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Many of you may have noticed the term “YKK” on the zippers used in many of our clothes. I have often wondered what this term stands for, and also who exactly is the firm that makes these zippers. Turns out that YKK, which stands for Kogyo Kabushikikaisha, has more than 50% market share in the zipper industry (annual volumes of more than 7 billion zippers!). One would think that zippers are largely commodities, so there should be rampant price competition (with buyers asking for a base level of quality). buyers (usually production managers at apparel firms) are not that price sensitive the cost of a zipper (30 cents) is miniscule compared to the cost (and esp the retail price) of an average garment but it is crucial that it works reliably (you dont want your zipper to break down at work, or at home for that matter!
polo ralph lauren frames Business Strategy Blog
). While the market has a lot of cheaper options available, none of them offer the same reliability that YKK offers. I suspect this enormous scale implies YKK has a cost advantage as well (possibly scale economies in purchasing and maybe manufacturing), but clearly the firm is able to charge a premium due to its differentiation based on quality and reliability. YKK a “vertical architect” like Coke or Intel? Probably not end buyers dont base their apparel buying decisions on the brand of the zipper, so there is little “demand pull” (pun unintended!). However, YKK clearly captures value owing to its reputation of being able to produce reliable, high quality zippers. interesting read throughout.
polo ralph lauren frames Business Strategy Blog

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