Business of Sport: ASICS tread own path to get ahead

Denzil Pinto 28/03/2017
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Gael force: French tennis star Monfils is one of ASICS’ most visible ambassadors.

Given their pledge is to always “bring harmony to the body and soul”, of their customers, ASICS certainly stayed true to their words when they opened their new subsidiary in the UAE earlier this month.

There was a distinct atmosphere, helped by the sound of catchy music, as more than 120 guests got a close look at their new Dubai Design District showroom.

For the Japanese sports manufacturer, it was no ordinary occasion. This was something big and just the start of ASICS pushing themselves ahead of their competitors in their bid of claiming a bigger slice of the market in the Middle East.

Since founder Kihachiro Onitsuka first started making basketball shoes in 1949, ASICS have come a long way and are now not only one of the most famous names globally but considered among the best running brands. The company already find themselves in a strong position in the UAE.

At any major shopping mall in the country, you’re most likely to find one of their branded stores, while local retailers like Modell’s, Go Sport, Foot Locker and Stadium, present more opportunities for consumers to purchase merchandise.

With major rivals continuing to push in such a competitive market, ASICS have decided to go alone and take matters into their own hands by replacing distributor Falaknaz, who had played a role in their success since 2003.

It means ASICS will now take charge of their own distribution, sales and marketing plans in bringing more success to their business, which already has more than 100 stores across the region.

It might well be more expensive than working with a distributor but the advantages are huge, giving them further room to expand their footprint in the region, while reinforcing their premium positioning.

They plan to increase their marketing investment, using up to 20 per cent of their budget, while also developing direct relationships with key retailers.

It’s part of their vision in not only bringing innovative products to the the market but offering consumers a “premium and unique retail experience.”

For Alistair Cameron, CEO of ASICS Europe, Middle East and Africa (EMEA), this step is a “new beginning”. “We are a $3.5 billion company and are big in America, Europe and Asia,” he said.

“With this in mind, it’s really important that we can articulate the benefits of the ASICS brand. Although we have been in the region for some time, our brand positioning globally as the No1 running brand hasn’t yet been discovered to its full extent in this region.

“Our distributor has done a really good job and helped us establish ourselves. But for us, for them to significantly invest at a level on what we want, is a tall order, and so that’s why we have come in and done it ourselves.”

While financial figures for 2016 are yet to be released, the move comes after profits for 2015 fell by approximately $80 million, more than 50 per cent than 2014. It was the first time since 2011 they saw such a decline.

With that now in the past, they are looking to the future and Cameron remains optimistic this region can become as valuable as Europe, Asia and America. “The UAE and Saudi Arabia will be the big markets for us,” he said.

“To maximise our opportunity, we will continue using premium retailers like GO Sport. But we will also be driving a much stronger premium level of presentation of all our products, including accessories, which will involve a lot of technical training.”

To ensure that consumers purchase products that are best suited to their needs, they plan to introduce more of their ASICS Foot ID systems in partner stores which have been rolled out in the US and Europe.

The high-tech shoe selection service combines static and dynamic measurement and analyses your movements to determine the right shoe for you.

With that now in place in certain countries, as well as the high volume of sales and the fine detail to research put in by scientists in Kobe, Japan, it’s easy to see why their footwear still remains their biggest seller with 346,080 million Japanese Yen ($311m) in net sales in 2014.

“In terms of running, we are the No1 global running brand,” declares Cameron. “At most businesses, there will be big volume for the lowest priced products but at ASICS it’s the other way round.

Our most expensive products does the volume for us and that’s because our science and technology is far superior than anyone else.

“Here in his region, while we want to extend our business to more branded stores, there will be more need for sales staff to be trained and well-equipped to sell and handle technical products.”

Their cause of hopefully seeing positive results in the future is helped given the importance of health and fitness. In the UAE, the facilities are second to none while Dubai and Abu Dhabi’s sporting calendar is packed with countless events throughout the season.

“With the world moving, there’s a switch in society and we’re seeing that health and movement is becoming important for people,” adds Cameron.

“Particularly, if you take Saudi Arabia, where there are high obesity levels, there are a lot of initiatives for authorities to invest in gyms and get people moving. It’s a major territory to grow.”

While sales is key to growth, so too is sponsorship and their multiyear partnership with athletics governing body IAAF is another indication of how they’re reaching out to global audiences.

The deal, which saw them replace adidas, who ended their agreement three years early, will not just see their logo on display around the stadium but will also see all IAAF officials kitted in ASICS apparel in all of the World Athletics Series meets as well as the 2017 and 2019 World Athletics Championships in London and Doha, respectively.

