The sportswear industry provides clothing, including footwear, worn for sport or physical exercise and has now evolved as casual fashion clothing more than athletic wear. In this report I will be talking about Kotler’s macro forces and their effect on the sportswear industry. I will also be comparing two organizations from the industry and evaluating the similarities and differences between them.
Macro environment or macro forces consists of the larger societal factors that have the potential to affect an organization’s strategies. According to Phillip Kotler, these variables include demographic, economic, natural, technological, political, and cultural outside forces. (“Josbd”, n.d, para. 7)
The demographic environment is a major part of
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The sportswear companies have to keep in mind that aging population could either result in a decrease of sales or cause change of product as waist sizes would change along with other body changes that come with age, which the company would have to adjust to. Increased diversity also affects the industry as people from different countries would be purchasing the products, thus making it harder for companies to produce the kind of garments that most people would be comfortable with. The economic environment consists of factors that affect the consumer’s income and spending patterns. If there is a drop in the economy of a country, there would definitely be a low saving rate and a higher rate of debts, making a difference in what they buy or how much they spend, which in turn affects the company’s market value. (“Josbd”, n.d) Moreover, organizations need different kind of equipment, machinery which can be a great threat to the natural environment. To ensure the damage is minimal, governments require businesses to follow certain rules and regulations in …show more content…
Technological environment is the combination some factors which develop new products and also create opportunities and threats for the company. Not only does it benefit marketers greatly creating new product and market opportunities, it also creates opportunity for customers to consume new products. The evolution of technology has provided many platforms for marketers. New and improved technology can either profit the organization, or create threats of more competitors in the market. In the sportswear industry, technological factors could cause unemployment as machines replace workers. It could, however, reduce cost as more products can be made at a lower cost and lesser amount of time compared to labor made garments. Moreover, technology can benefit the sportswear marketers as a form of market research as social media and internet has outrageously developed over the past decade. Social media famous people can promote the sportswear by just wearing the items and posting a picture on the internet or simply advertising it at a really low price, almost immediately increasing sales. Political factors are those that affect the
Over the last 10 years’ gym memberships within the United States have increased from 41.3 million to 54.1 million. The biggest trend over the last few years is becoming fit, more and more each day people are finding ways to live fit and healthier lifestyles. From eating the right nutritional foods, working out and people just wanting to follow the latest and greatest trends. The increase in gym memberships and the amount of people working out leads to the increase in athletic attire. For this exact reason athleisure wear was born, it is the newest fashion trends were people wear athletic clothing regardless if they intend go to the gym or not that day. People are wearing it to the office, shopping, to run errands and other social events. Athleisure wear consist of articles of clothing such as spandex, leggings, yoga pants, sports bras and fashionable sweats. Over the last 10 years an increase in athleisure wear has spread at a rapid rate globally, particularly in the women’s fashion industry. Since 2013 the increase in athleisure wear apparel has grown by 14% and accounts for 18% of the total clothing retail market. With this trend still catching on, active wear is expected to continue to grow at an average rate of 3.3% annually. Due to this rapid increase in purchasing athleisure wear the apparel industry will continue to grow especially Nike because they are the market leaders in active sportswear. For that exact reason I believe that Nike is a
The background of this paper we need to mention is that West Coast Fashions, Inc. (WCF), a large designer and marketer of branded apparel announced a strategic reorganization calling for a divestiture of certain assets, and one of the divisions it intended to shed was Mercury Athletic, its wholly owned footwear subsidiary. John Liedtke, the head of business development for Active Gear, Inc. (AGI), a privately held athletic and casual footwear company, contemplated an acquisition opportunity of Mercury that would significantly improve his business. So, he wanted to evaluate this opportunity.
An organization’s external environment is terribly important and must be studied and understood for the organization to truly succeed. Through such study and understanding, a manager would be able “mitigate threats and leverage opportunities” that are caused by the six segments identified as macro-level external forces: (1) political, (2) economic, (3) sociocultural, (4) technological, (5) ecological, and (6) legal (Rothaermel, 2013, pp. 56-57). Since the manager’s decisions, or firm effects, have a greater impact than those external forces mentioned only when the manager accounts for them and builds a strategy around them, the manager must be aware of and understand these forces to be
In the athletic apparel industry, as in any industry, it is key to stay in touch with the current trends in order to keep your products relevant. With Lululemon focused on such a niche activity it will be important that they explore other markets within the sports apparel industry in the future so as to stay relevant. We can see the company’s first steps in doing just this when they recently introduced their men’s apparel line. A summary of the athletic apparel industry’s external environment are listed in Exhibit 1.
