The athletic apparel industry is worth approximately $168 billion worldwide in 2017 and is estimated to reach $231.7 billion by 2024. Major players like Nike and Adidas dominate the market but new entrants are expected to join. The industry is facing trends like activewear lines from fashion retailers only accounting for 10% of the market. The North American sports apparel market is expected to grow at a compound annual growth rate of 5.9% from 2016-2022.

1. Athletic Apparel Industry Analysis
Minbae Kim

2. Industry Overview
Athletic apparel Industry sold and marketed to be worn during
fitness or wilderness related activities such as sports, running, and yoga.
Athletic Apparel Industry
Industry Size
Approximately $168 billion in 2017 worldwide 1
Estimated $231.7 billion by 2024 worldwide 2
Industry Trends
“Activewear lines from fashion retailers only account for 1/10 of the market.” 3
New players will join in the game.
1
Statistica: Global Sports Apparel Market Revenue
2
Global Industry Analysts Inc. 3
Stylescape: What will happen to activewear in 2018? 2

3. Market Share
3
1
Euromonitor International: Sports versus Non-Sports Apparel: Share of Total Market, 2016 (%)
2
NPD Group: Athletic Footwear Market Share in the United States, 2016 (%)
Athletic Apparel
Non-Sports Apparels
Performance Clothing
11.4%
7.4%
5.7%
2.9%
1.7%
1.0%
Sports-inspired Clothing
Sports-inspired Footwear
Performance Footwear
Outdoor Footwear
Outdoor Clothing
Footwear 2Apparel 1
35.6%
15.7%
11.4%
4.7%
4.1%
2.5%
26.0%
Others

4. Buyer
Power
Industry Analysis
Supplier
Power
Threat of
New Entrants
Rivalry among
Competitors
Low switching cost
Low brand loyalty
High price sensitivity
Low backward integration
Independent manufacturers
Low supplier concentration
Numerous supplier contraction
Casual apparel
Low switching cost
Numerous substitutes
Average brand preference
Oftenly price competition
Consistent Growth, CAGR 5.9%1*
Low capital intensity
Light regulation
Average access to the market
Average Economies of scale
4
Threat of
Substitutes
1
KBV Research: North America Sports Apparel Market (2016-2022)
* CAGR: Compound Annual Growth Rate
Five Forces Analysis

5. Political
Economic
Social
Technological
Legal
Environmental
Political tension in Asia; political commentary by CEO/representatives; possible Chinese tariffs
Rising labor and supply prices across the value chain; Counterfeit products;
EU low interest rates allows for continued inventory/production costs borrowing
Increased wealth in developing markets, increase “healthy” lifestyle movement;
socially aware consumers demand ethically made clothing; Women’s athletic movement
IOT in sports gear; leveraging apps with brands; new materials;
value chain integration; sustainability movement and consumer demand.
Expanding environmental policies; air and water pollution (suppliers);
Labor and tax law/distribution; new international trade protection;
intellectual property (advertisement lawsuit)
Industry Analysis
PESTEL Framework
5

6. Strategy Analysis
1
Strategic Position and Competitive Scope: Athletic Apparel Brands
Competitive FirmsPositioning Map 1
6
COMPETITIVESCOPE
STRATEGIC POSITION
Cost Differentiation
NarrowBroad
Product Differentiation
Product Differentiation
Focused Differentiation
Cost Leadership

8. Strategy Analysis
SWOT Analysis
Product
Innovation
Brand
Power
Distribution
Channel
Economies
of Scale
Global
Network
Product
Diversity
Finance
Community
Market
Demand
Economic
Situation
Trends
Sensitivity
Brand
Representative
Marketing
R&D
Niche
Market
Product
Expansion
Competitors
Government
Regulation
Internal Analysis
Strengths/Weaknesses
External Analysis
Opportunities Threats
8

9. Strategy Analysis
SWOT Analysis
Internal Analysis
Strengths/Weaknesses
Product
Innovation
Brand
Power
Distribution
Channel
Economies
of Scale
Global
Network
Product
Diversity
Finance
Community
Strong Brand Image
High Customer Loyalty
Low Manufacturing Cost
Global Network/Influence
Strengths Weaknesses
Footwear Dependency
High Products Prices
High Advertising Spending
Bad Brand Reputation
9

