External Analysis-Columbia - University of San Diego Home

Alexa Strobridge Zach Lewis Lexi Fascenelli Qi Chen Frank Li

CULTURE

Cultural trends play a major role in the consumer appeal of this industry.

There is a high seasonal influence on consumer buying.

SEASONS

Summer products typically cost less than winter products Sales during offseason offsets sales revenue

Capital Innovation Competition



Substitute Prices • Customers might be attracted to the lower cost of products from

outside the industry



Substitutes performance and quality • Performance expectations cannot be met by the industries outside of

our own.



No switching costs • There are few switching costs for the customer, thus making it easy to

substitute the product.

• http://www.youtube.com/watch?v=r3QXAqgddZc

Each of the major brands in this industry have their own unique fabric blends. They each offer similar features while using different technologies. 

Columbia: Omni-Dry, Omni-Heat etc.



Northface: HyVent, GORE-TEX



Patagonia: Synchilla, Capilene, Regulator



REI: ecoSensitive materials

 Outdoor

Sportswear Companies are the dominant customers of these suppliers

 These

supplies give these companies competitive advantage over each other.

 Their

name brand is associated strictly with the suppliers of these materials.

Two segments: Baby Boomers (born 1946-1964) 78 million “mastering a kick-flip at the skate park is as satisfying to a millennial as summiting mount rainier might be (or have been) to a Boomer.” — Beaver Theodosakis prana

Millennials (born 1978-2003) 100 million

“our challenge is to meet them where they are; after all, it’s the participant who will define us, not the other way around.” — Angel Martinez deckers outdoor corporation most often seen: hiking, biking, camping, fishing and paddling –

the Industry’s pillar activities.

 There

are a few major rivalries within the outdoor apparel industry • Columbia • Patagonia

• REI • North Face

 Outdoor

sportswear industry is becoming more expensive • Supported by buying habits of millennials and

boomers  Lower

price points

• Price range for Columbia jacket is $100-250 • Price range for North face jacket is $250-500

 Resource

similarity

• The industry uses the same resources as any

other clothing industry  Same fabrics and materials  Similar research and development  Market

Commonality

• There is much market commonality within the

industry and outside the industry

 They

all have very high FIXED costs

Sourcing, merchandising, distribution, and administrative functions • Must have high sales to return a profit  STORAGE

costs are reducing

• Clothes are manufactured as the newest style

and pushes old ones out • Brick & Mortar  Click & Mortar

Outdoor clothing as an industry has a great deal of differentiation If you participate in outdoor sporting activities, for most people it is considered a commodity Example: You would not choose to go snowboarding in a pair of jeans and sweater

The Outdoor sportswear industry has very

low exit barriers

• Limited specialized assets • No strategic interrelationships • Lack of government and social restrictions

The few barriers • Some fixed costs of barriers

• Emotional barriers

 Statistics

show that Gen Y and Z have greater living and fashion standards then previous generations (millennials) • Outdoor clothing is already comfortable and

becoming more fashionable to attract consumers

8.3

billion Americans:

(Baby Boomers and Millennials)

 Online

81%

shopping sales start to take off

of retailers reported revenue ^ UP compared to 5 years ago - with an average growth of 32%

High Barriers to Entry Few Substitutes Growing Market High Revenues, High Fixed Costs Shared Resources High Competitive Rivalry Strong Buyer Power