Asics, headquartered in Kobe, Japan, is a multinational corporation that manufactures and sells running shoes, sneakers, and athlete apparel. It was founded by Kihachiro Onitsuka in 1949 when he opened Onitsuka Co.
Asics traditionally boasts strong brand power in sports footwear, including marathon and volleyball. As of 2024, it is the best-selling brand of sports shoes in Japan. Overseas sales have also steadily increased. The company name Asics is derived from the Latin phrase 'Anima Sana in Corpore Sano,' meaning 'a sound mind in a sound body,' attributed to the ancient Roman poet Juvenal. Asics recorded a loss in 2020, trailing competitors like Nike and facing a survival crisis. However, it is now anticipated that sales and operating profit for 2024 will set record highs, indicating a successful revival. What is the reason for Asics' resurgence after four years of struggling with losses? A major factor is the improved performance of its premium brand and fashion sneaker line, 'Onitsuka Tiger,' which resulted in reduced discount sales and reinforced inventory management. Yet, underlying this success is the invisible leadership of the externally recruited Chief Executive Officer (CEO).
Successful innovation case of an external CEO
Nike, the world's largest sportswear company, began selling carbon plate running shoes in 2017. This groundbreaking new product is referred to as the 'sole revolution'. Previously, there was a widespread belief that thicker soles made running difficult. However, by creating a thicker sole while achieving lightweight construction, Nike succeeded in combining speed and comfort. Such shoes quickly gained popularity among global athletes.
Yasuhito Hirota, who previously served as a representative at Mitsubishi Corporation, was recruited by Asics in 2018 as an external figure. When he took office as president in the first half of 2018, Nike was dominating the running shoe market with its thick-soled shoes. Athletes wearing Nike products were setting new records at world competitions, while not a single athlete was wearing Asics running shoes. Asics was completely outmatched by Nike, which had achieved the sole revolution. Hirota, who is both chairman and CEO of Asics, noted, 'We all acknowledged our defeat against Nike.' However, simply acknowledging defeat was not an option. He researched ways to reclaim the glory of Asics running shoes. He deliberated with developers on whether to pursue thick or thin soles. Some of Asics' internal developers argued for the development of thick soles like Nike's, while many advocated continuing to produce lightweight shoes. Those opposing thick soles claimed, 'Thick soles are not a crucial factor in improving records,' and 'Running shoes with thick soles shorten an athlete's lifespan.' The more industry experience an employee had, the louder their opposition. It was a moment that called for Hirota's leadership.
Spending sleepless nights filled with resentment
November 2019 was a humiliating time for Hirota as CEO. He received a cold evaluation from institutional investors at an investment briefing in Boston, USA. As negative comments like 'Is Asics okay as it is?' and 'It's different from the former Asics' poured in, Hirota resolved to create shoes capable of competing with Nike. He then initiated a new project with a goal of becoming the best in the world. The project name was inspired by the management philosophy of Asics founder Kihachiro Onitsuka, known as the 'Peak Strategy.' This meant consolidating efforts to become the best in a specific area rather than in all businesses. Drawing from the Japanese pronunciation of 'peak,' Chōjō, the name of the Asics revival project was designated as the 'C Project.'
The process of creating new shoes was completely overhauled. Previously, the development department led the creation of new shoes. The entire process, involving research and development, marketing, product registration, manufacturing, sales, and promotion, took about three years. Hirota deemed this process overly slow and unnecessary. In the winter of 2019, he gathered young employees from various institutional sectors and proposed, 'Let's create the fastest shoes in the world.' Their target was the Tokyo Olympics in July 2020 (actually held in July 2021). They aimed to complete in one year what had previously taken three years. At that time, a sense of crisis pervaded Asics, as the company's presence was declining in athletic competitions globally ahead of the Olympics, causing its stock prices and brand power to plummet. Recognizing this situation, Hirota CEO sought solutions through building empathy among the rank-and-file employees. He reinforced on-site management by meeting once a week with employees to check development progress and visiting development sites. Hirota's proactive approach rallied employees together with the mindset of 'We will definitely create the highest quality shoes.'
Additionally, the opinions of athletes who directly wear the products were actively incorporated. Previously, shoes were developed by distributing completed prototypes to athletes for feedback. However, the C Project enabled athlete participation from the very beginning of development. The resulting product was Asics' flagship running shoe, the 'Meta Speed.' Under the pandemic's delay, the Tokyo Olympics were pushed back by a year, but at the London Marathon in October 2020, American athlete Sara Hall, wearing Asics, finished in second place. Furthermore, during the triathlon at the Tokyo Olympics in summer 2021, athletes wearing Asics won gold medals in both the men's and women's categories. This proved Hirota's direction was correct. As a result of these achievements, the number of athletes using Asics running shoes in marathons surged. From nearly 0% in 2021, the percentage of athletes participating in marathons wearing Asics was 11.4% in 2022, 15.2% in 2023, and 24.8% as of October 2024.
Success in new product development, the return of Asics
The phrase 'the return of Asics' began circulating within the industry. This was because the results of the C Project were evidenced in 21 marathons worldwide, including the six major marathons in Europe. The number of Asics-wearing athletes finishing in the top three increased from 10 in 2022 to 16 in 2023, and to 23 as of October 2024. Asics has steadily strengthened its influence beyond long-distance races like marathons, also interacting with top athletes in short-distance track events. At the World Athletics Championships in 2022, five of the finalists wore Asics products, increasing to 14 in the 2023 competition. Thanks to these efforts, on Oct. 13, 2024, at the Chicago Marathon, one of the six major marathons in the world, Asics-wearing athlete John Korir from Kenya emerged victorious. Although athletes like Naoko Takahashi and Mizuki Noguchi won gold medals at the Olympics in Asics running shoes in the early 2000s, recently, athletes in top positions had monopolized victories while wearing Nike shoes, making this win more precious for Asics than ever before.
Asics aims for the top position in global market share
Asics has set its sights on achieving the top market share in the running shoe markets of the U.S., Japan, and Europe. Hirota CEO stated in the company's mid-term management plan this November, 'We aim to achieve 10% revenue growth every year and an operating profit of 130 billion yen (approximately 1.3 trillion won) by 2026.' To reach these goals, Asics plans to actively target the high-priced sports goods market dominated by global leader Nike. He remarked, 'The global running shoe market is shifting to a 'fashion' trend,' and announced plans to significantly increase sales of high-priced lifestyle sneakers. Asics is also actively pursuing emerging markets, such as China, India, and Southeast Asia, where the market is rapidly growing.
To enhance quality competitiveness, plans are underway to reorganize the 'Asics Sports Science Institute,' established in 1990, and create a research-focused 'Asics Innovation Camp' in Kobe.