For the Strategic Analysis final project, I am choosing Mizuno Corporation. Mizuno was founded by Rihachi Mizuno and his younger brother Rizo in Osaka, Japan in 1906(Corporation, 2016).
Company Overview
For the Strategic Analysis final project, I am choosing Mizuno Corporation. Mizuno was founded by Rihachi Mizuno and his younger brother Rizo in Osaka, Japan in 1906(Corporation, 2016). When the company first was established, they were producing baseballs and baseball gloves. Following baseball sporting goods was golf clubs and then skis. As the decades passed they became known for producing a variety of sporting goods and with a good quality. Since then Mizuno Corporation continues to uphold their products to high standards and expectations they have been known for. They claim that each and every employee is guided by the ideal of true sportsmanship. That was true over 100 years ago and is still true today.
Mizuno Corporation Strategy
The sporting goods industry is Mizuno Corporation’s sole focus. This industry is competitive with several well-known and successful competitors that have been around for an equal amount of time in this industry. Mizuno’s stated strategy is, “Our product development strategy is to create products with features that enhance athlete performance and are unique to only Mizuno. These technological advancements make our sporting equipment and apparel go the extra mile and keep you in tip top playing form no matter the sport or the conditions. We believe in making products that work in harmony with your body, helping you to be the best athlete you can be”(Corporation, 2016). I think that Mizuno’s is precise in the description of their product mission, no matter what sport activity, and they honor it.They are able to explain to consumers what they do, what they sell and what they promise to do.
Mizuno Corporation Mission Statement
Mizuno’s mission statement is“Contributing to society through the advancement of sporting goods and the promotion of sports”(Corporation, 2016). Their mission statement also withholds the standards that their strategy states, but in a simpler phrase. One of Mizuno Corporation’s top competitors is Nike. Nike’s mission statement is “To bring inspiration and innovation to every athlete* in the world.”(Nike, 2017). Both mission statements actually make it very clear their intentions. Mizuno’s main focus is the world of sports while Nike’s mission statement focuses on the athlete.
Mizuno’s mission, vision and values that are stated in their strategy and mission statement are very clear what their overall goal is in the sporting goods industry. They value their craftsmanship and their targeted audience of not only professional athletes – but those that are heavily into the passion of their chosen sport. For all athletes – professional or everyday – quality is a major factor in the equipment they choose for their sporting activity for good reasoning as well.
External Environment and Competitive Position
Mizuno Corporation not only upholds their reputation with their consumers, but with their competitors too. In order for Mizuno to maintain their competitive edge against their industry rivals, they must look at where their strengths are in the market and what areas they need to work on. In order to gain a better understanding of where Mizuno stands in the market, the use of the Five Forces Analysis assumes that there are five important forces that determine competitive power in a business situation. The Five Forces Model is one of the most commonly used business strategy tools in strategic planning and also simplifies the complexity of strategic planning.
Competitive Rivalry
With this force, the number of competitors and their products dictates the power of a company. For Mizuno, there main industries include sporting goods, apparel, and fitness equipment. With such a presence in these industries they have several well established competitors in these industries. Currently their biggest rivals are Nike, Inc., Rawlings Sporting Goods and Adidas (Hoover, 2016).
Supplier Power
Suppliers can definitely drive up the price of goods and services. Mizuno’s rivals are well established brands, and they are major players in their respective niches, however Mizuno and their rivals are at the mercy of their suppliers for certain materials. For example, Mizuno’s suppliers are mainly sourced from Indonesia, Japan, Brazil and Korea. Under Mizuno’s CSR, their suppliers do have to undergo two procurement activities; one is the CSR evaluation in advance of the supplier’s manufacturing factory before dealing, and the other is CSR audits during dealing (Mizuno, 2014). In the event that something detrimental happens to one of their suppliers or even a shortage in a certain material, the threat of demand can potentially drive the prices up.
