Footwear Industry Market Analysis

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  • Topic: Athletic shoe, Shoe, Footwear
  • Pages : 4 (597 words )
  • Download(s) : 1481
  • Published : March 16, 2012
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Situation/Market Analysis

Market Size:

* 33,946,600 sports footwear sold in 2010 for a total of $ 2,538.4M * 19,149,200 men’s sports footwear sold in 2010 for a total of $ 1,363.9M * 14,797,400 women’s sports footwear sold in 2010 for a total of $ 1,174.5M

Market Growth:

Global sports footwear:

* 46.8% volume growth from 05-10 and 2.1% from 09-10
* 46.7% value growth from 05-10 and 3.3% from 09-10

Men’s sports footwear:

* 65.6% volume growth from 05-10 and 2.5% from 09-10
* 65.8% value growth from 05-10 and 4.0% from 09-10

Women’s sports footwear:

* 28.0% volume growth from 05-10 and 1.7% from 09-10
* 27.5% value growth from 05-10 and 2.6% from 09-10

Future Growth Potential of the Market (2010-2015)

Global sports footwear:

* 11.9% volume growth
* 9.1% value growth

Men’s sports footwear:

* 16.9% volume growth
* 11.8% value growth

Women’s sports footwear:

* 6.9% volume growth
* 6.3% value growth

Barriers to Entry:

There are high barriers of entry in the athletic footwear industry.

* Strong brand loyalty

* Economies of scale and scope:

* The athletic footwear industry faces economies of scale as the total cost of manufacturing shoes goes down as output increases and the fixed costs of marketing, production and R&D spread out. * Larger companies (NIKE, Adidas, …) can afford to put more money into marketing and R&D due to larger sales volume. * Larger companies often produce a wide range of related goods (ex. Nike: shoes, watches, tees, …)

* Consolidation

* Larger companies often acquire smaller companies before they grow substantially and become threats. (ex.: Converse – Nike / Reebok – Adidas ),2

* Patents:

* Patents are made on new shoe features.
* More difficult to enter the market as new companies need to design their shoes without infringement.

* Licensing and Retail Agreements

- Big...
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