“If you take London, there will be 80,000 spectators every day over a 10-day period,” said Cameron. “After London it will be held in Doha in 2019 and that is a massive investment for us in this region and for us it will be how we can maximise that opportunity.”

Despite being the top-ranked brand for runners, that hasn’t stop them from exploring other sports. On their books are players in tennis, triathlon and volleyball as well as interest in cricket and rugby.

World No11 Gael Monfils of France, 2011 US Open champion Samantha Stosur of Australia, and British world No11 Johanna Konta are among their tennis ambassadors.

Rio Olympic gold medallist and two-time world triathlon champion Gwen Jorgensen of USA also put pen to paper. Ambassadors are paramount to the company.

They visit Kobe to ensure their apparel is up to their exact standard, while giving ASICS crucial feedback that allows them to enhance their products. And it isn’t just their results that attract ASICS. “We are really careful that they fit the brand,” said Cameron.

“It’s really difficult in today’s world to find a personality who is humble and would want to work with you and be inspired by what you do. “Gael has really helped us by helping testing products and everyone’s a great ambassador.

“We’re always on the lookout and it’s a competitive game.”

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Business of Sport: Aston Martin's Second Century Plan

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Leading from the front: Andy Palmer has already inspired a new team spirit at Aston Martin.

For the moment, James Bond may be more synonymous with Aston Martin than Andy Palmer but if things go to plan that may well change in the not too distant future.

Palmer has a mission to put Aston back into profit, to lead the 103-year-old company into what he calls ‘The Second Century’.

He has already refinanced the company which has had several owners over the years, transformed the management structure, launched the stunning new DB11, and formed a fascinating alliance with Red Bull Formula One team to produce a hypercar, the sensational looking AM-RB 001 (below).

He took some time away from his hectic schedule to talk to Sport360° editor Steve McKenlay about the future.

How long have you been with Aston Martin now?

For just over two years. Prior to that I was chief planning officer for Nissan based in Japan. I was 23 years with Nissan, 10 years in the UK and the rest of the time overseas and I am a mechanical engineer by training.

Aston came in for me. I had a little bit of insight into Aston beforehand because at Nissan we looked at whether they would fit into our portfolio or not so I had a reasonable understanding of the challenges but the turning point for me was the five per cent shareholding with Daimler which gave Aston access to the technology it clearly needed plus assurances from the two other shareholders, Investment Dar in Kuwait and Investindustrial in Italy, that they would back my plan.

What did you see before you came into Aston Martin that persuaded you to join them and what were the main challenges you expected to face?

What I saw was a great brand which I thought I could take somewhere special. There was an emotional side of that of course in that I reached 50 years old at Nissan where I had a great job and could have continued doing that.

However, I always wanted to be the CEO of a car company and I always thought it was a huge shame that the UK has barely any of its own car industry left.

Aston is it basically, so it was a bit of bringing the head and the heart together with a sincere belief that given the right team, the right challenge and the right motivation I could at least turn Aston into the British Ferrari. I don’t mean copy Ferrari but as a stand alone manufacturer and maybe more.

Ferrari already sets the bar high. It just recently had a successful IPO (Initial Public Share Offer) and set a very high target but we can go further because we aren’t limited to only making sports cars. We can do SUVs and Lagondas.

What was your opinion of Aston Martin cars when you joined the company?

The cars are great. We can talk about the old VH (vertical/horizontal platform) architecture but it was really ahead of its time but the models are ageing and in particular the electrical architecture was starting to show its age.

So, coming in I knew I wanted to do something about the navigation system in the cars which was one of its major weaknesses and I wanted to do something about the gearbox by giving an alternative to the single-clutch gearbox and update the interior. So, on a product basis it was a case of go ahead to do it.

I did all that and that is before the new product comes. There was a whole bunch of other things I needed to do within the first two years which was a stabilisation period. I put together a corporate plan which was approved at board level, got it funded and started to put the management structure in place.

I have taken out two levels of management trying to create a large flat structure, started a cost reduction programme and regrettably had to make some redundancies – about 400 – and started a whole new quality process. That comes from my Japanese training because they are obssessive about quality.

So that sort of marked the end of the beginning and we are just starting phase two which is core rebuilding which is the new sports cars, starting with the DB11.

I came to the launch of the new DB11 in Italy and one of the things that struck me was the enthusiasm of the team you now have. Was that enthusiasm already there ready to be tapped or have you introduced it?

