Sports Apparel Industry

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The high performance sports apparel industry (HPSAI) is a highly competitive industry because most of the companies are expanding aggressively worldwide. The global market of the industry was fragmented around 25 brands with diverse product lines, and they are competing to gain market share either within a single country or geographic regions. Competitors are focusing on performance and reliability as well as developing product identity through marketing, and new product development. To illustrate, the global market of the industry was worth approximately $135 billion in 2012, and it is expected to grow to $181 billion in 2018. This external analysis, which follows, includes Porter’s five forces analysis and key success factors.…show more content…
Companies are seeking higher market share within the industry through research and development (R&D), marketing, and establishing new product lines. It invests heavily in R&D to consistently produce high quality products that are demanded by professional sports teams, individuals interested in sports, and athletes. It has invested in physical plants, which makes it costly to leave the industry. Its products in the current situation are similar in quality and price. Therefore, it focuses on marketing its products intensively within the market. Bigger competitors control most of the market share. In 2012, Nike had a 17% market share in global footwear. Therefore, competitors must distinguish their products using new technologies within their product lines. In addition, buyers can switch brands with less cost, which leads to a high rivalry in the industry. Overall, the competitive rivalry within the high performance sports apparel industry is strong (Appendix 1). Buyer bargaining power is moderately low, the threat of product substitution is high, supplier bargaining power is moderately low, the threat of entrants into the market is moderate, and competitive rivalry is strong. Therefore, the industry’s attractiveness is moderate, as most companies compete to gain market share with standardized products now unless they can innovate new technologies that will help gain profits. High buyer demands will attract players, but…show more content…
Marketing and promotion are the reason why UA was not popular in the foreign markets while Nike and Adidas were popular, as they invested in sponsoring professional sports teams, locating their products on big retailers’ shelves, and heavy marketing. For example, UA spent $205.4 million in marketing and promotion while Nike spent $2.71 billion in 2012. As a result, Nike is gaining more market share in the foreign markets. All in all, good marketing and promotion will increase a company’s market share in foreign countries, and improve its reputation as well as the customers awareness about the company
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