Camelbak

Stephen Manzi

0301

1. Discuss how business relationships and strategic partnerships have helped to increase the value of CamelBak’s products and the business itself.

* After the CamelBak inevitably spread throughout the cycling world, the company began to make profitable relationships and really grow its product’s value. In 1995, Kransco bought the brand from its original owner for $4 million, and established a relationship commitment with the U.S. Military. The military models were designed to not only serve as a crucial hands-free hydration device during combat, but also function as camouflage and protective body armor, greatly increasing their value.

* A few years later, structural improvements like the sturdier WaterBeast reservoir, a resilient nozzle, 99.99% bacteria-removing tube linings, and an LIRR system (developed in a strategic alliance with DuPont) allowed CamelBak’s cash cow to claim 90% of the military’s packs worn today. Recently, the water pack added a CBR 4.0 technology, meant to withstand biological warfare, which has driven the product’s price to about $200 per pack. Today, the CBR 4.0 is used by many military and government related agencies around the globe. Therefore, it is no wonder that former financial giant Bear Sterns was willing to pay over $200 million to purchase CamelBak in 2003.

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2. What type(s) of business market customers does CamelBak sell to?

* CamelBak’s most profitable products are the heavily researched and developed; high-tech packs it manufactures to sell to international military and federal government related agencies. However, the company also offers cheaper packs designed for much less intense usage, which they distribute through resellers (usually outdoor or sporting good stores), then to the average consumer for recreational and athletic activities.

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3. Review the types of demand that most influence business markets. Which ones do you think are most important for CamelBak to...