Transcript 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