How Geox has Rejuvenated the Footwear Industry Arnaldo Camuffo

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1.The Geox’s story
A wine maker by ancestry and training, Mario Moretti Polegato stumbled upon his destiny as inventor and entrepreneur 13 years ago, during a wine convention in Reno, Nevada. To relax between conference sessions, he went hiking in the Rockies, during which time his feet began to sweat and burn.(http://www.ghd4hairs.com)

So, he took out his pocket knife and cut holes in each of the soles of his sneakers to let the heat out. Back in Italy, he realized that no one had successfully solved the problem of how to design shoes that both kept out water and ventilated air. He spent three years studying, experimenting and doing research and development, eventually creating Geox, a shoe which combines a perforated rubber sole with a sophisticated membrane. He patented it and knocked on the doors of the big ootwear manufacturers: Nike, Adidas, Timberland and others.

They all turned him down. Instead of giving up, Moretti Polegato took on five employees and started production on his own. Today, only 10 years later, Geox has become one of the world’s largest manufacturer of “brown shoes” (Table 1), outperforming the industry in terms of profitability and business growth (Figure 1 and 2), and becoming an internationally celebrated case of business innovation1. (http://www.fad77.com)

Such success is striking, given the fact that Geox is a young company, in a mature, global and extremely competitive industry, and is based in Italy, a country that, albeit traditionally strong in footwear, seems to be lagging behind in terms of innovation and growth. Yet, despite the skepticism of some financial analysts, and notwithstanding the strong Euro, thus far Geox’s key financials look so good that a legitimate question arises: how did they do it?

2. Seeking distinctive ways of competing in mature industries When we see a company outperform competitors in a given industry, it’s because it has created a difference that it can maintain. The essence of strategy is exactly this: choosing a different position within an industry, that involves a unique configuration of activities (Porter, 1996). The uniqueness of such a configuration rests not only on which activities a company performs and how it configures each of them, but also on how such activities relate to one another (Milgrom and Roberts, 1995; Whittington and Others, 1999). In fact, while achieving excellence in performing individual activities or functions is important, strategy is about combining activities in an original fashion (Mintzberg, Ahlstrand and Lampel, 1998).

Sustainable competitive advantages are created from the way activities fit and reinforce one another (Miller, 1996). Unfortunately, different strategic positions and unique configurations of activities are neither known a priori by managers nor able to be be picked “off the shelf”. Identifying them is a complex exercise, requiring vision, insight, effort and risk taking.

In most industries, few firms have the capabilities, the determination, and the good fortune to be able to pursue strategies that are diverse (McGahan, 1999). More often, they do not pursue diversity and behave as if there were only one possible and “right” strategy (Porter and Siggelkow, 2000). But, by doing so, they navigate the “Red Oceans” of the known market space (Kim and Mauborgne, 2004). They oblige themselves to fight for a greater share of existing demand, to accept the current industry boundaries, and to obey the competitive rules of the game.(http://www.fad77.com)

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Given the fact that Geox is a young company GHD Hair Straightener, in a mature, global and extremely competitive industry, and is based in Italy, a country that, albeit traditionally strong in footwear, seems to be lagging replica handbags behind in terms of innovation and growth.

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