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