Industry Analysis Paper

Athletic footwear exertion Analysis When you think of gymnastic footgear what ar your primary thoughts? Nike? chthonian armor? Skechers? K-Swiss? All these companies deliver a common type of product/category called gymnastic footgear that they all sell and deem a huge salary from. end-to-end our analysis we al imp everyplaceished for snap primarily on the unite States grocery store sedulousness comp atomic number 18d to the International industriousness in athletic footgear/ course situation. Within the United States in that location is a wide variety of polar types of shoes but one of the most contract setting shoes that provide the most income be athletic footwear/ hurry shoes.The United States has over 10 cardinal dollars of revenue of proceeds that the athletic footwear pains provides and is one of the largest grocery storeplaces for athletic apparel and footwear in the world, which forget provide a sufficient analysis for us to determine (Ath letic garment Stores in the US commercialize Research Report, IBISWorld 1999). This will al wretched us to focus on a market that we are familiar with and will penetrate the industry down to make a more high-fidelity analysis on the industry athletic footwear/ running shoes. We will be analyzing women and mens retail running shoes through with(predicate) their industry activities.This will declare an accurate competition take among different competitors throughout the industrys products. Athletic running footwear has had an extreme admit of athletic apparel due to increasing go of athletes and the developing health awareness among the people of the US (Ken Research in Footwear, Market Research 2013). There is more of a demand for womens running shoes compared to men with the improver of interest to jogging/running for the women population (Ken Research in Footwear, Market Research 2013). We will be analyzing all aspects of the United States industry within the men and wom ens fancy up of running footwear. many of the slides in the general environment of the athletic footwear industry are the economic climate, healthy and active lifestyle, and fashion trends. In either retail industry the current state of the economy can greatly affect the environment. If the economy is in a depression that effects the shop patterns of their consumers and as a result becomes a little terror to the industry. The athletic footwear industry took a hit when the recession decelerated the US economy in 2008 (Smith). Many Americans were struggling financial which led to the athletic footwear industry to take a hit in their cyberspace margins as well.Companies had to discount their products to keep a high volume of sales (Smith). The economic climate also plays a role in the uprising population and disposable income levels of consumers. In 2010, consumers felt more confident financially by having more disposable income and began purchasing items equivalent athletic fo otwear more frequently (Smith). The industry was able to gain leverage to increase prices and focus the consumer on quality and not price (Smith). The increased level of income allows consumers to afford a premium-priced shoe which is driving the industrys profit margins today (Smith).Both income levels and general population are continuously growing which becomes an prospect for the industry to capture as much of the market as possible. some another(prenominal) trend that is affecting the industry is the healthy and active lifestyle. Obesity is at an all-time high and the lifestyle of healthy living is becoming a major part of our culture (Smith). This trend has encouraged consumers to exercise more and therefore need athletic shoes (Smith). This is a major fortune for the industry because their product is chargely related to the culture change we are headed in.Finally fashion trends have become a big role in the footwear industry. The market is in demand for innovative design s, styles, and celebrity endorsements. Some consumers in the industry are flavour for footwear that is specifically make to help them perform better while others look for shoes as a fashion trend. The current trend of light fish footwear is attractive to runners because it helps them perform better. The industry is currently thriving on profit from running shoes (Townsend). And in 2010 sales surged when the trend of light weight shoes with styles of neon hues hit the market (Townsend).Consumers are now eroding those bright colored shoes as a fashion trend whether it be on the track or on the city sidewalks (Adams). They are not afraid to pay up for shoes that are easy and trendy (Townsend). The industry also uses celebrities in marketing their products to reach consumers. Athletes like Michael Jordan and Lace Armstrong contributed to the success of athletic shoe companies. Many consumers look up to these athletes for motivation and in return will buy shoes because they are weari ng the same style or brand of shoe.These trends are an opportunity for the industry because it allows companies to fill the need of consumers and in return they become profitable. The first holy terror identified by the five forces framework is the affright of reinvigoratedly entrants. New entrants are firms that have either recently started operating in an industry or that threaten to begin operations in an industry soon. The athletic footwear industry is a very difficult industry to come into. This is because of the market in which the footwear industry operates, is highly virtuous.This saturated market combined with the economies of casing in production, research and development, and marketing make a company have to operate in large scale to be cost effective in the industry (Athletic Footwear Industry Analysis). Also, the main companies in this industry have major cost advantages strong-minded of scale. Their management know-how that they have developed over the years un ited with their erudition curve allows them to dominate this industry (Athletic Footwear Industry Analysis). The second threat is the threat of rivalry, which is the intensity of competition among a firms direct competitors, is high for this industry.The main positionor of the competitiveness of the industry is due to the fact that industry rivals compete aggressively against one another for vital market share. The athletic shoe industry is very old and companies moldiness focus on market share rather than concentrating on market growth. The athletic footwear market is expected to grow at a uninterrupted annual growth rate of 1. 