In the mid 1960s, Jake Burton was one of the thousands of young people who enjoyed surfing on snow with Sherman Poppen’s Snurfers. In 1977, Burton was surprised to discover that, in the intervening years, the industry had not developed, expanded, or innovated much. Noting this lack of development in snowboards, Burton quit the Manhattan business world, moved to Londonderry, Vermont, and started designing and testing his own snowboards. From his recognition of a product need, the possibility of a profitable market niche, and commitment to a quality product came the world’s first snowboard factory—Burton Snowboards.
Like most new small businesses, the early years were filled with change and hard work. In just its second year, Burton moved the company into a farmhouse in Manchester, Vermont. Working out of his home, a group of four to five workers produced, sold, and repaired all the Burton snowboard models. The company’s toll-free customer service line rang in Burton’s bedroom throughout the night. He would often load his car and visit as many as 10 shops a day, pitching the company’s boards to shop owners whenever orders were low.
In the 1980s, Jake realized that, for the sport to grow in popularity, it had to become more than just a cult sport in which snowboarders used sledding hills or snow-covered golf courses. Burton lobbied eastern U.S. ski resorts to open their lifts to snowboarders, and one by one they did. As more resorts opened to snowboarders, the demand for the company’s snowboards and innovations in them increased rapidly.
For example, edgeless wooden boards that were best suited for powder weren’t optimal for the icy conditions of eastern ski resorts. These conditions still drive innovation at Burton Snowboards. The company’s basic policy is that, if a board doesn’t work in Vermont, it doesn’t get made. As the company continued to grow, Burton moved the company to a modern facility in Burlington, Vermont.
To remain the world’s leader in snowboarding and snowboarding accessories, Burton must constantly monitor the company’s external environment. He realizes that the environment’s most influential factors are snowboarding’s social trends. Participants in snowboarding have their own slang, dress, and activities that dominate the industry’s culture. It is Burton’s responsibility to ensure that the company’s products match the changing tastes and preferences of this dynamic group. Although the company produces a product for all ages, its primary target age group is 12 to 35. However, the preferences of this group aren’t homogenous, so the company develops different boards for various segments of it.
The company has a strong commitment to technological innovation, annually redesigning and updating its core products. It takes advantage of the latest computer innovations, allowing it to simulate the hills and mountains that its boards will “surf” and improve product design before actually making a prototype.
Burton Snowboards has led the industry by being the innovator and has attracted many competitors who often copy or imitate its earlier designs. The industry also is steadily consolidating small competitors into larger corporations. However, Burton believes that the company’s future is secure so long as it remains focused on serving its core consumers. To do so, Burton Snowboards needs to remain committed to producing the highest quality (even if that means higher costs) and most innovative snowboards on the market.
Questions
1. Describe the environmental factors affecting Burton Snowboards.
Burton Snowboard’s primary environmental factors are the social trends in snowboarding, the demographics of its consumers, technological advancements, and global competition. The social trends are the most important influence on the company, with its consumers describing snowboarding as a way of life and having their own culture of clothing and slang. The leading demographic factors are the age and gender of its consumers. The company produces snowboards for men and women of all ages, but its key demographic group is the segment aged 12 to 35. The technological environment of the industry mandates that the company continuously innovate in terms of product design and quality. Finally, competition in the industry is increasing as small competitors are becoming consolidated into larger competitors.
2. Identify which of the five competitive forces in the industry have the greatest impact on Burton Snowboarding.
Burton Snowboards and the rest of the industry are affected to a greater or lesser extent by all five competitive forces (competitors, new entrants, substitute goods and services, customers, and suppliers). Markets (customers) are the company’s primary concern, so it must actively monitor, assess, and meet their preferences in snowboards and accessories. Moreover, Burton Snowboards must continually monitor the consolidation of its competitors and take actions to head off challenges to its dominant market position.
3. Is socialization a major factor at Burton Snowboards? Explain your answer.
Socialization is the process by which people learn the values important to an organization and the broader society. People who accept and act in accordance with these basic values are less likely to sympathize with positions or take actions that threaten the organization or the society. At Burton Snowboarding, the company’s employees seem to embody the passion for snowboarding and an appreciation for customer preferences. Whether these views were innate or learned through the socialization process, the company’s employees focus on satisfying consumer desires. Further evidence of this unified view as a result of socialization can be found in the employees’ consistent testimonials regarding the importance of new-product innovation and a commitment to making the best snowboard possible (even if it costs a bit more).