There is definitely a real buzz around the place now and it wasn’t there when I came. I think that fundamentally we didn’t change too many people. There was a passion for the brand.

People work at Aston because they love cars but the company was spinning its wheels. There wasn’t really any approval of products there was nobody taking brave decisions so there wasn’t a lot of celebration of how good things could be because there wasn’t any money.

They went back to a kind of feudal system with the heads of all the functions basically protecting their patch and no real teamwork so the hardest thing to start with was the cultural change, engendering a team spirit with a clear, deployable plan and a leadership that works harder than anyone else.

So I think there was a lot of frustration amongst the workforce with nothing to channel the passion into.

New models are in the pipeline for Aston Martin.

The DB11, the first Aston produced under the partnership with Daimler, has been well received so what is next?

You and I are privileged to have driven the car but we need to tell everyone the story about what we have done which is why I will personally be inspecting the first 1000 cars that leave the factory. No car goes out of the factory without my assurance that it is a good car.

What does your inspection involve?

Twenty to thirty minutes depending on whether I decide to give it a test drive or not but it is principally around gaps and flushes, making sure everything works and that there is no damage to any materials interior and exterior.

There is an obssession with getting things right. I wouldn’t put my name on it if it wasn’t right and every car goes with my email address so if there is something wrong then I will hear about it and I answer all my emails.

Have you always been that hands on?

Yes, I left school at 16 and worked on a factory floor and I prefer it like that. I have other weaknesses but I like being on the shop floor.

Tell me more about the future of Aston as you see it.

The turnaround plan it is to make the most beautiful automotive art in the world from a great British car company. There are six pillars of the turnaround plan starting with the luxury products and not just cars – boats for example.

The second is making sure we have got a sales network which is capable of growing to, in the first instance, 7000 cars a year, and then double that; the third is about unrivalled quality; fourth is about great processes; fifth is about passionate, professional people the most important asset in the company and the sixth is having the finance and the discipline there which means we never have to go back to the begging bowl.

How difficult was it to fund your plan?

There were plenty of cynics for sure but the plan is extremely cohesive and my management team has credibility within the investment community and for the last seven quarters in a row I have bettered the budget we had set and that gives confidence to the financial community.

What new cars are next?

In terms of products the next is the new Vantage and then the Vanquish and that covers the next phase of the plan.

Are you going to replace all your models including the Rapide?

The Rapide will become electric. It fulfills two needs. I have obviously run electric car programmes before and I know how hard it is and I know that you need to concentrate on just the things that you are changing ie so it allows us to address that issue of understanding the technology.

It also allows us to meet emission regulations around the world and I think there is room for a luxury brand above Tesla so eventually the Rapide will become our vanguard of the electric car. Then we have the SUV code-named DBX and the Lagonda.

Motorsport has always been important to Aston. Have you considered entering Formula E which is now attracting all the major manufacturers?

Yes, and we will continue to consider it but we won’t be entering until the technology allows a race to be done on one battery.

If you want to be the first electric luxury car company it is a way of showcasing that so it is definitely on the agenda but I think having to change the battery by changing cars half way through the race is just reinforcing people’s perception that electric cars have a range issue.

That will change and I believe that 25 per cent of new car sales will be electric by 2025.

Aston does a lot of limited special edition cars and has just announced a hypercar in a partnership with Red Bull. How important is this business to Aston Martin?

In 103 years Aston has made just 80,000 cars and within a couple of years we are going to be making 7000 cars a year and then 10,000 plus so it’s suddenly a different sort of exclusivity. So in order to preserve the sort of exclusivity to get with a DB5 I want to make every year, two sets of low volume specials.

It also transforms the way people view our product line because we are selling out with significant over subscriptions on every one of these special series that we are doing.

So you are creating a head of steam with people who want to get close to the company and so they also get close to the core range and we now have more than 4000 orders for the DB11.

So, is the association with James Bond still part of your turnaround plan?

We are not Ferrari looking for that fraction of a second more speed, we are not Rolls-Royce and we are not the average of the two.

We position ourselves around the love of beauty and beautiful cars and we have to put it into the minds of the customers that the reason the fictional James Bond will drive that car is because of its beauty, its athleticism; because it suits what he is. He is one of the tools, like racing, that we use to market our brand. So yes, he is still important.

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How Du Tough Mudder went global

Jay Asser 6/12/2016
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Strength in numbers: The event breeds camaraderie and teamwork.

Rolling in mud, being submerged in ice water and enduring electric shocks may sound like a miserable time to many, but for a segment of the fitness world, it’s another way to exercise.

