Industry Analysis

Presentation
Ronald VanWagoner
Abdorhman Balkadr
Tie-Shay Moncrief
Alexander Shemes

University of Michigan-Flint
Business & Corporate Strategy - MGT489

Instructor: Amy Gresock

02/15/2016

Joshua Shemes
Adel Almuqbil
Zijie Yang

Points of Interest
Executive Summary
Industry Analysis
Bargaining power of Suppliers
Bargaining power of Buyers
Threats of New Entrants
Threats of Substitutes
Competitive Rivalry w/in Industry

Industry Summary
Overall Analysis & Recommendation

Executive Summary
World Prime Consulting

Focused on the Athletic Apparel industry

NAICS code- 315220
Key competitors:
Nike
Adidas
Under Armour

Establishments primarily engaged in

manufacturing mens and boys cut and sew
apparel from purchased fabric.

Bargaining Power of
Suppliers
The presence of powerful suppliers reduces
the profit potential in an industry (Mars).
Suppliers drive the prices/quality up or down
which leads to competition
Very tough for small suppliers to compete.

Bargaining Power of
Suppliers
Nike and Under Armour practically own their
suppliers
Under Armour products produced by 27
manufacturers in 14 different countries.
Nike products are manufactured by third-party
contract manufacturers.
No factory accounted for more than 6% of total
Nike brand apparel production in 2013

WHAT DOES THIS MEAN?

Large companies control, new entrants pay the
price.

Bargaining Power of Buyers

Better customer services, higher quality and
Lower price.
Concentrated on Quality lower bargaining
power in relation to prices. (increase the
profit )
Concentrated on Price higher bargaining
power, sellers would be forced to lower the
price. (less profit)
Bargaining power also consider with buyers
Income, Interest and Brand loyalty.

Threats of New Entrants

Barriers :
Investment Cost
Nikes total assets accumulated to over 21 billion dollars

Production Cost
Manufacture their own apparel vs Outsourcing

Product differentiation and customer loyalty

Strong brand name in the market

Suppliers and distribution channels

Adidas has 1746 locations
Nike has more than 750 locations

Threats of Substitutes
Different options
Many brands offering the same clothing
Trust of brand
Pricing

Competitive Rivalry w/in

Industry
The industry has a great number of
competitors
Have the power over other companies.

There is a great number of companies

business are involved:
Adidas,
Nike,
Under Armour.

Competitive Rivalry within

Industry
It is a major factor:
the more competitors, the more risk the business is
likely to face
increase the cost,
lowers the profit.

There are many ways that companies can

overcome threat:
Adidas subscribe to Real Madrid,
Nike subscribe to Barcelona,
and Under Armour subscribe to Tottenham.

Industry Summary
Suppliers & Buyers
Diversity of suppliers
Quality and price
Threat of New Entrants
Companies control of the market
Competition
Ability to compete

Industry Summary
External Environments
Location of manufacturing
Marketing
Endorsement deals

Overall Analysis

The Market & The Analysis

Wide open for entry, however too many established
competitors.
High Competition
A niche must be determined in order to compete against
Nike, Adidas, and Under Armor. (The Big 3)
Branding
Must create a brand that will be recognized and hold its
own vs competition.
Brand must be established before charging higher prices

The Recommendation

Too large of a market to proceed with

entering.
Competitors are likely to stay on top.
Established brands have established
loyalty.
Expensive to Enter
The market its self is already controlled. It
would be difficult to join and compete and
that level.