5 Forces analysis on the athletic footwear market in UK

Business Environment

Table of Contents
1) 5 Forces analysis on the athletic footwear market in UK.......................................................1
2) Assets and competencies of Nike’s internal environment......................................................4
3) SWOT analysis for Nike (UK) and future strategy that can be pursued................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Athletic footwear industry offers four variety of products and it includes comprise of
Insert shoes, sport shoes, backpacking shoes and hiking shoes. Present report is based on Nike
which is leading company that offers superior quality products for its business consumers. The
report describes about five force analysis of the athletic footwear market of UK. Along with this
analysis and discussion of assets and competencies of Nike's internal environment has been done
by making use of appropriate tool. In addition to that SWOT analysis has been conducted and
future strategy has been recommended for the firm.
TASK 1
1) 5 Forces analysis on the athletic footwear market in UK
Footwear industry of UK is growing at a faster rate and it is offering success and growth
opportunities for various organizations that are working in this sector. It is critical that global
player firms should adopt Innovative approach for staying in market. It will also support for
gaining competitive advantage for the business and ensuring long term survival and growth in
market. Porter's five force analysis supports for evaluating different factors that gives impact on
the performance of this sector (Craig and Campbell, 2012). Other than this it also aids in
identifying elements that gives impact on the performance of the company. Analysis using
porter's five force is as mentioned :-
Bargaining power of buyers :- Buyers in the footwear sector have large number of options to
choose their products and due to that bargaining power of buyers is high. More preferences are
given by them for price and quality of the products and they give preferences for purchasing the
products which are of superior quality (Hollensen, 2015).
Consumers posses high control in this market and there are large number of substitutes
and competitors that are available in the market. It enhances power of the buyers to purchase
superior quality products in affordable price ranges. Large number of options are available for
buyers and due to that bargaining power of buyers becomes high. Large number of customer
purchase products from the footwear industry and due to that market size is large and it provides
opportunity for the business firms to sell large volume of the products. Quality of footwear
products are given more preferences (Huang and Sarigöllü, 2012). Hence it can be ascertained
that organizations working in this sector can adopt innovative practices so that satisfaction level
of buyer can be obtained by offering them superior quality products. Products are given more
1

preferences by buyers and due to that it has become essential that strategic approaches should be
used by business firms so that consumers can be attracted towards selling products that are being
offered by the company (Lee and Carter, 2011).
Bargaining power of suppliers :- Bargaining power of suppliers is low as there are large
number of suppliers that are selling their products and due to that suppliers have vary little
power. Medium control is hold by them in market and majority of the activities in market are
regulated by market forces and consumers (Luan and Sudhir, 2010). Raw material for
manufacturing footwear products is easily available in the market and due to that it has becomes
essential that suppliers should take strategic approaches for selling their goods to companies.
Moreover, outsourcing can also be chosen by buyers so that they can sell large amount of
products without facing much difficulties and challenges. There are some elements that gives
impact on the bargaining power of suppliers and it includes low cost of switching due to which
difficulties are faced by suppliers in existing in the market (Nwokah and Ahiauzu, 2009). Other
than this volume of the products is also critical for them and due to which also low control is
hold by suppliers. In addition to that diverse distribution channels of the company also creates
difficulties for suppliers to sell their products in market. Along with this low concentration of
suppliers and rivalry among them also reduces their power in market. It creates advantage for the
companies that makes use of power enjoyed by the suppliers.
Threat of New entrant :- Huge success and growth opportunity that is provided by footwear
sector aids for attracting large number of firms for executing their operations in this industry.
Many global brands are already operating in this sector and small medium size firms are also
trying to operate their functions in this industry. However, any new entrant firm that is trying for
starting their operations in this industry has to face diverse barriers and due to that difficulties are
faced by them in performing their functions (Park, 2014).
Government rules and regulations needs to be followed and it makes it critical that all the
guidelines should be followed properly so that new companies can establish their business
successfully in footwear market. New companies have to face huge challenges and competition
and due to that it has become vital for them that they should develop and design innovative
products so that large number of consumers can be attracted for selling their services. It is vital
that strong brand name should be hold by companies so that buyers can be attracted for selling
the products that are being offered by the company.
2