The fitness industry is ever-expanding and far-reaching, with alternative forms becoming more and more mainstream. Obstacle course events are no different and their popularity has surged over recent years to now rival more traditional races like marathons and triathlons.

Arguably the leading name in obstacle course and endurance events is Tough Mudder, which has grown exponentially since starting in 2010. The brand has had more than 2.5 million participants across three continents to date and will finish this year with more than 120 events staged in 10 countries.

Dubai will be the latest city to host the experience as the du Tough Mudder makes its debut in the emirate at Hamdan Sports Complex this weekend on December 9-10. The UAE is no stranger to obstacle course and endurance events, but Tough Mudder CEO Will Dean believes the appetite for the concept is as big as ever.

“I think the younger generation sees experience as being the new luxury good,” he told Sport360.

“What kind of watch we have or what kind of car we drive is less important than the memories we share. Our memories appreciate in value and our iPhones are quickly replaced with something better.

“Secondly, I think fitness has changed. Functional fitness is much bigger now than it used to be. I’m not against marathons or triathlons, but if you only run or bike, you’re not going to be in the best shape you can be. You need to have that functional fitness and that’s what Tough Mudder is about.”

Dean, who is a native of Great Britain, came up with the idea as a second-year MBA candidate at Harvard Business School in Boston. Again, he wasn’t the first person to imagine the obstacle course, but by refining the obstacles, upping the challenge and focusing on values like personal achievement and teamwork, Tough Mudder has thrived.

Tough Mudder now includes its standard 10-12 mile series of military-style obstacle courses, a five-mile version called the Tough Mudder Half, a course created by women for women called Mudderella, an event for children aged seven to 12 called Fruit Shoot Mini Mudder and its signature 24-hour endurance competition, the World’s Toughest Mudder.

An 8km and 16km course will be available to those eager to get dirty in Dubai this weekend, as well as the 1.5km du Mini Mudder for aforementioned children.

Tough Mudder has also partnered with Dubai Sports Council and got IMG on board as organisers, which is one of the major factors behind Dean finally feeling it was the right time to expand into the Middle East.

“Dubai is a market we’ve been planning on coming to for several years now,” he said. “You have a large, young middle class here into health and wellness. There’s a trend around the world – it’s true here as well – more people put more emphasis on being healthy and living healthy lifestyles. But not just that, but challenging themselves and taking on new things.

“This is a part of the world that’s pioneering. People are doing new things and looking for new adventures. You also have a large expat community, so you have a lot of people that have relatively high disposable income, free time and are young enough to come do things.

“I also think Tough Mudder as a company is now sophisticated enough that we can work with third parties and actually support them in the way we need. But in IMG, you have the world’s largest sports marketing company, world-class event production skills and they’re very, very strong on the ground here in Dubai.”

Despite putting on an event for the first time in this region, Dean is confident with his target of 5,000 participants – and he has every reason to be.

As mentioned, Tough Mudder’s participation numbers are through the roof. But maybe the number that truly speaks to Tough Mudder being a movement is 5,000, as in approximately how many people have a tattoo of the Tough Mudder logo.

That dedication and passion is the result of what Tough Mudder puts people through, both physically and mentally.

Just take a look at the list of obstacles. Participants have to jump into a dumpster filled with ice water in Arctic Enema, traverse through a mud field with live wires hanging overhead in Electroshock Therapy and run up a slick quarter pipe covered in mud and grease in Everest. Those are just a few of the insane creations thought up by Tough Mudder’s research and development team, which Dean describes as “nutty professors”.

But more than just pushing your body to the limit, the obstacles are specifically designed to inspire teamwork and camaraderie, whether that’s helping fellow participants or encouraging them on the course. That’s one of the qualities that Dean believes really separates Tough Mudder from the competition.

“I really believe that the best companies out there are purpose-driven organisations, companies that exist to try and make the world a better place,” Dean said. “Maybe that sounds cliche to some but that’s what I believe and I believe Tough Mudder gets people to live happier, healthier lives.

“It gets people to spend time with their friends, it pushes them to do something they weren’t sure they can do, so people feel good about themselves. The key to building self confidence is doing things that scare you a little and Tough Mudder is a little scary. I’m proud of that and I’m proud that it’s something that forces you to turn off your smartphone for a couple of hours and actually spend time with your friends.

“If you’re the kind of person that holds the door open for somebody or helps someone with their luggage, you’re actually going to be a happier person. The brain releases endorphins when you help people and Tough Mudder is just the extreme version of that.”

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