General Environment:
• Cultural o Cultural trends play a major role in the consumer appeal of this industry. We go through phases of what sports are trendy.
• Seasonal o There is a high seasonal influence on consumer buying. Summer products typically cost less than winter products. Sales during offseason offset sales revenue. Winter sales are higher during the holidays and prices of the products are higher.
• Physical o These companies are very aware of their carbon footprint. They are all based on the idea of being outdoors and care about how their production activities are affecting the environment.
• Legal o As with many companies, these companies need to be sure they are following policies that abide by labor standards, for example, child labor laws, workers compensation, and labor training.
Five Forces:
• Threat of Substitutes o Substitute products pose no real threat, as they are not able to maintain the same level of quality and performance of the products within the industry. o Substitute Prices
 Customers might be attracted to the lower cost of products from outside the industry o Substitutes performance and quality
 Performance expectations cannot be met by the industries outside of our own. o No switching costs
 There are few switching costs for the customer, thus making it easy to substitute the product, although customers are not willing to do so because of the lack of performance from substitute products.
 Those products that are capable of satisfying similar customer needs but come from outside the industry and thus have different characteristics
• Supplier Power o Each of the major brands in this industry has 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 o The companies in this industry each have different types of fabric so they have different suppliers. Each company is exclusive to their individual suppliers, making them huge customers of these supplier groups. If any of these companies were to stop using their supplier, it would hurt the supplier significantly. The success of all the companies in this industry is based mainly on the consumer demand for these unique materials. o Substitutes do not really exist in this industry, unless a new supplier was to come up with new, innovative materials. o There are not many companies outside of this industry that need to use these suppliers. The companies of this industry are the dominant customers of the suppliers. o The supplies each of these companies need for their products are what set them apart in order to gain competitive advantage over each other. They cannot share suppliers for this reason, because their name brand is associated strictly with the suppliers of these materials. o The bargaining power of suppliers depends on suppliers’ economic bargaining power relative to firms competing in the industry. Suppliers are powerful when firm profitability is reduced by suppliers’ actions o Common resource suppliers have little to no leverage over firms.
• Barriers to Entry o Entry is difficult or when it is too costly and places potential entrants at a competitive disadvantage relative to firms already in the industry o High barriers due to capital needs, that the industry requires opening a lot of retail 5stores over the world. Columbia, for example, distributes its products in more than 72 countries and 13,000 retailers, that means it needs large amount of capital to run the business in this industry. o The superb innovation of the industry makes it a challenge for start-up companies to compete. Outdoor Sportswear is not only about a jacket or shirt anymore that people want it to be fashionable and trendy. Fabrics are involved with high-tech and footwear too, like lightweight running, barefoot/minimalist footwear and toning. It is hard to keep up as the pioneer all the time. o The competition of the outdoor sportswear industry is one of the most competitive clothing industries. There is a strong competition between the outerwear industry and the athletic sportswear industry. Beside that, the competition in the industry is pretty strong too. As we said before that this industry is highly innovated but there are some problems.
 According to Mick McCormick, Executive Vice President of Columbia Sportswear: “it saw too much similarity even among the fiber and fabric innovations, with many companies adopting the same third-party branded technologies into their lines, contributing to a field of product that differed very little from brand to brand. If everybody has the same technologies and styles, then what would compel a customer to choose one brand over the next?" o Brand Loyalty to the four major firms in this industry poses a large threat to any new companies that want to try to take some of their market share.
• Rivalry within industry o Four major players in the industry
 Columbia
 The North Face
 Patagonia
 REI o Four major firms compete intensely over market filled with a high level of buyer power. o Price battles and acquisitions are a common occurrence. o Columbia is the only publically traded firm out of the four. o Resource similarity is rampant amongst these firms. o The industry uses the same resources as any other clothing industry
 Same fabrics and materials
 Similar research and development o Research and Development could easily be exchanged between firms with a great level of consistency. o Market Commonality
 There is much market commonality within the industry and outside the industry o Price fueled by high quality materials and consumer demand, the industry is becoming more expensive and having higher revenue returns. o Constant price battles amongst competitors. o Attempting to seize control of the ever-developing market, lower price points are the focus of all of the firms within the industry. o Price competition is not as major of a factor as it is in other industries because people are more willing to pay the high prices for the products. There is a high degree of brand loyalty.
• Buyer Power o Activities supported by the industry are recreational commodities. o The industry’s pillar activities that stimulate the largest percentage of buyer power are hiking, biking, camping, fishing, and paddling o The two segments:
 Baby Boomers (born 1946-1964) 78 million
 Millenials (born 1978-2003) 100 million
 These two segments that have power over the outdoor clothing industry due to their buying habits of active lifestyle clothing. o Buyers have high levels disposable income to spend on active hobbies.

Overall industry profitability:
• High barriers to entry o Makes this industry attractive to be involved in because new competitors will have a difficult time entering the market.
• Few substitutes o The quality and performance of our products makes other industries obsolete. Even with little know switching costs, the option of substituting our products is overridden by their performance.
• Growing market o The current popular culture trends of the different generations wearing outdoor sportswear as a fashion statement has opened our industry to a new market, where consumers purchase the products for style, rather then substance or occasion.
• High revenues and fixed costs o High revenues must offset the high fixed costs for the company to be an attractive industry. This keeps new competitors again out of the market creating a competitive advantage for the established firms within the industry.
• Shared Resources o The sharing of common resources is not a major hindrance because the specialized resources our industry uses are company specific and unique from one another. The common fabrics and materials can be purchased from a number of suppliers causing price competition amongst the suppliers giving it an advantage to the established firms within our industry.
• High competitive rivalry o Products and prices are consistently being enhanced creating in increase in profit and quality within the industry. This also keeps other competitors from entering the industry.
• Strong buyer power o Brand loyal customers with disposable incomes are willing to pay for the differentiation of specific products offered from companies within the industry. This gives the firms an advantage over their customers and makes the industry attractive.