Porter’s Five Forces
Industry Level Analysis
What industry is being considered?
Active Outdoor Apparel (Columbia Sportswear)
1.Threat
of
Potential
Entrants
Process steps:
1. Identify industry or segment boundaries.
2. Identify players in each Force using case facts.
3. Assess level of threat, power, intensity of each Force
using case facts and course concepts.
4. Make final assessment of how attractive the industry
is in which to compete, using results of 5 Forces
analysis to support your view.
Name: Lili Chen
MGO-403 Time: 11:00AM -12:20PM
1. Low/Medium
- Successful entry is challenging due to the economies of
scale and operational efficiencies; Large capital costs are
required for branding, advertising and developing
technology.
- Other existing sports apparel could enter the active outdoor
apparel market through acquisitions or creating a new
market segments .
6.Rivalry Between
5. Bargaining
Power of Suppliers
Competitors
5. Low
A diverse supplier base limited bargaining
power, and firms with headquarters in the
same nation or region can negotiating
lower costs with suppliers
6. Low
- High existing concentrated market and popular brand in
the industry like Nike, The North Face, Timberland and
L.L. Bean.
-There are some loyal customers and firm try to offer
differentiated high performing products through technology
4. Low
The demand for active outdoor apparel and
accessories is expected to continue in
known future. There is not obvious known
substitute to replace active outdoor apparel
market
2. Bargaining
Power of Buyers
2. High
Buyers are individuals who participated
in outdoor activities or individuals who
are looking for warm winter apparel.
They bears low switching cost, but there
are some individuals might have brand
loyalty.
4.Threat of
Substitutes
3. Influence of
complementors
3. Medium
-Celebrities wearing
clothing/accessories from
our brand.
How attractive is this industry?
Active Outdoor Apparel is an attractive industry because the demand will continue for the active
outdoor apparel since there is no other substitutes, and high existing concentrated market.
Although bargaining power of buyers are high and it is very easy for them to switch and bear no
switching cost. Firms tried to differentiate themselves and there are always many loyal customer
1
bases. The industry face low threat of potential entrants because economies of scale and high
capital cost requirement.