Question 1
I’m going to identify why so difficult for new firm to enter the sportswear industry based on evaluating the following barriers. Those barriers are capital requirements, economies of scale, product differentiation, access to channels of supply & distribution, legal and regulatory barriers, expected retaliation.
First of all, I’m going to analyze legal and regulatory barrier. Sportswear industry is a free market, investor are free to enter the market. The international community is not particularly regulatory to enter the market, therefore the legal and regulatory barriers is low.
Secondly, the industries are freely access, this makes the industries have many new competitors, and therefore existed companies are
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Support activities included firm infrastructure, human resource management, technology development and procurement. And the following are their competencies and identify the core competence.
Under Armour did well in their distribution since they have great an effective and efficiency system and well international expansion plan. Under Armour have a SAP system to manage a more diverse inventory and to ship directly to distributor, this make the distribution work efficiently and effectively, it save cost of distribution. Under Armour make a good distribution network, they sell product over 13 countries, through in-house distribution, partnership, third-party distributor and online store. This is because of a well international expansion plan, Good distribution network make more consumers can come into contact with their product and more convenient to buy their product, it directly increases their sales. Armour oversea business are done through partnership and third-party distributor, therefore Under Armour need not to open its’ store, this act can save cost of open new store. Therefore, Under Armour performance has been improved.
Also, Marketing help Under Armour generate revenue. Under Armour has a great marketing team, they hired retried baseball player to be their official uniform representative since he was partnered with Nike, this act seems like demonstrations to Nike, and they capture much of youth sports industry by sponsoring
Obviously, there is a big number of driving forces in the athletic footwear industry. Each of these driving forces has different impacts—some of them can have a more considerable effect than others on figuring out how much cross-company differences influence market shares and a number of units sold. The first line of most influential factors includes comparative prices, S/Q ratings, and a number of models offered among the footwear competitors. These three most important competitive forces affect customer decisions of which athletic footwear brand to choose. Furthermore, the decisions of customers whether to purchase one brand or another are also influenced by such forces as advertising, celebrity endorsements, the number of independent retail
In this article Michael Koziol discusses the conflict of the church when it comes to enacting legal protections for the LGBTI+ community. It particularly focuses the fact that both major political parties carry a fear of getting on the wrong side of church lobby groups and the effect that this has had the development, or lack there of, of the rights of the LGBTI+ community. He directly references times where this has been an issue for this community like the fact that the NSW Anti-Discrimination Act exempts private schools from the section on homosexuality and when this issue was brought to parliament by Alex Greenwich it had to be shelved due to the lack of support from the coalition.
A newcomer is going to have to build its way up the same way all the famous sporting goods brands have done it. Under Armour, Nike and Adidas/Reebok are aware of the possibility of new entrants in the market and that is why they keep advertising, establishing distribution channels, making marketing agreements, and keeping up brand loyalty in their customers.
In the athletic apparel industry, as in any industry, it is key to stay in touch with the current trends in order to keep your products relevant. With Lululemon focused on such a niche activity it will be important that they explore other markets within the sports apparel industry in the future so as to stay relevant. We can see the company’s first steps in doing just this when they recently introduced their men’s apparel line. A summary of the athletic apparel industry’s external environment are listed in Exhibit 1.
a. Under Armour’s approach towards innovation is very unique, they think and plan out their projects thoroughly in order to create a one of a kind product that could be appealing to their consumers. The company has been extremely progressive throughout the years in order to stay ahead of the other competitive companies in their targeted industry. By constantly updating and coming up with different product lines, such as compression shirts and cleats, Under Armour is able to compete with other top athletic wear company’s in their market. If
Sport Apparel is a large industries with many firms such as Nike, Adidas, Reebok, Under Armour, the Gap, Athleta, Nordstrom, Lucy and Bebe store. Large industries allow multiple firms and producers to prosper without having to steal market share from each other. Large industry size is a positive for Lululemon Athletica. … This qualitative factor will lead to an increase in costs.
