International Management- Hunter Boots Ltd.

Topics: Wellington boot, Boot, Hunter Boot Ltd Pages: 5 (1727 words) Published: April 23, 2013
“Designed to be outstanding in any field, from city streets to music festivals and rugged countryside, Hunter footwear is recognized for its performance durability and comfort – achieved through a fusion of tradition and technology” (Hunter Boot Ltd., 2013)

Hunter Boot Ltd. was founded in 1856, styled as the North British Rubber Company, producing not only rubber boots but also tyres, conveyors and flooring. The famous ‘wellies’ or wellington boots rose to fame when they were mass-produced during World War I to supply the army. By the end of the war ‘wellies’ had become popular for use among the general population as well. After changing ownership several times Hunter Rubber Company became a standalone company in 2004, and was bought out of administration as Hunter Boot Ltd. in 2006. Now solely focusing on footwear, the company has since positioned itself firmly and both the UK and USA footwear markets. In 2008 Hunter closed its plant of 96 years and relocated its headquarters to Edinburgh (Scotland) and production to China. Striving for more efficiency and effectiveness in the production process Hunter boots are only still visually similar to its original design, whereas they have in fact become virtually identical to the boots produced by its competitors. Nevertheless Hunter has experienced a period of considerable growth and is now distributed internationally in over 30 countries (Hunter Boot Ltd., 2013).

The author feels that is important to make a clear distinction between the years up to 2006, which is the year Hunter Boot Ltd. was placed into admission, and the years 2007 and onwards to where Hunter Boot Ltd. is currently controlled by Searchlight Capital Partners LP (SCP)., which is a private investment firm operating in North America and Europe. First this paper will analyse the rise, and demise, of the company and then will shed some light on its resurgence in popularity and turn-around sales in recent years (Paton 2011).

According to Porter (1991) sustainable competitive advantage in international business is determined by the four factors that form the diamond of national advantage; factor conditions, demand conditions, related and supporting industries and firm strategy, structure and rivalry. The factors are interdependent and all are essential for achieving (international) success. The application of this framework certainly holds true for Hunter Boot Ltd.’s (international) success from its founding years to the early 2000’s.

Diamond of National Advantage| Hunter Boot Ltd. 1856 – 2006| Relative level of Importance| Factor Conditions| ‘Dumfries’ production plant, skilled labor and sufficient infrastructure.| High Importance| Demand Conditions| Wet weather conditions make suitable footwear a necessity. Army supplier during both WWI and WWII.Loyal customer ranging from the British Royal Family to general population.| High Importance| Related & Supporting Industries| Close working relationships with suppliers and end-users within national boundary.| Medium Importance| Firm Strategy, Structure and Rivalry| Ability to manage vast growth in both production and labor force. Ambitious management strategy.| High Importance| Table 1: Porter’s Diamond of National Advantage applied to Hunter Boot Ltd. 1856-2006

The company’s decline became inevitably clear in the years 2003-2005 when it recorded a pre-tas loss of approximately £700,000 with a net debt that had grown to more than £2m. These perils can be explained by two of Porter’s factors. Firstly the company’s Factor Conditions, mainly its production plant, changed from major strength to major weakness. The location and facilities that helped bring to company to greatness during the war became hopelessly outdated in later years leading to relatively high costs of trying to continue its Scotland production. Lower production costs abroad, due to surges in gas, electricity and rubber prices in the UK, and the overall British...
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