De La Salle University

Ramon V. del Rosario College of Business

Firewire Surfboards Light Up with CAD

In partial fulfilment
of the Course Requirements for MIS535M
(Information Management)

Submitted by:

Baguisi, Zyril
Balbuena, Jade
Sacramento, Jayvee
Tayag, Irish

Submitted to:
Prof. Jeffrey Roxas

February 22, 2020

 FireWire Surfboards

I. Summary of Findings
The case is how FireWire utilizes computer-aided design (CAD) software that allows them to
design surfboards, instead of having it hand-crafted by shapers. With CAD, the design of the
surfboards is 85 to 90 percent complete, leaving the artisan to complete the customization and
lamination process. However, manufacturing a single surfboard would take 29 time-consuming and
labor intensive processes. Offering a personalized CAD to average customers is impossible since it
will overburden FireWire’s CAD software.

Customers that want to have customized boards would need to fill-out a form and indicate their
dimensions for the requested changes then FireWire will design the surfboards based on those
dimensions. With that, Firewire started working with ShapeLogicNX software in 2009 to develop its
own Firewire Surfboards’ Custom Board Design (CBD) which would allow customer users to
customize dimensions of established models to how they want it.

When customers use the system to order custom boards, the CBD then generates a precise CAD
model which will then be transmitted directly to the Firewire factory for driving the Computerized
Numerical Control (CNC) machines to manufacture the board. Firewire also gains an additional
benefit from this streamlined process because customers would want to share their design through
social media and ask fellow surfers for opinions and advice. This led to more customers to the
Firewire site on how surfboard customization has become interactive.

II. Company Background

FireWire Surfboards was formed by Nev Hyman, Mark Price, and a group of longtime
surfing friends in Carlsbad, California. This surfboard company thrived because of their innovation
and first major change in the surfboard composition and assembly methods. Instead of using
polyurethane resin and polyurethane foam, their boards are composed of expanded polystyrene
(EPS) foam, epoxy resin, and balsa wood. Because of the materials they use, the surfboards they
produce are lighter, stronger, and more flexible. Furthermore, their materials have reduced
environmental impact since the compounds emit only produce 2 percent of harmful compounds.

The company is competing in a crowded field that includes Isle Surfboards, Surftech, Aviso
Surf, Boardworks Surf, Channel Island, and Lost Enterprise.

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FireWire Surfboards

A. SWOT Analysis
Strengths Weaknesses
● Surfboards are composed of ● Multifaceted manufacturing process
expanded polystyrene, epoxy made it impossible to offer
resin, and balsa wood; thus personalized CAD to average
having reduced environmental customers
impact
Internal ● Custom boards had to be ordered by
● FireWire produces custom filling out a form with various
surfboards instead of off-the- dimensions for the requested changes
rack sizes
● No visual representations of the
● They utilizes CAD to in
adjustments or assess impact on the
designing 85-90 percent of the
board/s volume
surfboard
Opportunities Threats

● Top-level competitive surfers as ● FireWire competes in crowded fields

customers can drive the broader and against other competitors.
surfing market
External
● Sharing of customers unique
designs through social media
which in turn would be a buzz
that would boost sales

B. Value Chain Analysis

Value chain analysis (VCA) is a process where a firm identifies its primary and support
activities that add value to its final product and then analyze these activities to reduce costs or
increase differentiation. It is a strategic tool used to analyze internal firm activities. Its goal is to
recognize which activities are the most valuable (i.e. are the source of cost or differentiation
advantage) to the firm and which ones could be improved to provide competitive advantage. In
other words, by looking into internal activities, the analysis reveals where a firm’s competitive
advantages or disadvantages are. The firm that competes through differentiation advantage will
try to perform its activities better than competitors would do. If it competes through cost
advantage, it will try to perform internal activities at lower costs than competitors would do.
When a company is capable of producing goods at lower costs than the market price or to provide
superior products, it earns profits.

Value chain represents the internal activities a firm engages in when transforming inputs
into outputs. The most common value chain analysis used is Porter’s value chain analysis.

