Dunkin’ Donuts enters the UK market

So Dunkin’ Donuts has entered the UK market, with two locations so far, and plans for expansion to 100 outlets in five years. The locations of the first two outlets, Harrow and Chelmsford (with plans for a third in Cambridge) make me feel confident about the chances for the chain’s future success in the UK. Not too flashy, with low rents. The mistake of many US food chains has been to occupy high profile central London outlets, with very high rents, and this rarely works out. This lack of arrogance on the part of DD may seem refreshing, but their humility stems from the fact that this is their third attempt to crack the UK market.

Harrow Dunkin' Donuts outlet
The first Dunkin’ Donuts site in the UK, in Harrow

Despite media claims about the “battle of the donuts”, Krispy Kreme will not be DD’s major rival in the UK. DD will compete primarily with Greggs, supermarkets, McDonald’s, and to a lesser extent the likes of Costa and Starbucks. Greggs is the company that has the most to fear from DD’s expansion, although Greggs is a wily competitor. Greggs did not emerge as the sole national bakery chain by falling asleep at the helm.

DD’s main customer base will be commuters, particularly during the lunchtime period. I haven’t been a DD either in the UK or elsewhere, so I can’t comment specifically on the food quality, but as it looks to be similar to McDonald’s and Greggs standard. If this is a case, it will be difficult for DD to succeed without matching their competitor’s prices. Due to its obvious initial cost disadvantage to its competitors due to its lack of scale, DD’s American parent company will have to be prepared to absorb sustained losses for at least a few years before the chain becomes profitable. The question is, how badly to DD want to gain a slice of the UK market?

The rise and fall of the UK’s Big Four supermarkets

When the major supermarket chains were growing at a massive pace during the 1990s, we liked them.They used their might to cut the profit margins of their large corporate suppliers, and passed the savings onto us. They offered all we needed from our weekly shop under one roof.

But the shine eventually wore off the new-build stores. Some became tatty and dirty. Standards slipped. Shelves were more likely to be bare. And the stores increasingly came to look like one another, as the majors imitated the best features of their rivals. Consumers felt that their freedom of choice was lessening.

After the hype faded from what had originally seemed innovative and convenient (clothes and TVs at the supermarket!), we came to see the superstores for what they were: down-market shopping malls.

Then the stories began to leak out: Tesco and ASDA were putting the squeeze on poor farmers, who were struggling to make ends meet. Dairy farmers were forced to sell milk at less than it cost to produce.

We saw the devastating impact the out of town supermarkets had on our high streets, and small local independent retailers. Whilst money spent at locally owned shops had a habit of staying within the local economy, money spent at the Big Four went to Cheshunt, London, Leeds and Bradford, to be distributed amongst shareholders. Supermarkets were no longer the good guys, they were the bad guys.

The most recent data from Kantar indicates that Tesco, Sainsbury’s, ASDA and Morrisons are currently the “squeezed middle”, as Waitrose continues to outperform at the top end of the market, and LIDL and ALDI put the squeeze on at the value end of the market. Middle class customers are increasingly shopping at the discount supermarkets, as the recession causes them to ask, “Why pay more when you don’t have to?”

As plucky (and relatively new) upstarts, ALDI, LIDL and Waitrose have so far avoided the backlash against the major supermarkets. The relatively small three still only have a combined market share of 11.8%. The Big Four have a combined grocery market share of 74.9%.

The Big Four offer customers a broadly similar range of products, but the “small three” genuinely offer something different. Waitrose offers products that you otherwise wouldn’t be able to find unless you happened to live near to a large and well-stocked deli or farm shop. ALDI and LIDL offer heavy discounts on brand name products, and offer cheap own-brand imitations. All well and good, but you’d struggle to do your weekly shop there, and the same goes for Waitrose for all but the wealthiest shoppers. The “small three” are growing now, but their market is principally “top up shoppers”; people adding to their weekly shop.

I predict that after a slight decrease in market share for the Big Four, and some further increases in market share for the “small three”, the market will level off. As the economy improves, customers will revert to shopping at the Big Four.

