A shoe and a cash cow

How come a tennis shoe is still a big hit 40 years later....

Do you remember the BCG Matrix? The business model from 1970 by Bruce Henderson from the Boston Consulting Group. The BCG Matrix classifies any product into one of four categories - depending on its market share and market growth. So as can be seen below you have the Star, the Dog, the Question mark (also called the problem child) and the Cash Cow.

In business school the focus was always on 'Star' examples. It was just more fun and uplifting to discuss a 'winner' with high market growth and high market share. So we discussed 'Stars' whilst we didn't spend much time on 'Dogs' or 'Question marks' - and certainly not on 'Cash Cows'. Just the word 'cow' made us shun away from spending much time on this category.

But now is the time to catch ups and shine some positive light on the 'Cash Cow'. Because I think I just found the right example! A product which is just as old as the BCG Matrix itself. Namely, the 'Stan Smith' tennis show by Adidas.

A bit of background here:

I am sure that everybody knows about German sport apparel manufacturer Adidas. Founded in 1949 Adidas is today one of the world's most succesful and recognised brands. And its tennis show 'Stan Smith' is a flagship product in the Adidas portfolio. This tennis show was originally designed back in 1965 under the name "adidas Robert Haillet", but renamed 'Stan Smith' in 1971 - so more than 45 years ago. Stan Smith is a a former world No. 1 American tennis player and two-time Grand Slam singles champion. Stan Smith retired in 1985, and today he is 70 years old.

I mention his age because I find it a bit amusing and also surprising that a man who could easily be their grand father is a brand name 'used' by teenagers and young adults all over the world. The Stan Smith tennis show - although mostly used as a sneaker today - is an all time big seller, and a huge revenue machine for the Adidas group.

Most of these young people probably don't even know who is Stan Smith (or care). Most likely they don't even play tennis. But they all wear the Stan Smith tennis shoe - and proudly so. Which is a bit funny as young people often reject their parents - and certainly their grandparents - choice of products and brands. Just think about Levi's for instance.

The 'Stan Smith' is a real 'Cash Cow'! 50 millions pairs sold to this day - with a design which has remained unchanged ever since the first pair hit the shelves in 1971. It is a 'Cash Cow' as it has a big market share, but relatively low growth. And I am sure Adidas makes a lot of cash on this product as there is very little money spent on product development (if any), new distribution channels or marketing support. Adidas can just lean back and enjoy the never-ending sales. For very little investment and innovation.

Stan Smith was already 'Cash Cow' when I went to business school in the 80s! I just wish we had spent more time back then on understanding 'Cash Cows' - not only 'Stars'. Because the real star in the BCG Matrix is the Cash Cow! The problem, however, is identifying what it takes to make a Cash Cow, and certainly accepting that it takes patience and a long-term view.

PS If only I understood why so many teenagers and young adults choose to wear the Stan Smith tennis shoe. I mean it is a nice looking shoe, but so are many other sneakers and tennis shoes. So what makes Stan Smith so special? Anybody our there who can shed some light on the 'Why'?