I am an MBA student and I need help doing my paper about studying an article and answering in essay format

I need someone to help me studying the article attached and write 3 pages long essay answering these questions. Lance Armstrong Case Please address the following questions in your write-up:1.In what ways the negative publicity of an endorser can affect the brand?2. What types of issues with athletes can negatively affect the brand?3. How should Nike respond to the revelation of Armstrong’s doping issue?4. How should Armstrong respond to the negative publicity and rebuild his reputation?
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For the exclusive use of X. Chen, 2018.
W14230
LANCE ARMSTRONG AND LIVESTRONG FOUNDATION: RISING
AGAIN AFTER THE FALL1
Dheeraj Sharma and Varsha Verma wrote this case solely to provide material for class discussion. The authors do not intend to
illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other
identifying information to protect confidentiality.
This publication may not be transmitted, photocopied, digitized or otherwise reproduced in any form or by any means without the
permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights
organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western
University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveycases.com.
Copyright © 2014, Richard Ivey School of Business Foundation
Version: 2014-06-19
2012 had been a tough year for renowned athlete Lance Armstrong. The cycling legend and cancer
survivor had been found guilty of using performance-enhancing drugs ? i.e., ?doping? ? and stripped of
his titles. After the report highlighting his doping was released, all sponsors had dropped Armstrong. Of
the experience he said in an interview, ?I don?t like thinking about it. But [I lost] about US$75-million2
[that] day.? Next, came the battle with The Sunday Times, whom he had sued for defamation regarding his
alleged cheating and drug use in 2006; at the time, Armstrong had been awarded £300,000. After
Armstrong accepted the doping charges, The Sunday Times counter-sued for approximately £1 million.
In less than six months, 41-year-old Armstrong had lost his titles, reputation and money. In addition to
this, Armstrong was finding it difficult to protect Livestrong, a foundation that he had created to support
cancer research and treatment. The foundation was his pet project and he had had put years of effort and
funding into it. To protect the foundation from the backlash of the doping charges, he had stepped down
from the board of directors; however, Armstrong?s damaged reputation and financial setbacks were
directly affecting Livestrong as he had invested a substantial part of his income and brand image into the
foundation. Armstrong needed to recover from these setbacks and salvage Livestrong.
EARLY YEARS
Lance Edward Armstrong was born to Linda Gayle and Eddie Charles Gunderson on September 18, 1971,
in Texas. Linda Gayle was just 17 when Armstrong was born.3 Despite the social stigma attached to
giving birth to a child out of wedlock, Gayle was a determined person who believed in converting all
obstacles into opportunities. Conversely, Armstrong?s father left before the birth. Terry Keith Armstrong
later adopted Armstrong when he was three years old; however, Armstrong was evidently destined to
1
This case has been written on the basis of published sources only. Consequently, the interpretation and perspectives
presented in this case are not necessarily those of Livestrong or any of its employees.
2
All figures in US$ unless otherwise stated.
3
Lance Armstrong and Sally Jenkins, It?s Not About the Bike: My Journey Back to Life, Penguin Putnam, New York, 2001,
pp 14.
This document is authorized for use only by Xiusheng Chen in Strategic Insights and Implementation Spring 2018 taught by Irina Stoyneva, Philadelphia University from January 2018 to July
2018.
For the exclusive use of X. Chen, 2018.
Page 2
9B14A021
grow up with a single parent as Terry also later left. It was his mother who proved to be Armstrong?s
strongest support and motivator throughout his life. She inculcated the ?never-say-die? spirit in him and
kept him going in difficult times.
Armstrong proved to be very athletic and started with rigorous swimming and cycling sessions at the
early age of 10. Having identified his strength and passion for sports, Armstrong started participating in
cycling competitions and triathlons when he was only 13. A triathlon is a multi-stage competition with
three consecutive levels: 40 kilometers of cycling, 750 metres of swimming, and five kilometers of
running4. Armstrong swiftly moved from swimming to cycling as he found himself more capable at it; he
also enjoyed it much more.
During his high school days, Armstrong was invited by the U.S. Olympic Development team to offer
training for Colorado Springs. After passing high school in 1989, Armstrong qualified for the Moscow
Junior World Championships. Notably, Armstrong achieved 11th place in the World Championship Road
Race with the best time since 1976. Later, in 1990, Armstrong overtook key professional cyclists in the
First Union Grand Prix and the Thrift Drug Classic races to win the title of U.S. National Amateur
Champion. Amidst this success, Armstrong was known to be very aggressive; others felt that he didn?t
respect his team members. It seemed winning was the only thing on his mind and there was nothing that
could distract him.