Local vs national brands

In the 1970s, business was driven by the idea that bigger was always better. And perhaps no industry demonstrated the application, and folly of this notion, better than the brewing industry.

Beginning in the Victorian era, two brewing names achieved national distribution in the UK: Bass Pale Ale and Guinness Stout. Guinness owned no pubs at all, but the popularity of the Bass and Guinness brands saw rival brewers stock their products in their pubs. Like bottled beers in pubs today, these were premium products, selling for a higher price than the local draught bitter.

In the 1950s, a Canadian businessman called Eddie Taylor began to market a Canadian lager called Carling in the UK. He bought small local brewers and amalgamated them under the  United Breweries banner. By 1960 he had 2,800 outlets. He stopped in 1967 when he created Bass Charrington, an entity that owned 11,000 pubs. The idea was to acquire breweries and tied estates of pubs as an outlet for Carling. By pushing just one megabrand in a fragmented industry, Taylor believed he could achieve a dominant position in the UK beer market. He was right: by the 1980s Carling was the highest selling beer brand in the UK, and it hasn’t slipped from that position since.

Taylor kickstarted a wave of consolidation in the UK beer market to form the Big Six brewers (plus Guinness). In the 1960s, marketing spend was put behind single keg ale brands such as Worthington E (Bass), Younger’s Tartan Special (Scottish & Newcastle), Courage Tavern Keg, Whitbread Trophy, Double Diamond (Allied) and perhaps the most notorious, Watney’s Red Barrel. The new keg ales were easier to look after, and had larger profit margins, and there ubiquity quickly spread.

Watney Mann ranked alongside the biggest brewers of Bass and Ind Coope/Allied. It was the most aggressive in promoting its main product. In 1971, it relaunched Red Barrel as Red, with a marketing campaign heralding the “Red Revolution”. The marketing campaign featured actors made up to look like Castro, Mao and Khrushchev sipping the product. Watney pubs were painted red.

A Watney pub interior

Meanwhile, as the brewers pushed these major products, they closed down small local breweries, and stopped brewing many of the popular local ales. This provocation eventually caused a consumer backlash. The new keg ales were fizzy, overpriced and bland. Local ales were often more flavourful, and besides, people preferred to have a choice. They resented being forced to drink something else. In 1968, the Competition Commission found that a single brewer, Courage, owned 80% of the pubs in Bristol!

CAMRA was formed in 1971 to resist the blandification of consumer choice. Today there are hundreds of microbreweries, and consumers haven’t had as much choice in beer since the Victorian era. The mass keg ale market (John Smith’s, Tetley, Worthington) is declining. The mass lager market is declining, with preference switching to smaller, premium brands such as Peroni Nastro Azurro, or cask ales. Carling is still the highest selling beer though.

On the skids: Dunlop Rubber

Dunlop Rubber was once a leading British multinational. Its presence at Fort Dunlop, Birmingham ended in 2014 after almost 100 years.

John Boyd Dunlop (1840 – 1921) was a Scotsman who developed the pneumatic tyre. In 1889 a company, led by Harvey du Cros, was established in Dublin to manufacture bicycle tyres based on Dunlop’s discovery. Dunlop himself was sceptical of the commercial potential of the product, and took a 20 percent stake in the venture.

The product was tested by the greatest cyclist of the era, Willie Hume (1862 – 1941), who won seven races out of eight in a trial of the new tyre.

Manufacture was relocated from Dublin and Belfast to Coventry, the heart of the British cycle industry, from 1893. Factories were also established in the United States, France and Japan.

John Boyd Dunlop divested his shareholding in 1895, and the company was sold to the financier Ernest Terah Hooley (1859 – 1947) for £3 million in 1896. Within a matter of months, by bringing on aristocratic directors and garnering press attention, Hooley was able to publicly float the company for £5 million.

Dunlop produced its first tyre for a motor car in 1906. The first rubber estates in Malaysia were acquired, in order to ensure a supply of raw material, in 1910.

Construction began on the 400 acre Fort Dunlop headquarters and production site in Birmingham in 1916.

