IntroductionRipCurl has been operating in the surf industry in Australia since 1969. Over the years, the company has continually adapted and improved its operational strategies to meet the ever-changing demands of consumers and ensuring they are still “sticking to their grass roots”.
Through a combination of a strong company visions and well-founded operational strategies, they have given themselves a sustainable competitive advantage against large-player competitors such as Mambo, Billabong, Rusty and Quicksilver. Many of these strategies implemented relate to quality, dependability, flexibility, speed and cost and the methods the company has utilised to reduce costs and improve efficiency.
Executive SummaryThis business report aims at highlighting the importance and relevance of business operational strategies in the success of RipCurl, a clothing company that is known for selling surfwear and accessories all across the world. In 2013 the company generated total revenue of $401,696,000 including sales and other revenue. And had 635 employees in Australia including employees from all firms under the company’s control.
QualityRip Curl is perceived as good quality and consumers who buy Rip Curl products expect a certain level of quality. In managing the quality of products, a good relationship with suppliers is essential. It is important for Rip Curl to trust their supplier, for example if a problem arises, a quick resolution can be reached with the supplier. The strategies of trust and flexibility are used to achieve this. A ‘Sweat Test’ is the strategy used to manage the quality, testing how effectively the T-shirts absorb perspiration. Sewing of the garment is the next step, it’s carefully checked against a particular specification sheet and then finally a quality check on the print is carried out.
FlexibilityFocusing on the brand qualities also requires flexibility; a strategy Rip Curl took to adapt to their target markets’ changing needs and wants quickly yet effectively. An example of the strategy used is to monitor its productivity where the local production offices meet regularly to ensure that the global positioning guidelines are being followed without eliminating regional influences.
Flexibility is also applied to the corporate identity through regular logo redevelopment and design, keeping interest and uniqueness among the consumers. It is a very competitive market, where the colour, designs, and T-shirt price are all crucial to consumers. Rip Curl maximises its profits to grow its markets share, ensuring they are operating as efficiently as possible and stay ahead of their competitors.
TechnologyStrategies in relation to adapting modern technology has had a significant impact on sustaining RipCurl’s competitive edge, especially through the printing of the T-shirt. Technology is one successful strategy that helps the complex system of printing the T-shirts possible. With the use of: Automated welting machines, which are used to fold and stitch hems, as they are assed through. Computer Aided Design (CAD) is used for the Pattern Plotting System, which assists in working out the patterns, grading of sizes and the more complicated patterns.
SpeedSpeed is an effective strategy that has been successful in maintaining RipCurl’s competitive advantage. The strategy of facility design is one that implements speed. The Torquay factory is a very large open design, without any supporting columns to get in the way of machinery. The factory is therefore flexible enough to be changed into a warehouse if it is ever required. Different doorways are used for suppliers coming in and going out.
Materials management is another strategy that RipCurl maintains by selling packs of 24 t-shirts in assorted sizes and colours for each print then decide what these assortments will be. This makes the factory manager’s job much easier and simplifies production planning where ordering of fabric quantity and colours is concerned.
CostOutsourcing, another major strategy, helps maintain RipCurl’s competitive advantage by reducing costs of components as they can produce the item more cheaply due to economies of scale and increased speed and quality of outputs, due to technology and global sourcing.
Global SourcingThe T-shirts are manufactured at Torquay, Victoria; about 250,000 are produced at RipCurl, where 125,000 are produced in Australia and the rest manufactured in China and Fiji. This strategy ensures fast response to markets needs and the ability to correct imported mistakes cheaply.
ConclusionTogether, all these operational strategies that have been put into place and maintained have helped RipCurl significantly to remain the market leader for over 30 years.