Page 2 W25189 America doing it."15 Davis said, "Coming from such an opposite side of the spectrum-formal wear-and going into armor, we look at it a completely different way.""* The co-founders allied with a US-based ballistics producer for developing aprototype suit. " Haider said, "Before we could even present our project to the class, we were already talking to some 'three-letter' agencies [e.g., CLA, FBI, NSA, etc.] who were interested in what we had developed."16 Hai der and Davis mentioned how the classes they had taken as part of University of Mary Washington's liberal arts requirements as business majors proved to be useful, when it came to launching the business. Haider explained, "Theater and acting has been helpful because a big meeting with investors and clients is a performance. We see all walks of life here and we always have something to talk about because we know a little bit about everything."" Commenting on the struggles getting the business off the ground, Davis mentioned he was selling Aspetto's suits to clients wearing attire he had purchased at Goodwill. By 2018, Aspetto's founders had raised US$300,000 in seed funding from venture capitalists." After 2019, Aspetto's sales increased exponentially. Its expected revenue by the end of 2020 was $12.5 million; by comparison, in 2018 it was $0.45 million" (see Exhibit 2). Aspetto expected its revenue to surpass $25 million in 2021." Several celebrities and politicians had purchased body armour from Aspetto. All of its products were made in the United States25 (see Exhibit 3 for details on the manufacturing machinery Aspetto possessed). In 2019, Aspetto had 13 employees.34 BODY ARMOUR INDUSTRY Bulletproof clothing included body armour, personal armour, suits of armour, and coats of armour designed to absorb and/or deflect slashing, bludgeoning, and penetrating attacks by weapons. It was used to protect se outside these parameters is a copyright violation . military personnel, police, private citizens, private security guards, and bodyguards."The National Institute Authorized for use only in the course BUSI 7000 Strategic Management II at Memorial University of Newfoundland taught by Dr. Majid Eghbali-Zarch from 5/1/2022 to 8/31/2022. of Justice (NIJ) of the United States set the nationally accepted body armour standards. According to the Justice Technology Information Center, a subsidiary of the NIJ, Level II body armor is tested to stop 9 mm [ millimetre] and 40 S&W [Smith & Wesson] ammunition fired from short-barrel handguns (no rifle ammunition protection); Level IIA is tested to stop 9 mm and . 357 Magnum ammunition fired from short-barrel handguns (no rifle ammunition protection); Level IIIA is tested to stop .357 SIG [firearm manufacturer SIG Sauer] and 44 Magnum ammunition fired from longer-barrel handguns (no rifle ammunition protection); Level III is tested to stop 7.62 mm FMJ [full metal jacket] lead core rifle ammunition; and Level IV is tested to stop 30-caliber steel core armor-piercing rifle ammunition. The top three body armour players in the United States focusing on military clients were Point Blank Enterprises Inc., Ceradyne Inc., and Safariland Group. Together they controlled more than 87 per cent of the industry in 2020% (see Exhibit 1). Some segments were even more concentrated in terms of competition. For example, Point Blank Enterprises Inc. supplied the US military with about 80 per cent of its soft body armour." In 2020, the US body armour manufacturing industry revenue was $695 million, which was a 49 per cent increase over 2014 (see Exhibit 4). Analysts expected body armour's global market to be worth $5.7 billion by 2024.30 Companies could export Level IV body armour with the US Department of State's permission. In contrast, the US Department of Commerce regulated the export of Level III armour and granted regulatory approval for the export of body armour that was Level III-compliant, which was comparatively easier to receive than export approval for Level IV body armour (see Exhibit 5). Manufacturers seeking to export lower-level armour did not face many regulatory challenges, though they did face intense competition from other companies, as developing lower-level armour was less complicated. 32Page 11 W/25189 Siemaszko and Lilley, "Survival of the Stylish." 97 Greenwood, "Inside America's Growing Bulletproof Clothing Industry." Greenwood, "Inside America's Growing Bulletproof Clothing Industry so Greenwood, "Inside America's Growing Bulletproof Clothing Industry 1 Scott Burton, "3D Printed Body Armor: An Upcoming Invention of the U.S Army Research Laboratory," Body armornews.com, August 22, 2018, https://www.body armornews.com/3d-printed-body-armor-an-upcoming-invention-of- the-u-s-army-research-laboratory!. 101 Burton, "3D Printed Body Armor." 102 Burton, "3D Printed Body Armor. 15 Scott Burton, "Body Armour Made from Parts of Coconut Tree," Bodyarmornews com August 19, 2020, https:/www.bodyarmornews. com/coconut-body-armour!. 10 Steph, "Nature's Wisdom: 9 Brilliant Examples of Biomimicry in Design," Web Ecoist, December 31, 2014, https:/www.momtastic.comwebecoist/2014/12/31atures-wisdom-9-brilliant-examples-of-biomimicry-in-design. "The US Air Force Leans on on Biomimicry for New Body Armor," Cool Hunting, October 21, 2019, ittps://coolhunting.comdesign/the-us-air-force-leans-on-biomimicry-for-new-body-armor. 