ASICS: Chasing a 2020 Vision

Elie  Ofek; Nobuo  Sato; Akiko  Kanno

Case | HBS Case Collection | October 2016 (Revised April 2018)

ASICS: Chasing a 2020 Vision

by Elie Ofek, Nobuo Sato and Akiko Kanno

Abstract

In early 2016, Motoi Oyama, president and CEO of ASICS, a major sports apparel and footwear manufacturer based in Japan, lays out his company’s growth plan for the upcoming 5 years. The new plan set ambitious goals in terms of revenue and profit increases. At the heart of the strategy to achieve these goals are a desire to embrace a more direct to consumer mindset, expand into new customer segments, and communicate a more consistent and emotional brand worldwide. With its primary core customer currently the “serious” runner and its innovation strategy geared towards high-end performance, pursuing these objectives in light of the fierce competitive landscape posed a multitude of challenges. Moreover, the company had recently launched several lifestyle brands (using brand names it had revived), which posed brand architecture issues. Lastly, the company had just acquired a digital fitness app, RunKeeper, and was wondering how best to leverage this asset and how it fit with the main pillars of the growth plan strategy. The Tokyo 2020 Olympic Games would coincide with the conclusion of the 5 year plan, and ASICS had paid over $100 million to be a Gold Sponsor of the games—Oyama wondered whether his company was on the right track to achieving the goals he intimated to shareholders.

Keywords: brand management; sports apparel; digital platforms; competitive positioning; direct to consumer marketing; retail formats; lifestyle brands; Technology; Competition; Brands and Branding; Organizational Change and Adaptation; Market Platforms; Product Positioning; Marketing Channels; Sports; Retail Industry; Apparel and Accessories Industry; Sports Industry; Entertainment and Recreation Industry;

Language: English

Format: Print

26 pages

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Citation:

Ofek, Elie, Nobuo Sato, and Akiko Kanno. "ASICS: Chasing a 2020 Vision." Harvard Business School Case 517-060, October 2016. (Revised April 2018.)

In June 2016, Benjamin (Bibi) Netanyahu, Prime Minister of Israel, wrestled with how to sustain Israel’s strong innovation track record and the country’s reputation as the “start-up nation.” Despite the economic miracle the country had wrought since its founding, he knew he could not be complacent. On the one hand, in 2015 Israeli start-ups raised record-breaking amounts of venture capital, and exits for the year totaled over $8 billion. On the other hand, government expenditure on R&D had decreased and Israel’s position in the Global Innovation Index had fallen. Several other indicators, such as achievement tests among elementary school students in math and science, painted a grim picture. Furthermore, in spite of the wealth created by many high-tech Israeli firms, socioeconomic gaps in the country had widened. A two-tier economy had formed. The long-term sustainability of the “innovation economy” was in doubt, as the sector faced increased competition from foreign innovation hubs, was being reshaped by the growth of Multinational Corporations (MNCs) locating R&D centers in Israel, and had to contend with a vexing shortage of human capital and low labor force participation among some groups. Netanyahu had to assess whether it was time to sound the alarm, and whether drastic and immediate measures were needed to right the innovation economy ship. Bibi mulled over which policies or interventions would best curb the erosion of Israel’s competitive position as an innovation powerhouse and how best to promote social equality. He pondered whether public policy could make a difference or whether the market and societal currents, responsible for these trends, were too strong for him and his government to try to contend with. Several prominent figures, including the Governor of the Central Bank of Israel, Knesset members, Israel’s Chief Scientist, prominent business leaders, academics, and journalists weigh in on the formation of the Israeli entrepreneurial and innovation ecosystem, the challenges it faces going forward, and what approaches might help it continue to thrive.

In the spring of 2018, Israel was set to celebrate its 70th anniversary. While there was much to rejoice in reaching this milestone, the country’s brand image internationally was far from ideal. Past efforts to impact perceptions of Israel, spearheaded by the Ministry of Foreign Affairs as well as various Jewish organizations, were mainly aimed at “explaining” Israel’s political position and convincing the world that the country was acting in a just manner. However, a series of seminal market research studies revealed that many people in the U.S. and Europe primarily associated Israel with military imagery, held views of the country as steeped in conflict, and believed its people were devoutly religious and unwelcoming. Making matters worse, many expressed an indifferent attitude towards the country and felt that Israelis were dissimilar to them. In an attempt to change the situation, several individuals and entities embarked on various initiatives aimed at branding Israel differently and “broadening the conversation” about the country. These efforts included generating a brand book for Israel that suggested a guiding brand position of “creative energy”; inviting social media influencers to partake in trips focused on lifestyle interests; generating appealing, non-conflict related content linked to Israel and attracting online viewers to the content; appointing a goodwill ambassador to communicate the culture and day-to-day life in Israel; and multiple measures to draw in more tourists (Jewish and non-Jewish) to the country. Taking stock of these efforts revealed a mixed picture at best, and it was unclear whether Israel’s brand image among international audiences was indeed shifting in the intended direction. Several observers were further worried that the younger generation was finding Israel even less relevant and urged for devising a new approach. What should or could Israel’s brand positioning be? Were the recent efforts to change perceptions about Israel and Israelis on the right track and it was just a matter of time and scale before they bore fruit? What else could be done to break the indifference and emerging negative attitudes towards the country?

Case | HBS Case Collection | December 2016 (Revised December 2018)

From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem

Elie Ofek and Margot Eiran

In June 2016, Benjamin (Bibi) Netanyahu, Prime Minister of Israel, wrestled with how to sustain Israel’s strong innovation track record and the country’s reputation as the “startup nation.” Despite the economic miracle the country had wrought since its founding, he knew he could not be complacent. On the one hand, in 2015 Israeli start-ups raised record-breaking amounts of venture capital, and exits for the year totaled over $8 Billion. On the other hand, government expenditure on R&D had decreased and Israel’s position in the Global Innovation Index had fallen. Several other indicators, such as achievement tests among elementary school students in math and science, painted a grim picture. Furthermore, in spite of the wealth created by many high-tech Israeli firms, socioeconomic gaps in the country had widened. A two-tier economy had formed. The long-term sustainability of the “innovation economy” was in doubt, as the sector faced increased competition from foreign innovation hubs, was being reshaped by the growth of Multinational Corporations (MNCs) locating R&D centers in Israel, and had to contend with a vexing shortage of human capital and low labor force participation among some groups. Netanyahu had to assess whether it was time to sound the alarm, and whether drastic and immediate measures were needed to right the innovation economy ship. Bibi mulled over which policies or interventions would best curb the erosion of Israel’s competitive position as an innovation powerhouse and how best to promote social equality. He pondered whether public policy could make a difference or whether the market and societal currents, responsible for these trends, were too strong for him and his government to try to contend with. Several prominent figures, including the Governor of the Central Bank of Israel, Knesset members, Israel’s Chief Scientist, prominent business leaders, academics, and journalists weigh in on the formation of the Israeli entrepreneurial and innovation ecosystem, the challenges it faces going forward, and what approaches might help it continue to thrive.

Keywords: Israel; Israeli Start-up Nation; Innovation economy; Entrepreneurial mindset; scaling-up; Unicorns; Innovation clusters; High-tech; innovation management; Multinational Corporation R＆D Centers; Social equality; Two-tier economy; Liberalizing an economy; foreign investment; Military service; Quality of human capital; Socioeconomic gaps; labor force participation; Government initiatives; Innovation and Management; Entrepreneurship; Venture Capital; Business Startups; Government and Politics; Economy; Equality and Inequality; Education; Resource Allocation; Globalization; Israel;