Salomon Sports Goods. Pioneering Innovation and Growth in Sports Equipment

Salomon Sports Goods, founded in 1949 and controlled by the Salomon family, has a storied history characterized by its relentless pursuit of quality and innovation. Initially known for ski bindings, the company expanded into ski boots and golf equipment. Under the leadership of Georges Salomon, the company adopted a centralized, functional structure, with a strong emphasis on research and development. This top-down approach fostered significant product and process innovations, transitioning from a "technology push" to a "market pull" strategy driven by complex market research and customer feedback. As the company grew, it decentralized into a divisional and regional structure, maintaining its focus on technological competitiveness. Salomon's rapid growth strategy is bolstered by a robust international distribution network and diversification into other markets to mitigate seasonal demand fluctuations. Future expansion opportunities include the water-ski and in-line skating markets, leveraging potential technological and production synergies.

Contents

Executive Summary 2

Terms of Reference 3

Contents 4

Introduction

1 Salomon’s growth strategy
1.1 The competitive environment 1952-1992
1.2 Salomon’s innovation strategy
1.3 Salomon’s ability to convert its technical competencies into effective innovations
1.4 Special problems in building small innovative firms

2 Salomon’s innovation process
2.1 The key stages of innovation
2.2 New product development 1952-1992
2.3 The Research and Development department

3 The Need for organisational change

4 Conclusion

5 Appendix
5.1 Michael E. Porter’s Five Forces Model
5.2 Stages of the Industry Life Cycle
5.3 The Cultural Web

6 References

Executive Summary

Salomon Sports Goods is a fast-growing, technology-based company. It was founded in 1949 and has remained in the control of the Salomon family ever since. Characteristic for the company is its constant quest for product quality and innovation. Over time it has expanded from ski bindings into ski boots and later into the golf equipment market. In its early stages the company was organised in a centralised structure with functional departments. Georges Salomon has the most influential position in the company and Georges’ vision and leadership dominate the atmosphere at Salomon. He is the head of the research & development department, which plays a central role at Salomon. The drive for innovation materialised into a “technology push” to the market. Through complex market research mechanisms and customer feedback loops this transformed gradually into a “market pull” situation with high customer responsiveness. Salomon introduced not only many product innovations but is also very strong in the field of process innovation.

The top-down approach towards innovation and change is very typical for Salomon. When the need for organisational change, initialised by the constant growth of its operations, emerged in the company, it was the top management that diagnosed, planned and implemented the necessary change. Salomon changed into a more decentralised organisation with a divisional as well as regional structure. The focus on technology as a major source of competitive advantage and along with that the concept of a powerful, influential R&D department remained.

Salomon’s operations follow the grand scheme of a rapid growth strategy. This growth is geographical as well as market-wise. Salomon’s established international distribution network aids the introduction of new products. The diversification into other industries (e.g. golf) is a reaction to environmental changes as well as the need to establish a counterweight to the seasonal demand for winter sports equipment.

The company’s main strength in the innovation process lies in the environmental scanning. Market research enables it to respond quicker and better to customer demands. After initial problems, the manufacturing department was involved in the innovation process to ensure frictionless implementation of product and process innovations.

In compliance with its growth strategy, Salomon will have to look for further fields of expansion. Sectors with potential technological and production synergies are the water-ski market and the market for in-line skaters.

Terms of Reference

This report was written as part of the requirements for 4MBS316 Management of Innovation & Change at the University of Westminster, London. It is assignment one of two and it was designed as a group work. The module leader and seminar tutor is Alan David. The report was instigated to analyse Salomon Sports Goods in regard to its innovation and change process.

Introduction

Salomon Sports Goods is an example for a very innovative, growth oriented company. This essay focuses on the change the company underwent over time and the innovations it came up with. Chapter one focuses on Salomon’s growth strategy. Changes in the competitive environment and an evaluation of Salomon’s innovation strategy are included in the analysis. The chapter concludes with a closer look at the special problems Salomon had to face as a small innovative firm.

The company’s innovation process is discussed in chapter two. The company’s performance in each of the steps of the innovation process is examined. Further emphasis is put on new product development. Because Research & Development play a special role at Salomon, this report devotes a separate segment to its analysis. The report concludes in chapter three with a look at organisational change at Salomon and the company’s ability to diagnose the need for change as well as its implementation.

