Preview

Lithuanian Footwear Manufacturing Industry Analysis According to Porter‘S Five Forces

Powerful Essays
Open Document
Open Document
1687 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Lithuanian Footwear Manufacturing Industry Analysis According to Porter‘S Five Forces
Lithuanian Footwear Manufacturing Industry Analysis
According to Porter‘s Five Forces

Introduction
For all times footwear has been a basic necessity and just recently it has become a matter of fashion and prestige, thus making huge changes in footwear industry: it expanded and became well differentiated. Therefore, in order to perform and compete effectively, companies have to analyze their external environment. This paper will concentrate on Porter’s five forces that shape competition in Lithuanian footwear manufacturing industry.
Rivalry
A decade ago there were much more footwear manufacturers in Lithuania. However, right after Lithuania joined the European Union, footwear imports from China to the European Union increased eight times. It caused huge profit losses for Lithuania’s footwear manufacturers and many of them withdrew from the market. Today there are two main footwear manufacturers UAB “Sabalin” and UAB “Lituanica”, a few smaller manufacturers such as UAB “Paliūtis” and UAB “Evenida” and there are also some individual businesses which do not mass-produce but manufacture shoes just for individual orders. As we can see there are not many Lithuanian companies but their competition creates the rivalry a positive sum. The largest companies UAB “Sabalin” and UAB “Lituanica” produce leather shoes for the whole family and export most of their production to other European countries, especially to Great Britain, Latvia and Finland (http://www.lituanica.info/m93-1.html, http://www.visalietuva.lt/imones/info/sabalin-uab). Smaller manufacturers concentrate on specific footwear production such as boots and working shoes or take orders from Lithuania’s companies and produce big quantities of specific safety shoes or shoes which are part of employees’ uniform. Footwear manufacturing usually is not their only scope so when they have hard times in shoes manufacturing, they concentrate on other fields. For example UAB “Paliūtis” produces not only boots but also



References: June 27, 2005. Avalynės gamintojai siekia ES apsaugos. Retrieved from http://www.zebra.lt/lt/naujienos/verslas/avalynes-gamintojai-siekia-es-apsaugos-72238.html June 2010. Footwear Industry Profile: Europe. Industry overview. Retrieved from Business Source Complete Inčiūrienė, Sigita. November, 2010. Vidmantas Šimkus: Man geriausia Šiauliuose. Retrieved from http://lics-siauliai.lt/wp-content/uploads/2010/02/Mes-Siaulieciai-Nr61.pdf August 29, 2005. Kinų batsiuviai veržia kilpą Lietuvos avalynės gamintojams. Retrieved from http://www.verslobanga.lt/lt/spaudai.full/4312ada8d1f1a October 18, 2010. Lietuvos batsiuviai be batų nelieka. Retrieved from http://www.verslozinios.lt/index.php?act=mprasa&sub=article&id=26957

You May Also Find These Documents Helpful

  • Powerful Essays

    Strategic Fit

    • 5046 Words
    • 21 Pages

    For Nike, to ensure survival, a constant review of its external and internal environment must be done as this will ensure that measures are taken to safeguard markets, profitability and leadership, Nike cannot be caught sleeping. Nike’s value chain gave management the opportunity to understand internally competencies and how cost can be managed. Porter’s five force analysis (1985) gave an external view of the market and the reaction of the environment they operated within. Strategies can affected by the culture, environment and practices that has been proven, however strategy may differ as the company is faced with the challenges of the market and changes in the social context of its existence.…

    • 5046 Words
    • 21 Pages
    Powerful Essays
  • Satisfactory Essays

    Shoe Industry

    • 552 Words
    • 3 Pages

    Reebok or Nike operates in the ‘upscale’ segment of the Indian footwear industry. This segment was analyzed using the Porter’s Five Forces model. For this, the five forces in the industry were identified:…

    • 552 Words
    • 3 Pages
    Satisfactory Essays
  • Powerful Essays

    Crocs

    • 2766 Words
    • 12 Pages

    The U.S. footwear industry in 2002 was $49.3B in annual sales1, split about 60%-40% between fashion and athletic. Within the fashion footwear segment, categories are well established with shoes representing 55%, sandals representing 25%, and boots and other 20%2. The industry prior to Crocs' strategic move was mature, growing between 1.5%-3% a year, and competition was extremely intense – a red ocean. The marketplace was nearly all imports, with only a relative handful of U.S. firms continuing to manufacture domestically. In 2002, import penetration for all footwear was 98%3. As a result, successful U.S. shoe…

    • 2766 Words
    • 12 Pages
    Powerful Essays
  • Powerful Essays

    The current manufacturing practices of the sneaker industry, in particular companies such as Nike, Reebok, Adidas, Converse, and New Balance, takes place throughout the globe. With the industry experiencing severe competition, and the product requiring intensive labour, firms are facing extreme pressure to increase their profit margins through their sourcing practices. The following paper will analyse the sneaker industry, while examining the multitude of viable manufacturing options, and critiquing their current manufacturing structure.…

    • 1737 Words
    • 7 Pages
    Powerful Essays
  • Good Essays

    Michael Porter’s five forces model is a useful tool for industry and competitive analysis. It holds that an industry’s profit potential is largely determined by the intensity of the competitive rivalry within that industry, and that rivalry, in turn is explained in terms of five forces: 1) the threat of new entrants, 2) the bargaining power of customers, 3) the bargaining power of suppliers, 4) the threat of substitute products or services, and 5) the jockeying among current rivals. Under Armour is specialize in sports apparel. The sports apparel industry have very high demands are very competitive. The increase in rivalry is led by number of firm that are in sport apparel industry such as Nike, Adidas, Reebok etc. All these sports apparel…

