Reference no: EM131261969
THEY'VE GOT YOUR ‘BAK In 1989, Michael Eidson probably never imagined that his homemade, do-it-yourself fix for dehydration during long cycling races would evolve into the world's premier hydration device for outdoor enthusiasts, soldiers, and law enforcement personnel. That is exactly what happened to the CamelBak backpack, however.
The first version, which used medical tubing to flow water from an intravenous drip bag that was insulated by a sock and strapped to the back of his shirt, was born as most inventions are-out of necessity. The special pack made it possible for Eidson to take in fluids while sitting upright without having to sacrifice speed by reaching down for a water bottle during a race. The packs gained fame during the 1991 Gulf War as extreme sports enthusiasts in the U.S. Special Forces carried their personal CamelBaks into combat during Desert Storm.
Thereafter, the CamelBak name would be forever associated with extreme performance and the U.S. Armed Forces. By 1995, Eidsen sold the company for $4 million. Its buyer, Kransco, introduced the first camouflaged models, and the packs continued to gain acclaim. In 1999, two years after buying his first CamelBak pack, cyclist Chuck Hunter left Lockheed Martin to join the upstart company in hopes of growing its military business. He promptly moved the company to the Sonoma Valley, built a research and development center, and leveraged his experience in the defense industry to launch a military-specific line of packs. Hunter partnered with DuPont to help CamelBak develop the Low Infrared Reflective (LIRR) system.
LIRR applies specially developed materials to a pack's compartments, buckles, and straps to shield soldiers from enemy detection systems. As advanced identification and kill technologies are increasingly being deployed on the battlefield, individual protection applications like the LIRR will be the camouflage of tomorrow. Other CamelBak innovations include the WaterBeast reservoir, a fluid storage system that boasts 30 percent more rigidity than other packs on the market. The WaterBeast has the ability to withstand lengthy field engagements, aided by its silver-ion reservoir and tube linings that eliminate 99.99 percent of all fungus and bacteria in the water delivery system.
The WaterBeast reservoir is now a standard feature on all CamelBak packs, as is the company's proprietary drinking nozzle, or bite valve, which must withstand 10,000 compressions to guarantee it will last through 3 years of combat use. Another CamelBak first is its CBR 4.0 pack system, which is specially designed to perform under chemical or biological weapons attack. The CBR 4.0 took 5 years to develop, and like all CamelBak military and law enforcement products, it was created to meet the specific requests and requirements of the target market.
Since its introduction in 2005, the U.S. Special Forces, New York Police Department, U.S. Secret Service, Department of Health and Human Services, and a myriad of HAZMAT, law enforcement, and government agencies from around the world have adopted and deployed the CBR 4.0. Though CamelBak specializes in offering extreme performance packs for the military, industrial, and professional markets, it also sells a variety of products for hunting, extreme sports, recreational, and "light" law enforcement applications.
Having claimed more than 90 percent of the military market for hydration packs, product manager Shawn Cullen likens CamelBak to Kleenex: "Everyone calls a hydration system a CamelBak," he says. Ironically, the company's biggest customer is its biggest competitor. While it continues to use CamelBaks, the U.S. Army is working with a former supplier to develop its own version, most likely in an attempt to reduce costs. ©PR NEWSFOTO/CAMELBAK PRODUCTS, LLC A At prices up to $200 for combat-ready systems, one thing CamelBaks aren't is cheap.
But then again, neither is CamelBak itself. Its strong product lines, history of innovation, secure strategic relationships, and dominance in government and institutional markets drove its value to over $200 million when investment bank Bear Stearns Company bought the outfit from Kransco in 2003-not bad for a product that started life as an intravenous fluid bag wrapped in a sock.
1. Discuss how business relationships and strategic partnerships have helped to increase the value of CamelBak's products and the business itself.
2. What type(s) of business market customers does CamelBak sell to?
3. Review the types of demand that most influence business markets. Which ones do you think are most important for CamelBak to consider in its marketing strategy? Why?
4. What type of business product is a CamelBak backpack?