An assessment of the attractiveness of the athletic footwear industry.
Written in 2010; 737 words; 2 sources; APA; $ 26.95
Paper Summary:
The paper argues that the athletic footwear industry is unattractive and will continue to be so for the foreseeable future. The paper uses Porter's five forces model and explains how this industry is characterized by low supplier power, low buyer power, high barriers to entry, low threat of substitutes and a high degree of rivalry. Therefore, the paper comes to the conclusion that while the athletic footwear industry is an attractive industry in which to operate, it is not an attractive industry to enter. The paper does note the industry's key opportunities, but points out the many threats to the industry, including the increase in competition and the many intellectual property rights violations.
From the Paper:
"The athletic footwear industry is unattractive and will continue be so for the foreseeable future. Porter's five forces model can be used to illustrate this industry's lack of attractiveness.
For manufacturers, this industry is characterized by low supplier power. Most firms in this industry are larger than their suppliers, and among suppliers there is little differentiation. For example, Nike uses almost 700 suppliers, reducing supplier power dramatically. The industry is also characterized by low buyer power. Buyer volumes are insignificant and they are bound by brand identity and concentration within the athletic footwear industry. This manifests itself in high margins, as firms in the industry are able to command pricing."
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