105 David Szondy, "Shrimp Shells to Serve as the Basis for New Multi-Protective Coatings," New Atlas, May 31, 2020, https:// newatlas.com/materials/shrimp-shells-multi-protective-coatings-soldiers/. " Scott Burton, "Body Armor Coated with 3D-Printed Shrimp Shell Material Could Protect Soldiers from Bullets, Poison Gas & Lasers," Bodyarmornews.com, June 12, 2020, https://www.bodyarmornews.com/ body-armor-coated-with-30-printed- shrimp-shell-material-could-protect-soldiers-from-bullets-poison-gas lasers/. 105 Azman Zakaria, "Bulletproof Armour Vest Made from Parts of Coconut Tree," UPMedu, August 18, 2020, https:// upm.edu.myews/bulletproof_armour_vest_made_from_parts_of_coconut_tree-57986. 109 Zakaria, "Bulletproof Armour Vest Made from Parts of Coconut Tree." 110 Greenwood, "Inside America's Growing Bulletproof Clothing Industry." 111 Dobson, "Bulletproof Fashion for Men." 112 Feldman, "From Bullet-Resistant Suits." 113 Feldman, "From Bullet-Resistant Suits." 114 Siemaszko and Lilley, "Survival of the Stylish." 115 Siemaszko and Lilley, "Survival of the Stylish." Authorized for use only in the course BUSI 7000 Strategic Management II at Memorial University of Newfoundland taught by Dr. Majid Eghbali-Zarch from 5/1/2022 to 8/31/2022 Use outside these parameters is a copyright violation.1. Key issueldecision point - Explain what the most important strategic issue facing the organization is (and the corresponding decision point). - You could also note other salient strategic and operational issues in this section (which are to be dealt with in the implementation plan), but should make it clear what is the most important strategic issue you will focus on in your report. 2. Alternative assessment - Preferably, each alternative should be meaningrlly labeled. - Briey describe each alternative and follow with the prosx'cons. - Though not always necessary, it is preferable to include a synthesized assessment of each alternative after the pros] cons. 3. Recommendation - Clearly state what alternative(s) you recommend and briey recap your rationale. Should you recommend multiple alternatives, be clear about the relationships between them (e.g., prioritization). Page 3 W25189 ASPETTO'S INNOVATION IN BODY ARMOUR FABRIC Traditionally, armoured clothing was hard and stiff, as companies made the clothing from steel. But over the years, companies had started using different fabrics to make other categories of armoured clothing, such as soft armour and hard armour (see Exhibit 6). The fabrics used in the clothing included Kevlar and Dyneema." For example, the clothing of Bladerunner, a London, UK-based body armour company, provided knife protection (i.e., cut-resistant, anti-slash) using Kevlar, while Garrison Bespoke, based in Toronto, Canada, used the same carbon nanotubes designed for certain US army uniforms. The patented suit material was much thinner, more flexible, and 50 per cent lighter than Kevlar. Soft body armour inserts were "made of incredibly strong Kevlar and para-aramid materials. These inserts are placed in the front and back of vests and are made of protective ballistic material, which is held inside of a carrier."> In contrast, hard body armour used "layers of firm, durable materials, such as steel, ceramics, ceramic composites, polyethylene, bullet-resistant fibers, and occasionally, materials like Kevlar. The vest carriers themselves are typically made from fabrics such as nylon." Hard body armour weighed more than soft body armour. Haider mentioned that the ballistics industry was slow to change but was starting to understand that body armour needed to be "lighter and quicker."36 Haider and Davis were obsessed with making their bulletproof attire look less bulletproof. The traditional technique was to sew ballistic panels into clothing." Aspetto did not follow this technique but rather designed hidden compartments into the lining of the clothing for the panels, the texture of which was similar to tough sponges."The armour was zipped in and could be easily removed to dry clean the garment. The design required an extremely lightweight bulletproof material, which Aspetto did not have, but partnered with Point Blank Enterprises Inc. to develop it."This led to the creation of the lightest, strongest ballistic clothing in the world, which transformed luxurious, bespoke Aspetto suits into America's toughest Ise outside these parameters is a copyright violation . bulletproof suits. The Aspetto bullet-resistant blazer provided NIJ-Level II or Level IIIA (the most popular) Authorized for use only in the course BUSI 7000 Strategic Management II at Memorial University of Newfoundland taught by Dr. Majid Eghbali-Zarch from 5/1/2022 to 8/31/2022 ballistic protection." Haider boasted, "We use the lightest materials in the world"$1 the materials weighed approximately four and a half pounds in a suit.*2 Haider explained, "The idea is for it to all sit naturally and look natural." Aspetto ordered its bullet-resistant materials-incorporated into the interior of the suits-from major ballistic companies, while the exterior of its suits were 100 per cent wool." ASPETTO: GROWTH THROUGH INNOVATION AND ITS CHALLENGES Aspetto's founders were keen to decide how to incorporate innovation into the company.