Buyer Power
Buyers are a main force that also possess the ability to drive prices down. Price is also It is affected by how many buyers, or customers, a company has, how significant each customer is and how much it would cost a customer to switch from one company to another (Investopedia, 2016). Mizuno’s customers have the ability to control the prices that are set for certain Mizuno products. For example, since one of Mizuno’s long established niches is baseball equipment, if customers choose to purchase more baseball gloves from competitors such as Rawlings Sporting Goods due to their quality and a lower price, this could force Mizuno to drop their prices to compete. In the case of the Major League Baseball organization, Rawlings and Mizuno have to compete aggressively to win contracts with such a powerful buyer.
Threat of Substitution
Competitor substitutions that can be used in place of Mizuno’s products can pose a major threat to the company. The major substitution threats will more than likely come from Mizuno’s rivals. This force weakens the power of Mizuno in the industry because the top rivals also produce the majority of the same products, therefore Mizuno will always have the threat of substitution with a good portion of their product lines.
Threat of New Entry
This force creates a threat to Mizuno in the event that a new company enters the industry. Since Mizuno and other rivals like Nike and Rawlings have been around for decades – and even a century – the barriers to entry in the sporting goods and apparel industries are the strong and durable. Luckily, Mizuno possesses a favorable position in the industry due to longevity, and the threat of new competition entering the market is obsolete.
Mizuno’s Closest Rival
Mizuno’s closest rival is definitely Nike, Inc. Nike was founded in 1978 in Oregon and has since rapidly grown to become the number one sports manufacturer in the world. They have endless product lines and have attained their success in the market due to the quality of their products and the stellar branding campaigns.
Driving Forces of Change
In order to compete with such a power house company as Nike, Mizuno’s major driving forces of change fall under competitive rivalry and threat of substitution which pose as the forces that create the most pressure for them in the industry. In 1996 Bob Puccini was appointed president of Mizuno USA. While at the time Mizuno was priced competitively in the market as one of the lower priced manufacturers, Puccini recognized that he needed to build the brand and find a way to differentiate it from the competition so people would choose Mizuno (Ohara, 2011). In order to relieve the pressure faced in 1996, Puccini introduced the concept of biomechanical needs of athletes, and then translated that technology and know-how into a brand experience that Mizuno exemplifies presently in the market industry.
Mizuno continues today with their advanced sports technology incorporation to aid in athlete’s biomechanical needs. In order to provide the technology and quality they back, Mizuno happens to be stronger in their supplier power force by interacting closely with their suppliers. For Mizuno, “good manufacturing” does not simply mean producing high quality, safe and reliable items. We believe that their manufacturing processes should meet international criteria in terms of respect for human rights, labor conditions, and environmental conservation. (Mizuno, 2014). To relieve pressure, continuing to audit their manufacturers and work closely with them to maintain the quality of their products will benefit Mizuno in the long run. In order to reduce pressure from Mizuno further, the best thing that they can do as a strong competitor in the market is to continue investing their technology that helps them stand out with their products. This will ultimately help them to become a stronger player not only in the forces with the most pressure, but also in the buyer power force too. Customers tend to remain loyal to those products they achieve the most success or performance with.
Mizuno Corporation’s SWOT Analysis
Strengths:
- Diversity in sports niches: Mizuno manufacturers equipment, footwear and apparel in golf, baseball, volleyball, running, track and soccer.
- Key Brand Ambassadors and featured athletes to promote products, Notable Sponsors in the collegiate and Olympic levels of sports
- Company reputation and seniority in the industry
Weaknesses:
- Lack of Global offices and presence in the global market
- Lack of presence in major US sports organizations such as NFL and NBA
- Buyers are more familiar with rivals such as Nike and Adidas
Opportunities:
- The capability to build in other countries and expand their global presence is achievable
- Mizuno’s pursuit of innovation – the quality of their innovative products place them higher with athletes of all levels
- Their popularity in ‘secondary’ sports such as softball and volleyball put them at a higher ranking within those sports for equipment, apparel and footwear.