10. Strategy Analysis
SWOT Analysis
External Analysis
Opportunities Threats
Market
Demand
Economic
Situation
Trends
Sensitivity
Brand
Representative
Marketing
R&D
Niche
Market
Product
Expansion
Competitors
Government
Regulation
Opportunities Threats
Competitive Market
New Entrants
Rapid Tech Innovation
Brand Dilution
Imitation
New Market Exploration
Develop More Niche Market
Improve Labor Practices
Product Line Expansion
10

12. Strategy Analysis
12
SWOT Analysis
Market
Demand
Economic
Situation
Trends
Sensitivity
Brand
Representative
Marketing
R&D
Niche
Market
Product
Expansion
Competitors
Government
Regulation
Internal Analysis
Strengths/Weaknesses
External Analysis
Opportunities Threats
Product
Innovation
Brand
Power
Distribution
Channel
Economies
of Scale
Global
Network
Product
Diversity
Finance
Community

13. Strategy Analysis
13
SWOT Analysis
Portfolio Diversity
Strong Financial Position
Distribution Network
Collaborations
Flexible Supply Chain
Strengths Weaknesses
Premium Price Range
Outsourced Manufacturing
High Marketing Costs
Internal Analysis
Strengths/Weaknesses
Product
Innovation
Brand
Power
Distribution
Channel
Economies
of Scale
Global
Network
Product
Diversity
Finance
Community

14. Strategy Analysis
14
SWOT Analysis
Market
Demand
Economic
Situation
Trends
Sensitivity
Brand
Representative
Marketing
R&D
Niche
Market
Product
Expansion
Competitors
Government
Regulation
Opportunities Threats
Competitive Market
Rapid Tech Innovation
Government Regulation
New Entrants
New Market Development
Develop More Niche Markets
Product Line Expansion
Backward Integration
Expand e-Commerce presence
External Analysis
Opportunities Threats

16. Strategy Analysis
16
SWOT Analysis
Market
Demand
Economic
Situation
Trends
Sensitivity
Brand
Representative
Marketing
R&D
Niche
Market
Product
Expansion
Competitors
Government
Regulation
Internal Analysis
Strengths/Weaknesses
External Analysis
Opportunities Threats
Product
Innovation
Brand
Power
Distribution
Channel
Economies
of Scale
Global
Network
Product
Diversity
Finance
Community

17. Strategy Analysis
17
SWOT Analysis
Digital Channels
R&D
Increased Growth Rate
Strong Marketing
Strengths Weaknesses
High Inventory Capital level
Reliance on US market
Supplier Dependence
Less Distributors
Losing touch with consumer
Internal Analysis
Strengths/Weaknesses
Product
Innovation
Brand
Power
Distribution
Channel
Economies
of Scale
Global
Network
Product
Diversity
Finance
Community

18. Strategy Analysis
18
SWOT Analysis
External Analysis
Opportunities Threats
Market
Demand
Economic
Situation
Trends
Sensitivity
Brand
Representative
Marketing
R&D
Niche
Market
Product
Expansion
Competitors
Government
Regulation
Opportunities Threats
Strong Rivalry
Obesity Rates
Lack of Patents
Expanding Digital Marketing
Licensing Collegiate Teams
Growing Female Consumers

20. Strategy Analysis
20
SWOT Analysis
Market
Demand
Economic
Situation
Trends
Sensitivity
Brand
Representative
Marketing
R&D
Niche
Market
Product
Expansion
Competitors
Government
Regulation
Internal Analysis
Strengths/Weaknesses
External Analysis
Opportunities Threats
Product
Innovation
Brand
Power
Distribution
Channel
Economies
of Scale
Global
Network
Product
Diversity
Finance
Community

21. Strategy Analysis
21
SWOT Analysis
Internal Analysis
Strengths/Weaknesses
Collaborations
Improving Financials
International Strategy
Brand Recognition
Sustainability/Environment
ally friendly
Strengths Weaknesses
Least Brand Power
Limited Resources
Strong Rivalry
Lower profit margins
Product
Innovation
Brand
Power
Distribution
Channel
Economies
of Scale
Global
Network
Product
Diversity
Finance
Community

