Industry Analysis Paper

Topics: Athletic shoe, Shoe, Footwear Pages: 6 (2047 words) Published: March 30, 2013
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 largest markets for athletic apparel and footwear in the world, which will provide a sufficient analysis for us to determine (Athletic Shoe Stores in the US: Market Research Report, IBISWorld 1999). This will allow us to focus on a market that we are familiar with and will penetrate the industry down to make a more accurate analysis on the industry athletic footwear/ running shoes. We will be analyzing women and men’s retail running shoes through their industry activities. This will declare an accurate competition level between different competitors throughout the industry’s products. Athletic running footwear has had an extreme demand of athletic apparel due to increasing number of athletes and the growing health awareness among the people of the US (Ken Research in Footwear, Market Research 2013). There is more of a demand for women’s running shoes compared to men with the increase of interest to jogging/running for the women population (Ken Research in Footwear, Market Research 2013). We will be analyzing all aspects of the United States industry within the men and women’s attire of running footwear. Some of the trends in the general environment of the athletic footwear industry are the economic climate, healthy and active lifestyle, and fashion trends. In every retail industry the current state of the economy can greatly affect the environment. If the economy is in a depression that effects the shopping patterns of their consumers and as a result becomes a threat to the industry. The athletic footwear industry took a hit when the recession decelerated the US economy in 2008 (Smith). Many American’s were struggling financial which led to the athletic footwear industry to take a hit in their profit margins as well. Companies had to discount their products to keep a high volume of sales (Smith). The economic climate also plays a role in the rising population and disposable income levels of consumers. In 2010, consumers felt more confident financially by having more disposable income and began purchasing items like athletic footwear more frequently (Smith). The industry was able to gain leverage to increase prices and focus the consumer on quality and not price (Smith). The increased level of income allows consumers to afford a premium-priced shoe which is driving the industry’s profit margins today (Smith). Both income levels and general population are continuously growing which becomes an opportunity for the industry to capture as much of the market as possible. Another trend that is affecting the industry is the healthy and active lifestyle. Obesity is at an all-time high and the lifestyle of healthy living is becoming a major part of our culture (Smith). This trend has encouraged consumers to exercise more and therefore need athletic shoes (Smith). This is a major opportunity for the industry because their product is directly related to the culture change we are headed in. Finally fashion trends have become a big role in the footwear industry. The market is in demand for innovative designs, styles, and celebrity endorsements. Some consumers in the industry are looking for footwear that is specifically made to help them perform better while others look for shoes as a fashion trend....
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