Havainas_Summary Case
Havaianas – The Flip-Flop Case
Purpose
Apply the tools studied in the classroom to assess Havaiana’s intended strategy to expand its business in international markets: specifically China, India and Pakistan.
Company’s main competitive advantage: differentiation, diversification and innovation of the product as well as it’s brand.
Brief history of the company:
Havaianas began its operations in 1962 with the launch of a simple flip-flop model, made from synthetic rubber and low cost production. The goal was to create a high- scale production in order to target the low-income population with affordable prices.
In the 90s Havaianas reached sales of 100 million pairs per year. With an increase of copies made by their competitors and the fact that a negative image among the higher income population resulted in low profit margins .
The company's profitability worsened in 1994 alongside the economic upraise in Brazil. The increase of the population’s standard of living and purchasing power attracted competitors. E.g.: There was “Grendene”, a company that released flip-flops called “Rider” and - despite a higher price - started to win the market due to a strong advertising campaign.
The new market environment forced Havaianas to think about adapting new strategies. It released several versions of sandals and increased its advertising campaign as well. Initially Havaianas possessed only one model of flip-flops with 5 different colors and now, new product lines were created with the objective to target a higher-income population. They also wanted to reach specific audiences: children, women and surfers. Also the advertising campaigns were intensified.
During the 90s, Havaianas mainly exported within Latin America as well as to some countries in Asia and Africa (same initial strategy of large-scale, affordable for low-income population). It was easy to be copied however and the presence of Chinese manufacturers with even lower production costs
Purpose
Apply the tools studied in the classroom to assess Havaiana’s intended strategy to expand its business in international markets: specifically China, India and Pakistan.
Company’s main competitive advantage: differentiation, diversification and innovation of the product as well as it’s brand.
Brief history of the company:
Havaianas began its operations in 1962 with the launch of a simple flip-flop model, made from synthetic rubber and low cost production. The goal was to create a high- scale production in order to target the low-income population with affordable prices.
In the 90s Havaianas reached sales of 100 million pairs per year. With an increase of copies made by their competitors and the fact that a negative image among the higher income population resulted in low profit margins .
The company's profitability worsened in 1994 alongside the economic upraise in Brazil. The increase of the population’s standard of living and purchasing power attracted competitors. E.g.: There was “Grendene”, a company that released flip-flops called “Rider” and - despite a higher price - started to win the market due to a strong advertising campaign.
The new market environment forced Havaianas to think about adapting new strategies. It released several versions of sandals and increased its advertising campaign as well. Initially Havaianas possessed only one model of flip-flops with 5 different colors and now, new product lines were created with the objective to target a higher-income population. They also wanted to reach specific audiences: children, women and surfers. Also the advertising campaigns were intensified.
During the 90s, Havaianas mainly exported within Latin America as well as to some countries in Asia and Africa (same initial strategy of large-scale, affordable for low-income population). It was easy to be copied however and the presence of Chinese manufacturers with even lower production costs