Chapter 1 Columbia’s resource base

Chapter 1
Columbia’s resource base, including both tangible and intangible resources:
The resource base theory of the organization concentrates on different resources, capabilities and core competency with the firm that will allow it to be in a competitive market (Fernie et al. 2003).Therefore, the resources are classified by Wernerfelt et al 1984 in two categories which are tangible and intangible resources. First of all, tangible resources of Columbia sportswear are those resources that are fixed and stable for the firm that have a long run capacity, and they consist of the physical resources that includes 118 retail stores in 2016 that are located in the United States, Latin America and Asia, Europe, Middle East, Africa and Canada (Columbia sportswear company, Ca.2016, P: 21). On the other hand, the intangible resources consist of 6023 employees that are highly skilled in the company, and also of the rational capital that focuses on the relationships between the organization and the external environment (Tabares, et al.2015). For example, the suppliers that provide the company with special fabrics and suitable zippers used in their items , also the company design, source, market and distribute the products under four primary brands which are Columbia, Sorel, Mountain Hardwear, PrAna in order to satisfy the customers’ needs through different trademarks that are considered to be one of the intangible sources such as the Columbia diamond shaped logo, the Mountain Hardwear nut logo, the SOREL polar bear logo, and the prAna sitting pose logo. The company considers these trademarks is one the main characters that are used by customers in order to recognize their products from the rivals’ products (Columbia sportswear company, Ca.2016, P.4).

Columbia’s overall (horizontal and vertical) business network:
The business network in Columbia sportswear is based on two networks, the first one is the vertical network that includes the upstream and downstream networks. Let’s start with the upstream vertical network that focuses on the relationship between the internal team of specialists of the organization and with the suppliers who are freelancers in order to visualize, improve and to market the newest technology and items in order serve the best quality and service. Also, they have created relationships with experts in the field of chemistry, bio chemistry, engineering, industrial design, material research, graphic design and packaging, for example Columbia sportswear is a partner with energy trust of Oregon which provide strategies for reducing and managing the energy, and generating renewable power in order to protect the environment. In addition to the first relationship, the company also has long-term relationships with manufacturing companies which are located outside the United States. These relationships represent the main factors of success that Columbia is achieving now for their products (Columbia sportswear company, Ca.2016, P.4,8).Moreover, Columbia serves the community by having other relationships with societies and non-profit organizations which are the grassroots, hiking societies, national breast cancer foundation and the national park foundation (Columbia sportswear company, Corporate responsibility). The second part of the vertical business network is the downstream network that focuses on the relation between the organization and the customers’, and the distributors’. Columbia is targeting a huge audience by differentiating their products by using the integrated marketing communication tools that includes online advertising, social media, television and print publications in order to deliver their mission and message that explains the features and the benefits of their products. Furthermore, they are building relationships with distributors by extending credit to them without any guarantee, and by offering them discounts for placing advanced orders (Columbia sportswear company, Ca.2016, P.8).

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Secondly, the horizontal business networks focuses on the competition that is facing the firm, and in Columbia there is a high competition in the market and specifically for the outdoor and recent lifestyle clothing and for the footgear. The competition that is facing Columbia is from large companies in China and Korea that they have a large number of heavy local and global brands. In other countries, such as Europe, they are facing threat from brands that have a big market share in more than European markets. Also, Columbia is facing a big threat from outside the market. For example, they are paying a lot of money for the import duties and also they are dealing with complex technical features, textile and raw material restrictions or other restrictions from federal and foreign governments (Columbia sportswear company, Ca.2016, P.9).

Columbia’s vertical (supply network) collaborations:

Figure SEQ Figure * ARABIC 1: Shows the Vertical and Horizontal supply network (Johnson, Scholes & Whittington 2005)
The vertical supply network in Columbia is divided into two parts, the first one is the backward integration where Columbia is operating with manufacturing facilities that are located outside the United States, and Columbia controls the supply network from a global and local perspective by adjusting and changing the global production environment, raw material costs and transportation costs. Also, Columbia is producing their clothing, accessories and the raw materials in 17 countries including Vietnam and China with almost 65% of their production in 2016 (Columbia sportswear company, Ca.2016, P.8).

The second part of the vertical supply network is the forward vertical integration. Columbia controls 11 manufacturing contact offices in Asian countries in which they create a connection between the direct employees of the organization and with their contract manufacturers in order to check the production cycle and procedure. Moreover, Columbia is selling a wide range of its products through licensing’s arrangements with third party manufactures and with professional sports organization and entertainment companies (Columbia sportswear company, Ca.2016, P.4).