Threats:
- Top rivals such as Nike and Adidas are entering the market for those ‘secondary’ sports which could affect Mizuno’s position within those niches.
- Mizuno’s high pricing structure make them much more expensive than their rivals with certain products.
Mizuno Corporation’s Value Chain Analysis
Inbound logistics: inventory control and lower inventory risks due to the CSR auditing with manufacturing facilities and focus on athlete’s biomechanical needs and technology for new products.
Operations: Investing in research and development for the latest technologies in sports, implementing the green initiative by reducing environmental impact and energy consumption.
Marketing & Sales: Continued brand recognition and quality reputation, diversity of products and sporting niches, signing reputable brand ambassadors and sports organizations/events.
Services: Increased customer satisfaction due to high standard of product quality
Firm Infrastructure: Strong brand, products, market placement in several sporting categories, diligent compliance process
HR Management: Creation of the ideal working environment, Encouragement of diversity and Development and training of human resources.
Technology Development: devotion to improving, technology, Aside for the Wave technology, Mizuno offers several other footwear technological designs for cushion, moisture, shock absorbance and water resistance (Corporation, 2016).
Procurement: The company-wide promotion of eco-friendliness throughout the entire product lifecycle, from material procurement to production, transportation, sales, use, and finally disposal helps to conserve resources, preserve the environment, and reduce the environmental load (Mizuno, 2014).
Mizuno’s SWOT analysis is comparable to Nike’s in several ways. For example, Nike has the following similar strengths: Nike differentiates by making innovative products which has global recognition, it is ranked among the top companies for climate-friendly companies. Nike has more threating strengths over Mizuno such as Exclusive shops all over the world apart from availability through multi-brand retail stores and Nike associates itself with leading international sports teams, players and events (MBASkool, 2017).
One weakness that is listed for Nike is The Nike company faced allegations of labor and wage laws with employees, poor working conditions. Mizuno actually puts a great deal of compliance in their ethical standards by requiring suppliers to comply with labor laws and regulations and to provide a safe and sanitary working environment (Mizuno, 2014).
Nike’s opportunities and threats are very similar to Mizunos. Nike lists some of their threats that Mizuno is also facing: the footwear market is so competitive, major competition from other brands, fake imitations and replicas often cause a problem for a brand like Nike and adaption of new techniques and innovation by other brands (MBASkool, 2017).
The core competencey of Mizuno is the fact that they invest heavily in the technoligical advancements of their products – especially footwear. They keep pushing the boundaries of engineering in an effort to help athletes push the boundaries of sports. The Wave plate technology was so innovative when it was introduced to the U.S. market in 1997, that the company’s running shoes quickly gained a following as one of the most innovative and technologically advanced brands.
Mizuno’s value chain activities continue to support their competitive industry position, which shows in their steady reputation. Some recommendations for Mizuno to continue their positive track record would be to work on the weaknesses they possess in their SWOT. Becoming more relevant in top US sports and opening more global offices would help their position greatly.
Competitive Strategy
Mizuno’s competitive strategy is best labeled as product differentiation. This strategy has been shaped by Mizuno’s continuous focus on external environmental factors and government regulations. Mizuno has established its own environmental impact assessment scheme called Mizuno Green Grade to make companywide efforts to reduce the environmental impact associated with all its products. With a view to having all our products, including continued products, certified with the Mizuno Green Grade by 2020, we will continue to press ahead with our initiatives (Corporation, 2016).
Mizuno’s strategy has also been shaped by firm’s competitive advantages and their innovative technological advancements in the sports products. To develop and maintain its competitive advantages, Mizuno should continue to expand their global offices outside USA and take opportunities in unsaturated foreign markets to sustain leadership in the industry. Mizuno should also consider investing and improving their retail store presence, and even their online presence. Participating in social events, other US sports and to improve and enhance brand image and industry placement would also be beneficial.