1 Salomon’s growth strategy

The competitive environment Salomon was faced with has undergone substantial change since the company’s founding in 1947. In the first section we will focus on the competitive environment in which Salomon is operating and how it has changed over time. The second section provides an analysis of the company’s ability to convert its technical competencies into effective innovation in terms of new products and markets. In addition, we will have a look at how Salomon managed its growth strategy to cope with the changing environment. This chapter concludes with some problems Salomon as a small company faced when trying to build an innovative firm.

1.1 The competitive environment 1952-1992

1.1.1 1952-67

Salomon entered business during a time of change in its industry. Formerly, the retailers would assemble the ski edges manufactured by Salomon. Now, ski manufactures themselves would assemble the ski edges, turning Salomon into a mere supplier for the ski manufacturing industry. To avoid this “fate”, Georges Salomon decided to produce ski bindings instead. Out of competitive reasons, Salomon targeted the U.S. market first. According to the product life-cycle theory of international trade by Vernon and Wells (1996)¹ it is very typical for a country with innovative firms to export in the early stages of a product’s life. Our analysis of the competitive environment in the specific markets is based on Porter’s Five Forces Model (see Appendix 5.1). In the United States Salomon enjoyed a first mover advantage - the other big European firms where not yet present². The company was able to raise the barriers to entry for its European competitors by achieving cost advantages through the adoption of industrial processes and economies of scale through mass-production. Since the industry was still in is growth stage, risk of new entry was generally high. In addition, this is one of the company’s most important sources of competitive advantage. However, when Salomon entered the market in France, the barriers to entry were low because the ski industry was still in its early stages of the lifecycle³. Brand loyalty was not yet established by the companies and Salomon profited from its export activities in the fields of cost advantage and economies of scale. Even though the market was fragmented with a variety of companies competing against each other, since demand was growing rapidly during this period, rivalry between firms was low⁴. Because the market was fragmented, however, the bargaining power of the buyers (i.e. ski retailers) was high since they were able to choose from a variety of similar products. The bargaining power of the suppliers on the contrary was low since the materials for manufacturing were basic and easily obtainable. There was an average amount of threat of substitute products because alternative systems for ski bindings were not yet invented (see Appendix 5.1.1).

1.1.2 1967-78

Through the establishment of several subsidiaries from 1969 to 1977 in Europe and the USA, Salomon became a truly international company. During this time, the focus of the company’s research efforts was in the ski boot sector where it wanted to prevent to become a subcontractor to boot manufacturers. This possibility of boot manufacturers including the binding into their boots increased the threat of substitute products. The company’s method of subcontracting on the other hand gave it even more power over its suppliers (see Appendix 5.1.2).

1.1.3 1979-84

According to Salomon, the winter sports equipment industry reached its maturity stage in the 1970’s. Along with this development the competitive environment in that sector became more hostile. To achieve further growth, Salomon switched its focus to the market of ski boots. The market was fragmented (see Chart 4- 1) and unindustrialized, making the barriers to entry low and enabling Salomon to profit from cost advantages out of synergies between ski boots and bindings⁵. Salomon underwent extensive organisational restructuring to adjust to the fast growth of the company. Three product divisions, three geographical sales zones and several committees were established. Again, Salomon was able to stay ahead of the competition that did not spend as much on research and development and failed to respond to Salomon’s innovations fast enough to prevent it to gain substantial market share before competitors would enter.

illustration not visible in this excerpt

1.1.4 1984-92

To work against the seasonal fluctuations in the winter sports equipment industry, Salomon diversified into the golf equipment business⁶. Those two industries do not only behave counter-cyclical but also contain synergies between each other. The fact that the golf equipment industry was also fragmented made it easier for Salomon to enter that market. To obtain the technological knowledge for this industry, Salomon acquired Taylor Made in 1984. Along with the maturity of the winter sports equipment industry the market became less fragmented with Salomon among the top players worldwide. This greatly enhanced rivalry among the established firms (Appendix 5.1.3).

As the industries Salomon was operating in went into different stages of the lifecycle, the competitive environment also changed accordingly. Because growth was one of Salomon’s major objectives, when certain industries ended to grow (maturity stage) the company entered new, still underdeveloped industries (growth stage) were growth was still possible. That way they managed to focus their attention to industries were one of the company’s core competencies - the management of growth - was the most suitable to the competitive environment.