Dunlop was the fourteenth largest manufacturing company in Britain by 1918, and its only large-scale tyre manufacturer. It had a market value of £8.9 million in 1919.

Dunlop began to diversify from tyres from 1924. It entered the sports market in earnest when it acquired the tennis racket manufacturer F A Davis. Charles Macintosh, the raincoat manufacturer, was acquired in 1926.

The Malaysian estates were expanded over time, and Dunlop was the largest single landowner in the British Empire by 1926.

By 1930, Dunlop was the eighth largest public company in Britain, with a market value of £28.2 million. The company was a major industrial supplier for Britain during the Second World War, producing the bulk of rubber tyres and boots for the war effort.

By 1946, Dunlop had 70,000 employees, and sales outlets in nearly every country in the world. By 1948 Dunlop  was the tenth largest British company, with a market value of £55.9 million.

Dunlop’s fortunes were closely interlinked with the British car industry. In 1950 Britain was the world’s second largest car manufacturer, and the world’s largest exporter of cars. Many of these cars were fitted with Dunlop tyres. In the 1950s Dunlop accounted for almost half of all tyre sales by value in Britain.

By 1955 Dunlop employed 100,000 people, and was the second largest private employer in Britain after ICI. In 1959 Dunlop was the twelfth largest company in the world outside the US.

Dunlop began to decline from the early 1960s as it was slow to adapt to the new market for steel-belted radial tyres. Performance was also undermined by the decline of the British car industry.

In 1970, a long strike at Fort Dunlop resulted in a loss of £3 million at the group’s British operations: the first in its history. As a result, the largest British car manufacturer, British Leyland, which had previously acquired all of its tyres from Dunlop, adopted a policy of dual sourcing to ensure supply.

In the late 1960s, Dunlop was the 35th largest company outside of the United States. In 1973, Dunlop was the eleventh largest British industrial company, with a turnover of £495 million and capital of £290 million.

In 1971, the company merged with Pirelli of Italy, to create the world’s third largest tyre manufacturer. The combined group had a turnover of almost £900 million.

The merger was a disaster: the Pirelli branch lost money every year until 1980. The merger was undone in 1981, but it was too late: Dunlop had amassed massive debts and was almost bankrupt. Dunlop shed over 19,000 employees between 1978 and 1982.

By 1978 Dunlop’s tyre manufacturing operations ran at an increasing loss. By the late 1970s, the Washington plant near Newcastle upon Tyne was the only profitable factory among Dunlop’s eight European sites. Tyre operations lost £22 million in 1980.

In 1981 Dunlop sold its 51 percent stake in its Malaysian rubber estates for £60 million to Multi-Purpose Holdings, a Chinese-Malaysian group. The Dunlop estates were Malaysia’s sixth largest plantation group, covering over 55,000 acres.

In 1983, Dunlop’s European tyre business was sold to its former Japanese subsidiary, Sumitomo, for £82 million.

Between 1970 and 1983, Dunlop had shed over half of its employees, from 107,000 people to 53,000.

The remnant of Dunlop was acquired by the industrial conglomerate BTR plc for £101 million in 1985. BTR sold the US tyre business to its management for £142 million.

In 1996, BTR began to sell its remaining Dunlop businesses to various interests around the world. The sporting arm, Dunlop Slazenger, was sold to private equity firm Cinven for £372 million. Dunlop Standard, the aerospace group, was sold to private equity firm Doughty Hanson for £510 million.

W H Smith and Woolworths: a cautionary tale

Tired stores, confusion over what the shops sell, high prices. No, it’s not Woolworths, its W H Smith’s.

W H Smith currently occupy the position that Woolworths held maybe ten years before its demise. The Smith’s stores desperately need a makeover. Too many of the stores are dirty and untidy, and reminiscent of a jumble sale.

Smith’s actually did quite well from the demise of Woolworths. It likely picked up some of the stationery, toys and confectionery business from its rival. But it’s struggling in the face of intense competition on the high street, online, and from the supermarkets.

