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Forces

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Five Forces Analysis on Competitive Forces Confronting Under Armour, Nike and Addidas
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Five Forces Analysis on Competitive Forces Confronting Under Armour, Nike and Addidas Under Armour, Nike and Addidas are leading manufacturer of footwear and sports accessories for children, men and women. This products are worn by athletes and persons with active lifestyles. Moreover, their products are sold in nearly all parts of the world with majority sales coming from North America. This paper Analysis five forces confronting Under Armour Nike and Addidas: superior supplier bargaining power, substitutes, new entrants, competition from existing producers and customer bargaining power. Superior supplier bargaining power is a common competitive force among the three companies. Though it is presumed that the three companies get their raw materials from several suppliers, and that supplier power is low. Suppliers form cartels and groups that help them negotiate higher prices for their supplies (Porter, 1979). Companies lack strength, to negotiate back, limiting their options and buy supplies at high prices which is common with Under Armor, Addidas and Nike. Substitutes are products that can be used in place of another product, they offer customers a wide variety of choices and can switch from one product to another with ease. This force offers a challenge among the three companies as customers choose one product from another. Threat of substitutes is characterized by switching costs among substitutes. The effect of substitutes is felt by companies in the long run WR (1980). Addidas, Nike and Under Armour face this immense challenge as they struggle to maintain their loyal customers and attract new customers. New entrants are a threat to existing producers as they come to invade on the…...

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