* However, they had faced disputes over intellectual property, both as the plaintiff and as the defendant. Davis said, " You're going to have a target on your back if you are successful and that's magnified when you're not from that arena."* Despite being a small team of 13 employees, Aspetto was able to leverage its innovation in the body armour industry in different ways. Haider said, "We don't have master's [degrees] from top business schools, but that's how we're learning." Aspetto wanted to become "a one-stop shop" for the military market, " with Haider sharing, "We are getting into armored helicopters, armored vehicles."49 Aspetto not only offered bulletproof suits but was also able to add unobtrusive ballistic protection to articles of clothing such as shirts, wests, undershirts, shoes, and boxer briefs."Its ballistic T-shirt had saved lives. The US Department of State bought 1,300 such T-shirts as troops were deployed to Guatemala. An officer who was wearing an Aspetto ballistic T-shirt had been shot three times and remained unharmed." As Aspetto grew, the founders intended to focus more on research and development. Davis shared, "We just got a patent for a quick release buckle system to be able to quickly put on and take off the [ballistic] vest."" He added, "Everything we take on, we try to do something new with." Aspetto also launched a linePage 4 W25189 of bullet-resistant furniture. Bullet-resistant housewares sold for double the price of traditional furniture. $3 Haider explained why Aspetto ventured into bullet-resistant furniture, saying, "There's a lot of heat these days in politics, especially as people pick up arms and enter government buildings.""* Osdin Shield, a bullet- resistant furniture company, sold custom-built sofas for up to $9,000." Eight-five per cent of Aspetto's business came from government employees, including the US Army, US Department of State, US Air Force, and US Marine Corps. "There is a decent portion of commercial and private clients as well," Haider said, explaining that these clients included "foreign dignitaries, oil executives, and regular citizens looking for covert protection." According to Haider's estimate, half of his customers were also gun owners" (see Exhibit 6 for a customer segment-based revenue breakdown for the entire body armour industry). Consumers were able to order Aspetto suits online (subject to a background check) with two different options for armour." As Haider explained, "The ideais to have as little an imprint as possible."" With increasing incidences of mass shootings in the United States, demand for bulletproof backpacks for children increased, and Aspetto also fulfilled that demand-though Haider expressed regret over such demand." Commenting on the saddest request Aspetto had received, Haider said, "There was an older lady who called for a bullet-resistant sweatshirt because she did not feel comfortable going to the grocery store."] Aspetto even had clientele in international markets to whom the company offered customized solutions to accommodate local tastes." For example, female members of Saudi Arabia's royal families needed bullet- resistant jalabiyas (caftan-like gowns)." Afghan clients required bullet-resistant kameez (long traditional shirts), in addition to suits and T-shirts. Aspetto offered all of these customized solutions in these markets." However, the company did not invest in growth at the cost of safety and security, especially in the civilian market. Aspetto was cautious and conducted background checks on anyone who wanted ballistic clothing, to prevent people with criminal backgrounds from ordering.'s Commenting on background checks, Haider outside these parameters is a copyright violation. said, " As a small business, it's tough to say 'no,' but we don't want our armor in the wrong hands."6 Authorized for use only in the course BUSI 7000 Strategic Management Il at Memorial University of Newfoundland taught by Dr. Majid Eghbali-Zarch from 5/1/2022 to 8/31/2022. BODY ARMOUR AND THE CIVILIAN MARKET A 2020 study by the Pew Research Center, Harvard University, and Northeastern University revealed that about 40 per cent of Americans said they or someone in their household owned a gun." In the first six months of 2020, approximately 19 million firearms were sold, implying more than one firearm for every 20 Americans." This made the United States one of the largest markets globally for gun accessories." Demand for body armour in the US civilian market was increasing. Body armour, including bulletproof clothing, was fully legal for citizens to purchase and did not require a special permit or any waiting period. Felons, however, could not legally purchase body armour, and buying guidelines varied by state. " Though civilians were buying more body armour, they also believed the US government needed to have stricter gun laws for possession by civilians (see Exhibit 7). David Yamane, a sociology professor at Wake Forest University and an expert on US gun culture, commented that demand for bulletproof fashion implied that individuals believed they should be more responsible for personal safety than the government. He said, "The self-defense core of contemporary American gun culture heavily promotes the idea that you are your own first responder. Sayings like 'I carry a gun because I can't carry a cop' and 'When seconds count, police are just minutes away' reflect this sensibility."