solution

Read and answer the questions at the end of the case. For Innovation Subject

This case is derived from the following source:

Pavlovich, K., Bowden, S. C., Simnadis, T., Connolly, H., Collins, E., & Gibb, J., (2020). Allbirds: Sustainable

innovation disrupting the casual shoe industry. In SAGE Business Cases. SAGE Publications, Ltd., https://www-doi-

org.ezcentennial.ocls.ca/10.4135/9781529713206

The Birth of Allbirds

Tim Brown was an elite member of the New Zealand 2010 World Cup ‘All White’ soccer squad and,

boy, did he know about sore toes. While he knew he was lucky to get free shoes, he did not like the

bright colours and logos plastered all over them; nor did he like that his favourite style was

unavailable the following year. He also knew that the footwear industry was beset with

unsustainable production practices, an issue that continued to bother him after his soccer career

was over. He finally decided to give it a go and create a sustainable shoe himself. Being from New

Zealand, he knew of the fabulous qualities of merino wool and wondered if this product be used to

make great shoes.

He talked to Joey Zwillinger, an engineer and sustainability expert based in San Francisco. Joey

introduced Tim to sustainable material innovation. The journey was not easy, but 200 prototypes

later, they had done it! A beautiful, simply designed, comfortable shoe made out of merino wool.

They called the fledgling company Allbirds.

While incumbent footwear manufacturers had economies of scale and well-honed product

manufacturing, distribution, and marketing capabilities, the secret of Allbirds’ success was its

sustainable materials innovation. Despite not having the resources that existing footwear brands

possessed (e.g. distribution and marketing), Allbirds drew on a network of valuable resources in the

form of expertise in materials innovation to carve out a position in the market.

Its first product, launched in 2016, was the Merino sneaker, made from sustainably and ethically

sourced merino wool. Merino fibres are 20% of the diameter of the human hair, enabling the wool to

breathe and manage moisture better than any other fibre, an ideal material for footwear. Merino

also requires 60% less energy to produce than typical synthetic materials. However, the company’s

sustainable material innovation extended further than just the fibre. Allbirds designed a new form of

shoe insole using part castor bean oil, a renewable raw material that replaced 20% of the

petroleum traditionally used in the polyol of polyurethane foams. The shoelaces were made from

recycled plastic bottles. People thought they were crazy because the shoelaces cost three times as

much as standard laces to produce, but the decision was an easy one since it aligned with an

Allbirds core value of sustainability. To finish off, the product packaging was a shoe box made from

90% post-consumer recycled cardboard and used 40% less materials than traditional packaging.

Values

The business was anchored in a couple of simple products, and its values were based on constant

improvement. These values were non-negotiable and included:

1. Comfort: people buy shoes because they are comfortable, but until now that has usually

meant they were unattractive.

2. Design: simple and needs to look good. Usually the design is overdone.

3. Sustainability: people care about the planet,

Going back to their values, the team realised that they were about sustainable material innovation,

Going back to their values, the team realised that they were about sustainable material innovation,

not just wool, inspiring them to look for a new materials. These values of constant improvement to

design and comfort resulted in 27 product improvements to the wool shoe over the last three years

– much of it stemming from customer feedback. Hence, innovation does not have to be something

revolutionary – just the need for a comfortable pair of shoes that brought comfort and design

together

A Foot in the Market

In August 2018, Allbirds’ shoes were available for purchase in the United States, New Zealand,

Canada, and Australia, and the online release was planned for the UK in October

The attention to materials science enabled Allbirds to forge a unique position in the market. Such

advances were not immediately obvious to existing footwear manufacturers, as they did not

observe an immediate impact on their customers’ preferences. Behaviour among these

organisations continued to revolve around incremental improvements to existing products, rather

than developing products that were a radical departure from existing industry norms.

Walking Through Their Business Model

Tim and Joey believed that their success was due to cultivating a deep relationship with the

consumer through a direct to customer (D2C) presence. The first element was the direct

relationship with the customer. Tim said this was their main competitive advantage, as they listened

to feedback from customers and could instantly learn whether a new product worked or not.

Remember that they had made 27 changes to the Merino shoe already, from both customer

feedback and their own experience. Speed to market was also significant as they could move fast

when the quality was ready, bypassing the need to attract the attention of wholesalers – like their

sugar-cane Zeffers that just turned up for sale on their website without fanfare. Controlling margins

carefully and ensuring operational flexibility were also important. WhaAlthough sales were online, Allbirds also understood the importance of retail stores where customers could check sizes and

colours, as well as feel the product before purchasing, often done online afterwards. A retail

presence could also strengthen the brand and story being told. They wanted to create a purity of

connection with customers, never having to discount, and to stand behind their product through

listening to feedback.

Please ensure that you answer the following questions in complete

sentences, using appropriate sentence structure and grammar. Refer to

content in the textbook, modules and class discussions to support your

answers. Your answers should be 100-125 words per question.

1. Describe the innovation process. How does it manifest in this case?
2. What innovation drivers do you see described in this case? Explain.
3. Where does Allbirds fall in the sustainability Led innovation (SLI) framework? Why?
4. How are Allbirds examples of social innovators? Explain in the context of the definition developed and explored in the previous modules.