The travel concessions are actually pretty good. They offer the traveller all that he or she needs for a journey: books, chocolate, magazines. But I don’t see much reason to visit a high street Smith’s. Waterstones do books better, Amazon do books cheaper. Okay, their magazine range is good. I might consider them for cards if there isn’t a Clinton’s nearby. Their stationery is quite good, but nothing fancy, and is overpriced. And why do I need stationery? People don’t really buy stationery that often, do they? It’s no surprise to read that the travel concessions are keeping the entire business afloat.

http://www.retail-week.com/companies/whsmith/whsmith-trials-franchising-to-expand-its-store-network/5050816.article

Smith’s seem to sell a lot of children’s toys and games these days. It’s just a confusing premise. Why does a newsagents sell toys? I don’t think W H Smith why I need to buy a toy. One gets the impression that they’re just trying to fill some of those massive stores.

The whole situation reminds me of Woolworths. Both are (were) brands with enormous recognition and presence on the high street. But people found fewer and fewer reasons to pop in. Then they got embarrassed to be seen in one. Then Woolworths closed.

I read that Smith’s are trialling franchising their brand to newsagents. Some trialists report a 20 percent rise in sales as a result. Smith’s main problem is their store size. They’d be better off with more small locations that trade on their convenience. Smaller stores would result in lower rents.

The saga of SegaWorld London

SegaWorld was the largest indoor theme park in the world, and operated in central London between 1996 and 1999.

Nick Leslau (born 1959) and Nigel Wray (born 1948) paid £96 million to acquire the Trocadero on Piccadilly Circus, London, in 1994. Tenants included a Planet Hollywood restaurant, a cinema, retailers such as HMV and the Guinness World Records experience, but 110,000 square feet across seven floors remained unused.

The partners negotiated with Sega to open an indoor theme park. At the time Sega, along with Nintendo, dominated the world video gaming scene, and Sonic the Hedgehog was at the peak of its popularity. Sega would operate the park rent-free, with the landlords receiving a half share of the profits.

SegaWorld had already received a “light launch” in Bournemouth, with a £3 million video game arcade that opened in July 1993. After the London SegaWorld opened, the Bournemouth park’s name was changed to “Sega Park” to avoid confusion.

The London site was modelled on Sega’s Joypolis theme park in Tokyo, which contained many of the same rides. Although Joypolis was smaller, when it had opened in 1994 it had been the largest indoor theme park in the world.

SegaWorld London logo

SegaWorld London received a £50 million investment and was the largest indoor theme park in the world. Sega claimed that over $1 billion in research and development had helped produce the park. SegaWorld had six rides which combined traditional and virtual reality elements. The concentration on virtual reality was partly due to the fact that space was constrained in the Trocadero. Each ride cost around £2 million to build. As well as the rides there were 400 coin-operated arcade machines.

SegaWorld also contained the longest above-ground escalator in Europe. Customers embarked upon it at the park entrance, and it took them up all seven floors in a single run. It was so large that during installation it had to be lowered in through the Trocadero roof in five sections.

SeagWorld London had massive marketing hype. James Bidwell, head of marketing for Sega Europe, called SegaWorld, “the most sensational new tourist attraction in the world”. Buzz words like “futuractive” were used to describe the park by its marketing agency.

SeagWorld London opened in September 1996, with a launch party featuring Robbie Williams.

Laslau later reported that his “heart just sank” at the launch event. Over 100 people were queuing for a ride that could handle 40 customers per hour. He prepared himself for the media evisceration that he predicted would be forthcoming.

The Daily Telegraph described the park as “little short of a disgrace” and a “joyless tourist trap”. Cosmo Landesman of the Sunday Times described the park as “prosaic and tacky”. Meanwhile, Tom Whitewell of The Guardian said “it’s not all that different from your local shopping centre” and described the ride technology as “nearly always obvious and unsubtle”. Several reviewers pointed out that one of the rides was a dressed-up dodgems.

It was overpriced (£12 entry for adults), rides broke down, the queues were lengthy, and it failed to live up to the marketing hype. The coin-op machines cost £1 a time, and were already available elsewhere without an entrance fee. Laslau later described his disappointment:

Sega could not deliver what they said they’d deliver… It looked amazing, but their rides were not capable of delivering the number of people they needed to deliver to support the operation. People were queuing for ages … It was a question of over-anticipation and under-delivery.