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FireWire Surfboards

Below is the value chain analysis applied to FireWire Surfboards

Primary Activities

Inbound Logistics Suppliers provide expanded polystyrene, epoxy resin, and balsa wood
as raw materials for the surfboard.

Operations Firewire competes in crowded fields that include Isle Surfboards,

Surftech, Aviso Surf, Boardworks Surf, Channel Island, and Lost
Enterprise.

Outbound Logistics Surfboards can be either sold off-the-rack or made-to-order after using
CAD.

Marketing and Sales FireWire markets both its off-the rack its bespoke surfing board
service. The latter offers the customer a way to make the surf boards
personalized. For professional surfers, they can get the best
performance possible since their surf boards are custom-built.

Service The customer can make a return purchase with FireWire since they can
to save their own designs, print it, or retrieve it later.

Secondary Activities

Firm Infrastructure Firewire utilizes CAD software which allows them to design
surfboards. With the the new CBD, it allows customers to customize
established boards, then feeds it directly to the CNC machine to
manufacture the board upon ordering.

Human Resource They employ shapers to perform finishing touches to the surfing

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FireWire Surfboards

Management board.

Technology CBD allowed customers to be able customize established boards, thus

Development they use technology to directly manipulate board dimensions thus
eliminating: (1) the use of paper to indicate board dimensions, (2) the
staff in having to process requested dimensions into the CAD system,
and (3) the overburdening of CAD system.

Procurement Because of the CAD technology that FireWire employs, they are more
efficient in procurement because they will be able to more accurately
forecast how much raw materials they need.

C. Porter’s Five Forces

The Five Forces model is named after Harvard Business School professor, Michael E.
Porter. Porter's Five Forces is a model that identifies and analyzes five competitive forces that
shape every industry and helps determine an industry's weaknesses and strengths. Five Forces
analysis is frequently used to identify an industry's structure to determine corporate strategy. It is
a business analysis model that helps to explain why various industries are able to sustain different
levels of profitability. Understanding Porter's Five Forces and how they apply to an industry, can
enable a company to adjust its business strategy to better use its resources to generate higher

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FireWire Surfboards

earnings for investors. Five Forces analysis can be used to guide business strategy to increase
competitive advantage. (Chappelow, 2019)

Below is the five forces analysis for FireWire Surfboards:

Industry Rivalry HIGH - According to the case text, FireWire Surfboards is competing
in a crowded market that includes a number of companies. This means
that industry rivalry is high because there are a number of competitors
fighting for market position for a niche market like surfers.

Supplier Power HIGH - Since FireWire is alone in reintroducing balsa wood to the
board rails, and are using materials that are only exclusive to FireWire.
Firewire is also introducing environment-friendly materials, which may
be harder to source so their suppliers may have leverage over pricing.

Threat of New LOW - The market is a crowded space, according to the case text, so
Entrants new entrants might not be as encouraged to enter the market. They will
have a hard time winning market share in a competitive space.
However, that might not deter some from entering the market.

Buyer Power HIGH - Rising interest in surfing among adventure enthusiasts,

especially millennials, has been a crucial factor driving the demand for
and sales of surfing equipment, such as surfboards, gear, apparel, and
accessories. (Grand View Research, 2019)

Since Firewire is competing in a crowded space, buyer power is high

because customers can choose to go to other brands.

Threat of Substitutes HIGH - Because the industry rivalry is high, and FireWire is
competing in a crowded market space, the threat of substitutes is also
high. In addition, surfing is a seasonal sport - no one really does surfing
during the winter or rainy seasons.

