Business Model and Strategy
MIPS operates today as an ingredient brand. This means that MIPS sells its products to helmet manufacturers who implement MIPS technology in helmets that are then marketed to end users. MIPS works with several of the major helmet manufacturers around the world in the Sport category, but also sells the company’s solutions to brands active in the Moto and Safety categories. Helmets equipped with MIPS technology are often priced somewhat higher and the premium for the MIPS product starts at USD 15–20 and upwards.
The ingredient brand model enables MIPS to reach, with limited costs, a large number of customers and receive high exposure to end-users through the helmet brand’s broad and global marketing resources.
MIPS enjoys close working relationships with customers with a view to ensuring a uniform and controlled message to end-users and the media. This also includes MIPS providing the necessary expertise, resources and marketing material to the customers’ sales staff and distributors – through participation in sales and distribution meetings, for example.
MIPS also actively works with strategic and cost-efficient marketing strategies targeting distributors, dealers and the media. This work takes place in close collaboration with the company’s customers (helmet brands) by educating distributors, dealers and the media about the benefits of MIPS technology, for example through various sales programs and by providing follow-up training materials.
MIPS wants the company’s technology to be the expected helmet safety solution by becoming the obvious safety solution that consumers and the industry demand regarding increased safety.
The company’s long-term financial targets are ambitions that the Board of Directors and senior management believe are reasonable expectations for MIPS.
- Growth: The target is to organically grow net sales to more than SEK 1,000 million by 2025.
- Profitability: The target is to achieve an operating margin of more than 40 percent.
The target is to distribute approximately 50 percent of the company’s annual net earnings as dividends, taking into account the company’s financial stability, future profits, investments needs, liquidity and development opportunities, as well as general economic and business conditions.
MIPS wants to increase safety for every individual who wears a helmet.
To achieve this objective, the company aims to become the obvious partner to all relevant helmet brands by:
• offering the best and most cost-effective solution based on science and research
MIPS is a company that is based on research. MIPS aims to invest 5–7 percent of net sales annually to ensure that the company continues to have superior technology whose function is scientifically proven. MIPS is engaged in ongoing dialogue with leading universities and other technological institutes around the world to ensure that MIPS remains at the forefront of developments.
MIPS has access to one of the world’s most validated data models on the brain (the “Finite Element model,” developed by the Royal Institute of Technology), which enables the company to continue leading development of solutions to protect the brain in the field of helmet safety.
• develop solutions that make it possible for MIPS technology to be included in all types of helmets
MIPS has a large addressable market with the opportunity to make a difference in a large number of applications in which a helmet is worn. It is important for MIPS to be able to offer a relevant solution to all areas of use that the company addresses. The company therefore constantly develops new solutions in order for the technology to work in as many different types of helmets as possible. Currently, MIPS offers eight different types of solutions and is able to cover a large part of what the company considers to be its market.
• develop an intellectual property portfolio that will continue to protect the company’s technology
MIPS currently has a large patent portfolio consisting of 36 patent families and a total of 187 granted patents. The company is constantly developing new patents to protect both the solutions that MIPS markets today and the solutions that are intended to be marketed in the future. In 2019, MIPS strengthened the organization with internal expertise in patents, but also uses external expertise when necessary to ensure that the company’s intellectual property protection is as strong as possible.
• strengthen the company’s brand to ensure that consumers understand the added value of MIPS technology and always look for the yellow MIPS logo when buying a helmet
MIPS conducts business according to an ingredient brand model. The company’s vision is for its technology to be the safety solution in demand in all types of helmets. Achieving this vision requires increased awareness regarding and understanding of MIPS technology. In addition, consumers need to recognize the added value of buying a helmet with MIPS technology. To make this happen, MIPS intends to invest 5–7 percent of annual net sales in marketing over the next few years. In addition, the company has invested in strengthening the organization to ensure that this aspiration is achieved in the long term.
The new 2025 strategy has been built around the three main helmet categories Sport, Moto and Safety, which together represent a focus market of a total of 130 million helmets, compared with the previous focus market of 43 million helmets.