Reviews following the launch event did not improve. In December 1996, John Tribe reported the experience to be a “glitzy con-trick” in The Times. That month, the entrance fee was reduced to £2 but fees for the rides of between 50p and £3 were introduced in an attempt to reduced the hour-plus queues that developed during busy periods.

In February 1997, it was revealed that SegaWorld visitor numbers, at 1.1 million, as well as average customer spend, were about half those anticipated. The park lacked basic facilities such as a bar, chairs or cloakrooms.

After a £1 million loss in 1997, admission fees were removed entirely in December that year and an IMAX cinema was installed. John Conlan, the Trocadero’s new chairman admitted:

We have realised that this is not an indoor theme park. It is an amusement arcade and you would not normally pay to go to an amusement arcade.

A £2 million 125 ft free-fall ride was opened in March 1998, with sponsorship from Pepsi. But this new investment failed to stem continued losses of £2 million a year, and Sega was evicted by Trocadero management in September 1999.

The disorganisation, mechanical failures and lack of market research reflected poorly on Sega. A Sega World operated in Sydney, Australia between 1997 and 2000, but closed down under similar circumstances.

The interactivity, optimism for the future, over-expectation and consequent media cynicism would also characterise the Millennium Dome, which was a kind of theme park/interactive museum.

Further parallels can be made between Sega World and DisneyQuest, a similar indoor theme park with virtual reality elements which also over-promised and failed to deliver.

Cadbury Dairy Milk

Cadbury Dairy Milk

Cadbury is the second highest selling confectionery brand in the world after Wrigley’s chewing gum. Similar to the Coca-Cola Company, much of Cadbury’s success has been driven by a single product, the Dairy Milk bar. When someone says Cadbury, you instantly think of Dairy Milk, it’s purple packaging, and the famous “glass of milk and a half” slogan.

The Cadbury Dairy Milk chocolate bar was introduced in 1905. Developed by George Cadbury Jr, it was the first milk chocolate bar to be mass produced in the UK. By 1914, it was the highest selling Cadbury line. The economies of mass production combined with rising incomes meant that the working classes could afford chocolate for the first time.

However, other manufacturers such as Fry and Rowntree soon caught up with Cadbury’s mass production methods. So why were none of their own product lines as successful as Dairy Milk? There is first mover advantage, yet it took seventy years for a product to seriously challenge Dairy Milk in the UK market. The Rowntree Yorkie bar made inroads in the 1970s, but has since faded somewhat. The Mars Bar built market share throughout the 1970 and 80s, largely because it retailed for half the price of Dairy Milk, so it was hardly battling on equal terms.

Why has Dairy Milk been so successful? There are two consistent brand selling points: Quality/Healthfulness and Luxury.

The brand has always been advertised as affordable luxury. Purple has been the dominant colour in the packaging since 1920. When you see purple on the shelf of the supermarket, you can be almost certain that it’s a Cadbury product. Purple reinforces the brand image: purple is regal and elegant and represents luxury. By dressing their product in purple regalia, Cadbury are expressing their confidence in the quality of their product. The packaging implies “Fit for Kings”, without the arrogance of explicitly saying so.

There is also an implicit ego boost associated with consuming a product that is “fit for royalty”. “You are good enough to consume this regal product”. The brand is egalitarian, which ties into the egalitarian nature of the Quakers, of which the Cadbury family were members.

This ties in with the original context of the product, which was offering the once luxury product, only affordable for the few, to the masses.

The luxury connotations of Dairy Milk reinforce the notion of a chocolate bar as a form of self-treating. The idea of chocolate as a reward, which is a powerful one, as consuming chocolate triggers the release of endorphins into the brain, which are the body’s “reward mechanisms”.

Since 1928, the product has been represented by the famous slogan, “A glass and a half”. This refers to the amount of milk (426ml) that a half pound (227g) bar of Dairy Milk contains. The slogan represents quality: no other competitor claims to contain as much milk, and milk is a simple, pure, quality ingredient.

