Footwear Industry Analysis

Topics: Middle East, Costs, No frills Pages: 2 (1087 words) Published: October 30, 2014

September 29, 2014
Footwear Industry Analysis
When you wake up and get dressed every morning, one of the first decisions you make is what shoes you will wear that day. Depending on the weather and the level of professionalism you are perceived to demonstrate, you make your decision. The footwear industry is a large and ever changing industry that caters to the needs of everyone. Although in some parts of the world people are lucky to have one pair of shoes, many people, including myself, have somewhere around 50-100 pairs, each serving a unique purpose. Recently, market trends have shown that the global footwear industry has grown at an average rate of 4.4%, and is expected to continue this growth well into the future. The footwear industry is segmented into four different geographic regions, Americas, Europe, Asia-Pacific and Middle East & Africa. The Americas account for 38.2% of the industry, Europe 38.1%, Asia-Pacific 19.7, and Middle East & Africa only 4% combined. This shows that the majority of the revenue for the market is generated in the Americas and Europe combined. The market distribution ranges from clothing, footwear and sportswear retailers, department stores, hypermarket, supermarket and discounters as well as other channels. The five forces driving competition in the global footwear industry are buyer power, supplier power, new entrants, substitutes, and the degree of rivalry. Although the industry is very large, it is dominated by intense rivalry between large retail groups. Since footwear is considered a necessity among most humans, the overall sales volumes are generally high, reducing buyer power. The majority of the footwear industry is manufactured in low-cost areas (usually South-East Asia); many other manufacturers can compete effectively within the market. Since the fixed costs for retail operations are low, the threat of new entrants are rather high, however many existing firms have significant economies of scale therefore...

Cited: "Global Footwear Industry Profile." Footwear Industry Profile: Global (2014): 1-29. Business Source Complete. Web. 29 Sept. 2014.
Schmitz, Hubert. "Learning And Earning In Global Garment And Footwear Chains." European Journal Of Development Research 18.4 (2006): 546-571. Academic Search Complete. Web. 29 Sept. 2014.
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