International Expansion

Tough Mudder has and is continuing to expand into international markets.  They have events in Canada, Australia, and the U.K. in 2012.  In 2013-2014, TM is also planning to host events in Germany, the Netherlands, Sweden, Austria, Switzerland, France, Japan, New Zealand, and countries in South Africa.  Many of these countries don't yet have planned events, but if people are interested in competing there, they can submit their name and email address on the website ("pre-register") and then receive a discount once an event is scheduled.

They employ an international strategy -- there is little pressure for local adaptation (besides geographical factors of course) because Tough Mudder wants to keep the event and their reputation consistent.  In addition, I would assume fairly low pressures to lower costs, although price will vary slightly country to country.

I see two main motivations for Tough Mudder to expand into global markets:

1. The obvious one -- to increase the size of potential markets.  The U.S. represents less than 5% of the world population, which leaves a lot of untapped opportunity to involve people in other parts of the world.  There are definitely high amounts of demand and interest outside of the U.S.

2. In order to truly find the "World's Toughest Mudder," the company better have events worldwide!  Tough Mudder is seeking to become the preeminent brand in endurance sports.  Obtaining a global presence will enhance their brand, and increase awareness and popularity.

The main challenges Tough Mudder will encounter with global expansion will involve inevitable differences between foreign markets: culture, customs, language, income levels, and customer preferences.  These factors automatically bring some degree of local adaptation.

Corporate-Level Strategy

Tough Mudder is a single business organization. They are very new, as the company's first event was just held in May 2010. Additional 2010 events were held in Northern California and New Jersey, followed by 2011 events in Texas, Georgia, Pennsylvania, Vermont, Southern California, Colorado, Wisconsin, Northern California, Texas, Virginia, New Jersey, Indiana, and Florida. Tough Mudder is hosting 30-40 events in 2012 while expanding internationally to the UK and Australia.  In 2013, they are planning to expand into more cities in the U.S. and also New Zealand, Canada, South Africa, Japan, and more countries in Europe including Germany, the Netherlands, France, Switzerland, Austria, and Sweden.  

So as you can see, they are growing and expanding like crazy! However, they have not yet become a diversified business (entered new businesses).

Business-Level Strategy

Tough Mudder is the most expensive in the industry, yet the company employs a combination focus-differentiation strategy that ensures unique and valued event experiences among targeted markets.

• Best developed and recognizable brand name
• Everyone knows the value associated with finishing a Tough Mudder race
• Focus strategy is on one, distinct race (*toughest in the world) creates a consistent image.
• Are not targeting people just looking to complete a fun, mud run (Warrior Dash) or trying to create something for everyone (Spartan Races).  They only want the mentally and physically tough -- and it is a challenge people have to train for.
• Under Armour sponsorship really sets them apart and above from the rest of the industry.
•  Adds to the "coolness" factor and high performance.

• I also think the higher prices give customer perception of quality and reaffirms that Tough Mudder is the toughest and best.  People are glad to pay a premium for this.

Example:  Registration prices for Tough Mudder Twin Cities on May 19th

First Week Special	Until September 23	$80
Early Bird Discount	September 24 to October 24	$100
Tough Discount	October 25 to December 15	$110
Mudder Entry	December 16 to March 31	$125
Final Entry	April 1 to May 12	$150

Example:  Registration prices for a Spartan Race in Texas on May 19th

$60.00	November 19th (Early Bird)
$70.00	December 19th
$78.00	January 19th
$83.00	February 19th
$87.00	March 19th
$90.00	April 19th
$95.00	May 2nd
$100.00	May 16th (Registration Closes)

Human Capital

ATTRACT

• High company growth and increased excitement about the company
• High position standards/requirements (increasing each month)
• However, they look further than knowledge, ability, and skill and focus on personality, attitudes, values, beliefs, and interests.
• Example application questions:
• You know that book (and website) about 6 word memoirs?  Well, now is your chance to write one.  We want to hear your six word memoir.
• Tell us what you do for fun.  This can be having a drink with your friends or playing chess --we don't care what you do, we just want to know what you do outside the office.
• Working at Tough Mudder is more than a job and is even more than a career -- it's a lifestyle.  Tell us why you want your work to become a lifestyle and the benefit of achieving such a thing.
• Everyone starts with an internship.  This gives Tough Mudder a trial period to see if new hires fit in -- they have time to decide whether to make a permanent offer.
• Have a fun and attractive corporate culture.  From their website:

Tough Mudder is not the average work place, and we don’t employ average people.


You’ll learn more in 2 months at Tough Mudder than you did in 2 years at your old job and will have real responsibilities from day one. Forget about getting coffee or making copies – you’ll be negotiating with vendors, brainstorming new marketing strategies, and traveling to planning meetings across the country. You’ll work alongside an incredibly talented group of 35 all-stars with backgrounds in everything from banking, trading, law, tech, construction, events, sports business and more.


Most importantly, you’ll be working in a place where we take our work seriously, but not ourselves. There’s a sense of humor about TMHQ that you won’t find at other companies and we’ve been profiled by the NY Times as a place that “exudes Gen Y cool”. Our offices are in DUMBO Brooklyn – the home of New York’s creative industry where we’re surrounded by start-ups, studios, and countless other innovative young companies.

