NorthFace Case Study

ENT 440—New Product Development—The North Face

The North Face was founded as an outdoor company which made tents, sleeping bags, packs (which they referred to as “hard goods”) and a few items of outerwear. The company built is leading brand by producing the highest quality products which were backed by a lifetime warranty and prided itself on making long lived, sustainable products. As it grew the sales and focus of the company shifted heavily towards fall outerwear sales, This created some unique challenges for the company.

1).. The rate of growth of tent sales which was the largest selling category of “hard goods” was slowing. Management believed this was caused by two factors: One, the company’s tents were so well made they lasted forever and, unlike outerwear, most people didn’t need more than one tent. And two, the original excitement regarding “hard goods” had been around innovation but most of the innovation had recently gone into developing apparel.

2) The North Face believed one of its key points of differentiation as a brand from other outdoor apparel companies was the fact that it created world class outdoor “hard goods” which were used by influential outdoor explorers in doing world class outdoor explorations. They were concerned that if its image became one of being only an apparel company it might undermine the unique brand they had developed.

3) Sales of apparel and outerwear was almost all in the Fall and Winter months. Sales of tents, sleeping bags and tents were mostly in the Spring and Summer months. Initially this nicely balanced production and sales over the year, but as apparel sales grew exponentially, the sales and production (and cash flow) started to become imbalanced.

The North Face management pondered two questions:

1.. How would it regain balance in its product mix?

2. Where should they go to rekindle the innovation in their tent line.

What would the students suggest to The North Face management?