Industry Analysis Paper

2035 Words Apr 8th, 2013 9 Pages
Athletic Footwear Industry Analysis
When you think of athletic footwear what are your first thoughts? Nike? Under armor? Skechers? K-Swiss? All these companies have a common type of product/category called athletic footwear that they all sell and make a huge profit from. Throughout our analysis we will focus primarily on the United States Market industry compared to the International industry in athletic footwear/ running shoes. Within the United States there is a wide variety of different types of shoes but one of the most trend setting shoes that provide the most income are athletic footwear/ running shoes. The United States has over 10 billion dollars of revenue of profit that the athletic footwear industry provides and is one of the
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The industry is currently thriving on profit from running shoes (Townsend). And in 2010 sales surged when the trend of light weight shoes with styles of neon hues hit the market (Townsend). Consumers are now wearing those bright colored shoes as a fashion trend whether it be on the track or on the city sidewalks (Adams). They are not afraid to pay up for shoes that are comfortable and trendy (Townsend).
The industry also uses celebrities in marketing their products to reach consumers. Athletes like Michael Jordan and Lace Armstrong contributed to the success of athletic shoe companies. Many consumers look up to these athletes for motivation and in return will buy shoes because they are wearing the same style or brand of shoe. These trends are an opportunity for the industry because it allows companies to fill the need of consumers and in return they become profitable.
The first threat identified by the five forces framework is the threat of new entrants. New entrants are firms that have either recently started operating in an industry or that threaten to begin operations in an industry soon. The athletic footwear industry is a very difficult industry to come into. This is because of the market in which the footwear industry operates, is highly saturated. This saturated market combined with the economies of scale in production, research and development, and marketing make a company have to operate in large scale to be cost effective in the industry (Athletic

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