The tough 12-stage race of Tour DuPont was first conducted in 1991, when Armstrong covered 1,085
miles in 11 days. This was the grand opening in the world of international cycling in which he proved his
potential. The same year Armstrong went on to win the Settimana Bergamasca race held in Italy. In the
1992 U.S. Olympic time trials, Armstrong took the second position. After this he was expected to win at
Barcelona, Spain but his performance turned out to be quite disappointing. Just after the Olympics,
Armstrong became professionally associated with the Motorola cycling team from 1992 to 1996. His
performance in the first event at San Sebastian Classic, Spain after his association was again
unsatisfactory. Nevertheless, Armstrong was not a player who could easily be discounted. In the World
Cup race at Zurich, Switzerland he regained his performance and achieved second place.5
In 1993, Armstrong achieved 10 one-day titles over and above the stage races. This included the
prestigious win at the Thrift Drug Classic, the Kmart West Virginia Classic and the U.S. Professional
Championship. Apart from this, he earned second place in the Tour DuPont. Armstrong participated for
the first time in the prominent Tour de France and won the eight stages. The best win of the year was the
World Road Race Championship in Oslo, Norway. It turned out to be the most special victory as
Armstrong survived tough weather conditions that led to several crashes. The day-long event covering
161 miles and made Armstrong the youngest and second American to win the rare title. In the year 1994,
Armstrong was the runner up at Tour DuPont. Quite disappointed by his performance, Armstrong
underwent a rigorous training routine and made a marvelous comeback with a win, completing two
minutes before Viatcheslav Ekimov from Russia (the same competitor who had prevented Armstrong
from winning in 1994). Armstrong set new records again at the Tour DuPont in 1996, creating a historic
margin of three minutes and 15 seconds with an average speed of 32.9 miles per hour.
These were the last few wins for Armstrong before cancer started taking a toll on his health. Armstrong
participated for the Olympics team, Atlanta, and the Tour de France in 1996, but could not perform well.
4
?Triathlon Distances,? totaltriathlon, 2012, http://totaltriathlon.com/triathlon-distances, accessed December 8, 2012.
Lance Armstrong and Sally Jenkins, ?It?s Not About the Bike: My Journey Back to Life,? Penguin Putnam, New York, 2001
pp 39.
5
This document is authorized for use only by Xiusheng Chen in Strategic Insights and Implementation Spring 2018 taught by Irina Stoyneva, Philadelphia University from January 2018 to July
2018.
For the exclusive use of X. Chen, 2018.
Page 3
9B14A021
However, he still survived as the seventh-ranked cyclist worldwide. This provided him an opportunity to
sign a well-paid contract with a French team, Cofidis.6
BATTLE WITH CANCER
On October 2, 1996, the shocking news that Armstrong was suffering from testicular cancer was
announced. Armstrong was 25 at the time. The disease had already reached the third stage, attacking his
brain, abdomen and lungs. An immediate surgery coupled with exhaustive chemotherapy sessions was
performed. After getting primary treatment at Austin, Texas, he was admitted at the Medical Centre of
Indiana University, Indianapolis, where the use of cisplatinum was pioneered by Lawrence Einhorn to
treat testicular cancer.
The survival rate post-surgery kept declining from 85 to 65 to 50 and finally, 40 per cent. All of
Armstrong?s contracts were terminated as no one expected him to recover from such a deadly disease.
Furthermore, even if he could fight back, there was no hope that Armstrong would again compete in races
with the same energy and enthusiasm. However, for Armstrong, this setback could not shake his passion
for the sport. Armstrong?s only goal was to beat the disease and get back to cycling.
Undoubtedly, this attitude helped him to fight the disease and he was declared cancer free in February
1997. As a result, Armstrong was considered a fighter both in his personal and professional life. Initially,
he had to struggle to find someone to sponsor him and gain back the same trust in his ability to win.
Though Armstrong was eventually successful in getting a sponsor post-cancer treatment (the U.S. Postal
Service Team soon signed him for $200,000 annually), he took a substantial pay cut from the annual pay
package of $600,000 that he had earned prior to the disease.7
Even before Armstrong was declared cancer free, he had decided to run a cancer foundation in his name
to help, educate and treat cancer patients. Livestrong (formerly known as the Lance Armstrong
Foundation) was founded in 1997, the same year that he was declared cancer free. This tragic disease had
changed his way of looking at life and he wanted to dedicate his success to those who suffered from the
same.