Strengthening Competitive Position
In order for Mizuno to remain a leading company in the sports equipment industry, they must continue to aggressively pick new products by pursuing the latest technologies and designs for athletes. Doing so would increase Mizunos’s advantages and empower the company due to their diligent athlete performance and material enhancements research. A great example is the enhancement of creating huge-head tennis rackets made with lightweight materials instead of the impractical wood or metal materials while sturdy, affect the weight requirements.
Mizuno is additionally a noteworthy player in the carbon fiber composite golf club showcase. Teaming up with Italy based company Pininfarina on full scale streamlined evaluations to enhance head speed, for example, in the improvement of the upgraded ZP-1 golf club. The club head shape and skin treatment were optimized to attain minimal aerodynamic resistance and increase impact velocity (Fiordelisi, 2013).
Mizuno is continuing to make great strides in pursuing future complementary strategic options. As a feature of its advancement system, Mizuno utilizes automatic generation lines with advanced technology assembling offices to prevent overflow and excess productions of products. This in turn will allow them to cultivate new products, and do so by cost-aggressively utilizing a variety of management strategies.
Product advancement is also tracked by market inclusion using a prominent ‘consultative staff’ that incorporates major sports athletes to weigh in on their opinions and critique. For example PGA Tour champion Sandy Lyle, professional tennis players Ivan Lendl and Mary Joe Fernandez, and Alpine skier Franck Piccard to name a few.
Methods Used to Enter Foreign Markets.
Exporting
Mizuno Corporation utilizes the trading technique, which is the most financially savvy and most regularly utilized strategy for entering another global market. A few organizations don’t effectively plan to wind up exporters, they may essentially begin accepting orders from abroad clients. Because of that, numerous organizations are arranged exporters who wish to extend their global nearness.
Joint Ventures
The partnership likewise utilizes a joint venture or project in which is the course of action between the organizations with each having a partake in both the monetary management and the administration of the business. A good example of this type of market entry would be the collaboration with the above mentioned Italian company Pininfarina (Fiordelisi, 2013)
Competitive Advantage
The Mizuno organization has gained the upper hand over their competition in several ways. For instance, the key for Mizuno to compete in world markets incorporates keeping up a global generation base and trading merchandise to outside business sectors. Also authorizing remote firms to utilize the organization’s innovations or even creating Mizunos’s products by utilizing differentiating techniques to enter a remote market or to even fortify their presence in current world markets.
Additional Actions
Mizuno can get involved in additional action such as gaining a wider access to other attractive country markets. Another action could be for Mizuno to allow the capture of economies of scale in production and marketing. A few more could be filling gaps in technical expertise and product development; focusing on the knowledge of local markets; potentially saving on costs by sharing distribution facilities and dealer networks and helping combat the impact of alliances that rivals have formed in order to gain a competitive advantage in foreign markets.
Corporate Strategy: Business Diversification
For over a century since its foundation, Mizuno has been adhering to its’ corporate theory by adding to society through the headway of donning products and the advancement of sports. They also have been attempting to offer prosperous products, while never sacrificing quality to convey the love of sportsto all of their customers. They were able to do so by supporting the advancement of all sportswhile benefiting from their contributions to society as much as possible.Mizuno additionally creates productsthat capitalize on the estimation of sports and effectively spreads that in day by day life.
The aim of diversification has helped the Mizuno Corporation in creating value and wealth. Mizuno believes that creating fair opportunities regardless of age, disabilities, or living location is important, and it undertakes support activities for community sports and improving access to sports. Furthermore, it contributes to the creation of connections and communications between people through its activities and sports (Corporation, 2016). In February 2016, the Mizuno Nagoya branch office entered into an agreement on all-inclusive cooperation with theNagoya administration college and Owariasahi City and continued with the healthy city promotion as part of the citizens’ health project through sports with the cooperation of the Government-Enterprise-Academic Community. Owariasahi City won’t just use Mizuno’s mastery, but it will likewise cooperate with the Nagoya Administration College and Mizuno to actualize solid city Owariasahi City in view of the participation of the Government-Enterprise-Academic Community.