1.2 Salomon ’ s innovation strategy

As the competitive environment and the company changed over time, so did Salomon adjust its innovation strategy. From the very beginning, strong emphasis was put on the R&D function. Working along the framework developed by David Treece and Gary Pisano⁷, Salomon adopted a rationalist innovation strategy: it analyses and understands its surroundings (“environmental scanning”) before entering a market. Furthermore, innovation was not only limited to products⁸. The company also came up with process innovations. Examples for that is the horizontal press injection method (1977) or the shoe moulded in a cast of polyurethane foam (1977), which made automatization and industrialisation possible. In addition, it was also good in recognizing external knowledge (boot stretcher “Lift”, golf clubs) and, if necessary, recruitment of specialists to gain technological knowledge. The company started out with a “cost minimisation/imitative” innovation strategy⁹ but as it gained unique technological competencies over time (due to extensive R&D spending) it adopted a “leader/offensive” innovation strategy. The R&D spending which accounted for the technological innovativeness of the company mixed with its prior gained experience in automatization of manufacturing enabled it to produce good quality at low cost.

1.3 Salomon ’ s ability to convert its technical competencies into effective innovations

The analysis above stresses the point that Salomon puts a lot of emphasis on its R&D function, developing technical competencies. But in how far was Salomon able to make use of these competencies? An innovation is only an effective innovation if it can be put to use in a way that benefits the company¹⁰. In this section we take a look at Salomon’s innovations in terms of products and markets to determine their contribution towards Salomon’s success. According to Treece (in Tidd et al 1997) two factors determine firm’s ability to benefit from its investment in technology:

(1) The firm’s capacity to translate its technological advantage into commercially viable products or processes
(2) The firm’s capacity to defend its advantage against imitators.

(1) Salomon was able to develop several product innovations over the last 40 years. Those innovations were supported by extensive market research in form of interviews with skiers and retailers as well as keeping good relationships with their customers.¹¹ This can be seen as accounting for much of the success of Salomon’s product innovations. More importantly, Salomon was able to revolutionize the industry by introducing automatization to the production process. This was a radical process innovation. Automatization and the fact that they were able to keep product complexity low benefited the company through reduced costs. To benefit from its technical competencies, Salomon had to link this core competency to other core competencies of the company. Its international distribution network, for example, works together with the development of new products to deliver them to the markets.

“Walking in the footsteps of somebody else will not put you in front.”¹²

(2) Once a competitive advantage is achieved it has to be defended against competitors. Especially firms like Salomon that are very innovation oriented have to face the risk of imitation by competitors. Patents offer some protection but as the example of Xerox demonstrates, there are ways to work around patents. So in order to secure a competitive advantage the company has to constantly strive to stay ahead of the competition. Salomon does this by constantly developing new products and processes that ensures them a leading position in its industry.

1.4 Special problems in building small innovative firms

The first problem every future entrepreneur in building small innovative firms (or New Technology Based Firms - NTBFs) has to face is the problem of raising capital for the planned venture since start-up costs are often very high. In Salomon’s case the family was facing an FFr 500,000 investment. According to studies¹³, most of the time money has to be raised privately from own savings, family’s savings or friends, bearing high risk, since the risk of failure is relatively high. Venture capitalists are careful and seldom convinced of investing into NTBFs in the beginning. Evaluating NTBFs as being a good investment differs in North America, Europe and Asia. Venture capitalists focus mainly on the same criteria, but put different weight on the same. Financial returns are more important to venture capitalists in the U.S. whereas for the ones in Europe or Asia the innovation and its probable market acceptance is of higher importance¹⁴. Salomon raised the capital from family savings, which is typical for NTBFs and their entrepreneur’s aim for independence. The next problem a small innovative firm has to face is which aims to an end it needs, which machines, which resources. Finding good, motivated, well-trained employees is difficult, since a new company doesn’t have the good brand image and reputation yet to attract highly innovative and competent people. Another point is that a small newly built company usually doesn’t have the research resources needed and therefore sometimes has to buy them from other companies or research agencies. In Salomon’s case the issue was about how and which machines to choose, how to service them and how to use them, since they never worked with these modern machines before. The large overhead expenditures needed for good R&D research cannot be spread over a large production in small start-up companies¹⁵. A further potential risk is to get limited in future growth by becoming dependent on a few buyers or suppliers (which puts them in a position of high bargaining power). If an NTBF specializes only in serving a very narrow market or few potential buyers it runs the risk of getting dependent on those and is therefore limited in its growth and margins. Salomon avoided becoming dependent by recognising threats early and acting accordingly, as with the ski bindings project and the ski boot project.