Milk also suggests a certain amount of healthfulness. Milk grows bones and is/was given to schoolchildren. Milk is also a natural product, which counteracts the natural suspicions the individual may have regarding processed food.

Meanwhile, the name “Dairy” conjures up wholesome, rural imagery. The countryside has healthy and natural connotations. Interestingly, the second most successful Cadbury product after Dairy Milk is the Creme Egg, which also uses the double “dairy” imagery.

Dairy Milk line extensions continue to reinforce this image. To the modern consumer, “Fruit and Nut” and “Whole Nut” sound more like health bars or healthy cereals than high calorie confections. Again, fruits and nuts are products with healthy and natural connotations that professionals are always recommending we eat more of.

This healthfulness connotations help to allay the individual’s principal reason for not buying chocolate: it’s not good for you as it has a high sugar and fat content.

Bouncing back: Dunlop Slazenger

The Dunlop and Slazenger brands remain prominent in sporting goods, especially in racket sports such as tennis, squash, golf, badminton, hockey and cricket.

Dunlop was established as a rubber goods company in 1889. In 1909, it moved into sporting goods when it began to manufacture twelve dozen golf balls a day at Manor Mill in Birmingham. In their first year, Dunlop balls won five of the major British golf tournaments.

From 1924 the company branched out into tennis balls, and from 1925, tennis rackets. The decade saw Dunlop established as a leading sporting goods supplier due to a mechanised production line, which reduced costs, as well as a strong commitment to research and development. It was considered the foremost manufacturer of golf balls.

Production of the golf balls was temporarily discontinued in 1941 due to war work and a lack of rubber supply. After the war, Dunlop transferred production to Speke, Liverpool, where it had leased a former aircraft factory.

Dunlop’s Fort Maxply tennis rackets were used by more than half of the competitors at Wimbledon in 1952.

In 1959, Slazenger, a major English sporting goods rival, was acquired. In 1960, exports by Dunlop Sport totalled £1.6 million.

In 1971, astronaut Alan Shepard used a Dunlop 65 ball when he played golf on the moon.

Production of rackets at Waltham Abbey in Essex fell prey to cheaper imports produced overseas, and the factory was closed in 1979, with production concentrated on the Slazenger site at Horbury in West Yorkshire.

In the 1970s and early 1980s, the company was slow to see that wooden rackets were going the way of the dinosaur. Eventually, it started manufacturing the new lightweight graphite rackets, and wooden racket production ended in 1984.

From 1981 to 1988, Dunlop Sports sponsored John McEnroe in the most expensive tennis sponsorship deal in the world, worth $500,000 annually, plus commissions on McEnroe branded rackets.

More tennis Grand Slams have been won with Dunlop rackets than any other brand.

By 1982 Dunlop Slazenger had annual sales of £100 million, but it was struggling to remain profitable. In 1983 the company lost £6 million. Alan Finden-Crofts was appointed chief executive, and identified the company weaknesses as a local (as opposed to international) outlook, weak marketing and a lack of a global strategy. By 1986 he had turned around the company to make an annual profit of £16 million.

The Slazenger factory at Horbury, Yorkshire was closed in the late 1980s.

During the breakup of the Dunlop empire between 1996 and 1998, Dunlop Slazenger was sold to its management, backed by the private equity firm Cinven, for £330 million. Cinven sold Dunlop’s rights to the Puma sports brand in the UK back to its German parent. Cinven invested heavily into the business to make it profitable.

A large tennis ball manufacturing plant in Barnsley, Yorkshire was closed in 2002, and the machinery was shipped to a facility outside Manila in the Philippines. Token production in Germany and South Africa also ended, and the Philippine plant became the sole supplier of Dunlop Slazenger tennis balls. Due to Dunlop Slazenger’s high market share, the company estimated that 60 percent of the world’s tennis balls and 90 percent of squash balls were manufactured at the site.

Dunlop was producing around 250,000 golf balls every day by 2003.

Cinven sold the company to Sports Direct International for £40 million in 2004.

