Submitted by: Submitted by ellwn1234
Views: 209
Words: 1115
Pages: 5
Category: Business and Industry
Date Submitted: 03/24/2014 02:31 PM
EXTERNAL ENVIRONMENT
PESTLE
Political –
Economic
o global industry rapidly growing and highly potential market with dramatic growth in the past decade.
o industry growth rate slowed down 2007-08
o global financial crisis – revenue from international markets decreased by 5.1%
o industry is very vulnerable to the direct impact from the economic crisis and therefore a higher market saturation in that area
o 2009 store sales growth declined but still remains strong due to the spike in growth because of the Bejiing Olympics
o strategy focuses on second and third tier cities which have a low income level but highest growth potential
Social
o China has become the subject of major sportswear brands’ attentions due to the Bejiing Olympics
o more young Chinese consumers who are interested in sports apparel
o Western and Chinese business practices gap – difference in culture
o Western and Chinese size difference
o Fast moving consumer goods sector – frequent changes in consumer taste habits with design and fashion
o increase in sponsorship in China
Technological
o improvements in product design
o retail experience improvements by Adidas (sports performance and style all under one roof)
o growth of research and development centres
Legal
o in 2004 Li Ning went public on the Hong Kong Stock exchange establishing itself as an international brand
o partnership with French sports apparel brand AIGLE and Italian brand Lotto
Environmental
PORTER’S FIVE FORCES
Threat of entry
o Low barriers to entry
- many global brands have also entered sports apparel market in China
- Chinese market represents a large proportion of global industry which is rapidly growing.
- low differentiation amongst international competitors through high quality products
o high barriers to entry
- large product base from competitors making it very expensive for new entrants to match
- high differentiation amongst home competitors through high...