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Example research essay topic: Athletic Footwear Existing Competitors - 1,096 words

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... noted athletes (i. e. Kobe Bryant and his sexual assault case) Increase in the Price of Raw materials Nike's strong reputation in the footwear and apparel industry Continuing challenges in import / export duties Threats to free trade and foreign currency fluctuations Possibility of distress from growing beyond its capabilities Losing serious ground to Nike in the Soccer industry, which Adidas has a stronghold on Emerging competitors Both Nike.

com and Adidas have strong positions in the footwear and apparel industry. Integrating e-business to its existing line of business is a key advantage to both companies relative to its competitors. For Nike, to overcome the potential threats, they must continue to be innovative and explore opportunities globally. Furthermore, Nike must focus their energy towards reducing the channel conflict caused by the introduction of e-commerce to Nike's strategy. Nike.

com must balance out its efforts to reassure traditional retailers while expanding its own line of business through e-commerce. Very similar to Nike, for Adidas to overcome some of the potential threats they must continue to improve their strategic position in the industry by increasing their e-commerce reach to the global markets. For both companies, it's important to increase the market "pie" rather than increase their market share away from their retailers. Furthermore, the information, such as demographics and preferences, collected from directly selling to the end consumers should be used to market new goods and products.

PORTER'S FIVE FORCES Barriers to Entry - Low Due to the large scale of both Nike and Adidas, these firms are able to control their costs to retain performance advantage over emerging competitors in the industry. Their web sites are more sophisticated and enticing to browse, both contributed to their large marketing budgets. The capital injection into web site development is high and must be updated frequently with new promotions and added features to attract online shoppers. There are many proprietary product differences in the industry therefore brand identity has an immediate competitive advantage. The Nike and Adidas brand is well renowned globally and plays a major role in consumer decision making. Selling footwear online is highly competitive; however, barriers to enter into this e-commerce industry are quite low.

The capital requirement for setting up an online shop is comparatively lower than setting up a traditional bricks and mortar establishment. Therefore, the online footwear industry is highly abundant with hundreds of online merchants. Switching cost is low for the consumer, and may occur frequently depending on consumer preference and other factors affecting consumer buying decision, (i. e. price sensitive consumers). Another major barrier is security.

Although, Nike and Adidas have invested millions of dollars into their web site, there is an industry wide problem of securing data over the Internet medium. Hackers may potentially lacerate into the site and could retrieve sensitive data such as consumer profiles, credit card numbers, and other corporate data. They could even redirect the company's web site traffic to another web site similar to the case of Nike in June 2000. Nike experienced a hijacking of its web site. The traffic from web was redirected to a server at a Scotland-based Web hosting company Bargaining Power of Buyers - High There are a large number of buyers relative to the number of firms in this industry.

Therefore, companies like Nike and Adidas must continuously market their product and differentiate their brands against competitors, in order to increase sales and market share. The use of online tools has helped to enhance the accessibility and intimacy among users. For example, Nike's "nike. com" link allows consumers to customize and design their own footwear by permitting customers to specify the desired colours and the option to personalize the footwear with their name.

Brand identity plays a critical role in the buying behavior; strong identity will offer consumers trust and loyalty. Many online buyers are price sensitive and switching cost is low for the buyer. Bargaining Power of Suppliers - Low There are many suppliers in this industry. In essence, there is very little differentiation among the suppliers which makes suppliers' bargaining power non-existent. Leather, rubber, and cotton are commodity items and are available abundantly in the market place. Conglomerates such as Nike and Adidas have a definite advantage and power over their suppliers.

These suppliers become dependent on these firms as their means to survival. Additionally, Nike and Adidas have standardized their input procedures pertaining to the materials used, their labor force, supplies, services, and logistics. Firms are able to switch between suppliers quickly and cheaply, due to the globalize networks of cheap labor on various continents. Additionally, inputs are readily substituted and there are an abundant number of suppliers available. Threats of Substitutes - Low Buyers' propensity to substitute is low.

Consumer substitutes for athletic footwear products are low because there are little alternatives to switch, some substitutes for athlete footwear could be boots, sandals, dress shoes or bear feet. Consumers are not likely to substitute due to the performance specification of the product. For instance, a basketball player would not wear boots to play basketball. Therefore, there are no real substitutes for athletic footwear. Rivalry among Existing Competitors - High The rivalry among existing competitors in the footwear industry is quite high. Large firms such as Nike and Adidas have grown immensely over the last two decades.

Their global reach has expanded through all continents; this is attributed to the emergence's of the Internet and e-commerce. Online selling has enlarged the reach for these firms allowing them to increase sales while minimizing operating costs. Almost every large firm has a web site, and most of these web sites contain virtual stores which provide convenience to consumers. Most individuals in North America have access to high speed Internet and online purchasing has become the new trend for the twenty first century. Competition is fierce in the footwear industry and those who dominate or lead the market do so with high capital expenditures, aggressive sales and marketing strategies, and strong brand identity.

E-BUSINESS MODEL Nike and Adidas have adopted a merchant model which encompassed three pillars of their e-commerce strategy: pure-play e-tailer, bricks and clicks, and their online store. The main purposes of acquiring relationships with pure-play e-tailers is to promote and market products; focus on the content to create new exposure and; gather, gain and transfer market knowledge to their business counterparts. Nike has landed a deal with Fogdog Sports which will sell their entire Nike product line on its web site. Adidas signed an agreement with SportsLine. com and Sports. com.

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Research essay sample on Athletic Footwear Existing Competitors

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