22. Strategy Analysis
22
SWOT Analysis
Market
Demand
Economic
Situation
Trends
Sensitivity
Brand
Representative
Marketing
R&D
Niche
Market
Product
Expansion
Competitors
Government
Regulation
External Analysis
Opportunities Threats
Opportunities Threats
Inflated Stock Prices
Wage disputes
Fraudulent Products
Sponsorships and Contracts
Increasing R & D
Acquiring Niche Brands
Growing Female Consumers

23. Worst Performer
231
Danziger (2017). 2
Bain (2017). ³Mortimer (2016). ⁴Woolf (2016).
Company Strategy Sales/ Market Reaction
Triple Double Strategy1
3 % revenue decline; Increased global market share but lost U.S.
market share and shoe market share.
Acquisition of Reebok; Classic line expansion 2
Athletic Shoe Line
Forever Faster³
Doubled shoe market share to 11% 2
Stock went from mid $80s to $16.49. In 2 yrs⁴
Stock went from $194 to 427 in 2 yrs.⁴

24. Worst Performer
1
Samuels (2018).
Recommendations
24
1. Partner with influencers and other non-traditional marketing
to appeal to target audience; offer special designs or have
them work with R&D to develop untapped performance tech
opportunities. Particularly focusing on female consumers.
2. Use in-store tech, DTC and customizations to get greater
customer engagement and higher profit margins.1
3. Focused international market expansion with help of
applications (Connected Fitness): Asia

25. References
Bain, M. (2017, September 06). Nike is still the king of the sneaker industry, but even great empires can fall.
from http://qz.com/1067801/nikes-iron-grip-on-the-sneaker-market-is-slipping/
Bruno, Giovanni. (2016, August 04). Adidas (ADDYY), Nike, and Under Armour, Debated on CNBC's 'Halftime Report'.
Coresight Research. (2018). Deep Dive: Retail Revolution - US Apparel Shifts
from https://www.fungglobalretailtech.com/research/deep-dive-retail-revolution-us-apparel-shifts-20-charts/
Danziger, P. N. (2017, October 28). Nike's Challenges In The U.S. Market.
from https://www.forbes.com/sites/pamdanziger/2017/10/27/nikes-challenges-in-the-u-s-market/2/#54014e685081
Green, D. (2017, November 10). Adidas is defying the American curse that's haunting Nike and Under Armour.
from http://www.businessinsider.com/adidas-business-boom-2017-11
Mortimer, N. (2016, March 29). How Puma is turning to startups in its bid to become 'the fastest sports brand in the world'.
from http://www.thedrum.com/news/2016/03/29/how-puma-turning-startups-its-bid-become-fastest-sports-brand-world
Samuels, J. (2018, April 09). Under Armour: Poised For Underperformance?
from https://seekingalpha.com/article/4161785-armour-poised-underperformance
Smith, K. (2018, January 18). What will happen to activewear in 2018?
from https://edited.com/blog/2018/01/activewear-trends-2018/
Trefis, T. (2016, October 06). The Athleisure Trend Is Here To Stay.
from https://www.forbes.com/sites/greatspeculations/2016/10/06/the-athleisure-trend-is-here-to-stay/#6d87d76528bd
25

26. References (cont.)
Team, T. (January 24, 2017). Under Armour: Key Areas Of Growth Through Connected Fitness. Forbes.
from https://www.forbes.com/sites/greatspeculations/2017/01/24/under-armour-key-areas-of-growth-through-connected-fitness/#1ec35fa64248.
Woolf, J. (2017, March 15). Here's How Puma Overtook Under Armour in the Sportswear War.
from https://www.gq.com/story/how-puma-overtook-under-armour-in-the-sportswear-war
Brandon, G. (Feb 18, 2018). 37 Athletic Apparel Industry Statistics and Trends
from https://brandongaille.com/37-athletic-apparel-industry-statistics-trends/
KBV Research. (March 22, 2017). North America Sports Apparel Market to grow at a CAGR of 5.9% during 2016-2022
from https://kbvresearch.com/news/north-america-sports-apparel-market/
Market Insider. (Aug 10, 2017). The Growth of Sales in Sportswear
from http://markets.businessinsider.com/news/stocks/the-growth-of-sales-in-sportswear-1002249734
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