There are many companies in the sports apparel, footwear and accessories industry, such as Nike, Adidas, Puma,
Profitability. The company strategy is to target only 25-45 years for specialist sportswear products, but a lot of
Every year, millions of immigrants come into the United States. Generally, the United States policies are complex but the topic of immigration in the country is far more complicated to understand. Currently, the topic is extremely controversial yet the government has been trying to avoid addressing it for quite a while now. Nevertheless, it is very rare for a candidate to make immigration policy part of his platform but in the 2016 presidential election Donald Trump even made it part of his campaign which caused world-wide controversy. Trump claimed that he would “make America great again” and create a high security wall along the border between Mexico and the United States. Nevertheless, any decision taken by the government will affect everyone in the country, whether in a positive or negative manner, as “an estimated 11.4 million unauthorized immigrants were living in the United States in January 2012 compared to 11.5 million in January 2011.” The numbers keep increasing every day
As shown in Figure 2 of the Appendix, a Porter Five Force Analysis makes it clear that the overall rivalry within the athletic apparel industry is medium to high. Because Nike and Adidas already have a substantial amount of capital resources and other assets, Under Armour struggles against them to gain market share. 8Also, private labels of retailers and newer sports apparel companies could potentially pose a threat to Under Armour, but mostly due to the fact that Under Armour does not hold any fabric or process patents. This makes it extremely easy for any competitor to duplicate a product or process with no consequence. However, the threat of new entrants is not too troublesome within the industry because of the great capital cost required for branding, advertising, and meeting product demand. Furthermore, the sports apparel industry is in the maturity phase of the industry life cycle. This means that each company included in the oligopoly must
Competition is very fierce due to the number of companies competing for sales. Lots of money goes to marketing and promotions using various channels to reach the young demographic group of consumers who spend the most money on Nike’s products. Growth is slowing down in the athletic footwear industry. But new markets are emerging with high growth rates. These markets include extreme sports market and the corporate merchandise market.
The athletic apparel industry is also defined by a moderate threat of new entrants. As mentioned earlier, the industry is extremely concentrated, with large companies (Nike, Adidas, Under Armour) at the top and several smaller companies following. While the costs for starting a local company is low, as the company grows, it will become harder to compete and be profitable in this industry. The incumbent firms in this industry have the advantage of existing production, distribution, and supply chain processes. New companies would consider the large upfront costs of these processes while incumbent firms take advantage of economies of scale due to having the benefit of already securing a large market share. These large costs in turn cause the company to have low profits, which discourages new entrants. Additionally, the threat of new entrants is low because of the brand preferences of consumers in the economy. This industry
Technological environment is the combination some factors which develop new products and also create opportunities and threats for the company. Not only does it benefit marketers greatly creating new product and market opportunities, it also creates opportunity for customers to consume new products. The evolution of technology has provided many platforms for marketers. New and improved technology can either profit the organization, or create threats of more competitors in the market. In the sportswear industry, technological factors could cause unemployment as machines replace workers. It could, however, reduce cost as more products can be made at a lower cost and lesser amount of time compared to labor made garments. Moreover, technology can benefit the sportswear marketers as a form of market research as social media and internet has outrageously developed over the past decade. Social media famous people can promote the sportswear by just wearing the items and posting a picture on the internet or simply advertising it at a really low price, almost immediately increasing sales. Political factors are those that affect the
Firstly Nike sold its franchise licenses in different countries expanding the market share in sports wear industry, and then the company moved towards purchasing shares in equity to reduce the risk uncertainty. Finally the company managed to bring the dealers’s corporation under one direction enabling them a better control and monitoring capabilities. Nike is making new policies, analyzing the performance of marketing and advertising with the standards they have set to make sure that the company is in line with its required its standards in addition; company is moving towards improving its advertisement in order to make it more effective in different regions. Nike has also faced different issues while internationalizing the business, such as capabilities, access, finance and business environment; unavailability of trained workers, limited information about the market, inability of contacting foreign customers and new business environments describes these issues on a vast ground.
Since the evolution of the company, Under Armour rapidly expands their business while some internal problems still exist. For example, unprotected intellectual property right issue and supplier relationship management. Also, the current business strategy was focusing on marketing, international expansion, product differentiation, and other expenses while they have weak financial management. These will certainly pose future problems to the company.