DEVELOP

• Tough Mudder University
• Harvard Business Review case studies
• Mock HBS classes
• Reading program
• Employees are not limited to their position responsibilities.
• "At Tough Mudder, you'll learn everything from how to construct a quarter pipe to the in-and-outs of business development, brand management, and event production."
• Tough Mudder Ventures
• Start-up funding initiative that provides seed financing, office space, mentorship, and more to former Tough Mudder employees who launch their own businesses.
• They believe that people are their greatest competitive advantage and want to enable them to bring their visions to reality.

RETAIN

• Tough Mudder believes that hard work deserves to be rewarded.  Employee benefits:
• Up to five weeks of vacation per year plus official holidays
• Competitive health insurance benefits
• Free food and drink in the office
• Free gym membership "as long as you use it!"
• 40% off Under Armour gear
• iPad for finishing internship
• Attend regular company retreats in the Catskills
• Profit sharing plan
• Employees are helping to build an exciting endurance sports brand.  Belief and passion about mission.

Resource-based View of Tough Mudder

The RBV approach combines the internal company analysis with the external analysis of the industry and its competitive environment.  It identifies competitive advantages by analyzing each resource and capability and asking:

• Is it valuable?
• Is it rare?
• Is it difficult to imitate?
• Is it difficult to substitute?

Here is what I came up with for Tough Mudder:

Resource/ Capability	Valuable?	Rare?	Difficult to Imitate?	Difficult to substitute?	Implication for competitiveness
Tangible Resource
Target marketing system	YES	YES	NO	NO	Competitive parity
Employee development and rewards (TM University & benefits)	YES	YES	NO	NO	Temporary competitive advantage
Financial Resources – cash (high growth)	YES	YES/ NO	NO	NO	Competitive parity
Sponsors	YES	YES	YES	NO	Temporary competitive advantage
Intangible Resource
Brand name and reputation	YES	YES	YES	YES	Competitive advantage
Innovation and creativity	YES	YES	NO	NO	Temporary competitive advantage
Employee capabilities and skills	YES	NO	NO	NO	Competitive parity
Organizational Capabilities
Excellent customer service	YES	NO	NO	NO	Competitive parity
Innovative and tough course and obstacle development	YES	YES	NO	NO	Temporary competitive advantage
Ability to hire, motivate, and retain human capital	YES	YES /NO	NO	YES/NO	Competitive parity

HUGE strategic move: Tough Mudder signs Under Armour

On December 5, 2011, Tough Mudder signed Under Armour and brought in $25 million. Under Armour will also make branded gear for purchase and even says its training specialists will help people train for the events.  Matt Mirchin, Under Armour's head of Global Sports Marketing, said he learned of Tough Mudder when Under Armour employees started talking about it in the office.

"This is not only a community, it's a movement," Mirchin said. "We're a growing brand, they're a growing brand, it's just the right thing to do for us."

"In many ways, it looks like were already sponsored by them," Dean said. "An Under Armour shirt is something that you'll see on 70-80 percent of participants. It dries quickly, it's good when it's wet."

Click here to read the full article and watch the video interview:  
http://www.cnbc.com/id/45554832

Tough Mudder on the Under Armour website:  
http://www.underarmour.com/shop/us/en/tough-mudder

S.W.O.T Analysis

Internal

STRENGTHS:  

• Every race is different - climate, terrain, geographies, evolving obstacles
• Tough Mudder dominates the niche market of obstacle races
• Human Resources
• Tough Mudder University -- HBR case studies and book club (dedication to professional development)
• Every employee starts as a 6-10 week intern -- only hire from within
• Great employee benefits -- pride themselves for work being a lifestyle
• 21,000+ applications for employment within the last year
• Location: DUMBO Brooklyn -- home to New York's creative industry
• Surrounded by start-ups, studios, and tons of other innovative young companies
• Strong corporate culture
• Profiled by the NY Times as a place that "exudes Gen Y cool"
• Excellent word of mouth advertising -- Tough Mudder is a marketing company that puts on events
• *Facebook
• Target Internet ads
• Tattoos
• Memories
• Training programs
• Tough Mudder Post-Party

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WEAKNESSES:

• Event participant logistics
• At a sold out event, waves of 500 people go every 15 minutes -- congestion and back-ups at obstacles
• ....
• ....

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External

OPPORTUNITIES:

• International markets
• Clustering events/cluster markets
• Membership?
• Further developing training programs -- the training programs are becoming a huge social component and a key way to grow
• Focus/development in college markets
• College student only events -- student I.D. discounted
• End of the year celebrations with friends and classmates
• Training programs could be implemented into athletic/extracurricular class offerings

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THREATS:

• Obstacle racing could just be a fad and people return to the Ironman, triathlons, and traditional marathons
• World's Toughest Mudder Competition does not compete with Ironman
• Three-mile mud runs such as Warrior Dash
• http://warriordash.com/
• HUGE competitor: Spartan
• http://www.spartanrace.com/
• They offer something for everyone: Spartan Sprint, Super Spartan, Spartan Beast, and Death Race
• Threat of new entrants = low
• Tough Mudder, Warrior Dash, and Spartan are becoming well-established and max-out the obstacle racing market

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