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CASE 1
Tough Mudder Inc.: The Business of Mud Runs
TEACHING NOTE
■ SYNOPSIS ■
Established in 2010 by Harvard MBA graduate, Will Dean, Tough Mudder was an early leader in organizing
endurance obstacle races (“mud runs”). Dean’s challenge is to build the popularity of mud runs among a
growing range of endurance sports and to establish a competitive advantage for Tough Mudder over the large
■ TEACHING OBJECTIVES ■
The case is intended as an introductory case in the analysis of firm strategy. The learning outcomes
are the development of expertise in:
The identification and articulation of a company’s strategy
Understanding the role of strategy in a competitive market
Positioning a new company’s product in relation both to established substitutes and direct
■ POSITION IN THE COURSE ■
Tough Mudder is a small, start-up company with an easily understood product offering. The case is short and
is a suitable launch pad for a strategy course.
■ ASSIGNMENT QUESTIONS ■
1. What is Tough Mudder’s strategy? In particular, how has Tough Mudder positioned its product
in relation to other endurance sports and direct competitors?
2. Assess Tough Mudder’s strategy in terms of its fit with its business environment—particularly
3. If Tough Mudder is to reinforce its leadership in the mud runs industry, what are the key
priorities that Will Dean should attend to?
■ READING ■
■ CASE DISCUSSION AND ANALYSIS ■
What is Tough Mudder’s strategy?
This question typically elicits the story of Tough Mudder’s foundation and development. This provides useful
Product Attributes:
• Toughness—endurance run with multiple challenging and fear-inducing obstacles
Marketing:
• Intensive use of social media
Operations:
• Meticulous event planning and operations management to ensure a quality experience
R&D:
Growth strategy
• Rapid domestic and international expansion to pre-empt imitators and establish a standard.
Some of the key elements of Tough Mudder’s strategy are evident in the company’s own depiction of its
positioning in the market for endurance sports (see Figure 1 of the case reproduced below).
Assessing Tough Mudder’s Strategy
To explore the logic of Tough Mudder’s strategy, it is important to look at the two key players in Tough
I encourage my students to pay particular attention to the interactions between these different factors and how
they have forced Tough Mudder to reconcile conflicting forces.
For example, the critical appeal is the immensity of the challenge and the sense of achievement from
The presence of low barriers to entry is a major problem for any company wishing to establish leadership in a
new industry. In Tough Mudder’s case, the competition is not just from other commercial enterprises offering
events in multiple locations throughout the year, but also from clubs and communities that offer one-off events
at low cost. The implications of this mean that Tough Mudder needs to:
Exploit early-mover advantage by expanding quickly, including entering into foreign markets
before local competitors become established
Current Challenges and Strategic Priorities
There is no data available on financial performance; however, in terms of revenue growth and market share, it
is clear that Tough Mudder has been very successful in the five years since its founding. Sustaining that success
requires addressing some key challenges:
Are mud runs a passing fad? Tough Mudder has done an excellent job of tailoring its product
to the needs and desires of its target demographic group and in distinguishing its product from
Sustaining and reinforcing market leadership. Market leadership is critical to success in this
industry because of (a) economies of scale and the preponderance of fixed costs and (b) the
importance of brand recognition and standard setting: Tough Mudder as the recognized,
authentic mud run.
Ensuring leadership requires that Tough Mudder is an aggressive competitor. This necessitates:
o maintaining a strong marketing presence with continuing brand advertising and
establishing continuing media presence
Financial sustainability. Sustaining market leadership will require continuing heavy
investment. Mud runs are a strong cash-flow business (participants pay in advance) but
investing in advertising, obstacle development, customer feedback, and operational
improvements is likely to make overall cash flows negative. Important sources of funds are
likely to be:
o Revenue growth through product extensions that broaden participation (e.g.
■ KEY TAKE-AWAYS FROM THE CASE DISCUSSION ■
1. Identifying strategy
A firm’s strategy is not a list of all the things a firm is doing, nor is it the story of how it has developed. The
key to describing strategy is to synthesise these components into a generalized statement of a company’s
2. Assessing the strategy: strategic fit
Chapter 1 of Contemporary Strategy Analysis presents strategy as a link between the firm and its industry
environment (see Figure 1.2). The success of a firm’s strategy depends critically upon its fit with the external
industry environment and with the internal resources and capabilities of the firm. In the case of a start-up, there
