Icebreaker Case Solution

Arjun H. Shukla

Section C

Full Time MBA

Icebreaker Case

1. What have been the reasons for Icebreaker’s success to date?

Ice breaker’s success till date stemmed from the following factors:

• Superior product quality – Icebreaker’s products, made from superior quality Merino wool, were unlike anything being offered in the market. Being different from existing polymer or polyester offerings was an obvious added bonus, however, Icebreaker’s products did not possess any discomforting qualities inherent in wool – such as itchiness. Furthermore, it was light, breathable and comfortable.
• High premium on prices – owing to its superior attributes, Icebreaker sold its products at a 30-35% premium compared to alternative offerings, and this substantially aided the company’s rapid growth.
• Leveraging strengths in distribution Channels – Merino’s home office concentrated mainly on three core functions: marketing, merchandising and design. Actual processing and production was delegated to Hong Kong, South Korea and other Asian countries, which helped Icebreaker maintain a lean cost structure.
• Strong Leadership – Jeremy Moon embodied strong leadership qualities that are crucial to any newly founded business. Attributes such as having a long term vision, having the desire and ability to expand aggressively and humility to learn from mistakes were crucial for Icebreaker’s survival while traversing uncharted waters overseas.

1. Why had distribution succeeded in Europe, but failed in the US?

1. What should Icebreaker try to become? What could help or hinder in this quest?

• In my subjective opinion, Icebreaker should stay true to its clearly defined identity – a producer of superior quality, differentiated apparel that offers premium products.
• Continued investment in R&D would help it maintain a competitive edge over its rivals.
• It needs to thoroughly study the intricacies of any potential market it seeks to enter and should be aware of the risks associated with doing so, rather than just reflected in hindsight.
• Setting-up shop is not the only option of expansion into a country – if Icebreaker is entering uncharted waters then it should start by simply exporting its goods to a particular country (through online channels), before deciding upon having a concrete presence in the market.