Founded in 1928, Speedo is the global leading swimwear brand that has succeeded and thrived through changing market landscapes. The reason behind the Company’s longevity is its ability to adapt to its surrounding environment through maintaining a close alignment of its business and operating models. Today, Speedo’s business model is being the swimwear for all while continuing to build on its unique angle as the “fastest” and most technologically advanced swimsuit for competition. There are two key areas where Speedo’s operating and business models align to create value for its customers.
Central to Speedo’s business model is innovation and constructing the most efficient swimsuit for the elite swimmer. Innovation was actually what brought Speedo to the public spotlight in 1928 when Speedo created the Racerback suit (the world’s first non-wool swimsuit). Since then, Speedo has consistently produced cutting-edge suits, usually right before the summer Olympic Games when swimming gets much of its publicity. For example, in 2000 Speedo launched the Fastskin® swimsuit inspired by shark skin and today’s latest suit, the LZR Racer X, is considered to be the “fastest” with compression and water repellency features.
Supporting and integral to the business model is Speedo’s research & development facility, particularly the Aqualab. Its operating model is such that not only does Speedo bring NASA specialists to work on understanding the aerodynamics of body movement, but it also brings Olympic swimming champions for user insights. For instance, the aforementioned LZR Racer X is designed with lightweight fabric that enhances water repellency while incorporating a compression system for drag-reducing streamlined form. The intellectual property developed from Aqualab, as well as the extensive and diversity of resources Speedo funnels into research, operationally supports and creates the competitive advantage of creating the fastest suit and reinforces its business model. None of its competitors, whether it’s swimming-specific TYR or global athletics brand Nike, invest as much in innovation as Speedo does.
Swimwear for All
In addition to being the innovators of swimming, Speedo has an overarching mission to be the swimwear of choice for all, from the recreational swimmer to the Olympic champion. Total addressable market of global swimwear/beachwear is expected to reach $20 billion by 2020 and to capture this, Speedo has broadened its business model recently to target the non-competitive consumers. It hired brand chief Jim Gerson (formerly at The North Face) in 2010 to tackle the issue of brand expansion to the broader market. Gerson faced the similar issued at North Face in the early 2000s where they converted from a mountaineering brand to an aspirational brand. Post Gerson joining in 2010, Speedo focused on expanding the customer base to non-competitive athletes, a lot of which stemmed from the partnerships it formed (see final section).
From an operational perspective, Speedo became the first swimwear company to launch a digital platform to embrace the broader swimming community. Pace Club, which rolled out in 2011 (latest version called Speedo Fit), expanded swimming’s relatively “individualistic” sport to an interactive community-based environment through having users share their training programs, view technique tips from Speedo professional swimmers, and engage through social media. This rollout is consistent with Speedo’s shift to increase its emphasis in its aspirational lifestyle product line. Speedo now categorizes its swimwear by performance, fitness and recreational, all having equal importance on its website.
Combining Innovation and Broad Community
What is unique about Speedo is its success in integrating both goals of performance and expanding to the broader community. While on the surface these may seem to be contradictory, Speedo has leveraged its elite swimmers (Speedo’s core marketing is through athlete sponsorship) to integrate professional swimming to the community through broader social causes. An example of this is Speedo’s “Art of the Cap” program where Olympians and artists collaborated to create swim caps depicting stories of various community-wide causes. For example, Olympic gold medalist Dana Vollmer shared her story of overcoming life-threatening heart condition and her integrated heart cap links closely to the Simon’s Fund to raise awareness of cardiac arrest in children. This combination has led to high performance, as more gold medals have been won in a Speedo than in any other brand in every Olympics (innovation indicator) and record-high revenues was fueled by the non-performance swimwear segment in 2014 (community-reach indicator).
Overall, Speedo’s 87-year successful history is due to its close business and operating model alignment that drive market leading performance. It has maintained its key ingredients behind creating cutting-edge swimsuits while embracing each and every swimmer.
- Morrison, Jim. How Speedo Created a Record-Breaking Swimsuit. http://www.scientificamerican.com/article/how-speedo-created-swimsuit/
- Pentland website; http://www.pentland.com
- Philip Watts Design, Aqualab. http://www.philipwattsdesign.com/bespoke/speedo-hq-nottingham
- PVH website; http://www.pvh.com
- S&P Capital IQ; Speedo, Pentland, PVH, TYR, and Nike. https://www.capitaliq.com
- Speedo record sales help owner to big revenue rise. Herald Scotland, http://www.heraldscotland.com/business/13166892.Speedo_record_sales_help_owner_to_big_revenue_rise/
- Speedo website; http://www.speedo.com
- Swimming World. http://www.swimmingworldmagazine.com
- TYR website; http://www.tyr.com/
- Zmuda, Natalie. Speedo Wades Into the Social-Media Pool. http://adage.com/article/news/speedo-wades-social-media-pool/228900/