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 FireWire Surfboards

III. Answers to Case Questions

1. Analyze Firewire using the value chain and competitive forces models. See the section for
VCA and Porter’s Five Forces.
2. What strategies is Firewire in using to differentiate are its products, reach its customers,
and persuade them to buy its products? One of the main selling points of FireWire is their
bespoke surfboard service, where the customers can log in to their website and design their own
customized surfing boards. ShapeLogic made the production process unique because computers
made 85-90% of the board were finished by skilled artisans. Previously, they couldn’t offer mass
customization a wider customer base (it was only once available for professional surfers), but
ShapeLogicNX and FireWire collaborated to make this unique market proposition possible for
the general surfing public.
Another selling point for FireWire is their environment-friendly materials, which they claim only
emit only 2 percent of the harmful compounds of traditional boards. Surfing is a sport that uses
the environment (the sea) so the group believes that FireWire is using this as a selling point to
indicate to customers that “you are using environment-friendly materials to explore and enjoy our
environment”, which will be a hit for the millennials who are now more concerned with the
environment and social issues (Robinson, 2019).
Another strategy of Firewire is its interactive nature, which allows customers to interact with each
other and improve their designs. They can also report their shopping experience on the website.
This “word-of-mouth” drives customers to the FireWire website, and generates sales for them.
3. What is the role of CAD in Firewire’s business models? For the customer side, CAD allowed
FireWire’s customers to design their own surfing boards and crowdsource it, while sitting in front
of their computer desks at home. This allowed a wider audience to have a personalized product.
In addition, the customer can login to his/her account and retrieve previous custom specifications
made, which will help in the decision to make a repeat purchase with FireWire. For Firewire,
ShapeLogicNX allowed the company to offer a wide range of customizations to its customer base
while keeping its production process streamlined.

4. How did the integration of online custom board design software (CBD), CAD, and
computer numerical control (CNC) improve Firewire’s operations? As said earlier, it
improved the production process by reducing errors in the manual production process by
producing a surfboard that is 97% complete and reduced work done by hands by 10%. It also
improved the customer experience and the buzz generated additional sales for FireWire, while not
crippling the production process of the company. This entire process also ensures that a custom
surfing board by a customer can be remade with precision, which encourages repeat purchases.

a. CBD - This allows customers to create their own designs and share these designs to their
friends (or surfing experts) so that it could be improved. This makes for an interactive
experience which encourages collaboration in the surfing community.

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FireWire Surfboards

b. CAD - The computer-aided process of Firewire ensures that designs are replicable
anytime the customer wants to make a purchase. They can also save their designs in PDF
format which allows for greater collaboration even for those not in the website.

c. CNC - The computer numerical control production process ensures a precise production
process without the need for human experts. Human artisans are only for the finishing
process of the surfing boards and are not involved in the construction of the surfboard.

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 FireWire Surfboards

IV. Analysis and Recommendations

Recommendation

In order to address the capacity issues of Computer-Aided Design (CAD) system to accommodate
huge number of orders of customized or specialized boards on a multifaceted manufacturing process, the
researchers strongly suggest that Firewire should continue investing on advanced technological systems
that combines the functionalities of Custom Board Design (CBD), Computer-Aided Design (CAD), and
Computerized Numerical Control (CNC) that could accommodate huge number of customized boards in a
short period of time. Firewire requires its various computer based applications to be synchronized to
produce efficient results. Knowing that CAD system is highly customizable, Firewire is in great
advantage against its competitors to attract more customers from an average consumer up to the top
consumer (professionals/highly-skilled individuals). Since most of the customers prefer customized
boards, Firewire may utilize this kind of market behaviour from their target market with the help of their
technological advancement. This would be a huge and significant (in terms of monetary value) investment
of Firewire however, it would be beneficial for the company to maintain sustainable business operation
and achieve long-term goals. The cost may incur from the said investment will be compensated from the
revenue that they may get.

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FireWire Surfboards

References:
Chappelow, J. (2019). Porter’s five forces. Retrieved from
https://www.investopedia.com/terms/p/porter.asp

Grand View Research (2019). Surfing equipment market size, share & trends analysis report by
product (surfing boards, apparel & accessories), by distribution channel (online, offline), by region,
and segment forecasts, 2019 - 2025. Retrieved from https://www.grandviewresearch.com/industry-
analysis/surfing-equipment-market

Robinson, J. (2019). Millennials worry about the environment -- should your company? Retrieved from
https://www.gallup.com/workplace/257786/millennials-worry-environment-company.aspx