8% from 2011 to 2018 to reach 84. 4 billion by 2018 (PRWeb). Non-athletic footwear is the largest market segment and is expected to grow high-velocity than the athletic footwear sector.Various fashion trends in the market, such as demand for innovative designs and styles and celebrity endorsement, is driving the non-athletic footwear market (PRWeb). This new trend in the footwear industry makes the way companies compete vary vastly from company to company. Innovative companies such as Nike strive for product eminence as well as massive marketing strategies, but other brands such as Sketchers attempt to capture the low budget appeal. 70% of the market share is made up of the top five players which acknowledge Nike, Adidas, Reebok, Puma and New Balance (PRWeb).Other key companies are Asics, Converse, Sketchers and K-Swiss. The popularity of local manufacturers and growing piracy in developing countries remains the major challenge for orbiculate footwear manufacturers (PRWeb). With the new trend of switching from athletic footwear to non-athletic footwear, it makes the threat of substitution very high. The consumers ability to buy a non-athletic shoe is effortless, curiously due to the increased focus on value for money and looking for simple, hard-wearing shoes that last (Report Linker). When it comes to the suppliers in the ath letic shoe industry it has a low threat to the companies.There are a large number of firms that are able to supply the materials and basic needs of the companies. To add onto the limited threat caused by the suppliers, their industry is not dominated by a beautiful number of firms. The athletic footwear companies are able to exert their prolonged power over their suppliers on the three homogeneous raw materials of cotton, rubber, and effervesce needed to make a shoe (Athletic Footwear Industry Analysis). make up though the threat of suppliers is not an issue for this industry, the buyers can play a key factor when it comes to the decision making process.Buyers have a low threat risk because of the vast number of individual buyers, but there are few switching costs for them to switch to a new shoe brand. This causes companies in this industry to focus on the buyers needs and wants when it comes to designing a shoe. The five forces model shows that overall profitableness can be h igh for this industry. The cost it takes to produce the actual shoe itself is very low, but the limited amount of major companies that are continually rivaling one another allow them to dominate this industry and make it extremely difficult for new comers to last.The knowledge and skills that companies such as Nike have acquired over the years allow them to stay on top as well. The companies low production costs and high markup costs allow those firms in this industry to thrive to the point of their limits. But because these companies have grown so large, they must compete viciously against one another for the same customers. The main competitors of Nike in the shoe industry are K-Swiss, Skechers, and Under Armour. These are the publicly traded companies and are in direct competition in shoes. Nike dominates the market and has 42% of house servant market share in the United States (Articlebase).Recent net sales fibs Nike at $24. 12 billion (Market enchant), K-Swiss at $268. 36 mi llion, Skechers at $1. 56 billion, and Under Armour at $1. 83 billion. Nike has been the leader the shoe industry since 1980 when it gained 50% of United States market share (MyBizIQ. com). They have maintained the position as leaders in the shoe industry. Nike has become experts in segmentation and targeting their market (NikeRepository. com). Works Cited A Marketing Case Study on Nike. Articlebase. (2012) n. page. Web. 24 Feb. 2013. <http//www. articlesbase. om/international-marketing-articles/a-marketing-case-study-on-nike-5907782. html>. Adams, Brittany. Running fit outs Get The High Fashion Treatment. panache File RSS. Style. com, 19 July 2012. Web. 24 Feb. 2013. < http//www. style. com/stylefile/2012/07/running-shoes-get-the-high-fashion-treatment/>. Annual Financials for Nike Inc. Cl B. Market Watch (2011) n. pag. Web. 13 Feb 2013. <http//www. marketwatch. com/investing/stock/nke/financials>. Athletic Shoe Stores in the US Market Research Report. Athletic Shoe Stores in theUS Market Research. N. p. , n. d.Web. 21 Feb. 2013. <http//www. ibisworld. com/industry/athletic-shoestores. html. > Athletic Footwear Industry Analysis. 1 whitethorn 2006. 16 February 2013 <http//www. docstoc. com/docs/7937512/Athletic-Footwear-Industry-Analysis>. Nike, Inc. History and Information. NikeRepository. com. N. p. , 2010. Web. Web. 13 Feb. 2013. <http//www. nikerepository. com/nike-company-history>. PRWeb. Global Athletic Footwear Industry examine by Transparency Market Research. 26 October 2012. 13 February 2013 <http//www. prweb. com/releases/2012/10/prweb10056776. htm>.Report Linker. Footwear Industry Market Research Reports, Statistics and Analysis. 12 February 2013 <http//www. reportlinker. com/ci02119/Footwear. html>. Smith, Gavin. Athletic Shoe Stores in the US Industry Market Research Report at once Available from IBISWorld. Athletic Shoe Stores in the US Industry Market Research Report Now Available from IBISWorld. PRWeb, 30 Nov. 2012. Web. 24 Feb. 2013. <http//www. prweb. com/releases/2012/11/prweb10188965. htm>. Swooshing to Success. MyBizIQ. com. (2013) n. page. Print. <http//www. mybiziq. com/articles/studies/Nike. cfm>. The US Athletic Apparel and Footwear Industry Outlook to 2015 Evolving inlet Segments in Sportswear. By Ken Research in Footwear, Sports Apparel, Apparel. N. p. , n. d. Web. 12 Feb. <http//www. bharatbook. com/market-research-reports/retail-market-research report/the-us-athletic-apparel-and-footwear-industry-outlook-to-2015-evolving niche-segments-in-sportswear. html. > Townsend, Matt. Fashion Spurs Sales of Athletic Shoes. Bangor Daily News RSS. Bloomberg News, 26 May 2012. Web. 24 Feb. 2013. <http//bangordailynews. com/2012/05/26/health/fashion-spurs-sales-of-athletic-shoes/>.