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Athletic Footwear Market in the UK : Report

   

Added on  2020-01-21

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Running head: ATHLETIC FOOTWEAR MARKET IN THE UKAthletic footwear market in the UKName:Date:Institution:
Athletic Footwear Market in the UK : Report_1
ATHLETIC FOOTWEAR MARKET IN THE UK25 Forces analysis on the athletic footwear market in UK,Nike Inc. has over the years been one of the largest sportswear production firms around the world. As a result, it has gained worldwide recognition owing to the high-quality sportswear kits they produce. The firm has also been able to conquer other bigwigs in the market and thus secured its place in the global arena. Being a globally established sportswear corporation, Nike has faced various challenged gaining entry into new markets and in most instances, the barriers to entry have jeopardized the entire functioning of the organization along the way. Nike Inc. has experienced various obstacles, but the market forces have not stopped the firm from achieving the ultimate goal of providing sports shoes to most countries in the world. The market forces thataffect Nike Inc can easily be assessed by the use of Michael Porter’s five force analysis. The model tends to look all the vital elements that influence the distribution and the sale of footwear across the UK and other parts of the world. The forces can either affect the external or the internal environment based on the area which they concentrate mostly. The forces can either be strong moderate or weak basing on how they affect the market orientation of Nike Inc. The five forces are described below.Competition is one of the major market forces that affect the market share of Nike’s goods and services. The competitive rivalry as it is considered in the wider scale involves some of the major competitors of Nike in the sports shoes and others sportswear. The element of competitive rivalry helps to maintain the company in the global arena and also facilitate its penetration into unexplored regions. Additionally, the competitive rivalry serves to influence the operations of Nike either externally or internally based on the level of control it applies towards the activities of the firm. Crane points out that competition is an essential part of any business entity and can be used as a mirror to gauge the level of development achieved by any business
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ATHLETIC FOOTWEAR MARKET IN THE UK3entity (Crane, 2010 p.46). For the case of Nike, the major external competitive rivalry they experience low market growth rate which is a strong force that significantly affects the sales of the corporation. The implication of this effect is that the substituent companies crave to enter a market setting that grows at a slower rate. Additionally, high aggressiveness from other enterprises seeking entry into the larger markets and occupy a larger market share has acted as one of the forces affecting Nike's marketing strategy. Moderate amount of firms serves as a reasonable force that affects the functioning of Nike Inc. In an aim to surpass all these forces, Kuroiwa asserts that the company has to put more focus on the product development so as to create a competitive advantage to surpass the competitors (Kuroiwa, 2012 p.65). Another reasonable force affecting Nike Inc. is the bargaining power of their customers. The bargaining power affects the overall performance of the firm. In this instance, the bargainingpower brings about low switching costs, which gives the clients an easy time purchasing the sports shoes from other producing brands other than Nike. Amos and MacLaren also confirm that the bargaining power creates a favorable environment that promotes substitutability of Nike’s products with other manufacturing brands (Amos and McLaren, 2016 p.95). Thus to surpass the bargaining power by the clients the firm has to ensure it invests more in advertisement and production of high-quality merchandise.Furthermore, the bargaining power of Nike’s suppliers works as a weak force towards assessing the market force of the company. The suppliers affect the business through the provision of raw materials which he may choose to overprice thus jeopardizing the output of the firm which may influence the pricing of the final output. A Large population of supply affects
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ATHLETIC FOOTWEAR MARKET IN THE UK4the individual suppliers and their demands for huge companies Nike Being an example. Additionally, a modest number of different suppliers is a moderate force that alters the setting of the firm. Though the vendors act as one of the market forces, their interference is of less significance to the overall orientation of the footwear market. In the sports shoes, apparel and theequipment industry Nike has the mandate of formulating unique strategies that can adequately address this issue.Kuroiwa points out that the threat of substitution is a market force that significantly affects the market for goods from Nike (Kuroiwa, 2012 p.99). It is evident that substitutes pose great threats against Nike’s performance as one of the leading corporation supplying athletic shoes. Some of the significant risks posed by this force are the average performance per price of the substitutes. The customers at certain points have the likelihood to consider the alternatives over Nike’s apparels and sports shoes. Furthermore, low switching costs immensely affect Nike’s client base. When customers have easier and less costly substitutes, they can quickly switch to suit their satisfaction consequently altering Nike’s customer base.The threat of new entrants also works as a market force that alters the functioning of Nike’s client base. Kahle and Riley distinctly put it that new entrants into the new pose threats in the sportswear market as they bring about changes which may be negative or positive based onthe area they affect (Kahle and Riley, 2004 p.48). The high cost of brand development is a weak market force posed by the new entrants into the market seeking to run against Nike Inc. Additionally, high economies of scale is a moderate force that is experienced in the quest to try new markets. With the large economies of scale, Nike has a greater competitive edge against the new entrants and the other competitors in the global market. Giving consideration the global
Athletic Footwear Market in the UK : Report_4

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