External Analysis Outdoor Sportswear Industry

1363 words - 6 pages

General Environment:
• Cultural
o Cultural trends play a major role in the consumer appeal of this industry. We go through phases of what sports are trendy.
• Seasonal
o There is a high seasonal influence on consumer buying. Summer products typically cost less than winter products. Sales during offseason offset sales revenue. Winter sales are higher during the holidays and prices of the products are higher.
• Physical
o These companies are very aware of their carbon footprint. They are all based on the idea of being outdoors and care about how their production activities are affecting the environment.
• Legal
o As with many companies, these companies need to be sure they are ...view middle of the document...

Each company is exclusive to their individual suppliers, making them huge customers of these supplier groups. If any of these companies were to stop using their supplier, it would hurt the supplier significantly. The success of all the companies in this industry is based mainly on the consumer demand for these unique materials.
o Substitutes do not really exist in this industry, unless a new supplier was to come up with new, innovative materials.
o There are not many companies outside of this industry that need to use these suppliers. The companies of this industry are the dominant customers of the suppliers.
o The supplies each of these companies need for their products are what set them apart in order to gain competitive advantage over each other. They cannot share suppliers for this reason, because their name brand is associated strictly with the suppliers of these materials.
o The bargaining power of suppliers depends on suppliers’ economic bargaining power relative to firms competing in the industry. Suppliers are powerful when firm profitability is reduced by suppliers’ actions
o Common resource suppliers have little to no leverage over firms.
• Barriers to Entry
o Entry is difficult or when it is too costly and places potential entrants at a competitive disadvantage relative to firms already in the industry
o High barriers due to capital needs, that the industry requires opening a lot of retail 5stores over the world. Columbia, for example, distributes its products in more than 72 countries and 13,000 retailers, that means it needs large amount of capital to run the business in this industry.
o The superb innovation of the industry makes it a challenge for start-up companies to compete. Outdoor Sportswear is not only about a jacket or shirt anymore that people want it to be fashionable and trendy. Fabrics are involved with high-tech and footwear too, like lightweight running, barefoot/minimalist footwear and toning. It is hard to keep up as the pioneer all the time.
o The competition of the outdoor sportswear industry is one of the most competitive clothing industries. There is a strong competition between the outerwear industry and the athletic sportswear industry. Beside that, the competition in the industry is pretty strong too. As we said before that this industry is highly innovated but there are some problems.
 According to Mick McCormick, Executive Vice President of Columbia Sportswear: “it saw too much similarity even among the fiber and fabric innovations, with many companies adopting the same third-party branded technologies into their lines, contributing to a field of product that differed very little from brand to brand. If everybody has the same technologies and styles, then what would compel a customer to choose one brand over the next?"
o Brand Loyalty to the four major firms in this industry poses a large threat to any new companies that want to try to take some of their market share.
• Rivalry within...

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