?1 Some competitors who entered the ballistic textile market did so for emotional reasons. Damian Ross, owner of the Self Defense Company, which offered self-defense training, decided to venture into ballistic clothing after a shooting had taken place in 2013 at the Garden State Plaza mall in Paramus, New Jersey. Ross said, "I realized I needed areal solution, and set to work on finding an affordable, effective, realistic solution," adding, "Sure, I could avoid going to the mall altogether-there are certain times we don't-but it's just not pragmaticPage 5 W25189 So now, I just throw on my jacket and go." MC Armor was another competitor; originally, it had been based in Colombia and Mexico. Commenting on the company's entry into the United States, Carolina Ballesteros, wife of MC Armor founder Miguel Caballero, said, "The U.S. has a lot of guns, and it's part of the culture."" MC Armor's bulletproof backpacks had sold out within minutes ofthe shooting at Marjory Stoneman Douglas High School in Parkland, Florida, in February 2018."# Ball esteros mentioned that a huge untapped clientele in the United States could make it MC Armor's biggest market. In that country, MC Armor specifically targeted ballistic clothing for women.' Ballesteros said, "Women are learning about guns and safety and security and they want to know how to care for their family, the ones they love."" Commenting on MC Armor's clothing line, Ballesteros said it was fashion-"But it's fashion with protection."" With the emergence of bulletproof apparel retailers in the United States, Haider remarked that it was sad to see demand for bulletproof apparel increasing. " Commenting on the increasing popularity of Aspetto in the civilian market, Haider shared that right after the mass shooting in Las Vegas in 2017, Aspetto received several hits on the website and received inquiries."9 However, ballistic clothing companies also received criticism for making money out of fear. Shannon Watts, the founder of Moms Demand Action, said, "We should be asking ourselves if this is truly an effective way to stop injury by gunfire. . . . Our lawmakers should be the ones taking action to prevent people from causing harm in their communities." According to Watts, ballistic clothing " should not be the first line of defense for those who want protection." Ballesteros said, "It's not about fear, it's about protection."80 ASPETTO COMPETITIVE EDGE AND SHORTCOMINGS Use outside these parameters is a copyright violation . Authorized for use only in the course BUSI 7000 Strategic Management II at Memorial University of Newfoundland taught by Dr. Majid Eghbali-Zarch from 5/1/2022 to 8/31/2022. Neither Haider nor Davis had military experience. They believed that their civilian perspective gave them an advantage in the ballistic attire business, with Davis saying, "We know how [clothing] should look." He elaborated, "It looks very clean. It's well draped like an everyday suit-and that's what we would go for: a clandestine, low-profile ballistic suit." Aspetto was known to have launched America's first line of high-fashion bulletproof clothing. The body armour industry lacked variety in fashion fabric." But this is where Aspetto excelled. Haider said, "If it's a ballistic suit, we've got a selection of fabrics. We've got made-in-Italy fabrics. The same fabrics as Hugo Boss and Prada and Gucci and all those [other designers]." Commenting on fabric variety, Haider mentioned, "We currently have 500 fabric options, to ensure we can adapt to any wardrobe or style."36 Aspetto offered the most variety in the industry and also provided quality. About the bulletproof quality of the variety of fabrics it offered, Haider explained, "These finely-crafted fabrics from luxurious materials were technically advanced clothing with 3A [Level IIIA] ballistic material exceeding the NU, DEA [Drug Enforcement Administration], and FBI [Federal Bureau of Investigation] standards." Aspetto's competitors were investing in aggressive marketing. MC Armor, for instance, received instant attention when Caballero shot Ballesteros on camera to demonstrate the product's efficacy." Aspetto decided not to invest in marketing for the civilian market. Haider explained Aspetto's marketing strategy: "This is a product we don't market because we don't want people to think we're cashing in on peoples' fear." In the body armour industry, pricing also remained a challenge. The Self Defense Company's Bodyguard Tactical Jacket was offered with Level-IIA protection for everyday wear and Level-IIIA protection for high- risk situations and was priced at $467 and $597, respectively." Haider mentioned that considering their quality, ballistic suits could not come at low prices." The minimum price in the industry for a custom-made ballistic suit was $4,600, and this could increase depending on the level of protection. All of Aspetto'sPage 6 W25189 bulletproof suits cost $ 10,000." To increase affordability, Haider suggested ballistic T-shirts. He said, "They [most people] can get more use out of a ballistic T-shirt ($950) than a suit." Aspetto's dress shirt cost around $1,500, the same price as its bulletproof boxer shorts. Aspetto also offered fleece jackets priced at