Chinese manufacturers
* Industry increasing presence in shopping malls and department stores. Could lead to relative loss of vital retail shelf space
* Local major players may release very similar products with very similar image/branding as the leading surfwear designers/marketers
* Potential loss of mainstream interest in surf brands, contraction of market
APPENDIX 6: PESTEL
Political/Legal
Economic
* Globalisation of markets
* Disposable Income
* Political stability
* Interest Rates
* Free Trade Agreement
* Exchange Rates
* Shifting manufacturing centres
* IP for Designs
Social
Technology
* Acceptance of extreme sport into mainstream
* New manufacturing capabilities
* Increasing female participation in extreme sports
* Increased marketing capabilities through technology
* Importance of work/life balance
* Technological shifts in fabrics and designs
* Rising power of teenage/tween markets
Environmental
* Dressing becoming more casual
* Environmental consciousness
APPENDIX 7: COMPETITOR ANALYSIS
Competitor analysis has been conducted using critical success factors as marketing and promotion, distribution channels and design to identify the competitive strength of the major operators in the surfwear apparel and accessories industry. This analysis clearly identifies Billabong, Quiksilver and Rip Curl as the dominant leaders across these dimensions, while lesser "players' Mambo and Globe have clear deficiencies in distribution, supply chain efficiencies and market share. The analysis indicates that Billabong trails industry leader Quiksilver across three dimensions: supply chain efficiencies, market share and financial resources.
APPENDIX 8: BILLABONG - STRATEGY DEVELOPMENT DIRECTIONS
An adaptation of the product/market matrix, the strategy development directions matrix considers the options available to Billabong in terms of market coverage, products, competence base and expectations of its strategies.38 Among the considerations is has to choose from is market development by exploring opportunities in new market segments, territories or developing new competences. Diversification is also on option through leveraging existing competences or developing new competences.
APPENDIX 9: STRATEGIC OPTIONS RANKING MATRIX
APPENDIX 10: BILLABONG (MCKINSEY) GROWTH PYRAMID
APPENDIX 11: STAKEHOLDER INTEREST VS POWER MATRIX
APPENDIX 12: LEADERSHIP ANALYSIS - BILLABONG'S HISTORICAL PERSPECTIVE
To implement strategy, an organisation requires appropriate leadership. Gayle Avery classifies organisational leadership into four paradigms, classical, transactional, visionary (or transformational) and organic.39 Johnson & Scholes specifically relate two of these four leadership paradigms to strategy. They categorise strategic leaders as either visionary/charismatic or instrumental/transactional.40 Billabong has benefited from the influence of both forms of strategic leadership at different points of its organisational life cycle.
During its formative years Gordon & Rena Merchant appear to have led the company from a visionary paradigm, providing the organisation with a clear and unique vision and emotionally inspiring stakeholders to buy into and share that vision through the use of personal style, strength and charisma41. In the case of Billabong, the vision was dedicated to the surf culture, possessed a management philosophy that was a mix of Newtonian and New Science techniques, was low on Hofstede's power distance inequality and was masculine42. It is interesting to note that surf culture, which underpins and defines the surfwear industry, shares many stereotypical personal values with visionary leadership. These include charisma, confidence, outspokenness, non-cooperativeness, individualism and ruthlessness. The benefits of such visionary leadership for an organisation like Billabong in its early years are clear and include abilities to be future-focused in strategy, cope with uncertain or unknown market opportunities and to be single-minded in the pursuit of strategic goals.
The critical shortcoming of visionary leadership is that its effectiveness is often diminished as an organisation grows in size. Visions become harder to sell and commitment decreases as follower numbers increases and diversity in opinions and ideas eventuate.43 Billabong was no exception to this and found a need to switch leadership paradigms in 1998. During that year, Rena Merchant's share of the business was acquired by Gary Pemberton and Matthew Perrin, bringing about a shift in the strategic leadership paradigm to a transactional framework. Transactional leaders focus on designing systems and controlling an organisation's activities and attempt to improve on existing situations44. Such leadership involves the negotiation of outcomes between leaders and followers, using pecuniary rewards to motivate outcomes45. Pemberton, nicknamed "Mr. Blue Chip"46 , with his past experience of working for large transactions based organisations such as Brambles and Qantas, was ideally placed to lead Billabong from a transactional perspective. Transactional leadership at Billabong was characterised by leadership power through position, ability to reward/coerce, interpersonal skills and negotiated agreements. It was a pure Newtonian philosophy of management, high on Hofstede's power distance inequality, high on uncertainty avoidance and masculine47. The benefits to Billabong from such a leadership style included the ability to expand significantly across the globe, harness diverse talents from a large number of people through negotiation of transactions for reward as opposed to pure commitment to a single ideological vision and ultimately to list the organisation as a public company and to grow from the resources of such listing.
