Breathing Shoes

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Submitted By prateek07
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Breathing Shoes and Complementarities: How Geox has rejuvenated the footwear industry

Arnaldo Camuffo, Andrea Furlan, Pietro Romano, and Andrea Vinelli

MIT-IPC-05-005

June 2005

Breathing Shoes and Complementarities: How Geox has Rejuvenated the Footwear Industry Arnaldo Camuffo, Andrea Furlan, Pietro Romano and Andrea Vinelli MIT IPC Working Paper IPC-05-005 June 2005
We apply the related notions of complementarities and performance landscapes to study strategic positioning in the footwear industry. We use this theoretical framework to analyze Geox, an Italian footwear manufacturer that, in less than a decade, has grown to be one of the world largest brown shoe manufacturers, outperforming the industry in terms of market and financial results. We describe Geox’s choices within four stages along its value chain: product design, marketing and communication, production and supply chain, distribution and retail. We show that, though grounded on product innovation (the Geox breathes® patented system which allows ventilation in waterproof rubber sole shoes), Geox’s competitive advantage has not grown out of operational excellence in single activities in the business, but, rather, derives from a unique and consistent configuration of complementary activities. Such configuration represents an innovative strategic position and corresponds to a high performance peak in the footwear industry performance landscape. The case study provides anecdotal evidence in support of complementarity-based economic theory, showing how complementarities among activities help understand increasing returns to scale, firm size and business growth even without the standard assumptions about economies of scale. It also confirms that, in the presence of complementarities, rivals find strategy imitation and reverse engineering difficult due to the unique nature of the relationships…...

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