around $2,500." Its bestseller was the bespoke Ballistic Suit Level IIIA ($5,000), comprising lightweight bullet-resistant panels." The suit could stop a bullet at point-blank range from most hand guns and met testing standards by the NIJ, DEA, and FBI. Aspetto's suits were also popular among National Football League players." Yamane believed that the price of bulletproof fashion was the primary obstacle for its growth in the civilian market, however, with technological advancement, the price could decrease-though never becoming so cheap that every civilian could end up possessing one." He said, "It [the price] will never be at the H&M or Uniqlo level, though." Davis was concerned that lowering prices could happen at the cost of cutting comers, as new entrants exploiting the market could ignore the high degree of specialization and quality required in body armour."9 OTHER DEVELOPMENTS IN THE BODY ARMOUR INDUSTRY Since 2019, research into three-dimensional (3D) printing technology that would enable the US military to print body armour for soldiers had been going on, where unused body armour due to poor fit was a concern. Scientists at the Army Research Laboratory were looking into the means to develop 3D print ceramic materials. If the research was successful, experts believed it would be an immense improvement to the US army, as it would enable large-scale customization of body armour both for men and women. 2 Another area of body armour investigation was related to environmental friendliness. Several research universities globally were exploring biomimicry principles to develop body armour. Biomimicry implied innovation-especially sustainable innovation-through inspiration from Mother Nature. 104 US defense Ise outside these parameters is a copyright violation . Authorized for use only in the course BUSI 7000 Strategic Management II at Memorial University of Newfoundland taught by Dr. Majid Eghbali-Zarch from 5/1/2022 to 8/31/2022. agencies were also actively funding such projects.'s By May 2020, the US Department of Defense had approved a $600,000 grant for the University of Houston, Texas for professors to develop lighter, tougher body armour with a coating of chitin derived from shrimp, mushrooms, and other organisms. 10 Chitin was a very sturdy natural material that formed the shells of several crustaceans, and it enabled body armour to withstand bullets, poison gas, microbes, and lasers."Researchers from Universiti Putra Malaysia in August 2020 developed body armour using the skin layer of coconut sheath that met NL's Level-III ballistic standard. 106 A coconut-based fabric was 44 per cent cheaper than Kevlar-based material. 109 THE ROAD AHEAD Hader, commenting on the need for Aspetto, said, "The typical body armor user is tired of not seeing any innovation in the industry for years." Though innovation was happening, no bulletproof clothing protected against blasts or explosions; rather, it protected individuals from slashing and bullets. As Aspetto intended to serve all military needs, Haider believed the company's existing contracts could help it overcome its challenge of being anewcomer in the military market. He said, "When we got into the armor industry we didn't know much about armor, we just knew we wanted to learn about it." 12 Aspetto was also getting inquiries about its ballistic clothing from other countries, such as the Netherlands and Australia Further, Haider believed the increase in mass shootings in the United States meant demand for body armour in the civilian market would only grow. However, he was aware that affordability was an issue for the civilian market, which was not the case with the military market." Should Haider prioritize the military market over the civilian market, or vice-versa? What growth strategies could he pursue, leveraging innovation in the body armour market?Page 7 W25189 EXHIBIT 1: COMPETITORS FINANCIALS AND MARKET SHARE (2017-2020) Point Blank Enterprises Inc Ceradyne Inc. Safariland Group (US$ Million) (US$ Million) (US $ Million) Market Share (2020) Year Revenue Operating Revenue Operating Revenue Operating Income Income Income Company Percentage Point Blank 2017 259.0 8.6 127.6 3.2 78.3 5.8 Enterprise 54.4 Inc. 2018 256.3 9.0 89.6 3.4 81.2 6.1 Ceradyne 20.2 Inc. 2019 354.3 14.7 131.7 2.8 84.5 6.9 jafariland Group 12. 6 2020 377.9 15.9 140.5 4.2 87 .8 72 Other 12.8 Source: Jacqueline Hiner, "Body Armor Manufacturing: Bulletproof: Rebounding Defense Spending Is Expected to Bolster Revenue," I BISWorld, February 2020. ASPETTO SALES AND EMPLOYEES (2010-20 Yea Sales (US$ Million) Employees 2010 0.01 2011 0.01 2012 0.26 2013 0.24 2014 0.25 2015 0.25 2016 0.45 Use outside these parameters is a copyright violation. Authorized for use only in the course BUSI 7000 Strategic Management II at Memorial University of Newfoundland taught by Dr. Majid Eghbali-Zarch from 5/1/2022 to 8/31/2022. 