RISE TO STARDOM
After battling cancer for almost a year, Armstrong stunned the world by winning the Tour de France titles
from 1999 to 2005. Tour de France proved to be the most cherished and memorable victory for
Armstrong. The victory also attracted donors and with the prize money, the cancer foundation engaged in
substantial charity work. Armstrong declared his retirement from profession cycling in the year 2005, but
again started afresh with the Astana team in 2009, completing the 2009 Tour de France. After taking third
place, Armstrong confirmed his participation for 2010 with the Radioshack team. He finished the last tour
at 23rd position and announced his retirement from an international career in 2011. He would now
compete only in the United States for the Radioshack team.
Brand Armstrong
Being a high-profile sports personality, Armstrong had product endorsement contracts with major
footwear and sports apparel companies. A decade-long product endorsement contract with Nike was the
6
7
?Lance Armstrong Biography,? Bio, www.biography.com/people/lance-armstrong-9188901, accessed November 6, 2012.
C. Brown, ?Armstrong Making a Big Comeback,? The Cedartown Standard, July 22, 1999.
This document is authorized for use only by Xiusheng Chen in Strategic Insights and Implementation Spring 2018 taught by Irina Stoyneva, Philadelphia University from January 2018 to July
2018.
For the exclusive use of X. Chen, 2018.
Page 4
9B14A021
most substantial one as the company was frequently developing new products and advertisements. Nike
also contributed significantly to Armstrong?s cancer foundation through donations and manufacturing,
and by marketing the Livestrong brand of apparel and shoes. In addition, Armstrong signed a three-year
contract with the global beer giant, Anheuser Busch-InBev in 2009, and Trek Bicycles had a long-term
endorsement contract since 1998. An energy food company, Honey Stinger, made Armstrong part owner.
Due to his athletic physic, Armstrong secured a contract with 24-hour Fitness to open gyms and fitness
clubs. In July 2009, an endorsement contract with the retailer Radioshack was signed which also turned
out to be a key sponsor for Livestrong. Giro bike helmets signed up with Armstrong to introduce ?Lance?
helmets. He also served as a board member and investor to FRS Co., an energy drink company.8 It was
reported that Armstrong earned more than $100 million from his sponsors alone apart from the prize
money won in international competitions.9 He was estimated to earn around $4 million from the seven
titles of Tour de France won during 1999-2005.
Several books were written about Armstrong?s journey as an athlete, a cancer survivor and a person.
Lance Armstrong: The Philanthropist
The Lance Armstrong foundation, a non-profit organization, was established in January 1997, in order to
provide services to cancer patients and their families who faced financial and emotional challenges. The
services were provided free of cost and reached 2.3 million people through its cancer navigation services
from 1997 to 2012.10 The foundation worked in multiple ways to make a strong fight against cancer.
Apart from rendering services to overcome disease, it organized fund-raising campaigns, participated in
policy formulation and promoted education and research to combat cancer, which affected 12 million
U.S. citizens annually.11
In 2003, Livestrong.org was formed to provide online information to cancer survivors. Through the
Internet, the reach and awareness of the foundation increased drastically. Livestrong representatives acted
as a medium between the foundation and cancer victims, organizing programs and initiatives for the
foundation to help them reach out to the maximum number of cancer survivors. The organization?s online
presence also helped in recruiting more volunteers and in raising funds for the cause.
The foundation also actively supported research and grant funds on a regular basis. In 2011, 30 research
grants were extended that provided suggestions from the National Action Plan on Cancer Survivorship
and information on the Adolescent and Young Oncology Progress Review Group. The updated data from
the cancer survivors regarding their experiences was collected through a Livestrong survey. The data was
then used to develop reports reflecting the progress done by the foundation and recommendations for
health policy changes. To enhance collaboration and improve effectiveness of the programs, survivorship
centres were created in 2005.
Community programs were run to channel the funds from Livestrong for different activities. In 2011, the
foundation supported more than 27 conferences based on cancer-related issues and funded nearly 90
8
Rupal Parekh, ?The Implosion of Lance Armstrong?s Endorsement Empire: $30M and Counting,? AdAge, October 19, 2012,
http://adage.com/article/news/implosion-lance-armstrong-s-endorsement-empire/237854/, accessed November 6, 2012.
