Swot Analysis Of Skullcandy

Skullcandy competes with a long list of companies including Sony, JVC, Bose, Beats by Dr. Dre, Nixon, Adidas, Incase, Urbanears, Monster Cable Products, Sol Republic, iFrogz, Nike and Sennheiser. From the every beginning when Skullcandy is founded in 2003, Skullcandy built their brand on being the headphones for athletes and musicians which worked very well at the time. The company’s headphones had competitive advantages among snowboarders, skateboarders, and action-sports enthusiasts. Since the mid-2000s, however, the headphone market has become more competitive, with dozens of new companies cropping up with equally cool-looking headphones and a deep knowledge of consumers' lifestyles. Beats by Dre, for instance, which emerged in 2006, had

its finger on the pulse of the pop and hip-hop communities, partnering with musicians and celebrities in an effort to appeal to their fans. This strategy worked so well that by 2012, Beats had 64% market share for headphones that cost more than $100, and the company was valued at $1 billion. Companies, like Beats and Bose and SMS, cater to the higher end of the headphone market, where a typical unit sells for more than $100 each, but Skullcandy's audio hardware is comparatively cheaper. Skullcandy headphones were very popular because part of reasons was that they offered the consumer a cheap but stylish brand for the mass amounts of iPhones and iPods that were being sold. According to Michelle Whitehead, the company's director of brand and sports marketing, “rather than selling high-priced hardware, Skullcandy looks to differentiate itself by appealing to the young.” However, the issue Skullcandy facing was that they primarily sold inexpensive headphones and when the premium market emerged they were nowhere to be found. According to a research among current Brandeis students, 67 out of 81 students believe that Skullcandy has been a seller of cheap headphones and will not be able to transition to a seller of higher quality headphones at premium prices. Things get a little improved after Skullcandy appointed its new CEO, Hoby Darling, who believes that across the headphone industry, it’s no longer enough to focus on trendy design and lifestyle. Since Skullcandy's IPO in 2011, Darling thinks the company has focused too much on sales in an effort to meet shareholders’ demands; it has lost its focus on product development. As a matter of fact, "if you had been at Skullcandy (in 2010) and asked how many people work in product, innovation, and quality, the answer would have been five people. That’s it," Darling says. Today, he says that a third of the company works specifically on product development.

Recently, across the headphone market, there's been an increase in sports-focused products that are designed to be sweat-resistant and stay comfortably in the ear while the listener is in motion. Skullcandy is adapting to these changes, like other leading brands, such as Bose and Beats, by developing a line of earbuds specifically for athletic performance. In addition, Skullcandy has devoted extensive resources to creating earbuds and headphones specifically made for women. They tend to come in feminine designs with explosions of flowers and in a color palette of pinks and pastels. Driving innovation around key styles and innovative consumer-focused technologies, Skullcandy is bouncing back, with an 18% increase in sales in 2014, after several years of decline. However, the issue following with the change is simply that compared with other competitors like Bose and Beats which have clear product identities, Skullcandy has too many styles without clear differentiation or stories. It creates an image for consumers that Skullcandys offers “so many choice of Domino pizza” which is essentially an inferior good. Clearly, if Skullcrushers wants to be the model for the future and to maintain a diversified product offering, they have to

narrow the focus to seize its competitive advantages.