international management Essay

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Icebreaker Case Study

Introduction
Icebreaker began in 1994, when Jeremy Moon discovered a merino wool tee-shirt that provided insulation and natural antimicrobial wicking for his tramping pursuits (Icebreaker, 2013). The domestic strategy began with the 24 year old marketing graduate/ entrepreneur making sales call from his bedroom and using his grandad’s old battered suitcase to carry his entire inventory (Icebreaker, 2013). Icebreaker is now an international brand selling in 43 countries with a sales revenue of more than $100 million (Stanford Graduate Business School [SGBS], 2013). Icebreaker distributes product through wholly-owned subsidiaries in both 3000 outlet stores and 12 flagship retailers (Slade, 2012). Product is distributed to customers in accordance with the pareto principle: 80 percent via retail outlets and 20 per cent direct to customer (SGBS, 2013). Icebreaker appeals to international customers with the core values of “design by nature” and sustainability (Icebreaker, 2013). Icebreaker has 250 staff globally (SGBS, 2013) and operates in Australasia, Europe, North America and Asian markets. While western markets gravitate towards the edgy brand of sportswear (WWD, 2013), Asian markets are relatively undeveloped and Icebreaker must respond to issues such as product adaptation for these markets to pursue the lucrative opportunity to become a leader in a growing market (Black, 2012). Icebreaker uses a polycentric hiring approach to adjust products and marketing to each culture. Staff remain motivated as they are devoted users of Icebreaker products in outdoor pursuits. Management communications are participative, empowering local managers to tailor marketing to suit local culture. Icebreaker operates in a socially responsible manner, keeping employees throughout the supply chain motivated through fair wages and prices.

Company, Operations, Markets

Company History and Context
Amazed by the remarkably soft feeling of a prototype thermal tee-shirt made from 100%merino wool presented by a New Zealand farmer, Jeremy Moon, a 24 years old marketing graduate, started a business plan to develop the world’s first merino layering system for the outdoors, and create a global business in the process. Icebreaker is currently an internationally successful apparel company operating in more than 3000 stores in 43 countries (Icebreaker, 2013). The layering system has grown to include underwear, mid layer garments, outerwear, socks and accessories for men, women and children.

Operations and Products
Given the fact that production is 100 percent focused on Merino wool, Icebreaker is among the first revolutionary companies to begin offering multi-year contracts to New Zealand’s Merino farmers. Offering price premiums to farmers that could produce fibre that uniformly meet the company’s stringent requirements helps to build a long-term relationship between the two, which creates high value and stability. “The philosophy of nurturing long term relationships is completely aligned with the Icebreaker set of values”, said Rosanne Palmisano,global vice president of marketing, “They have worked with us closely in the past 15 years to create a healthy co-dependent relationship with our growers.”(SGBS, 2013)
In terms of sales channels, the primary focus of Icebreaker is retailers. With the company’s products carried in over 3000 retail stores around the world; this part of sales dominates 80 per cent of its sales revenue. However, the other 20 per cent is through 12 flagship stores (known as "Touchlabs") in New Zealand, the US, Canada and France, plus seven outlet stores in New Zealand, Australia and the US. Besides, Icebreaker garments are also available online for customers in New Zealand, Australia and the US. (Slade, 2012)
With these outlets and 3000 retailer distributors around the world annual sales were more than US$100 million (SGBS, 2013). Products differentiate against synthetic fibres using merino that has
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