2015 European Workwear Competitive Strategy Innovation …...For the Competitive Strategy Innovation...

2015 European Workwear

Competitive Strategy Innovation and Leadership Award

2015

EUROPEAN WORKWEAR COMPETITIVE STRATEGY

INNOVATION AND LEADERSHIP AWARD

2015

BEST PRACTICES RESEARCH

© Frost & Sullivan 2015 1 “We Accelerate Growth”

Contents Background and Company Performance ........................................................................ 2

Industry Challenges .............................................................................................. 2

Strategy Innovation and Customer Impact .............................................................. 2

Conclusion........................................................................................................... 5

Significance of Competitive Strategy Innovation and Leadership ...................................... 6

Understanding Competitive Strategy Innovation and Leadership ...................................... 6

Key Benchmarking Criteria .................................................................................... 7

Best Practice Award Analysis for Mascot International A/S ............................................... 7

Decision Support Scorecard ................................................................................... 8

Strategy Innovation .............................................................................................. 8

Customer Impact ................................................................................................. 8

Decision Support Matrix ........................................................................................ 9

The Intersection between 360-Degree Research and Best Practices Awards ..................... 10

Research Methodology ........................................................................................ 10

About Frost & Sullivan .............................................................................................. 11



Background and Company Performance

Industry Challenges

The European workwear market is highly fragmented with many local and regional competitors; competitive differentiation is crucial for long-term brand equity and success. However, with low barriers to entry, the market is commoditized, with low-cost imports from Asian countries that make customers more price-sensitive and put pressure on European manufacturers. This negatively affects the degree of technical change as customers are reluctant to pay more for innovative products. Thus, workwear manufacturers struggle to differentiate their products in the highly price-competitive market. Services are gaining importance in the workwear and personal protective equipment (PPE) market globally; companies that focus on this aspect of competitive differentiation are more likely to succeed.

Workwear has a much wider customer base, including the important do-it-yourself (DIY) user, than any other PPE product because of its diverse uses. Thus, distributors form a crucial link in the supply chain of the European workwear market. With the slow, yet steady penetration of e-commerce into the workwear and PPE market, it has become easier for manufacturers to establish an e-commerce platform to cater directly to end-users. However, it poses a high risk of jeopardizing distributor relationships and subsequently losing out contracts of smaller customers who are reluctant to procure products online because of concerns about traceability and no local point of contact.

An intelligent eCommerce system that addresses customers’ procurement concerns and does not jeopardize distributor relationships would be groundbreaking and well-received.

Strategy Innovation and Customer Impact

Strategy Execution

Mascot International A/S is top in the European workwear and safety footwear market, and is known for its high-quality products. Mascot has been focusing on improving services to differentiate itself, including through its recently launched Mascot E-Partner.

E-commerce is one of the top megatrends impacting the global workwear and PPE market. While large distributors are actively embracing this new market trend and establishing the necessary platform for online sales, smaller distributors lack the funds to invest in the necessary infrastructure. Large manufacturers have the money to establish an eCommerce direct sales channel, but many do not in order to maintain cordial relationships with distributors who account for a lion’s share in channel sales. Mascot’s ingenious E-PARTNER program strikes a balance between strong distributor relationships and the benefits of eCommerce.

The E-PARTNER program creates a virtual shop for distributors that either do not have an eCommerce platform or that want a more advanced, user-friendly platform. The Web shop



is customized for each distributor, allowing the use of brand logos and contact details on the home page. The main benefit for distributors — besides allowing access to the entire Mascot product range — is that for a small fee they can upload other products from their catalog. Mascot is essentially creating a personalized eCommerce platform for its distributors.

Strategy Effectiveness

MASCOT® E-PARTNER has been a very effective strategy that has helped Mascot to differentiate itself to its distributors. In a market where distributors and e-commerce are considered as two separate sales channels, Mascot has intelligently integrated the two channels in one, making the program one of its kind in the market. The approach is appreciated by distributors because it does not exclude them from the supply chain, and it gives smaller companies access to an eCommerce platform. Frost & Sullivan considers this to be an innovative strategy to retain distributor loyalty.

The success of MASCOT® E-PARTNER strategy can be attributed to the many benefits offered to distributors and customers. The program’s key advantage for distributors is that they are not expected to keep products in stock. Once orders are placed online, products are shipped from Mascot’s warehouse directly to the end user or to a distributor’s location for pickup. Such a set-up enables distributors to enjoy hassle-free operations as material handling and shipping are taken care by Mascot. Additionally, the E-PARTNER program allows access to the entire Mascot range of products on distributor web shops which is impossible in a traditional distribution program. Moreover, Mascot is actively investing on search engine optimization and marketing of the web shop, which is a crucial effort and expense in managing a web shop that is simplified for the distributors in the E-PARTNER program.

Besides offering benefits to the distributors, The E-PARTNER program also offers significant benefits to customers. It embraces the trend of one-stop shopping and provides customers with the comfort of buying online together with a seamless and reliable transaction through the local distributor.