2 Salomon’s innovation process

2.1 The key stages of innovation

2.1.1 Environmental scanning

Environmental scanning is about collecting information. It should involve all parts of the organisation in order to notice changes in the company’s external environment. This includes customers as well as competitors and in Salomon’s case especially the scientific/innovative research hemisphere. An external inventor developed one of its first big successes, the boot-stretcher „Lift“. By getting feedback and keeping in close contact, Salomon is also putting much effort into scanning the customer/retailer side. This enables it to become aware of changes in customer demand early. The developments in the ski edge assembly and the boot-binding fusion are examples of that. When Salomon entered the golf equipment market, it was important to gather information about competitors, technologies and customer demand prior to entry. A thorough market research showed the business opportunities and possible synergies with the winter sports equipment market. The golf market was fragmented. Demand was growing and - more importantly - counter-cyclical.

2.1.2 Identifying the signals

When analysing the data won from external scanning it is essential to identify important events that potentially will have a lot of impact on the industry in which the company is operating. Those signals can be important inventions, innovations or other significant events. One of those events was the bad winters1989-91. In a certain way Salomon reacted to this signal - by not changing its present strategy. It kept R&D spending high in preparation of coming years with good weather conditions. The seasonal demand for winter sports equipment was another signal that causes Salomon to engage into the counter-cyclical golf market. It has to be mentioned that the decision-making processes is very centralized at Salomon. The founder family and the R&D department hold most of this power. Unlike other companies, Salomon never saw itself “too good” to accept external knowledge to improve their own knowledge base. To acquire further knowledge in fields were Salomon lacked expertise, it either bought other companies, patents or hired specialists.

2.1.3 Enabling response

In order to respond to changes in the environment, a company needs financial, technological and human resources. To a certain extent, the company had those resources from the very beginnings: it was able to raise FFr 500,000 through private savings (financial), the founder hat worked in the ski industry before (technological) and family members did not only join the workforce but were also very interested in the company (human capital). Over time, the company acquired more of those resources, both externally and internally. Georges Salomon’s devotion to research & development helped the company to rapidly develop a solid technological base. It also recognized potentially profitable external inventions when it came across them. The good quality of their products was responsible for the success of their product. With a brand name established it was easier to attract better human resources, i.e. specialists and inventors in the field of the winter sports equipment industry. The company also kept a very low debt profile, making it easier to survive downswings of the economy - and especially the winter sports equipment market.

The risk an R&D based company faces in the response process is that not enough attention might be paid to the manufacturing side of the business. There might be a gap between the vision on the one side and business reality on the other. After initial problems with the R&D-Manufacturing interface, Salomon now tries to minimize this risk by involving the manufacturing department in the innovation process.

2.1.4 Implementation

Salomon’s centralized structure helps it to adapt to change quickly. On the other hand this might cause some difficulties during the implementation of new strategies. The R&D department is very dominant and this might cause input from other departments of the company to be neglected. At Salomon the manufacturing department is involved into the innovation process in order to avoid this problem.¹⁶ Once the product is manufactured, Salomon’s vast international distribution network makes it easy to introduce new products to the market. The implemented customer response loops feed back into the innovation process to improve product quality and respond to customer demands.

2.2 New product development 1952-1992

As stated in the case study, Salomon always spent more money on R&D and personnel training than their competitors. Therefore a good financial and personnel basis for effective new product development (NPD) was created. In the beginning, when Salomon was still a small company, NPD had a more traditional, informal and rather a craftsman-style nature¹⁷.

