Levi’s versus Lululemon: Combat-sports championship bouts as an analogy for hostile displacement in monopolistic competition In this paper I describe the analogous correlation between the case of Levi’s Strauss & Co. versus Lululemon Athletica Inc. and a similar phenomenon in combat sports, such as boxing and mixed martial arts (MMA), where a participant rises to dominance, becomes a champion, holds the title for some time and is then unseated by an unlikely contender. The most recent and arguably infamous example is of Ronda Rousey’s loss to Holly Holm in the UFC (other examples include Tyson vs. Douglas (boxing) and Silva vs. Weidman (UFC)). For the purposes of this paper, Rousey represents Levi’s (traditional market dominance) and Holm represents Lululemon (disruptive innovation).
UFC fighters typically prepare for a fight on two fronts. The first is a general technique and conditioning program tailored to their particular strengths and weaknesses. The second is a specific strategy outlined by their coaching staff to deal with the precise tactics they believe the opponent will utilize. With this in mind, one concept that contributed to the demise of both Rousey and Levi’s is that of “tape”. A fighter’s coaching staff will watch as much footage – tape – of the opposing fighter as possible. There tends to be more tape on long-term champions than challengers for two reasons. First, simply, champions tend to have had longer careers and therefore more fights on tape. Second, less obvious, is the length and quality of championship bouts; these tend to go on longer than normal fights and include opponents who are more prepared, resulting in closer and more competitive matches. The result: more video to watch, as well as more insight into the champion’s strengths and weaknesses. In regard to the companies at hand, Levi’s, founded in 1853, was, at its