Porter's Five Forces Analysis Of The High Performance Sports Apparel Industry

The high performance sports apparel industry (HPSAI) is a highly competitive industry because most of the companies are expanding aggressively worldwide. The global market of the industry was fragmented around 25 brands with diverse product lines, and they are competing to gain market share either within a single country or geographic regions. Competitors are focusing on performance and reliability as well as developing product identity through marketing, and new product development. To illustrate, the global market of the industry was worth approximately $135 billion in 2012, and it is expected to grow to $181 billion in 2018. This external analysis, which follows, includes Porter’s five forces analysis and key success factors.
1. Porter’s Five Forces Analysis
Porter’s five forces analysis is used to rate the attractiveness of the industry to generate profits. The attractiveness of the industry is determined by the strength of the
Companies are seeking higher market share within the industry through research and development (R&D), marketing, and establishing new product lines. It invests heavily in R&D to consistently produce high quality products that are demanded by professional sports teams, individuals interested in sports, and athletes. It has invested in physical plants, which makes it costly to leave the industry. Its products in the current situation are similar in quality and price. Therefore, it focuses on marketing its products intensively within the market. Bigger competitors control most of the market share. In 2012, Nike had a 17% market share in global footwear. Therefore, competitors must distinguish their products using new technologies within their product lines. In addition, buyers can switch brands with less cost, which leads to a high rivalry in the industry. Overall, the competitive rivalry within the high performance sports apparel industry is strong (Appendix