After encountering problems with the ski boot project, the NPD-style developed from being in the hands of the R&D department into a project- and team-style as it is nowadays. Salomon gave too much autonomy to the ski boot team and didn't see the need to bring in people from manufacturing as well. Costly and time-consuming problems in manufacturing arose quickly, which might have been avoided if somebody from the manufacturing would have been included in the NPD process. Salomon learned from the neglect to do so and decided to bring the ski boot team closer to the manufacturing team and therefore put down the cornerstone for project based NPD, introducing New Product Committees including people from different departments of the company, keeping up effective NPD.¹⁸

Over the years Salomon introduced a variety of new successful products to different markets. In 1952 Salomon assembled knowledge from an unexploited patent, a new model for ski bindings, which it bought from a Parisian inventor and developed further.¹⁹ The boot stretcher “Lift” was new to the product world, including new design and technology that soon proved to be very successful. Another significant technical innovation came in 1967, when Salomon introduced the first cableless heelpiece, which was a radical further improvement and development of an existing product, the ski bindings.²⁰ In 1974 Salomon decided to start a project on developing a ski boot, following a threat of dependence on boot manufacturers. The ski boot project was a new product line, which was aimed at diversification in the winter sports market and to enter the ski boot market. Even though the ski boot team came up with radical new innovations, including a great possible competitive advantage, Salomon had to face the above-mentioned problems and had to invest more money than necessary under other NPD management. In 1980 Salomon entered the cross-country ski shoe market (where Salomon was soon to become world leader) introducing the Salomon Nordic System innovation, launched a ski project in 1984 and also launched a hiking shoe project in 1990, which were again successful new product lines for the company. Even though there was a severe crisis in 1989-1991 Salomon held on to his ski project pushing it further up to market introduction, which shows how much emphasis lied on NPD.²¹ The ski project proved very successful and additions to the existing ski line were introduced in the following years.

In 1984 Salomon bought Taylor Made, a U.S. golf equipment manufacturer, and transferred U.S. research staff to France in order to learn the special techniques involved in manufacturing golf clubs and therefore being in a better and integrated situation for NPD.²²

In conclusion Salomon can be seen as being very effective in managing NPD and quick learning from mistakes, such as the ski boot project.

2.3 The Research and Development department

The reason why Salomon came into existence was a new product development. Because his superiors declined his proposal for a new ski edge, François Salomon founded his own company. So from the very beginnings, R&D was a key function. When the Salomon family started their business, technological knowledge was close to non-existing. Salomon’s first commercial success, the boot-stretcher “Lift”, was based on an external developed. By hiring talented innovators and buying promising patents, Salomon acquired the technology base needed for future developments. Georges Salomon’s interest was always in the R&D department and it has been under is supervision since the founding of the company. While the company profits from Georges’ vision and leadership, it also made itself heavily dependable on him in the R&D function. The proximity to the top of the organisational hierarchy puts emphasis on its importance to the company. The focus of the R&D department was on new product innovation but Salomon also went new ways in manufacturing processes. Salomon’s industrial mass-manufacturing processes, its international distribution network and subcontracting structure²³ were a radical innovation to the industry at that time. Because Salomon gave a lot of autonomy to its different functions²⁴, management always depended on the management style of their leaders.

As the company grew over time, diversifying into various businesses, this loose, functional structure was more and more difficult to maintain. In 1980 the functional structure was broken up and replaced by three product divisions and three geographical sales zones²⁵. As the winter sports equipment industry reached its maturity stage in the eyes of Salomon, the R&D function increased in importance as a means to differentiate its product against its competitors. The new product committees established meant a decentralisation of the R&D function for the company. It also divided the responsibility for R&D among the different product divisions as opposed to being combined in Georges Salomon before. Geographically, R&D was kept close together. When Salomon bought Taylor Made, the American golf club manufacturer, the R&D function was moved to France. Since there are some synergies and common technologies in both industries Salomon is operating in, a close spatial proximity encourages communication and technology transfer between different R&D departments, preventing simultaneous developments of similar products and realising innovation synergies.

With the maturity of the winter sports equipment industry, the importance of the R&D department got another quality. Salomon tries to differentiate its products from its competitors through quality and product innovation, which result from its R&D efforts.

