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Achieving Competitive Advantage: The Rise of the International Latex
Corporation
By Oleg Nekrassovski
Introduction
The present paper will look at the first 15 years of business of the International Latex
Corporation (ILC). First, it will be argued that the competitive strategy followed by ILC, in the
early and mid 1930s, was that of focus. In particular, an attempt will be made to demonstrate
that ILC followed the strategy of differentiation focus. The paper will also take a look at ILC’s
technology strategy, and argue that ILC engaged in developing product technology and sought
technological leadership. Next, ILC’s move into a new market segment in the late 1930s, some
aspects of its accompanying marketing strategy, and the relevant fashion trends of the time,
will be described. And it will be argued that prior to entering this new market segment, ILC
likely engaged in careful collection and analysis of marketing information, using some tool
similar to situation analysis, and in researching the buyer behaviour of its actual and potential
consumers. Finally, it will be argued that some of the specifics of the initial marketing strategy,
that ILC used to enter this new market segment, were unethical. So, an attempt will be made to
see whether ILC suffered any negative consequences, as a result.
The Early Years
In 1932, in response to a sudden and radical drop in the price of latex rubber on the
world commodity market, an already highly successful American entrepreneur, named A. N.
Spanel, founded the International Latex Corporation (ILC) (de Monchaux, 2011). At first,
Spanel’s company focused on, and succeeded in producing and marketing latex textiles to the
consumer market, by taking advantage of the waterproof, elastic nature of latex-impregnated
fabric to produce underwear, bed sheets, bibs and sunhats, for children and infants. Spanel
chose the brand name “Playtex” for his line of consumer products (de Monchaux, 2011).
By the late 1930s, ILC’s success, in the children’s consumer market, won Spanel great
praise for his innovative production of latex textiles, and for his innovations in advertisement
packaging (even earning him a marketing award) (de Monchaux, 2011).
The Focus Strategy
Thus, based on the above, it appears that, in its early years, the competitive strategy
followed by ILC was that of focus. Focus is a generic competitive strategy which involves
selecting a segment or a group of segments of an industry, and focusing exclusively on serving
those segments (Porter, 1985). ILC’s industrial segment of choice was, of course, the market for
children’s underwear and a few related products.

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The focus strategy has two variants, the cost focus and the differentiation focus. As their
names suggest, the cost focus involves seeking a cost advantage in the targeted segment of the
industry; while the differentiation focus involves seeking differentiation in the targeted
segment (Porter, 1985). And it appears that ILC’s focus strategy, in the market for children’s
underwear and related products, was that of differentiation focus; because differentiation
focus exploits the special needs of buyers in the target segment (Porter, 1985).
So, what were the special needs of buyers of children’s underwear and related products
that ILC’s unique products so successfully met? Apparently, given that small children often wet
their underwear and bed sheets and get wet whenever moisture gets on their bibs and hats
(which is often the case), there was a strong demand for waterproof underwear, bed sheets,
bibs, and hats for children and infants. And only ILC’s new, waterproof products managed to
satisfy this demand.
All of this reflects the fact that the focus strategy can be successfully employed only
when target segments are poorly served by competitors that have a much a broader focus, and
attempt to serve multiple industrial segments simultaneously. This allows the attainment of
competitive advantage by focusing, exclusively, on providing services to the poorly served
segments of the industry (Porter, 1985). ILC’s rapid success, in the market for children’s
underwear and related products, appears to underscore this idea.
Technology Strategy
The above, brief description of ILC’s early years, also illustrates its technology strategy.
As the name implies, the way a firm approaches the development and use of technology,
constitutes its technology strategy (Porter, 1985). And in order to achieve competitive
advantage, the firm should focus on developing those technologies that would most contribute
to its generic competitive strategy. However, the type of the optimal technology strategy would
vary considerably based on the generic strategy the firm is trying to follow (Porter, 1985).
We have already established, above, that ILC’s generic strategy appears to have been
that of differentiation focus. At the same time, the above, brief description of ILC’s early years
illustrates its focus on developing its product technology, rather than process technology. And
according to Porter (1985), a firm that focuses on developing its product technology in order to
enhance its strategy of differentiation focus, should work on designing products that would
meet the needs of a particular segment of the market, better than more broadly-focused
competitors. But, while an earlier discussion suggests that this is what ILC likely did; it is hard to
say, based on the presented information about ILC, whether its founder, Spanel, first decided to
pursue a differentiation focus strategy and then decided to support it by developing
appropriate product technology; or whether he started by developing an innovative product
technology and then decided to use it to pursue the differentiation focus strategy.

