Internal Rivalry Within The Outdoor Recreation Retail Industry

1682 Words Oct 29th, 2014 null Page
Five Forces Analysis
Internal Rivalry
Internal rivalry within the outdoor recreation retail industry is moderate to high. The industry consists of many sellers resulting in high competition. However, majority of the market share is owned by large companies such as Cabela’s, Dick’s Sporting Goods, Big Five Sporting Goods, and Hibbit’s.1 Smaller companies reside within the industry too but they have trouble competing with larger company’s prices. The larger companies have lower profit margins but sell substantially more products so they can take part in price competition and still be profitable. The Outdoor Industry Association estimated that consumers spent $120.7 billion on outdoor recreation products in 2012.1 Based on that estimate, it is evident that the outdoor recreation retail industry market is substantially large. Due to the multitude of choices for outdoor recreation products, switching costs within this industry are quite low. Consumers can purchase products from many different retailers so the companies within this industry must compete on prices and quality. Also, some of the larger companies within this industry can persuade consumers based on the availability of in-house credit. Cabela’s, for instance, offers a credit card that provides consumers with incentives for purchasing from Cabela’s. The industry continues to grow regardless of how the economy is performing. The Great Recession had little to no affect on this industry as it witnessed a 5%…

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