1. Macro environment analysis: the major externals which affect company’s decision making, marketing strategy and performance. It includes:
Obviously, there is a big number of driving forces in the athletic footwear industry. Each of these driving forces has different impacts—some of them can have a more considerable effect than others on figuring out how much cross-company differences influence market shares and a number of units sold. The first line of most influential factors includes comparative prices, S/Q ratings, and a number of models offered among the footwear competitors. These three most important competitive forces affect customer decisions of which athletic footwear brand to choose. Furthermore, the decisions of customers whether to purchase one brand or another are also influenced by such forces as advertising, celebrity endorsements, the number of independent retail
In this project, I have chosen to provide a microeconomic-based analysis on NIKE Inc. The study will include the analytic overview of the general market of Nike brand, as well as the information about the goods, service, and areas of operation. Throughout the research of this paper, I will discuss the cost of production, as well as the supply and demand in relation to microeconomics. Moreover, we will look at how supply and demand of this market regulates the equilibrium of quantity and price, as well as the economical efficiencies where the surplus for consumer and producer is maximized. Information will be explored to understand why businesses and people make decisions and how those actions we can be used for strategy. To conclude this research paper, I will take a deeper look and make recommendations for the future profitability, future growth and sustainability of NIKE Inc. (Hubbard & Obrien, 2015).
Macro environment are the external and uncontrollable factors that influence an organization’s decision making and affects its performance and strategies.
By the use of Porter’s Five Forces model to analysis the athletic footwear market around the world; our strategy is to cut the price of footwear in the Year 11 and 12, and to increase budget of advertisement and to bid celebrity endorsements in order to boost the sales volume in a competitive industry .
A macro business environment is inclusive all elements, that are out of the business’ control, that has direct and relative influence on strategic planning and goals. The microenvironment, includes current and any changes in local, state, federal and international laws and regulations. Laws and regulations literally dictate how a business regardless, of its sector, the guidelines of its operations. The state of the economy, consumer market and spending trends are also a major factor in the macro environment equation. The purchasing power, of the consumer, is vital for any business sector to succeed. In today’s technology driven society, it is utmost importance, that a business is, within the established perimeters of technology for their industry, or on the cusp of the cutting edge of technology. If a business has effective and efficient technology, across the board, in force, it can potentially cut costs and drive consumers to them. A business’ demographics
Identifying influencing factors of a company’s macro-environment helps in the strategic development and management within a company. The macro-environment outlines an industry and the competitive environment as seen in figure 3.1, (Gamble, Peteraf, Thompson, 39). Within the macro-environment there are the political factors, economic conditions, sociocultural forces, technological factors, environment forces, and legal/regulatory factors. All of these factors blanket the habitat an industry and its competition thrive in. Inside the industry and competitive environment there are five factors that influence an individual company. The five factors are suppliers, rival firms, new entrants, buyers, and substitute products. The biggest impact on a company are these five factors. For example, Under Armour focuses on their industry and competitive environment to survive and grow. Their strategy to win over the market share from Nike and Adidas consists of expanding a stable and original brand within record time, taking an innovative approach to their product line-up and brand-name appeal where the market seemed to be barren, and lastly, the company enters in the foreign market early on to establish its brand and influence markets outside of the US.
The athletic shoe industry is made up of companies that produce footwear for athletic use. This is a strong industry and has been around for over 100 years. The athletic shoe industry is one of the fastest growing footwear industries and have top growing sales compared to other footwear industries (NDP Group, 2016). The key players that currently dominate the market are Nike, Adidas, and Puma (Kates & Bolduc, 2013). This paper will use the porter five forces, industry life cycle, and the key players to understand the industry. Over these years the athletic shoe industry has grown into a competitive market.
REFERENCESBBC WEB SITEwww.bbc.co.ukCLARKS WEB SITEwww.clarks.co.ukKEY NOTEMARKET REVIEW 2006 CLOTHING AND FOOTWEAR INDUSTRYMINTEL MARKET REPORThttp://academic.mintel.com/sinatra/oxygen_academic/search_results/show&/display/id=220168THE TIMESONLINEhttp://business.timesonline.co.uk/tol/business/economics/article732688.eceVERDICT MARKETING WEB SITEwww.verdict.co.uk/marketing
(iii) Social-cultural (iv) Natural (v) Technological (vi) Political-legal 4) What recommendations would you make to senior marketing executives going forward? a. Understand people’s views of themselves, others, organizations, society, nature, and the universe as it pertains to sports. 5) What should they be sure to do with their marketing? a. Work closely with local and national governments, pressure groups and other environmental arenas to position the company as being socially responsible to the concerns about shoe manufacturing. Continue to present their advertising showing “fun” in sports and the use of their products
Macro environment consist of those major external and uncontrollable factors that influence an organization's decision making, and affect its performance and strategies.