3 The Need for organisational change

Salomon started out in 1947 as a small family business. 45 years later, in 1992 it was a globally operating corporation. During this time it underwent various organisational transitions. Georges Salomon, the company’s powerful visionary leader, is a symbol for the policy of constant change. He leads the company from one state through the transitional to the future state. In order to help in the transition process from one organisational stage to another, the cultural web can provide a useful tool.²⁶ Appendix 5.3.1 is an attempt to formulate the cultural web for the early years of Salomon’s operations. Salomon was still a family business with control held by the Salomon family. The company had a functional structure. Georges Salomon was and even remains today the single most important figure in the company’s change process. Throughout the history every major change in direction was either initiated or authorized by the Salomon family. Georges Salomon was very successful in analysing current and foreseeing future developments in the industry. The decision in the early 1950’s to turn to manufacturing of ski bindings was a response to the risk of becoming a contractor to ski manufacturers. Planning, implementation and management of the change process was also supervised by Georges Salomon. This was only possible because the workforce was still pretty small and Salomon put a lot of emphasis on the entrepreneurial family spirit.²⁷

When Michel Barthod was appointed Managing Director in 1978 he brought new management expertise into the company. He was an important figure in Salomon’s change process to adapt to the company’s growth and the change in the environment²⁸ in which Salomon was operating. A structure of product divisions and geographical areas was adopted. In addition, six functional departments were established. The organisation became more complex and hierarchical in order to cope with administrative demands of a multinational corporation. Committees were established for the most important decision-making processes.

The next important step was the diversification of the business into the golf equipment industry. This step was carefully considered. It had the great advantages to not only be counter-cyclical to the winter sports equipment industry but also bearing some technological synergies. The acquired company, Taylor Made, had a very similar structure to that of Salomon. This made the integration into the corporation easier. Appendix 5.3.2 shows the cultural web for Salomon as a multinational corporation. In the winter sports equipment market with its short product lifecycle, Salomon’s strategy of constant change and innovation is a major source of its competitive advantage.

4 Conclusion

The analysis above shows that Salomon follows a very distinct growth strategy. Led by Georges Salomon it systematically focuses on geographical as well as market expansion. Whereas global expansion was accomplished rather quickly, Salomon’s product diversification evolved over time as a reaction to the changes in Salomon’s competitive environment. One of its most important core competencies in its global success is the company’s innovation process.

The investigation into Salomon’s innovation process made clear that the company’s strength lies in the initial step of environmental scanning. Extensive market research enables superior customer responsiveness. Conflicts between the R&D and the manufacturing department were solved through an involvement of the different departments into the innovation process.

Over time, the need for organisational change emerged from within Salomon. The steady growth made change inevitable. New management expertise brought into the company helped to diagnose this need. The commercial success of Salomon, even after its transition into a globally operating corporation, indicates a successful transformation.

In compliance with its growth strategy, Salomon will have to look for further fields of expansion. Sectors with potential technological and production synergies²⁹ are desirable. The Tennis market, which might bear the greatest synergies, is saturated and has little opportunity for growth. The water-ski market, due to its counter- cyclical demand and technological similarities might be an attractive target for further expansion. In addition, in the market for in-line skaters, Salomon might profit from its knowledge it has gained through the ski boot manufacturing.

5 Appendix

5.1 Michael E. Porter’s Five Forces Model

³⁰ (1) Risk of entry by potential competitors
(2) Degree of rivalry among established companies
(3) Bargaining power of buyers
(4) Bargaining power of suppliers
(5) Threat of substitute products

5.1.1 1950’s - the beginnings

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5.1.2 1970’s - becoming truly international

illustration not visible in this excerpt

5.1.3 The winter sports equipment market for Salomon in the 1990’s

illustration not visible in this excerpt

5.1.4 The golf equipment market in the early 1980’s

illustration not visible in this excerpt

5.2 Stages of the Industry Life Cycle

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Figure 5-5; ©1998 Houghton Mifflin Company

The ski industry entered into the growth stage in the early 1950’s.

5.3 The Cultural Web

5.3.1 1952-1967: A small high growth company

illustration not visible in this excerpt³¹

5.3.2 1992: A multinational sports equipment company

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6 References

- Albaum, G., Strandskov, J. and Duerr, E. (1998) International marketing and export management, Addison Wesley Longman Ltd, Harlow
- Balogun, J. & Hailey, V. (1999) Exploring Strategic Change, Prentice Hall, Harlow
- Case Study: Calori, R. (1995) Salomon: a fast growing sports goods company.
- Hill, C. and Jones, G. (1998) Strategic Management - An integrated Approach, Houghton Mifflin, Boston, MA
- Tidd, J., Bessant, J. and Paritt, K. (1997) Managing Innovation, John Wiley & Sons Ltd, Chichester
- Trott, P. (1998) Innovation Management & New Product Development, Financial Times Pitman Publishing, London

[...]

