The Athletic Footwear Industry

The athletic footwear industry is inundated with various brands that are looking to position themselves as a leader in the market. The two main factors which determine a company's profitability depend on the industry they are in and the competitive positioning amongst other brands. The size of the athletic footwear market is large, and it is up to each brand to strategically position themselves for a well established market share.

The intensity of rivalry is essentially how hard each competitor is willing to "fight" for current and potential customers. First, the number of competitors effects the intensity of rivalry. Rivalry is on a different level when the competitors are in a similar market and compete to gain leadership. The number of customers also effects intensity as the less options a customer has, the higher the intensity. There is also intense rivalry if the market growth rate is slow. The costs of the products also make it difficult for consumers to make a decision. Low switching costs make it easy for consumers to "switch" from one brand to another. Product differentiation also makes rivalry more intense in which if the products are basically the same, the consumer will change products from time-to-time. Exit costs make it difficult for a brand to leave a market if they are heavily invested in the market place; such as long-term leases, factories and overhead. Fixed costs also add to market rivalry as high fixed costs lead competitors to compete for the necessary economy of scale to offset the high fixed costs. After considering these variables, the level of intensity in this industry is high.