Nike/Adidas: Key factors that influence success of Nike and Adidas, Swot Analysis.

2076 Words Jan 25th, 2006 9 Pages
Brand awareness is one of the biggest assets that athletic shoe companies as Nike, Adidas, Reebok, Fila can have. Brand awareness always brings a considerable advantage in getting consumer's attention and making a good place in that shoe market. If a well established brand name effectively mentions the messages of quality and dependability. Thus consumers will automatically go to that brand relying on the image that has been created when they don't have time to shop around.

Athletic shoe manufacturers must balance the costs of labor, raw materials, purchasing quantities, competitor strategies, shipping, import tariffs, and technological advancements. In an effort to keeps costs down, the industry has been looking to overseas sourcing. The
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It is difficult to for a new competitor to break into a that market if there is an established operator like Nike and Adidas which consumers and market knows them well.

The capital and distribution channels that are required for success make it difficult for the smaller entrants to grow in this market. The top manufacturers like Nike, Adidas, and Reebok absolutely hold the industry, with Nike holding over 40% alone.

The power of buyers and suppliers

These two forces can be considered together because they are linked. Buyers in the athletic footwear industry enjoy a great deal of power. Consumers have shown again and again that they will simply wait until prices reach a level they feel is reasonable before making a purchase. Nearly 40% of all shoe purchases are made through discount stores. Also, consumers are able to make informed decisions about a purchase through utilization of Internet websites. The bargaining power of retailers is also a problem for footwear manufacturers. In recent years, retailers have begun to hold fewer inventories, forcing manufacturers to pay for increased inventory levels on their end. Such as Foot Locker, the Sports Authority, and Foot Action are gobbling up mom and pop retail stores in the U.S. Manufactures of sporting goods equipment are dependent on retailers for premium pricing, brand push, and inventory control Manufacturers must

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