Kuhnert identified two types of transactional leaders, those who are concerned with achieving their own personal needs and others who are "team players" concerned with follower welfare and interpersonal relationships48. Matthew Perrin's case at Billabong was a classic illustration of the first form of transactional leadership. He brought his skills as a lawyer and corporate executive to the table to enable the company to achieve the public listing, in return for significant share options as reward. He later cashed in his options and moved on with no real concern for the organisation's strategic future.
Finally, a question arises as to whether organic leadership49, an approach where leadership is shared by highly skilled practitioners in a team environment, working in networks, has any merit for Billabong. While it is unlikely that overall strategic leadership at an organisation-wide level will ever become truly organic at Billabong, aspects of this New Science leadership philosophy are well suited to some of its divisional activities, such as the Global Design Team. Organic networks at the Design Team level at Billabong provide the ability to innovate outcomes rapidly to suit a complex and ever changing youth fashion market.
APPENDIX 13: REFERENCES USED
Journals
Barnett, B., 2004. 'You're only as young as you play', Pique Newsmagazine, 15 April
Deans, G.K. and Kroeger, F., (2004). 'Growing to New Heights', Executive Agenda, A.T. Kearney, Vol 7 No 1
Matthew Perrin interview, in: 'Rocky times in the surf', Canberra Times, 9 November 2002
McCullough, J., 2000. `Mr. Blue Chip - opts for a new place in the sun', Courier-Mail, 9 September 2000
Online References
Billabong CEO Derek O'Neill, interview, ABC "Business Breakfast", 27 August 2003, [Online]. [Accessed 15 July 2004], Available at www.abc.net.au/businessbreakfast/content/2003/s932831.htm
Billabong International Ltd., 2003 Annual Report - Consolidated Statement of Cash Flows for the Year ended 30 June 2003, p. 41, [Online], [Accessed 28 July 2004], Available at www.billabongcorporate.com
Billabong International Ltd., Company Profile, [Online]. [Accessed 2 Aug 2004], Available at http://biz.yahoo.com/ic/58/58460.html
Billabong International, Company Prospectus and Corporate Overview, [Online]. [Accessed 15 July 2004], Available at www.billabongcorporate.com
Billabong International, Concise Annual Report 2002-2003, [Online]. [Accessed 10 July 2004], Available at www.billabongcorporate.com
Billabong International Limited, Media Release CFO and GM Europe, 10 June 2004, [Online]. [Accessed 30 July 2004], Available at www.billabongcorporate.com
BRW.com, 2003 Rich 200, [Online]. [Accessed 15 July 2004], Available at http://brw.com.au/lists/richlist/profile.aspx?Id=528
McCarthy, T., 2004. 'When the Surf's Way Up', Time Magazine, 19 July 2004, [Online]. [Accessed 15 July 2004], Available at www.timecanada.com/story.adp?storyid=005
Political Trends Implications and Opportunities. Business Brief Series. Editor - Sally Neal. Sydney: John Wiley and Sons, Australia Ltd. [Accessed 26th July 2004], Available at http://www.dpi.qld.gov.au/extra/pdf/business/1politic.pdf
Rip Curl Owner Doug Warbrick interview, In: Rip Curl Pro, Rip Curl Website, and [Online]. [Accessed 12 Aug 2004], Available at http://www.ripcurl.com/content/anmviewer.asp?a=96&z=17
Ross, E., 2004. 'Profile: The Billabong founder who picked up her swag', BRW, 18 May 2004, [Online]. [Accessed 27 July 2004], Available at http://www.brw.com.au/fearticle.aspx?docId=26547
Sportswear Industry data and company profiles, Clean Clothes Campaign, Mar. 2004. [Online], [Accessed 12 July 2004], Available at http://www.cleanclothes.org/publications/olympic-profiles.htm
The Age, 'Mambo ditches Mombassa for a younger cool', 17 June 2004 [Online]. [Accessed 15 July 2004], Available at www.theage.com.au/articles/2004/06/16/187244977064.html
Rip Curl website, 2004. Tom Curren Re-signs with Rip Curl, 10 April, [Online]. [Accessed 12 Aug 2004], Available at http://www.ripcurl.com/content/anmviewer.asp?a=1153
Vuchovich, M., 2000. Billabong USA Becomes, Transworld Skateboarding Magazine, 24 Feb 2000, [Online]. [Accessed 15 July 2004], Available at www.skateboarding.com/skate/magazine
Way, N., 2004. 'Billabong International', The Age, 13 June 2004 [Online]. [Accessed 15 July 2004]. Available at www.theage.com.au/articles/2004/06/12/1086749947661.html
Wisenthal, S., 2004. 'Billabong Surfs Rising Swell in US', Australian Financial Review, 30 April, p. 38, [Online]. [Accessed 14 Aug 2004], Available from www.abc.net.au
Books
Avery. G.C., 2004, Understanding Leadership, Sydney: Sage Publications
Galvin, P., Hill, C. and Jones, G. 2003. 'Billabong International - Surf's Up!' Case Study, In: Strategic Management: An Integrated Approach, Sydney: John Wiley and Sons, Australia Ltd.
