1. strong brand name,
2. high quality
3. technologically advanced products,
4. successful acquisition program and
5. excellent innovations.
1. High production costs
2. Less profit margin
1. continuing globalization
2. improvements in its product innovations
3. Licensing and acquisition
4. Industry Growth
5. large profit potential from recovering market by 2013.
1. Competitor rivalry
2. increasing raw material prices
3. continued pricing pressures (Head Annual Report, 2004).
4. constrained demand in many categories and geographic regions
5. multi-currency environment or currency transaction risk (mainly between the US dollar and euro).
6. demographic trends
7. adverse weather conditions
8. unfavorable macroeconomic trend (Cosumer preferences).
Overall attractiveness/unattractiveness of the industry
1. large profit potential
2. Industry Growth
3. increasing global demand
4. relatively low entry cost,
5. low risk of failure experienced by the established companies Unattractiveness
1. customer brand loyalty,
2. potential lawsuits from safety
3. seasonal nature of the industry
Critical Success Factors: –
Reasearch and Development
Like any other industry, skill and experience in the field of producing sports equipment, with a strong strategic business plan, can be highly beneficial. Skilled and experienced workers and management usually guarantee that a company uses its resources wisely and is run efficiently. Therefore, it is important for companies to be built on intelligent and dependable people in order to stay competitive in this business (Hess & Siciliano, 1996).
Manufacturers of sports equipment have to be able to constantly come up with new technology and improve their products in order to continually satisfy consumer’s demand, keep up with the competition, and differentiate itself in a market with similar products. Again, in order to innovate, companies have to be willing to budget enough money in research and development, which should be an important calculated expense for every sports manufacturer who wants to be successful (Phil Pritt, 2006).
Building an effective distribution network is another key factor in the success of sports equipment manufacturers. Companies have to decide whether to sell their products to distributors and wholesalers who then forward them to retailers, sell them straight to retailers, or run their own specialty stores. Which ever way a company chooses, the decision should be based on what benefits the company and consumers most. A company should evaluate each market it operates separately, and choose the best distribution network for that market (Phil Pritt, 2006)