A business always goes through ups and downs with handling all the tantrums that market throws them into, often.
This case study presents the loss that Billabong Australia went through for a certain time.
Also, it will provide a platform for understanding the major causes that worked behind this surfwear failure, with a basic idea on the profit earned by the company outside Australia.
This report also includes a strategic analysis on the same case, with an appropriate measure for dealing with problems head-on.
Billabong was founded in 1973 in Goldcoast, Australia.Gordon Merchant and his then partner joint handily built this organization. Later this company became quite popular for producing good quality handmade boardshorts for surfing in water and snow, worldwide.
In 2007, they became the leading organization in surfboards in the global market. By that time, they’ve already grown unmatched brand integrity.During this successful period, they started sponsoring various sports in Australia like Snow surfing, water surfing.
Sponsoring athletes and hosting sports events is one of their marketing strategies for maximizing the profit.
A Case Study Was Done For Billabong Australia
This case study follows the manifold reasons that caused this turmoil of the surfwear company in Australia.
Identifying the problem of failure of Billabong Australia
It is not easy for a company to make it work in a brand new market. Although surfing is quite a popular sport for Australian citizens, still Billabong faced quite a rejection and failed miserably in the Australian market.
Billabong Australia,in 2011 made a huge investment to buy 11 brands for increasing market value and overall profit as well.This extreme step forced the company to go through reconstruction and closing around 150 stores all over the world. They suffered a decrease of 18.4% in their net profit, and after recovery they go through a moderate growth rate of 2.3% in their compound annual growth rate.
The major reason for the rejection of the Billabong company in Australia is that they were unable to meet the contemporary market demands, as per the customers.
The sudden hike of the Australian dollar value results in a deterioration in the sales of their product.
The Australian people have demands for more eco-friendlier products which are easy to dispose of, after every use. They do not like any harm to their environment.
The rise in competition in the market of the surfing board has made a good brand impact on the Australian market. It is revealing the difference between their product and the product of the company itself. Also, how their product is much better than the product of the Billabong company. The decrease in popularity also decreases there sales.
Objectives of the case study of Billabong Australia
With respect to the problem
Understanding the cultural difference between America and Australia-
There are a lot of differences between Americans and Australians when it comes to surfing culture. As citizens of Australia are more concerned about their environmental aspects, surfing is losing its place, over time.Also, there is less possibility of snow surfing in Australian climate, hence there’s a twofold downfall that happened with Billboard.
Sea surfing is common for a place like Australia, surrounded by the sea. So their are already surfwear competitors present to give tough competition for the outsiders.
Understanding the Australian customer preference on a surfboard-
Australian customers always prefer eco-friendly aspects over other ones, with increasing threat to pour nature. Products should be easily decomposable in nature without disrupting the balance. Commodities should also meet the brand value in the market.
The company should have analyzed the consumer market more than anything, so there wouldn’t be any failure on their certain strategies for them.
Another reason is also the reduction in surfing passion for them, they now become less interested in it. So the company should have interpreted this fact with full force, else they face the defeat.
Recommendation for Billabong on market entry strategies and the methods that could have helped them to prevent their rejection-
Based on this case study, we have imparted specific recommendations, that should have helped the company to prevent failure in Australia.
Definite strategies should have been made keeping market demands and lacks in mind.
Billabong should have registered for more company outlets rather than buying other brands for promoting their brand name. Also, the lack of customer-oriented products that made it to the market caused this huge pitfall.
The company should consider opening its doors to the Asia-pacific or European market because it’ll have a greater chance of success out there.
Developing a strategic analysis from which they should have been able to know what the customer and the Market Demands-
SWOT analysis is one of the basic requirements for serving an enterprise’s purposes for profit.The company should have applied its own weighty brand name, in the case of Australia. For targeting the potential customers, Billboard should have taken more accurate strategies like forming Billabong villages nearer to the seashore. The brand name would have worked wonders for drawing new customers.
By establishing credibility and trust with their customers, the conversion rates should have been higher than usual. Making proper marketing strategies for generating awareness amongst the customers can add worth to the market value of this company.
It highlights the undifferentiated surf wear development skills of the company.
This case study regarding the failure of the Billabong company is Australia added some real and vital points as the basis of the case. With significant brand management and speedier production are market-oriented products- this twofold way can be a comprehensive solution to all the company’s troubles. More emphasis on maintaining quality products to fulfill the requirements of individual customer segments is very important for the company.
A short SWOT analysis is also included in the study to comprehend the problem with easy and profitable solutions by student assignment help.
Implementation of analysis drawn from the cultural scenario and marketing perspectives should be the highest priority for the company to get back at the game.