Johnson, G. and Scholes, K., 2002. Exploring Corporate Strategy, Essex: Pearson Education Limited
McShane, S. and Travaglione, T., 2000. Organisation Behaviour on the Pacific Rim, Sydney: McGraw Hill-Irwin Ltd.
APPENDIX 14: ENDNOTES
Deans, G.K. and Kroeger, F., (2004). 'Growing to New Heights', Executive Agenda, A.T. Kearney, Vol 7 No 1, p. 54
2 Billabong International Limited, Media Release CFO and GM Europe, 10 June 2004, [Online]. [Accessed 30 July 2004], Available at www.billabongcorporate.com
3 Billabong International, Company Prospectus and Corporate Overview, [Online]. [Accessed 15 July 2004], Available at www.billabongcorporate.com
4 Way, N., 2004. 'Billabong International', The Age, 13 June 2004 [Online]. [Accessed 15 July 2004]. Available at www.theage.com.au/articles/2004/06/12/1086749947661.html
5 Billabong International, Company Prospectus and Corporate Overview, [Online]. [Accessed 15 July 2004], Available at www.billabongcorporate.com
6 Billabong International Limited, Media Release CFO and GM Europe, 10 June 2004, [Online]. [Accessed 30 July 2004], Available at www.billabongcorporate.com
7 Way, N., 2004. 'Billabong International', The Age, 13 June 2004 [Online]. [Accessed 15 July 2004]. Available at www.theage.com.au/articles/2004/06/12/1086749947661.html
8 Billabong International Ltd., 2003 Annual Report - Consolidated Statement of Cash Flows for the Year ended 30 June 2003, p. 41, [Online], [Accessed 28 July 2004], Available at www.billabongcorporate.com
9 Billabong CEO Derek O'Neill, interview, ABC "Business Breakfast", 27 August 2003, [Online]. [Accessed 15 July 2004], Available at www.abc.net.au/businessbreakfast/content/2003/s932831.htm
0 McShane, S. and Travaglione, T., 2000. Organisation Behaviour on the Pacific Rim. Sydney: John Wiley and Sons, Australia Ltd. p. 16
1 Billabong International Ltd., Concise Annual Report 2002-2003, p. 21, [Online]. [Accessed 10 July 2004], Available at www.billabongcorporate.com
2 Billabong International Ltd., Company Profile, [Online]. [Accessed 2 Aug 2004], Available at http://biz.yahoo.com/ic/58/58460.html
3 BRW.com, 2003 Rich 200, [Online]. [Accessed 15 July 2004], Available at http://brw.com.au/lists/richlist/profile.aspx?Id=528
4 Matthew Perrin interview, In: 'Rocky times in the surf', Canberra Times, 9 November 2002, p. 6
5 Galvin, P., Hill, C. and Jones, G., 2003. 'Billabong International - Surf's Up!', Case Study In: Strategic Management: An Integrated Approach, Sydney: John Wiley and Sons, Australia Ltd. p. C17
6 Ibid
7 Ibid, p. C16
8 The Age, 'Mambo ditches Mombassa for a younger cool', 17 June 2004 [Online]. [Accessed 15 July 2004], Available at www.theage.com.au/articles/2004/06/16/187244977064.html
9 The Age, 'Mambo ditches Mombassa for a younger cool', 17 June 2004 [Online]. [Accessed 15 July 2004], Available at www.theage.com.au/articles/2004/06/16/187244977064.html
20 Galvin, P., Hill, C. and Jones, G., 2003. 'Billabong International - Surf's Up!' Case Study In: Strategic Management: An Integrated Approach, Sydney: John Wiley and Sons, Australia Ltd. p... C17
21 Wisenthal, S., 2004. 'Billabong Surfs Rising Swell in US', Australian Financial Review, 30 April, p. 38
