“Innovation,” says Marco Lucietti, Global Marketing Director of ISKO—the global denim giant—“is anything that makes the lives of people better, and it is finding something that people and consumers have not yet found on the market. Innovation is about being able to interpret the unspoken needs of the consumer and to put [products] on the marketplace that they would like to buy, and products that they didn’t think to buy two years ago, but which now are available due to innovation.”
A Blue Ocean Strategy is one that mimics the behavior of the Marlin. It’s a concept that was developed in 2005 by W. Chan Kim and Renée Mauborgne, and it argues that instead of spending time and energy competing with the businesses in your same patch of the sea, a company should look outwards into the blue, and work towards creating new markets by exploiting an otherwise empty area. It is a concept that has been immensely popular in Silicon Valley—Apple being a seminal example of a company that develops new products which create their own entirely new market in the process. It’s a tactic that avoids competition in the “red” water where resources are scant, but that directs the effort of the company towards a “blue,” or less heavily populated part of the sea, where the company can exist sustainably.
ISKO is one of the biggest fish in the red water, and plays a role in the production of a third of global denim sales—one pair of jeans out of every three passes through their factories at some point—yet time and again ISKO continues to expand out into the blue water. They work from a crossroads, dominating an established market, yet at the same time forging ahead into entirely new markets. It is easy to see that their home base is an ideal location for this sort of ambidextrous venture—ISKO is based in Istanbul, the historical gateway between the East and the West.
“ISKO is a novelty because we have our cradle in a historical city,” says Marco Lucietti over the phone from his office in Milan, “I like to make a comparison—if you remember, the Florence of the 15th century, you have Michaelangelo, you had Machiavelli, intellectuals going to Florence in the 15th century because they found the right place to express themselves. It was financing, painting, and culture, and so on. I guess that this is more or less the same place, we have a very international team of people.”
ISKO’s journey into textiles began back in 1904. Over the 20th century the company grew ever-larger, and in 1989 opened the world’s largest single-space denim manufacturing plant—a facility that produces 250 million meters of fabric per year—if stretched from the earth, this would reach almost two-thirds the distance to the moon.
ISKO pursues many space age innovations, with its latest including POP Stretch technology—a 100% cotton that feels more like silk, and Scratch’n Jean—the first three dimensional denim that allows for infinite customization. ISKO has also launched Arquas—a research platform to drive innovation in high performance sports and fitness apparel.
Lucietti has been with ISKO for five years. During his tenure at the Turkish business-to-business firm he has seen dramatic change, not least in the fields of branded textiles. You might think that with such a strong dominance in the red water—selling a material that has a place in almost every person’s closet—ISKO would be content to keep doing what works and to resist innovation, but in fact they embrace and thrive on it, pushing the market into everything from Jeggings—super-stretch denim style leggings, to Bluejym—comfortable denim style exercise wear.
While the Marlin stays ahead of its competitors with speeds greater than 50 miles an hour, it still competes against a formidable pantheon of predators like the Mako shark. Similarly, while ISKO stays in the lead with its ingenuity, competition in the global market remains fierce. “In a theoretical point of view,” Lucietti says in response to a query about staying in the lead, “As far as competition is fair, the question is, ‘What is the competition?’ In a market where 90% of the case is fair competition, it drives the market in a better direction. [Our] market is a very competitive environment and competition adds to the quality of the market, and leads us to develop a better product for consumers.”
Ecosystems are indeed strengthened through competition. In the denim industry, by competing in a strong marketplace, the overall demand is enhanced, and the capacity to individualize the product is greater. “Community benefits from individuality,” Lucetti points out, “because at the end of the day, we have to keep the individuality of each person, and satisfy their needs as individuals. But such an individuality can’t take place without the community working for the same goal, so there must be a business direction. If we see individualism as a need driving innovation, then we must consider the individual as a part of a community.”
ISKO fosters competition and community through its I-Skool program, which is a division of their R&D branch, “Creative Room.” Each summer for the last two years in Milan, ISKO sponsors a creative and marketing competition for fashion students to demonstrate their talents at finding new blue water, and win an internship at ISKO or one of its affiliate companies.
“The times we are living are the times for ingredient brands.” Lucietti muses, “Today, with the availability of information you have on the web, consumers are willing to understand why they are paying money for a premium product. And one of the main reasons to justify the premium of the garments on top of brand loyalty, is to explain the stuff of which garments are made of. It is fabric at the end of the day, if you are able to explain that your premium pricing is thanks to premium ingredients, I guess that is what we are trying to do now.”
Although the Jegging market is no longer the blue water it was—with other brands bustling into the space—and although some reports are claiming the skinny jean is “over,” ISKO has repeatedly succeeded in finding the bluest water in an ocean of denim.
Advocates of this bluest of oceans, Kim and Mauborgne write that: “When imitation requires companies to make changes to their whole system of activities, organizational politics may impede a would-be competitor’s ability to switch to the divergent business model of a blue ocean strategy.” ISKO has succeeded in avoiding the pitfalls of the imitation game, and continues to rely on their capacity to innovate to stay ahead, deep out in the blue.