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Industry Analysis

2640 words - 11 pages

Athletic Footwear and Apparel Industry
GROUP 7:
Kirsten Ross April Rust Wenjun Zhao Elizabeth Poe Xaio Li Juexin Feng

Friday, February 24, 2012 *link for photo: Deviantart nike

1

NAICS/SIC Codes
NAICS code SIC Code
316211 316211 316219 316219 316219 316219 316219 316219 316219 316219 3021 3021 3149 3149 3149 3149 3149 3149 3149 3149

Description
Athletic shoes, plastics or plastics soled fabric upper (except cleated), manufacturing. Athletic shoes, rubber or rubber soled fabric upper (except cleated), manufacturing. Athletic shoes (except rubber or plastics soled with fabric upper) manufacturing. Cleated athletic shoes manufacturing. Footwear, athletic (except rubber or ...view middle of the document...

• Athletic apparel could be substituted with other types of clothes, especially casual clothes like jeans.
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Friday, February 24, 2012

5 Forces Model: Potential New Entrants
• Costs to start up are high. • Hard to get new brand recognized.

WEAK

• Economies of scale play a huge role because its hard for new companies to grow • New companies don’t have the financial resources to compete with industry bigs like Nike and Adidas. • Its hard for new entrants to get contracts with professional leagues, universities, colleges, and celebrity athletes.

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5 Forces Model: Suppliers
• Don’t have to contend with substitutes

MODERATE

• Forward integration is unusual because large companies have huge brand recognition. • There are a lot of manufacturers in low cost manufacturing locations (Asia, India) so you have the option to switch.

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5 Forces Model: Buyers
• Buying power for individual consumers is low because footwear is a basic necessity. • Buying power is also weak because there is a high volume of sales. • Buying power is strengthened because there’s a variety of options and styles.

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WEAK

10

Strategic Group Map
Popularity/Brand Image
High Under Armour

Nike
Adidas
Low Narrow Wide

Variety and Selection in Offerings
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Key Success Factors
• Reputation/Image • New Product/Innovation • Manufacturing Capacity • Financial Resources • Relative Cost Position

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Competitive Strengths Assessment
KSF/Strengh Measure Reputation/Image New Product Innovation Manufacturing Capacity Financial Resources Relative Cost Position Sum of Weights Overall strength rating Weight
0.40 0.20 0.10 0.20 0.10 1.00 8.20 6.00 5.50

Nike
8/3.20 9/1.80 8/0.80 10/2.00 4/0.40

Adidas
6/2.40 5/1.00 6/0.60 7/1.40 6/0.60

Under Armour
7/2.80 6/1.20 3/0.30 3/0.60 6/0.60

Rating Scale: 1 = Very weak, 10 = Very strong

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Our 3 Companies
• Nike

• Adidas

• Under Armour

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Nike - Background Info
Nike Inc. is a company that is in the business of designing, developing, and marketing athletic footwear, apparel, accessories and equipment. They were established in 1968 and are located in Beaverton, OR. Nike is the largest seller of athletic footwear and apparel in the world. They sell their products in over 170 countries. In addition to its NIKE brand, the company also owns the following brands: Converse, Hurley, Umbro, Cole-Hann, and NIKE Golf. Another big part of Nike’s business surrounds around marketing apparel with licensed colleges, pro teams, and league logos. They are well known for their affiliation with many universities.

Friday, February 24, 2012

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*Background Nike Logo comes from: hot.Pink.Nike.logo *Photo of shoes comes from: Pink/White Nike Air Link

Nike - SWOT
Strengths
•Their...

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