Amer Sports' strategy
Amer Sports’ strategy is based on sports, leisure-time activities, and well-being. Rising standards of living, the greater leisure-time people now enjoy, and growing awareness of the importance of physical and mental health open up future growth potential for the sports equipment industry. In addition to profitable organic growth, Amer Sports is focused on finding and effectively harnessing synergy benefits as well as cooperation within the group.
In line with this strategy, Amer Sports will continue to implement its growth strategy, of which the following are the cornerstones.
Leverage key brands to fully capture further growth opportunities
Amer Sports can further leverage its key brands by pursuing a number of strategic initiatives. For example, Amer Sports has launched a range of outdoor apparel and footwear for trail running under the Salomon brand, tennis apparel and footwear under the Wilson brand, and Mavic cycling apparel and footwear to capture the growth trend in the apparel and footwear market. In addition, Suunto has in recent years expanded its offering of wristop computers to the training and fitness category, including the targeting of the growing heart rate monitor segment. Another focus area has been to expand into protective equipment and enabling gear, which complement Amer Sports’ sports equipment offering. Amer Sports intends to continue to achieve organic growth by leveraging the customer loyalty of its key brands to launch new product lines within its core categories.
Continue to develop innovative products
As it is typical for the sporting goods industry, a substantial portion of Amer Sports’ net sales are generated each year by products that are in their first year of existence. Therefore, successful research and development is an important part of Amer Sports’ business, and the company seeks to continually introduce new technologically advanced products that meet trade customers’ and consumers’ needs.
Amer Sports supports its brands with significant investment in research and development, which represented 3.4 percent of its net sales at the end of 2009. Amer Sports also maintains a patent portfolio to protect its inventions.
Focus on further expanding the geographical reach of Amer Sports’ operations
Amer Sports intends to continue to expand the geographical reach of its operations. Some of Amer Sports’ brands have traditionally been stronger in certain specific geographic markets. For example, Precor is a well-recognized brand in the United States, but a challenger in Europe, providing it with growth opportunities in this region.
Wilson has been successful in growing its sales in Latin America by focusing on soccer, the most popular sport in the region. In addition, Amer Sports believes that certain emerging markets, such as China, Russia, and Brazil, provide attractive opportunities for growth as their standards of living improve and consumers’ disposable incomes grow. Amer Sports has already opened sales offices in these markets. As the retail infrastructure in most of the emerging markets is still undeveloped, Amer Sports considers the opening of brand stores important in accelerating growth and gaining brand recognition in those markets as compared to developed markets that have traditionally been retailer driven.
Increase direct -to -consumer contact
Like many other industries, the sporting goods business is changing as consumers have begun to desire more direct relationships with their favorite brands. In order to further promote its brands and access consumers directly, Amer Sports has adopted new multi-channel sales and integrated marketing strategies. These strategies involve opening additional brand stores and reaching out directly to consumers both via events and on the Internet. By opening brand stores and engaging with consumers directly, Amer Sports gains information regarding consumer behavior more efficiently, enabling it to better react to changes in the market, and develop more attractive products and marketing approaches based on direct consumer feedback.
Further improve operational efficiency
Amer Sports plans to continue to improve its operational efficiency and profitability. For example, Amer Sports opened its Asian sourcing office in Hong Kong at the beginning of 2007 to integrate its Asian sourcing activities, and it will continue to pursue other opportunities to leverage the Group’s scale, bargaining position, and talent base in its sourcing activities. The company is also considering further opportunities to centralize its logistics and is in the process of implementing an integrated IT system, known as Global One, which is designed to harmonize its business processes. Amer Sports believes that the company can achieve significant further cost savings through these measures.
Make strategic acquisitions and/or divestments
As part of its strategy to grow its business, Amer Sports will continue to consider acquiring companies that support its strategy, should attractive opportunities arise. Amer Sports believes that the most successful sporting goods companies will be those with a diversified and balanced portfolio of products that focus on creating strong global brands. To further focus its brand portfolio, Amer Sports may also consider divesting some of its brands in the future.