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Another broad aspect, of the technology strategy, is whether or not to pursue
technological leadership. As the name implies, the strategy of technological leadership involves
a firm seeking to introduce new technological changes that support its generic strategy; while
the strategy of technological followership involves a firm consciously and deliberately choosing
not to be the first to innovate (Porter, 1985).
Pursuing the strategy of technological leadership or followership can be used to achieve
either cost advantage or differentiation (Porter, 1985). And during the period of its history,
described so far, as well as to be described next, ILC obviously pursued technological
leadership, rather than followership, and did so in order to achieve differentiation. In fact, a
strategy of technological leadership, which seeks to achieve differentiation, involves pioneering
a unique product that will be perceived as being more valuable, than the offerings of
competitors, by the buyer (Porter, 1985).
ILC’s First “Girdle”
Spanel’s initial focus on children’s wear also happened, in no small part, because latex
had a tendency for sudden failure, by splitting along the grain of its manufacture – something
that adult wearers would not tolerate (de Monchaux, 2011). However, soon after 1937, along
with the new investments in production, Spanel developed and patented new methods of
shaping and curing of thin latex surfaces, which solved the problem of sudden failure of latex-
based textiles. This innovation allowed ILC to introduce its first foundation garment for women
in 1940 (de Monchaux, 2011).
The foundation garment that ILC introduced in 1940, was the “girdle” – a new
alternative to older corsets. ILC’s introduction of a girdle in 1940 did not happen by accident.
Instead it was clearly done because it was a very opportune time to do so (de Monchaux, 2011).
In fact, despite a move away from corsets in the 1910s and 1920s, constriction of women’s
waists and hips again became very popular at the end of 1930s. Not surprisingly, most
contemporary women were unused to wearing traditional constrictive corsets and were scared
of experiencing discomfort from this “new” fashion trend (de Monchaux, 2011). So, ILC’s
advertisement for its girdles successfully exploited this fear by claiming that its new product
wasn’t a corset, but a new, revolutionary method of curve control. Hence, women were
promised the stylish figure of a corset without the corset’s discomfort. And this marketing
strategy soon proved to be enormously successful, even though the actual experience of
wearing ILC’s girdle was far from comfortable (de Monchaux, 2011).
Collecting and Analyzing Marketing Information
ILC’s success in marketing its first girdle clearly stemmed from its successful collection
and analysis of marketing information relevant to its proposed new product. Marketing
information is often collected and analyzed using the situation analysis, which evaluates the

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internal environment of the firm, its customer environment, and its external environment
(Ferrell and Hartline, 2014). In its collection and analysis of marketing information relevant to
its girdle, ILC must have focused on the issue of why customers do (or will) select their products
(an aspect of customer environment), as well as on sociocultural trends (an aspect of external
environment), especially in women’s fashion. After all, properly assessing the issue of why
customers do (or will) select company’s products requires identifying unsatisfied or
undersatisfied customer needs, as well as potential current and future changes in these needs
(Ferrell and Hartline, 2014). At the same time, the renewed popularity of constricted women’s
waists and hips was clearly a ‘new’ sociocultural trend in women’s fashion.
Buyer Behaviour
ILC also must have researched the buyer behaviour of its actual and potential
consumers prior to introducing its first girdle. One of the key issues in understanding buyer
behaviour is the ability of the firm to recognize the needs and wants of its customers (Ferrell
and Hartline, 2014). And as has already been described, ILC did an excellent job of finding out
the needs and wants of consumers who may be interested in its new product. Another key
issue in understanding buyer behaviour is the ability of the firm to understand how its
customers evaluate alternatives (Ferrell and Hartline, 2014). ILC has clearly managed to
understand that, since its advertisements successfully exploited contemporary women’s
tendency to choose any foundation garment which promised comfort to the wearer, over any
competing product which made no such promises. However, the fact that this promise was
false, indicates that ILC’s marketing strategy ignored every firm’s implied ethical responsibility
to its customers. And since research indicates that firms who ignore ethical responsibilities can
destroy the trust of their stakeholders and even provoke government intervention (Ferrell and
Hartline, 2014), did ILC suffer any such consequences?
The 1940s
In the years immediately following the introduction of its first girdle, ILC nearly went out
of business, in no small part because Japanese takeover of Malaysia in 1942 cut off the US from
its major source of latex. And by 1944, the company was able to remain afloat only because it
managed to land contracts for producing inflatable boats and life rafts for the US Navy (de
Monchaux, 2011). However, even when the company returned to production in 1946, its
owner, Spanel, decided to create a separate branch of ILC, which would be dedicated to
developing products targeted at the government, rather than mass consumers. Also, while ILC
continued to advertise its girdle in the years following WWII, its marketing strategy shifted
towards making assertions, which customers would not be able to dispute even after trying
their product – such as the alleged connection of ILC’s girdles to contemporary fashion (de
Monchaux, 2011).

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Thus, it appears that ILC did suffer some loss of customer trust, and was apparently
aware of that. However, confounding variables brought about by WWII make it difficult to
judge the consequences and magnitude of that loss of customer trust.
Conclusion
Thus, we have seen that the differentiation focus strategy can be very effective
whenever certain segments of the industry are poorly served. And that the development of
appropriate product technology can further enhance the effectiveness of this strategy. Also,
ILC’s success illustrates the effectiveness of technological leadership strategy in achieving
differentiation; as well as that successful collection and analysis of marketing information
relevant to a proposed new product, especially using the situation analysis, is essential for
successful marketing of that product. In addition, researching the buyer behaviour of one’s
actual and potential consumers, prior to introducing a new product, is also essential for a
successful marketing strategy. On the other hand, making false or misleading statements about
one’s product is likely to lead to a loss of customer trust and a consequent drop in sales, that
ILC apparently suffered from its initial, unethical approach to advertising its first girdle.
References
de Monchaux, N. (2011). Spacesuit: Fashioning Apollo. Cambridge: The MIT Press.
Ferrell, O. C., and Hartline, M. D. (2014). Marketing strategy: Text and cases. Mason, OH: South-
Western.
Porter, M. E. (1985). Competitive advantage: Creating and sustaining superior performance.
New York: The Free Press.