Competitive Differentiation

Mascot is a fast-growing competitor in the European workwear market that has a vision to emerge as a pan-European market leader. The company strives to differentiate itself in the market and adopts blue ocean strategies to innovate, with a high focus on enhancing customer service and experience. MASCOT® E-PARTNER is a second venture into the service space, after the success of the Mascot® SmartStore venture a few years back.

Mascot® SmartStore is a web-based ordering solution that is provided free of cost to distributors and customers that enables mid and large size customers an efficient and hassle-free way to manage their workwear purchases. Remembering each user’s preferred sizes, the system enables workers to choose their own work wear from a limited



selection, within a pre-allocated budget and custom-delivers packages to each employee. This simplifies the process of workwear order placement and distribution by a large degree and ensures each employee receives the correct product. In addition to providing budget overview and control it also helps customers standardize the workwear across all locations and ensure consistency in the design and positioning of brand logos, thereby helping customers boost their brand image.

While Mascot® SmartStore has helped medium and large size customers with smart workwear procurement; the MASCOT® E-PARTNER program is an initiative to enable even smaller localized customers to enjoy an e-commerce experience. Thus, Mascot is one of the few companies in the European workwear market with an unwavering focus on the customer.

Executive Team Alignment

Mascot’s business model emphasizes technology. Its strong leadership team stays current with technological advancements and adopts new technologies that better serve customers. The company prides itself on its people, who have a profound understanding of the market, technologies, and business models. Its skilled IT team brings new eCommerce ideas to fruition with proper resources and lean sourcing strategies.

Customer Purchase and Ownership Experience with Mascot

In the commoditized workwear market, Mascot is among the few manufacturers that focus on adding value to diverse customers. Some customers like to browse products online but prefer to inspect, try on, and buy products from a local shop, while others prefer to buy products online but want a stable, local point of contact for any queries or repairs. The MASCOT® E-PARTNER program caters to all of these demands and more. It provides customers with multiple choices—pay and order online through credit cards, order through pre-existing distributor account and pay the distributor, or order online and arrange for pick-up of products from the distributor site. Such a unique business model taking into account the diversity in customer preferences makes the program one of its kind and highly valuable to the customer. It also allows customers to digitally design and position their logos and brand names on the workwear, allowing less room for error. Besides such unique benefits, the program allows users to enjoy the usual benefits of e-commerce—faster delivery, 24/7 access to browse and place orders anytime and bulk discounts for online orders.

While service is a small but increasingly significant part of ensuring customer satisfaction, a focus on product research and development is crucial to customer loyalty. Mascot has launched many innovative products in the past few years with novel features, such as a fabric with extremely durable, colour stable polyester facing with soft, comfortable cotton on the inside, a user friendly flexible sizing system for leg lengths, , intelligent use of hybrid mixes of fabrics depending on the product part’s exposure to the user’s wear, stretching, sweat etc. and magnets in trouser pockets for easier one-hand opening and



automatic closing. Magnets are also used in the tops of holster pockets to hold screws and other small tools in place for easier access. The company stays up to date on fabric trends and incorporates innovative fabrics such as Cordura® and PrimaLoft® for superior product performance.

Brand Equity

Mascot is one of the top competitors in the European workwear market. The company has a pan-European presence serving key workwear markets of Germany, UK & Ireland, Scandinavia, Alpine, and Benelux, and exports its products to other parts of the world. Based in Denmark, the company is the market leader in its home market and is ranked among the top 3 competitors in the Scandinavian market. Mascot enjoys a high perception of quality and brand loyalty. The company has witnessed consistent above-average market growth in the past few years and is gaining prominence as a strong contender in the European workwear market.

Conclusion

Mascot International A/S strives to be an innovator in the mature European workwear market with a customer-centric focus. The company also understands the importance of distributors in the value chain and constantly strives to serve them better, together with the end-users of workwear. The fact that the MASCOT® E-PARTNER does not allow a purchase without the selection of a distributor is an ingenious, one-of-a kind strategy that benefits and earns the loyalty of distributors and customers alike. The company’s balanced emphasis on product and service innovation has enabled it to establish its presence as a strong competitor in the European workwear market.

With its strong overall performance, Mascot International A/S has earned Frost & Sullivan’s 2015 Competitive Strategy Innovation and Leadership Award.



Significance of Competitive Strategy Innovation and Leadership Any successful approach to achieving top-line growth must (1) take into account what competitors are, and are not, doing; (2) meet customer demand with a comprehensive, value-driven product or service portfolio; and (3) establish a brand that resonates deeply with customers and stands apart from other providers. Companies must succeed at these three things—brand, demand, and positioning—to achieve best-practice levels in competitive strategy.

Understanding Competitive Strategy Innovation and Leadership As discussed above, driving demand, brand strength, and competitive differentiation all play a critical role in delivering unique value to customers. This three-fold focus, however, must ideally be complemented by an equally rigorous focus on strategy innovation and customer impact.