9
?Travis
Tygart:
The
Man
Who
Brought
Down
Armstrong,?
Bicycling,
October
22,
2012,
http://bicycling.com/blogs/dailylance/2012/10/22/travis-tygart-man-who-brought-down-armstrong, accessed November 6,
2012.
10
Annual Report, Livestrong, 2011, www.livestrong.org/pdfs/4-0/Annualreport_Web-version2011, accessed November 6,
2012.
11
Ibid.
This document is authorized for use only by Xiusheng Chen in Strategic Insights and Implementation Spring 2018 taught by Irina Stoyneva, Philadelphia University from January 2018 to July
2018.
For the exclusive use of X. Chen, 2018.
Page 5
9B14A021
annual replication awards. The four programs selected under the 2011 community impact project were
Cancer Transitions (a six-week program to educate on post-cancer treatment), Livestrong at the YMCA (a
wellness program with evidence-based physical activity for cancer patients), Livestrong Promoters
Training Program (a program for the health workers to address the concerns of cancer victims) and Camp
Kesem (a summer camp run by students to raise funds and aid children whose parents suffered from
cancer). Together, these four programs were estimated to directly or indirectly provide support and
training to almost 32,000 people.
Livestrong won the Hispanic Campaign of the Year award (2011) for treating approximately 1,253
Latinos and extending resources to them through the Livestrong platform. The Hispanic/Latino
population made up 15.2 per cent of the total U.S. population and was expected to triple from 2008 to
2050 as per the U.S. Census Bureau.12 This was a major concern, as cancer was the leading cause of death
among the community. A critical issue was delayed diagnoses that led to lower survival rates.
The Public Relations Society of America, Los Angeles Chapter, awarded three titles for the national
campaign undertaken by the foundation in 2011 (Nonprofit Campaign of the Year, Public Education
Campaign of the Year and Multicultural Campaign of the Year). An online curriculum was designed by
the foundation to help educate students about the disease through instructors. About 1.5 million students
and 100,000 teachers were engaged to support the cause in partnership with Scholastic Inc. The
Livestrong at the YMCA program increased its reach to 159 communities, 195 branches worldwide, and
served 6,000 individuals by 2011. The program undertook summer camps and developed childcare
programs as well.
The Livestrong Young Adult Alliance was started with the objective to serve young cancer victims.
Nearly 70,000 people in the United States between the ages of 15 and 39 were diagnosed with cancer
each year. Furthermore, the survival rates in this age bracket had shown no change since 1975, due to low
participation, delayed diagnoses or lack of insurance coverage. A coalition of 160 organizations,
including universities, hospitals, societies, non-profit organizations, etc., worked towards this cause. The
foundation provided professional education to healthcare workers to render the best possible service and
enhance knowledge. ?Focus Under Forty? was launched in partnership with the American Society of
Clinical Oncology Foundation to educate physicians, assistants and nurses to treat younger patients13.
Livestrong Navigation Services provided free information and aid to survivors or caregivers affected by
cancer. The group provided information on diagnosis, treatments available and the latest updates on the
disease, as well as financial and emotional support. Through Navigation Services, Livestrong reached
500,000 individuals, saving around $3.2 million through discounts and negotiations, aligning about
13,700 volunteers across 47,000 services, distributing 188,000 brochures, and serving 1, 200 clients in
Austin in 2011.14 Navigation Services were rendered in conjunction with five partners: the Patient
Advocate Foundation worked as an active mediator between victims and their employer or insurer;
EmergingMed analyzed treatment options; Imerman Angels connected peer-to-peer for patients and care
providers; the Navigate Cancer Foundation educated patients? families through nurse training; and Fertile
Hope rendered financial assistance and information on fertility preservation. In total, the navigation
services? partners serviced more than 225,700 victims were serviced through various avenues in 2011.15
12
Ibid.
S. Tappouni, ?ASCO and LIVESTRONG Launch Focus Under Forty,? ASCO, November 18, 2010, www.asco.org/presscenter/asco-and-livestrong%C2%AE-launch-focus-under-forty, assessed November 8, 2012.
14
Annual Report, Livestrong, 2011, op. cit.
15
Ibid.
13
This document is authorized for use only by Xiusheng Chen in Strategic Insights and Implementation Spring 2018 taught by Irina Stoyneva, Philadelphia University from January 2018 to July
2018.
For the exclusive use of X. Chen, 2018.
Page 6
9B14A021
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