Under Armour 5 Forces Essay

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Porter’s Five Forces of Competition Framework According to Grant (2005), there are many features of an industry in which a company competes that determines the level of competition it will face and the profits it will get. The most famous classification was done by Michael Porter, known as Porters Five Forces framework which can help a company determine its potential profits by looking at five sources of competitive pressure. The five sources of competition are 1) competition from entrants 2) competition from substitutes 3) competition from established rivals 4) bargaining power of suppliers and 5) bargaining power of buyers. Threat of entry/Barriers to entry The threat of entry is highest in the apparel market due to the relatively lower costs of manufacturing apparel compared to the footwear market where the biggest threat posed is basically from current rivals already established in the market e.g Adidas and Puma, who although behind in market share, are currently implementing strategies that are helping them close the gap on Nike. Adidas has especially been gaining ground on Nike boosted by its strong presence in sponsoring the European soccer tournament where it sponsored eventual winners Spain (Torry 2012). According to Marketing Weekly News (2012), Adidas is also planning on moving into the more fashion-aligned market of teenagers which could see it improve global market share. NEO, a fast fashion adidas sub-brand aimed at teenagers is Adidas’ attempts to enter new apparel segments that will even pit it against the likes of H&M and Zara in an effort to gain market share and squeeze more profits out of mature industries. Another threat of entry is posed by Under Armour Inc. an established company in the athletic sportswear in the USA which in 2009 decided to enter the U.S athletic footwear market creating competition in a market which had been dominated
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