Analysis on shoe industry based on Porters 5 force model

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Analysis on shoe industry based on Porters 5 force model

  1. 1. BY, ANNA VARGHESE, BATCH -B
  2. 2. KEY PLAYERS
  3. 3. TYPES: 1. ATHLETIC SHOES 2.BOOT SHOES 3.DRESS AND CASUAL SHOES 4. DANCING SHOES 5.ORTHOPEDIC SHOES
  4. 4. Source: Packaged Facts
  5. 5. Top ten footwear consumption all over the world
  6. 6. BARRIERS TO ENTRY • Access to inputs - Access to inputs is easy • Access to distribution opportunities is limited because of the top brands which have already recognized in market • Switching costs are low • Government policies –permitting and licenses are not that strict.
  7. 7. • Intellectual property – Patents and other types of proprietary intellectual property are effective in limiting industry entry. • Capital requirement- With regard to start up capital, it may be little costly because start up is labour and capital intensive. • Brand Identity- dominated by branded products and strong brand loyalty. HIGH !
  8. 8. BUYER POWER • Brand identity-High end brands and Large companies in the industry set price points for their products. • Substitutes Available- Except athletic,orthopedic,dancing shoes all other types can be substituted by normal sandals. • Product Differentiation –Low
  9. 9. Buyer’s Incentives – Seasonal sales offered by reputed brands and stores
  10. 10. • Buyer concentration vs. industry- Buyers are less concentrated, reduces buying power. • Buyer Volume-Don’t buy in large quantities. • Price sensitivity-Buyer’s are more sensitive to price. LOW!
  11. 11. SUPPLIER POWER • Major firms can switch suppliers quickly without worry of a significant decrease in quality. • Threat of forward integration –Low due to high entry barriers • Supplier concentration- Fragmented • Any supplier that meets quality standards for the company will be able to supply these commodity goods. LOW !
  12. 12. THREAT OF SUBSTITITES • Can be substituted except for athletic shoes by normal sandals • Switching costs are low MODERATE
  13. 13. RIVALRY WITHIN INDUSTRY • More of an emphasis on non-price competition. • Firms instead try to increase their range of products to capture more of the market. • Brand image and customer loyalty is huge in this industry, which leads to the brands competing in advertising.
  14. 14. • Some companies acquire other brands; mergers. Ex; Adida’s acquisition of Reebok may help it challenge Nike. HIGH

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