Analysis: Hundreds Of Millions Of Dollars Of Sports Shoes Business Battlefield In The United States

The United States, the alluring sports shoes market, let's analyze the battlefield of the US hundreds of millions of dollars in sports shoes business.

In Michael Potter's classic competition strategy, he put forward the industrial structure analysis model, the so-called "5 force model". He thought: the industry's existing competitive situation, bargaining power of suppliers, bargaining power of customers, the threat of substitute products or services, and the threat of new entrants, these 5 competitive driving forces determine the profitability of enterprises.

Based on these 5 forces, we analyze the competitive status chart of American sports shoes enterprises.

First, there is a higher entry barrier in this field.

The American sports shoe industry is made up of brand companies that do not need factory production. Large companies have more cost advantages in advertising, product development and sales network exports.

More importantly, brand personality and consumer loyalty provide invisible barriers to potential entrants.

Secondly, the bargaining power of suppliers is weak.

Because most of the investment in sports shoes industry is homogeneous, especially after Nike launched the wave of outsourcing, more than 90% of the production is concentrated in countries with low wages and far oversupply of labor.

Third, the end consumers of sneakers care about prices and are more sensitive to fashion trends, but have no negative impact on the company's profit margins.

Because if there is a reduction in profits, this will be made up by reducing production in developing countries.

In addition, most brands are successful in product differentiation, which prevents buyers from linking brand names to constantly changing brand images.

Besides, because other footwear is not suitable for sports, there is no complete substitute for sports shoes.

Finally, the American sports shoes market is seen as challenging and saturated, full of fierce competition and slow growth, so there is only little room for new entrants.

Nike, Adidas and Reebok have seized more than half of the market share and remain relatively stable.

By analyzing, we can see that on the one hand, this is a coveted market, but with high barriers, low bargaining power of suppliers, moderate bargaining power of buyers and no substitute products of focus products, it is difficult to squeeze profits.

On the other hand, when there is no monopoly power in addition to high market concentration, the confrontation in the region is fierce.

Therefore, in this competitive environment, the sustainability of the extraordinary profits of independent companies depends to a large extent on their strategies.

Nike, the leader's gesture, Nike originated in 1962 by Phil.

Nat first, then named "blue ribbon sports", officially changed its name to Nike. in 1970s. It initially exceeded Adidas in the US sports shoe industry and occupied about 50% of the US market share in 1980.

Since then, Nike has been implementing aggressive marketing activities, signing top athletes and creating the slogan "JustDoIt".

Nike positioned its sports shoes as innovative design and technology, high priced and high quality products.

With its rich product type and outstanding design, Nike occupied over 39% of the American sports shoes Market in 2000, almost two times the Adidas market share.

Since 1970s, Nike has gradually pformed from a product oriented company into a market-oriented company.

It operates globally, designs high technology and high quality products within the company, produces in low-cost countries, and successfully establishes brand as a symbol of youth subculture through marketing.

Nike's unique resources include patented products and trademarks, brand reputation, corporate culture and unique human assets.

In order to understand how Nike can develop into a competitive advantage on the basis of its resources and strength, we will analyze their value chain from the following aspects: production, sales, marketing and product development.

During the production process, Nike has outsourced manufacturing to many Asian countries since 1970s.

Outsourcing enables Nike to get cheap labor and get large discounts from suppliers.

Moreover, outsourcing enables customers to get new products faster from the market and reduce the risk of capital investment.

On the other hand, in the sale, this "futures" order plan allows retailers to set up a pportation guarantee in advance of 5~6 months, ensuring that 90% of the order will arrive at a fixed price at a fixed time.

This strategy has successfully reduced inventories to the minimum and shortens the turnover of inventory.

In the 2003 financial year, 91% of Nike's shoes were shipped in this way, 2002 in fiscal year 92%, 2001 in fiscal year 86%., and now Nike has three sales channels: retailers, Nike city and e-commerce.

The city of Nike was built in 1990s to display the latest or most creative product series of Nike and to advertise on the main road. The city of Nike is not so much a marketing channel as a marketing channel.

E-commerce started in 90s in Nike.com, and Nike also allowed other Internet companies to sell their products.

The e-commerce strategy has rekindled Nike's direct relationship with consumers.