2017 0 45 2018 0.45 2019 Approximately 2.00 13 2020 Approximately 12.50 nia Source: "DUNS No.: 83-278-3521: Aspetto Inc.," Mergent Intellect, 2020, accessed March 27, 2021, https://www.mergentintellect.com/; Amy Feldman, "Fredericksburg-Based Aspetto Featured in Forbes," Fredericksburg Today, October 6, 2020, https://fredericksburg. today/2020/10/08/fredericksburg-based-aspetto-featured-in-forbes/; "Aspetto Inc., " Linkedin, accessed March 27, 2021, https://www.linkedin.com/company/aspettoinc. EXHIBIT 3: MANUFACTURING MACHINERY POSSESSED BY ASPETTO Universal Laser System-VLS6.60 Laser Cutter Eastman CR 500-RollerSpreading Equipment AccuMark Pattern Design Software ec tra Systems-Vector Eclipse 2500 VacuPress Testing System Single Needle Machines Multi-Field Bartack Machine Hot Knife Cutting Machines Note: This list is only a sample of the machinery owned by the company. Source: Aspetto Inc., Aspetto Capability Statement, Aspetto.com, accessed March 28, 2020, https:// defense. aspetto. com/images/CAPABILITY_STATEMENT.pdf.Page 8 W/25189 EXHIBIT 4: US BODY ARMOUR INDUSTRY (2014-2020) Revenue Domestic Federal Year Exports Imports Funding for (US$ Million) Demand (US$ Million) (US$ Million) (US$ Million) Defence (US$ Billion) 2014 466 537 105 582 2015 611 694 124 563 2016 676 781 127 560 2017 682 795 555 018 541 642 573 2019 686 800 615 2020 695 110 663 Source: Jacqueline Hiner, "Body Armor Manufacturing: Bulletproof: Rebounding Defense Spending Is Expected to Bolster Revenue," I BISWorld, February 2020. HIBIT 5: US BODY ARMOUR MANUFACTURING INDUSTRY: EXPORTS AND IMPORTS Exports Imports Country Percentage Country Percentage Saudi Arabia 25.2 Canada 34.7 United Arab Emirates 22.6 Switzerland 10.5 Japar 14 . 7 Italy 10.3 Israel 6.5 United Kingdom 7.0 Other 31.0 Other 37 6 Source: Jacqueline Hiner, "Body Armor Manufacturing: Bulletproof: Rebounding Defense Spending Is Expected to Bolster Use outside these parameters is a copyright violation. Revenue," I BISWorld, February 2020 Authorized for use only in the course BUSI 7000 Strategic Management II at Memorial University of Newfoundland taught by Dr. Majid Eghbali-Zarch from 5/1/2022 to 8/31/2022 EXHIBIT 6: SEGMENT-WISE CONTRIBUTION TO THE US BODY ARMOUR MANUFACTURING INDUSTRY REVENUE (2020) Product and Services Segmentation Percentage Major Market Segmentation Percentage soft body armour 38.8 United States military 59.9 Hard body armour 54.4 Law enforcement agencies and consumers 32.8 Other products 6.8 Other 4.1 Exports 3.2 Source: Jacqueline Hiner, "Body Armor Manufacturing: Bulletproof: Rebounding Defense Spending Is Expected to Bolster Revenue," I BISWorld, February 2020. EXHIBIT 7: GENDER-, AGE-, AND EDUCATION-BASED SUPPORT FOR STRICTER GUN LAWS IN THE UNITED STATES (2019 Gender Age Education Gun laws should be Men Women 30- 50- 65 College No (% ) 29 49 64 Grad College Total than they are to day (% ) Degree More strict 55 64 56 62 55 About right 27 64 60 30 33 29 32 28 Less strict Source: John Gramlich and Katherine Schaeffer, "7 Facts about Guns in the U.S.," Pew Research Center, October 22, 2019, https://www.pewresearch. org/fact-tank/2019/10/22/facts-about-guns-in-united-states/.Page 9 W/25189 ENDNOTES 1 This case has been written on the basis of published sources. Consequently, the interpretation and perspectives presented in this case are not necessarily those of Aspetto Inc. 2 Amy Feldman, "From Bullet-Resistant Suitsto Personal Body Armor: How Two Young Entrepreneurs Pushed TheirWay into Government Contracts," Forbes, October 6, 2020, https:/www.forbes com/sites'amyfeldman/2020/10/06/from-bullet- resistant-suits-to-tactical gear-how-two-young entrepreneurs-pushed-their-way-into--government- contracts/?sh=2c27fccf1af6. 3 Jim Dobson, "Bulletproof Fashion for Men: Extreme Clothing for the World Traveler," Forbes, June 15, 2016, https://www.forbes.com/sites/jimdobson/201 6/06/15/bulletproof-fashion-for-men-extreme-clothing-for-the-world- traveler/?sh=5bda6c391 e01. " Andrew D. Luecke, "This Is the Bulletproof Limo of Suits," Esquire, June 18, 2015, https//www.esquire.com/style/mens- fashion/a34714/how-to-be-bulletproof-in-regular-clothes/. Aspetto Inc., Aspetto Capability Statement, Aspetto. com accessed March 28, 2020, https:/ defense. aspetto. com/ images/CAPABIUTY_STATEMENT.pdf. 6 Feldman, "From Bullet-Resistant Suits."" 7 Feldman, "From Bullet-Resistant Suits.' Polly Mosendz, "A Virginia Retailer's Quest to Make Bulletproof Clothing Look Beautiful," Newsweek, March 29, 2015, https:/www.newsweek com/201 5/04/1 Offine-art-stopping-bullet-317491. html. 9 Feldman, "From Bullet-Resistant Suits."; "Industry Trends: Bulletproof Vest Market," Global Market Insights, August 2020, https://www.gminsights.com/industry-analysis/bulletproof-vest-market; "MC Armor," Zoominfo.com, accessed June 21, 2021, https:/www.zoominfo. com/ c/mc-armor-company/452235592. 10 Feldman, "From Bullet-Resistant Suits." 11 AdeleUphaus, "UMW Alums, Aspetto Founders Included on Forbes '30 Under 30' List," The Free Lance-Star, November 26, 2017, https://fredericksburg.com/ news'localjumw-alums-aspetto-founders-included-on-forbes-30-under-30- list/article_8d7e397 e-ba0b-5239-95b3-fa335d2a03df. html. 12 AdeleUphaus, "UMW Alums." Cori Coffin, ' "High-End Bulletproof Fashion Growing in Popularity," Fox 5 DC, December 19, 2017, https:/www.fox 5dc.com/ news/high-end-bulletproof-fashion-growing-in-popularity. " Coffin, "High-End Bulletproof Fashion." 15 Chelsea Greenwood, "Inside America's Growing Bulletproof Clothing Industry," Racked, December 14, 2017, Use outside these parameters is a copyright violation. Authorized for use only in the course BUSI 7000 Strategic Management II at Memorial University of Newfoundland taught by Dr. Majid Eghbali-Zarch from 5/1/2022 to 8/31/2022. https://www.racked.com/2017/12/14/16738162/ bulletproof-clothing. Greenwood, "Inside America's Growing Bulletproof Clothing Industry." 