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Activewear Industry Analysis: Porter’s Forces, PESTEL, and Trends Research Paper

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Analysis of Porter’s Five Forces

Porter’s five forces are factors that analyze the competitiveness of a selected industry. First, the threat of new entrants is low, as the market is currently divided between large brands, such as Nike, Adidas, Puma, Under Armour, and more (Becker et al., 2021). Second, the threat of substitute products is rather high. Although activewear is a special type of clothing that everyday items cannot fully substitute, the selection of products with similar quality and prices makes switching between them easy for consumers (Adamkasi, 2022).

Nevertheless, the bargaining power of customers is low – the price ranges and quality are similar, and athletic clothes have a limited range of pricing options. The variety of suppliers lowers their power significantly as well. Finally, one can see that industry rivalry is extremely high, as consumers can switch between products without sacrificing quality.

PESTEL Analysis

The factors influencing the activewear industry from the outside can be analyzed using PESTEL analysis. Political factors may include governments’ support for local brands and a stable political environment in the retail market. However, conflicts may result in economic barriers to trading, slowing down and disrupting logistical chains (Becker et al., 2021). Moreover, as labor costs rise, businesses face economic challenges (Becker et al., 2021).

The social sphere is defined by the growing interest in active hobbies, healthy lifestyles, and locally produced goods (Nooh, 2022). The technology is also rapidly developing, allowing companies to improve their e-commerce segment. Environmental factors include the rising interest in recycling, environment preservation, thrifting, and sustainability. Lastly, legal aspects for activewear retail are the growing minimum wage and evolving.

Benchmarking Analysis

Similar to other spheres of retail, activewear-selling companies may engage in internal and external benchmarking. If the company has several types of products, it may separate the comparison by goods department and measure their financial performance. Some benchmarks here include the number of sales, the number of goods sold, the effect of advertisement campaigns on buyer behavior, the effectiveness of e-commerce and physical retail stores, and more (Nooh, 2022).

Moreover, a special type of internal benchmarking is retrospective analysis, reflecting on previous successes and failures and the company’s current results. External benchmarking is the process of measuring the performance of competitors in comparison to the company. In this case, the same benchmarks can be used to compare the companies’ profits and marketing successes to see whether one business strategy is more effective.

Driving Forces Analysis

The forces affecting the sportswear retail market are close to those of other clothes market segments. First, customers’ interest in clothing styles and activities is a major factor. Currently, activewear businesses are seeing a rise in the popularity of athleisure clothes, influencing the style and range of clothes for active sports and everyday wear (Nooh, 2022). The next trend identified by Becker et al. (2021) is the growing interest in yoga. This activity requires specific clothing and items, such as mats, athletic balls, comfortable socks and shoes, elastic bands, and more.

Another major shift in customer preferences refers to business operations and message – sustainability is gaining recognition as an important quality of retail businesses (Becker et al., 2021). As an outcome, companies start showing environmentally-friendly marketing campaigns and move toward conscious use of resources.

References

Adamkasi. (2022). . Porter’s Analysis. Web.

Becker, S., Berg, A., Kohli, S., & Thiel, A. (2021). . McKinsey & Company. Web.

Nooh, M. N. (2022). Designing a sportswear strategic marketing plan: A data analytics approach. ASEAN Entrepreneurship Journal (AEJ), 8(1), 53-70.

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IvyPanda. (2024, November 2). Activewear Industry Analysis: Porter's Forces, PESTEL, and Trends. https://ivypanda.com/essays/activewear-industry-analysis-porters-forces-pestel-and-trends/

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"Activewear Industry Analysis: Porter's Forces, PESTEL, and Trends." IvyPanda, 2 Nov. 2024, ivypanda.com/essays/activewear-industry-analysis-porters-forces-pestel-and-trends/.

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IvyPanda. (2024) 'Activewear Industry Analysis: Porter's Forces, PESTEL, and Trends'. 2 November.

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IvyPanda. 2024. "Activewear Industry Analysis: Porter's Forces, PESTEL, and Trends." November 2, 2024. https://ivypanda.com/essays/activewear-industry-analysis-porters-forces-pestel-and-trends/.

1. IvyPanda. "Activewear Industry Analysis: Porter's Forces, PESTEL, and Trends." November 2, 2024. https://ivypanda.com/essays/activewear-industry-analysis-porters-forces-pestel-and-trends/.


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IvyPanda. "Activewear Industry Analysis: Porter's Forces, PESTEL, and Trends." November 2, 2024. https://ivypanda.com/essays/activewear-industry-analysis-porters-forces-pestel-and-trends/.

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