Case 24–1: Body Glove*In March 1991, Russ Lesser, president of Body Glove, a small wetsuit manufacturer, reviewed theprogress his company had made, as well as the problems it had encountered, in the nine months he hadbeen president. The company was performing well: it was proFtable and was ranked number two inmarket share in the wetsuit industry. But Russ knew that he and his newly appointed management teamcould not a±ord to be complacent. The wetsuit industry was highly compe²²ve and the markets werecomplex, with rapid growth, fashion conscious customers, and seasonal demand. Much of Body Glove’ssuccess depended on its ability to respond quickly and in a coordinated fashion to changing marketcondi²ons. These responses should be facilitated by the company’s management processes, and Russwondered if the company had the right processes in place.The WETSUIT MANU³ACTURING INDUSTRYWetsuits are form-F´ng, insula²ng suits made of neoprene, a rubber-like material. The suits aredesigned to protect water sports enthusiasts, divers, surfers, windsurfers, kayakers, distance swimmers,and whitewater raµers, from cold water temperatures. The suits are called wetsuits because they let alayer of water in between the skin and the suit, and this water, warmed by body heat, provides a layer ofinsula²on.It was di¶cult to determine the precise size of the wetsuit market because most of the Frms in theindustry were privately held, but it was believed that the U.S. domes²c industry generated over $60million in revenues in 1990. It was clear that the wetsuit industry had grown rapidly since its beginning inthe early 1950’s because of two main factors: One was the emergence of a mul²tude of sport-speciFc aswell as “fashion” wetsuits which created the consumer desires to purchase a di±erent wetsuit for eachsport. The wetsuit manufacturers had also in·uenced consumer preferences and brand awareness withincreased adver²sing and sponsorship of water sport athletes. Another contribu²ng factor was thegrowth in par²cipa²on in water sports ac²vi²es, fueled by greater television coverage of water sportscompe²²ons.The industry was founded by small entrepreneurs, but by 1990 it was dominated by a small number oflarger companies. O’Neill, the largest company in the industry, with approximately a 50 percent marketshare, had the reputa²on for producing high quality “basic” wetsuits. Body Glove, number two in theindustry, was known as a fashion-conscious, high quality producer. O’Neill and Body Glove competeddirectly against each other in all market segments; the remaining manufacturers specialized. ³orexample, Rip Curl, the third largest Frm in the industry, focused on the surFng market. Compe²²on inthe industry was Ferce, as the Frms sought to increase their market shares at the expense of theircompe²tors.