17 AdeleUphaus, "UMW Alums.' 15AdeleUphaus, "UMW Alums." 19 All currency amounts are in US dollars AdeleUphaus, "UMW Alums." 21 "DUNS No.: 83-278-3521: Aspetto Inc.," Mergent Intellect, 2020, accessed March 27, 2021, https://www.mergentintellect.com/. 22 Feldman, "From Bullet-Resistant Suits." 25 AdeleUphaus, "UMW Alums." 24 Aspetto Inc.'s Linkedin page. Linkedin. Accessed March 27, 2021, https//www.linkedin.com/company/aspetto-custom-clothiers. 25 "Top 20 Best Bulletproof Backpack & Clothing Suppliers," The International Man, February 18, 2017, https://www.theinternationalman.com/bulletproof-clothing.php. 25 Greenwood, "Inside America's Growing Bulletproof Clothing Industry." 2 Greenwood, "Inside America's Growing Bulletproof Clothing Industry." 26 Jacqueline Hiner, " Body Armor Manufacturing: Bulletproof: Rebounding Defense Spending Is Expected to Bolster Revenue," 18ISWorld, February 2020. 2 Hiner, "Body Armor Manufacturing." Greenwood, "Inside America's Growing Bulletproof Clothing Industry." 31 Hiner, "Body Armor Manufacturing." 32 Hiner, "Body Armor Manufacturing.' Dobson, "Bulletproof Fashion for Men." " Dobson, "Bulletproof Fashion for Men." "How Does Soft and Hard Body Armor Work?," Bodyarmordirect.com, accessed March 28, 2021. https:/www.bodyarmordirect.com/blogs/body-armor-direct/how-does-soft-and-hard-body-armor-work. 3 AdeleUphaus, "UMW Alums." Mosendz, "A Virginia Retailer's Quest to Make Bulletproof Clothing Look Beautiful." 3 Mosendz, "A Virginia Retailer's Quest to Make Bulletproof Clothing Look Beautiful." 39 Mosendz, "A Virginia Retailer's Quest to Make Bulletproof Clothing Look Beautiful." "David Crane, "James Bond 007 Tech: Aspetto NIJ Level IIIA Soft Armor Bullet-Resistant Blazer/ Sport Coat for Ultra-Lo- Pro/Lo-Vis Ballistic/Body Armor Protection! (Video!)," Defense Review, October 24, 2017, https://www.defensereview.com/aspetto-nij-level-ilia- soft-armor-bullet-resistant-blazersport-coat-for-ultra-lo-prolo-vis- ballisticbody-armor-protection-video.Page 10 W/25189 " Coffin, "High-End Bulletproof Fashion." 12 Coffin, "High-End Bulletproof Fashion." " Coffin, "High-End Bulletproof Fashion." " Polly Mosendz, "Small Virginia Retailer Corners the Market on Fashionable Bulletproof Suits," The Atlantic, June 4, 2014, https://www.theatlantic.com/technology/archive/201 4/06/small-virginia retailer-corners-the-market-on-fashionable- bulletproof-suits/372178/. 15 Feldman, "From Bullet-Resistant Suits.' 15 Feldman, "From Bullet-Resistant Suits." " Feldman, "From Bullet-Resistant Suits." "AdeleUphaus, "UMW Alums." "Coffin, "High-End Bulletproof Fashion." Luecke, "This Is the Bulletproof Limo of Suits." 51 AdeleUphaus, "UMW alums." 52 AdeleUphaus, "UMW Alums." Polly Mosendz, "Bullet-Proof Fumishings Finish Off a Room," Detroit News, March 8, 2016, https:/www.detroitnews.com/story/business 201 6/03/08/bullet-proof-furnishings-finish-room/81500894/. 5 Mosendz, "Bullet-Proof Furnishings Finish Off a Room.' $5 Mosendz, "Bullet-Proof Furnishings Finish Off a Room." 56 Greenwood, "Inside America's Growing Bulletproof Clothing Industry.' 5 Greenwood, "Inside America's Growing Bulletproof Clothing Industry. "Shop," Aspetto, accessed October 22, 2021, https:/apparel.aspetto.com#product-filter?category=shop&sort=&price=&search=. 59 Luecke, "This Is the Bulletproof Limo of Suits." 60 Corky Siemaszko and Sandra Lilley, "Survival of the Stylish: This Company Makes Bulletproof Fashionable," NBC News, June 25, 2016, https://www.nbcnews comews/us-news/survival stylish-company-makes-bulletproof-fashionable-n597 301. $1 Greenwood, "Inside America's Growing Bulletproof Clothing Industry." 62 Siemaszko and Lilley, "Survival of the Stylish." Siemaszko and Lilley, "Survival of the Stylish." 6 Siemaszko and Lilley, "Survival of the Stylish." 65 Luecke, "This Is the Bulletproof Limo of Suits." 6 Coffin, "High-End Bulletproof Fashion." 57 Lisa Dunn,' w Many People in the U.S. Own Guns?," Wamu.org, September 18, 2020, Use outside these parameters is a copyright violation. Authorized for use only in the course BUSI 7000 Strategic Management II at Memorial University of Newfoundland taught by Dr. Majid Eghbali-Zarch from 5/1/2022 to 8/31/2022 https://wamu.org/story/20/09/1 8/how-many-people- in-the-u-s-own-guns/. Phillip B. Levine and Robin Mcknight, "Three Million More Guns: The Spring 2020 Spike in Firearm Sales," Brookings, July 13, 2020, https:/www.brookings edu/blog/up-front/2020/07/13/three-million-more-guns the-spring-2020-spike-in-fire 69 Gloria Riviera, Ignacio Torres, and Kelly Mccarthy, "Bulletproof Clothing Designers Say US Demand Is on the Rise," ABC News, July 12, 2018, https://abcnews.go.com/Business/bulletproof-clothing- designers-us-demand-rise/story?id=56532717. " Greenwood, "Inside America's Growing Bulletproof Clothing Industry." " Greenwood, "Inside America's Growing Bulletproof Clothing Industry." 12 Greenwood, "Inside America's Growing Bull of Clothin 13 Riviera, Torres, and Mccarthy, "Bulletproof Clothing Designers Say US Demand Is on the Rise." " Riviera, Torres, and Mccarthy, "Bulletproof Clothing Designers Say US Demand Is on the Rise." 75 Riviera, Torres, and Mccarthy, "Bulletproof Clothing Designers Say US Demand Is on the Rise." 76 Riviera, Torres, and Mccarthy, "Bulletproof Clothing Designers Say US Demand Is on the Rise." " Riviera, Torres, and Mccarthy, "Bulletproof Clothing Designers Say US Demand Is on the Rise." 78 Greenwood, "Inside America's Growing Bulletproof Clothing Industry." 