Ethics, Social Responsibility, and Environmental Sustainability
To satisfy their social corporate obligation, organizations need to guarantee that each representative agrees to laws and directions and corporate morals in all business exercises. As to with laws and corporate morals as a top need for the advancement of CSR, Mizuno has received its own particular Ethical Standards and Code of Conduct so that every one of its employees can do their work while following the basic qualities and measures of conduct. To keep up these standards, the organization creates nonstop endeavors to give their employees with the adequate tools to succeed.
The Mizuno Corporation strives to be a company that is trusted and required by all partners, by altogether underlining reasonable play, fellowship and battling soul and proactively attempting to understand a feasible society and protect the Earth’s environment.In pursuit to satisfy social obligation, it is vital to complete vigilant processes for lawful consistence and corporate morals in all business exercises of each employee. Aiming at big business which is important and solid by all partners, we decide Mizuno Corporation Ethical Standards as our behavioral rules.
On April 1, 2006, Mizuno announced that their framework for taking care of client grievances complies with ISO 10002, the Quality Management-Customer Satisfaction-Guidelines for Handling Complaints in Organizations(Mizuno, 2014). Mizuno investigated and updated different related inner codes. They also set up in-house client benefit advancement boards in all areas in charge of dealing with client protestations. Mizuno is likewise enhancing the abilities of their employees in dealing with client protests and client benefits through more compelling utilization of inside control framework.
In 2010, Mizuno amended their current guiding principles for suppliers(Mizuno, 2014). They reinforced the ecological class and additionally including new classifications, reasonable business practices and group inclusion and improvement, with reference to the ISO 26000 worldwide standard for social obligation and different sources. They also lead business exercises to insure worldwide ecological assurance, and to take a stab at vitality and asset preservation.
Nevertheless, detailing the CSR Procurement Code of Conduct, Mizuno Corporation should to reconsider their CSR Procurement Code, which set out gauges and systems for Mizuno’s CSR obtainment exercises including CSR acquirement evaluating and documentation to be traded with processing plants, and has been utilized since 2010. They ought to also plan CSR Procurement Guidelines as logical documentation for their business accomplices, and start educating business accomplices towards it. Mizuno needs to use these codes and rules to attempt more straightforward and reasonable corporate exercises and add to accomplishing a feasible society, which happen to be the objectives proclaimed in Mizuno’s CSR Basic Policy.
Works Cited
Corporation, M. (2016). Mizuno. Retrieved from Mizuno: http://corp.mizuno.com/en/about.aspx
Fiordelisi, F. (2013). Sergio concept car on the green of the 70th Italian Open. Retrieved from Pininfarina: http://pininfarina.com/media/files/comunicati_stampa/2013/opengolf2013bis-eng.pdf
Hoover. (2016). Company Profile. Retrieved from Hoovers: http://www.hoovers.com/company-information/cs/competition.mizuno_corporation.7a18bc05abe4c7ed.html
Investopedia. (2016). Porter’s 5 Forces. Retrieved from Investopedia : http://www.investopedia.com/terms/p/porter.asp
MBASkool. (2017). LifeStlye and Retail . Retrieved from MBAskool.com: http://www.mbaskool.com/brandguide/lifestyle-and-retail/3329-nike.html
Mizuno. (2014). CSR Cooperation with Partners. Retrieved from Mizuno: http://corp.mizuno.com/en/csr2015/partner.aspx
Nike. (2017). About Nike. Retrieved from Nike: https://help-en-us.nike.com/app/answer/a_id/113
Ohara, K. J. (2011, December 1). How Bob Puccini transformed Mizuno USA into a top-tier player. Retrieved from SmartBusiness: http://www.sbnonline.com/article/bob-puccini-transformed-mizuno-usa-into-a-top-tier-player/
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