Key Benchmarking Criteria

For the Competitive Strategy Innovation and Leadership Award, Frost & Sullivan analysts independently evaluated two key factors—Strategy Innovation and Customer Impact—according to the criteria identified below.

Strategy Innovation Criterion 1: Strategy Effectiveness Criterion 2: Strategy Execution Criterion 3: Competitive Differentiation Criterion 4: Executive Team Alignment Criterion 5: Stakeholder Integration

Customer Impact Criterion 1: Price/Performance Value Criterion 2: Customer Purchase Experience Criterion 3: Customer Ownership Experience Criterion 4: Customer Service Experience

Criterion 5: Brand Equity

Best Practice Award Analysis for Mascot International A/S Decision Support Scorecard To support its evaluation of best practices across multiple business performance categories, Frost & Sullivan employs a customized Decision Support Scorecard. This tool allows our research and consulting teams to objectively analyze performance, according to the key benchmarking criteria listed in the previous section, and to assign ratings on that basis. The tool follows a 10-point scale that allows for nuances in performance evaluation; ratings guidelines are illustrated below.

RATINGS GUIDELINES

The Decision Support Scorecard is organized by Strategy Innovation and Customer Impact (i.e., the overarching categories for all 10 benchmarking criteria; the definitions for each criteria are provided beneath the scorecard). The research team confirms the veracity of this weighted scorecard through sensitivity analysis, which confirms that small changes to the ratings for a specific criterion do not lead to a significant change in the overall relative rankings of the companies.



The results of this analysis are shown below. To remain unbiased and to protect the interests of all organizations reviewed, we have chosen to refer to the other key players as Competitor 1 and Competitor 2.

DECISION SUPPORT SCORECARD FOR COMPETITIVE STRATEGY INNOVATION AND LEADERSHIP AWARD

Measurement of 1–10 (1 = poor; 10 = excellent)

Competitive Strategy Innovation and Leadership

Strategy Innovation

Customer Impact Average Rating

Mascot International A/S 10 9 9.5

Competitor 1 7 8 7.5

Competitor 2 7 7 7

Strategy Innovation Criterion 1: Strategy Effectiveness Requirement: Strategy effectively balances short term performance needs with long-term aspirations and vision for the company

Criterion 2: Strategy Execution Requirement: Adoption of best-in-class processes to support the efficient and consistent implementation of business strategy

Criterion 3: Competitive Differentiation Requirement: Unique competitive advantages with regard to solution or product are clearly articulated and well accepted within the industry

Criterion 4: Executive Team Alignment Requirement: The executive team is aligned on the organization’s mission, vision, strategy and execution

Criterion 5: Stakeholder Integration Requirement: Strategy reflects the needs or circumstances of all industry stakeholders, including competitors, customers, investors, and employees

Customer Impact Criterion 1: Price/Performance Value Requirement: Products or services offer the best value for the price, compared to similar offerings in the market

Criterion 2: Customer Purchase Experience Requirement: Customers feel like they are buying the most optimal solution that addresses both their unique needs and their unique constraints



Criterion 3: Customer Ownership Experience Requirement: Customers are proud to own the company’s product or service, and have a positive experience throughout the life of the product or service

Criterion 4: Customer Service Experience Requirement: Customer service is accessible, fast, stress-free, and of high quality

Criterion 5: Brand Equity Requirement: Customers have a positive view of the brand and exhibit high brand loyalty

Decision Support Matrix Once all companies have been evaluated according to the Decision Support Scorecard, analysts can then position the candidates on the matrix shown below, enabling them to visualize which companies are truly breakthrough and which ones are not yet operating at best-in-class levels.

DECISION SUPPORT MATRIX FOR COMPETITIVE STRATEGY INNOVATION AND LEADERSHIP AWARD

High

Low

Low High

Cu

stom

er I

mp

act

Strategy Innovation

Mascot International

A/S

Competitor 2 Competitor 3



The Intersection between 360-Degree Research and Best Practices Awards

Research Methodology Frost & Sullivan’s 360-degree research methodology represents the analytical rigor of our research process. It offers a 360-degree-view of industry challenges, trends, and issues by integrating all 7 of Frost & Sullivan's research methodologies. Too often, companies make important growth decisions based on a narrow understanding of their environment, leading to errors of both omission and commission. Successful growth strategies are founded on a thorough understanding of market, technical, economic, financial, customer, best practices, and demographic analyses. The integration of these research disciplines into the 360-degree research methodology provides an evaluation platform for benchmarking industry players and for identifying those performing at best-in-class levels.

360-DEGREE RESEARCH: SEEING ORDER IN THE CHAOS



About Frost & Sullivan Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best in class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best practice models to drive the generation, evaluation and implementation of powerful growth strategies. Frost & Sullivan leverages almost 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 31 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com.

http://www.frost.com/

2015 European Workwear Competitive Strategy Innovation …...For the Competitive Strategy Innovation...

Documents

Transcript of 2015 European Workwear Competitive Strategy Innovation …...For the Competitive Strategy Innovation...