---

¹ Albaum et al (1998)

² Case Study

³ Albaum et al (1998), see also Appendix 5.2

⁴ Hill & Jones (1998)

⁵ Case Study

⁶ For an analysis of the competitive environment in the golf equipment for that time, see Appendix 5.1.4.

⁷ in Tidd et al (1997)

⁸ Cableless heelpieces (1967), back entry and internal regulation (1977)

⁹ Trott (1998)

¹⁰ This might be increased sales, reduced costs, improved brand image, etc.

¹¹ Case Study

¹² Poul Andreassen, former president of International Service System A/S

¹³ Tidd 1997

¹⁴ Tidd (1997)

¹⁵ Less ability for economies of scale

¹⁶ Case Study

¹⁷ Trott (1998)

¹⁸ Case study

¹⁹ Case study

²⁰ Trott (1998)

²¹ Case study

²² Case study

²³ It has to be stresses that R&D and quality control remained centralized.

²⁴ R&D, manufacturing and sales

²⁵ Case Study

²⁶ Balogun & Hailey (1999)

²⁷ Case Study

²⁸ New demands for communication, participation and training

²⁹ This was achieved with the expansion into the golf industry.

³⁰ Hill & Jones (1998)

Frequently asked questions

What is the main subject of this document?

This document analyzes the growth strategy, innovation process, and organizational changes within Salomon Sports Goods from 1952 to 1992.

What are Salomon's key strengths in innovation?

Salomon's strengths lie in environmental scanning through market research, which enables them to respond effectively to customer demands. They are also strong in process innovation and involving the manufacturing department in the innovation process.

How did Salomon's competitive environment change from 1952-1992?

The competitive environment evolved from Salomon being a supplier to ski manufacturers, to entering the US market with a first-mover advantage, to international expansion, diversification into golf equipment, and increased rivalry among established firms as the winter sports equipment industry matured.

What was Salomon’s innovation strategy?

Salomon adopted a rationalist innovation strategy, analyzing its surroundings before entering a market. It combined process innovation, product innovation, and market research. They evolved from a "cost minimization/imitative" strategy to a "leader/offensive" one thanks to R&D spending.

How did Salomon ensure their technical competencies translated into effective innovations?

Salomon invested in market research to develop commercially viable products and processes. They also focused on continuously developing new products and processes to defend their advantages against imitators and maintain a leading position.

What were some of the special problems faced when building Salomon as a small innovative firm?

The company faced challenges in raising capital, finding qualified employees, accessing research resources, and avoiding dependence on a few buyers or suppliers.

What are the key stages of Salomon's innovation process?

The key stages include environmental scanning, identifying signals, enabling response, and implementation. Salomon also incorporated feedback from customers to continually improve product quality.

How did Salomon's new product development (NPD) evolve?

It evolved from a traditional, informal craftsman-style nature into a project- and team-style approach after problems were encountered in manufacturing. They learned to include members from multiple departments in the NPD process.

What role did the Research and Development (R&D) department play in Salomon's success?

R&D was a key function from the company's inception. It was initially highly centralized under Georges Salomon, then decentralized into product divisions. R&D efforts were focused on differentiating Salomon's products from competitors and enabling growth in the sector.

How did Salomon adapt to the need for organizational change?

Salomon started as a small family business with a functional structure and then transitioned into a globally operating corporation. Key changes included the appointment of a Managing Director, the establishment of product divisions and geographical areas, and diversification into the golf equipment industry.

What potential areas for future expansion are mentioned?

Potential areas for expansion include the water-ski market and the market for in-line skaters.

What models are used for analysis in the report?

The report uses Michael E. Porter’s Five Forces Model, Stages of the Industry Life Cycle, and the Cultural Web for its analysis.

Details

• Grade: 70%
• Author: Christian Scheffler (Author)
• Publication Year: 2000
• Pages: 19
• Catalog Number: V96939
• ISBN (eBook): 9783638096140
• Language: German
• Tags: Salomon Sports Goods