Sports Direct sold Dunlop Sport to Sumitomo Rubber Industries of Japan for £112 million in 2017. Sports Direct retained control of Slazenger, thus reversing the effects of the Dunlop Slazenger merger in 1959.

A history of Donnay Sports

Donnay is best known today as a cheap clothing brand available from Sports Direct stores.

Donnay_Logo_1

Founded in Belgium in 1913, Donnay became involved in sporting goods in 1934 when they began to manufacture wooden tennis rackets. Throughout the 1970s, Donnay was the world’s largest producer of tennis rackets.

From 1979 to 1983 Donnay was buoyed by its sponsorship of Bjorn Borg, the superstar tennis player of the era. As the company did not have a marketing manager until 1987, the company image during that era was very closely tied to Borg.

Donnay first ran into trouble in 1973 when Wilson Sporting Goods dropped the company as its contract tennis racket manufacturer in favour of cheaper production in Taiwan. The Wilson contract had accounted for 1.3 million rackets out of a total production figure of 2 million.

Donnay was also slow to make the switch from the increasingly obsolete wooden rackets to the lightweight graphite models. The company manufactured just 3,000 graphite rackets in 1980, against 1.8 million wooden rackets.

When Bjorn Borg retired from tennis in 1983, it was the final nail in the coffin for Donnay. The company had tied its fortunes too closely to a single figure, and had maintained production in Belgium whilst competitors moved production to the Far East. Its production line was ten times longer than rival manufacturers.

The company lost money every year after Borg’s retirement, until it declared bankruptcy, with $35 million of debt, in 1988. It was purchased by Bernard Tapie, a French singer turned businessman, who later acquired Adidas.

Donny finally ended wooden racket production towards the end of the 1980s.

Tapie had a major success when he signed an 18 year old Andre Agassi between 1989 and 1992. Despite this, the company struggled to maintain profitability. The local government in Belgium acquired it to save it from bankruptcy in 1993. The factory in Belgium was closed down, and a company that had employed 600 people now employed 25 at a distribution centre. In 1996, Mike Ashley, the owner of Sports Direct, acquired the global rights to the brand for $3.9 million.

Ashley originally supported the brand as a leading tennis company. However in 2004, he acquired Dunlop Slazenger. Dunlop-Slazenger became the prestige tennis brand, and Donnay became the marque for cheap rackets and clothing.

Note: if it seems as if I just mined this from Wikipedia, I was myself largely responsible for writing the Wikipedia page as of 2014. (https://en.wikipedia.org/wiki/Donnay_Sports)

Will Facebook continue to dominate social media in 2014?

Facebook is a giant of social media. Entering 2014, its market capitalisation tops £80 billion. In October 2013, it demonstrated that it is able to be profitable. Its position as the Google or the Apple of social networking appears to be relatively secure.

MySpace was the original social media giant. Its position of market dominance seemed insurmountable. In 2005, Rupert Murdoch’s News Corporation acquired it for $580 million. And then Facebook came along and stole away much of its market share. In 2011, MySpace was sold off for just $35 million, a sign of just how much its star had fallen.

MySpace popularised social media. But it’s attitude was quite different to that of Facebook. As the name implies, MySpace was focused on “me” rather than other people. It offered a huge range of options for customising one’s homepage. Many of these options necessitated a basic familiarity with the HTML programming code. People spent so long working on their own “space” that they barely had time to look at other pages. It was a strangely inward-looking social network.

Facebook took notice of the success of Google versus Yahoo! as well as search engines such as Lycos, that no one has heard of anymore. Sometimes, simplicity is key, especially on the World Wide Web. People are rarely willing to learn to code with HTML when there are simpler options. The casual user is short on time. Apple provide a brilliant example: they have essentially created an entire brand which revolves around minimalism and simplicity of use, and Apple is the most highly capitalised publicly traded company in the world. The likes of Twitter, Snapchat and Instagram are very simplistic services that focus on just one aspect of social media: microblogs or photos.

Facebook’s position as the giant of social media seems secure. But with newcomers eating into market share, and the fates of former social network giant MySpace and other former WWW leaders in their category such as Yahoo!, Facebook knows that it cannot afford to become complacent.