79 Greenwood, "Inside America's Growing Bulletproof Clothing Industry." 30 Riviera, Torres, and Mccarthy, "Bulletproof Clothing Designers Say US Demand Is on the Rise." 31 AdeleUphaus, "UMW Alums." 32 Samantha German, "Behind the Making of Aspetto Inc.'s Bulletproof Clothing," Wral.com, February 27, 2018, https:/www.wral.com/behind-the-making- of-aspetto-inc-s-bulletproof-clothing/1 7377424/. Mosendz, "Small Virginia Retailer Corners the Market on Fashionable Bulletproof Suits." 34 Scott Burton, "36 Important Facts about Body Armor," Bodyarmornews.com, March 29, 2018, https:/www.bodyarmornews. com/allabout-body-armor-36-facts 35 Luecke, "This Is the Bulletproof Limo of Suits." 35 Mosendz, "A Virginia Retailer's Quest to Make Bulletproof Clothing Look Beautiful." Luecke, "This Is the Bulletproof Limo of Suits." Coffin, "High-End Bulletproof Fashion." 39 Siemaszko and Lilley, "Survival of the Stylish." so Greenwood, "Inside America's Growing Bulletproof Clothing Industry." 91 Luecke, "This Is the Bulletproof Limo of Suits." 92 Luecke, "This Is the Bulletproof Limo of Suits." 30 Siemaszko and Lilley, "Survival of the Stylish." 94 Siemaszko and Lilley, "Survival of the Stylish." 95 Siemaszko and Lilley, "Survival of the Stylish."IVEy Publish Press | Esc | to exit full screen W25189 ASPETTO: INNOVATION-BASED GROWTH STRATEGY OF A BALLISTIC CLOTHING COMPANY Arpita Agnihotri and Saurabh Bhattacharya wrote this case solely to provide material for class discussion. The authors do not intend to liustrate ether effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other wentifying information to protect confidentially. This publication may not be transmitted, photocopied, digitized, or otherwise reproduced in any form or by any means without the permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction right organization. To order copies or request permission to reproduce materials, contact ivey Publishing, Ivey Business School, Western University, London, Ontario, Canada, NG ON1; (t) 519.661.3208; (e) cases@ivey.ca; www.Neycases. com. Our goal is to publish materials of the highest quality; submit any errata to publishcases@ivey.ca. Copyright @ 2021, ivey Business School Foundation Version: 2021-11-15 Virginia, US-based Aspetto Inc. (Aspetto) integrated fashion with ballistic clothing. Its ballistic clothing protected the wearer from bullets-offering defense from firearms, revolvers, and submachine guns-though it did not provide any protection against blasts.' Aspetto's ballistic clothing was the lightest and strongest in the world.* The company delivered thousands of armour products every year to customers se outside these parameters is a copyright violation . that included the United States Air Force, the United States Marine Corps, the US Department of State, and Authorized for use only in the course BUSI 7000 Strategic Management II at Memorial University of Newfoundland taught by Dr. Majid Eghbali-Zarch from 5/1/2022 to 8/31/2022 various law enforcement agencies.' Co-founders Abbas Haider (chief executive officer) and Robert Davis (chief operating officer) were listed in Forbes 30 Under 30: Manufacturing & Industry in 2018 for being game-changers in the body armour industry. Haider said, "Innovation is what really helped us," adding, "The reason we were able to develop these better solutions for the military is that we were looking at it from a different perspective, from fashion." Aspetto's ballistic clothing was also popular in the civilian market, where demand for it escalated after every shooting incident in the United States. By October 2020, demand for ballistic clothing in the US civilian market was increasing though only smaller players were operating in the market, such as Aspetto and MC Armor." In contrast, the military segment had only a few key players (see Exhibit 1). With Aspetto's intent to innovate, and recognizing an opportunity in the military market, Haider needed to decide where to priontize Aspetto's focus: the civilian market or the military market, saying, "the goal is to continue doing innovative stuff on the armor side and diversify."10 Should Haider focus more on the civilian market or on the military market? How could he ensure growth through innovation? What strategic growth plan would allow him to do this? BACKGROUND Haider had been an entrepreneur since high school, when he managed an import-export business he had funded from savings eamed working at a Men's Wearhouse store. He was clear at that time that in the future he wanted to create branded suits." The idea for Aspetto came to Haider in 2008 as a freshman at the University of Mary Washington in Fredericksburg. In his senior year, Haider met Davis in a course on international business strategy that asked students to invent a product that could be successful in foreign markets. " Their target region was the war-torn Middle East. Hai der said, "The idea came to us that, 'Hey, how about we combine armor and clothing together?"" He added, "We realized there was nobody in