    • 306 Words
    • 2 Pages
    Good Essays
  • Powerful Essays

    To properly review the manufacturing in the footwear industry, it is necessary to first gain an understanding of the dominant leaders in the marketplace. The industry is currently experiencing hypercompetition, led by six main firms – Nike, Reebok, Adidas, Fila, Converse, and New Balance (see exhibit 1), with nearly $7 billion in revenues domestically. Nike is the industry leader, with a 47% market share, followed by Reebok, a distant second at 16%, and Adidas at 6% (see exhibit 2). This category is facing decreasing demand and the rising popularity of alternative footwear, resulting in more pressure than ever before to achieve high gross margins through effective global sourcing practices.…

    • 1744 Words
    • 7 Pages
    Powerful Essays
  • Best Essays

    Indonesian Footwear is one of the fast growing industry, and one of the most contributors of the Indonesian economy. It’s been rapidly developed since the first time it was introduced in the country. It was also the first group among non-oil products that successfully reached export value exceeding USS 1 billion (Export Indonesia, 2007). Footwear industry history in Indonesia starts when Bata, a Czechoslovakian footwear manufacturer established its factory in the area of Jakarta known as Kalibata in 1940s. The industry continuously growing, and by the year in 1970, Indonesia starts to implement the mass production of…

    • 2659 Words
    • 11 Pages
    Best Essays
  • Powerful Essays

    This paper introduces the basic situation and feathers of current athletic and casual footwear industry and raises that active management of inventory and production lead times are critical success factors. And then talks about the history, marketing, products and relate revenue and income of AGI, especially mentions its financial policy and performance. In addition, the case researches the history of Mercury, analyzing its products, production and operations, financial performance, and development of four main segments. Last but not least, the research tells us that Liedtke used base case assumptions to value Mercury, and also wanted to consider the value of possible synergies as well.…

    • 1043 Words
    • 5 Pages
    Powerful Essays
  • Powerful Essays

    Driven Athletic Footwear Company’s main objective was to create the competitive advantage in all regions by gaining the market share while increasing shareholder’s wealth. First, we aspired to create a brand the consumers would want and retailers would want to carry; therefore throughout the years we made attempts to increase the S/Q rating of our products, increase production in low cost regions, offering an array of models and styles, and maintaining our pricing structure,…

    • 1148 Words
    • 5 Pages
    Powerful Essays
  • Satisfactory Essays

    As one of the frontrunner company in the shoe industry, we fully understand that this market has a low entry barrier and the customers are sensitive about the price and quality. The low entry barrier increase the market competition, and causing the serious price dropping. The competitors also outsource or expand their factories outside of the US which also increasing the price competition in the market, however, since our competitors only thinks about cutting cost, the quality of the shoes has been lacked. Therefore, Delta Footwear’s future plan is focusing on making the premium quality shoes with the average…

    • 231 Words
    • 1 Page
    Satisfactory Essays
  • Good Essays

    Maple Leaf Shoes found its niche in being a low-cost provider, but production costs have been steadily rising. Not only is productivity an issue, but the company is faced with high labour costs. Compounding these issues is the fact that the price advantage was a critical aspect of the company’s marketing strategy, but competition from overseas has become a problem with high, quality shoes being made at a cheaper price due to the cessation of international trade barriers.…

    • 542 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    There are gaps in the Sporting Footwear and Clothing Industry. Only three shops are currently into that industry [B & B shops etc.]. This means the growing population of the area is not having a variety of products to choose from and this opportunity could be taken advantage of because Athletic Warehouse has the strength of being able to provide the market with “a variety of athletic footwear and clothing”, in its portfolio. There is a larger market with a possibility of having up to 36% of the youth population to count on.…

    • 317 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Industry Structure Memo Nike

    • 3481 Words
    • 14 Pages

    This paper will attempt to limit the analysis to the initial sector for Nike’s breakthrough of Rubber and Plastics Footwear Manufacturing.…

    • 3481 Words
    • 14 Pages
    Good Essays
  • Powerful Essays

    One and a half months ago, the biggest athletic event in the world ultimately drew its curtains after a pitched one-month-long battle, which saw thirty-two teams vying for the roll of honor of being crowned the final kings of football – the World Champions – and earn bragging rights for four years at least. It was not only a world war among 32 national teams, but also a white war among several major sponsors. Concentrating on those big-name stars, spectators would easily find that Adidas and Nike became the largest winners among various brands, obtaining the sponsorship of 12 and 9 among the 32 teams respectively. Coincidentally, in the current athletic footwear market, Nike control the largest market share though facing enormous challenges from both existing and potential competitors. This essay will base on the Michael Porter’s Five Forces Model, analyze both the internal and external competitive factors of NIKE, unearth the deep secret for NIKE as the market leader, and look forward to the future athletic footwear market.…

    • 1430 Words
    • 6 Pages
    Powerful Essays
  • Good Essays

    A business has to understand the dynamics of its industries and markets in order to compete effectively in the marketplace. Michael Porter has postulated that the intensity of competition in an industry is determined by its underlying economic structure. Porter (1985) defined the forces which drive competition, contending that the competitive environment is created by the interaction of five different forces acting on a business. In addition to rivalry among existing firms and the threat of new entrants into the market, there are also the forces of supplier power, the power of the buyers, and the threat of substitute products or services. According to Porter, industry structure is determined by five competitive forces and it is evident that all of these competitive forces will be affected by the development of the information economy.…

    • 2674 Words
    • 11 Pages
    Good Essays