22 McCarthy,T., 2004. When the Surf's Way Up, Time Magazine, 19 July 2004, [Online]. [Accessed 15 July 2004], Available at www.timecanada.com/story.adp?storyid=005
23 Galvin, P., Hill, C. and Jones, G., 2003. 'Billabong International - Surf's Up!', Case Study In: Strategic Management: An Integrated Approach, Sydney: John Wiley and Sons, Australia Ltd. p. C15
24 Rip Curl Owner Doug Warbrick interview, in: 'Rip Curl Pro', Rip Curl Website, and [Online]. [Accessed 12 Aug 2004], Available at http://www.ripcurl.com/content/anmviewer.asp?a=96&z=17
25 Rip Curl website, 'Tom Curren Re-signs with Rip Curl', April 2004, [Online]. [Accessed 12 Aug 2004], Available at http://www.ripcurl.com/content/anmviewer.asp?a=1153
26 Johnson G, Scholes, Exploring Corporate Strategy, Sydney: Prentice Hall, 2002
27 www.abc.net.au [Retrieved 14 Aug 2004]
28 Barnett, B., 2004. 'You're only as young as you play', Pique Newsmagazine, 15 April, p. 10
29 Sportswear Industry data and company profiles, 2004. Clean Clothes Campaign, March, [Online], [Accessed 30 July 2004], Available at http://www.cleanclothes.org/publications/olympic-profiles.htm
30 Hamel, G. and Prahalad, C. 1994. Chapter 12: Thinking differently, In: Competing for the Future, p. 317
31 Hamel, G. and Prahalad, C. 1994. Chapter 12: Thinking differently, In: Competing for the Future, p. 317
32 Johnson, G. and Scholes, K., 2002. Exploring Corporate Strategy, Essex: Pearson Education Limited, p. 550
33 Avery G.C.,2004, Understanding Leadership, Sydney: Sage Publications P24
34 Avery. G.C.,2004, Understanding Leadership, Sydney: Sage Publications, p. 19
35 Galvin, P., Hill, C. and Jones, G., 2003. 'Billabong International - Surf's Up!', Case Study In: Strategic Management: An Integrated Approach, Sydney: John Wiley and Sons, Australia Ltd. p. C18
36 Billabong International Ltd., Concise Annual Report 2002-2003, p. 21, [Online]. [Accessed 10 July 2004], Available at www.billabongcorporate.com
37 Ross, E., 2004. Profile: 'The Billabong founder who picked up her swag', BRW, 18 May 2004, [Online]. [Accessed 27 July 2004], Available at http://www.brw.com.au/fearticle.aspx?docId=26547
38 Johnson, G. and Scholes, K., 2002. Exploring Corporate Strategy, Essex: Pearson Education Limited, p. 362
39 Avery. G.C.,2004, Understanding Leadership, Sydney: Sage Publications, p. 18
40 Johnson, G. and Scholes, K., 2002. Exploring Corporate Strategy, Essex: Pearson Education Limited, p. 550
41 Avery. G.C.,2004, Understanding Leadership, Sydney: Sage Publications, p. 19
42 Ibid, p. 39
43 Ibid, p. 26
44 Johnson, G. and Scholes, K., 2002. Exploring Corporate Strategy, Essex: Pearson Education Limited, p. 550
45 Avery. G.C.,2004, Understanding Leadership, Sydney: Sage Publications, p. 22
46 McCullough. J, 2000. Courier Mail, Queensland Newspapers Pty Ltd, 9 Sept., p 69
47 Avery. G.C.,2004, Understanding Leadership, Sydney: Sage Publications, p 39
48 Ibid, p. 22
49 Ibid, p. 26
Strategic Management Industry Analysis: Billabong International
2
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MGSM860 Strategic Management
Don Anderson-Nicole Bartels-Vijay Hingorani-Ketha Mahesan-Chao Shen-Greg Williamson
