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Word Count: 343
Porters Five Forces sports good stores Bargaining Power of Suppliers Supplier bargaining power is likely to be high The market is dominated by a few large suppliers rather than a fragmented source of supply There is the possibility of the supplier integrating forwards in order to obtain higher prices and margins Forward integration provides economies of scale for the supplier Bargaining Power of Customers Customers bargaining power is likely to be high Switching to an alternative brand or store is relatively simple and is not related to high costs Customers have low margins and are price-sensitive The product is not strategically important to the customer There is the possibility for the customer integrating backwards Threat of New Entrants The competition in a sports good industry will be high it is easier for other companies to enter this industry In such a situation new entrants could change major determinants of the market environment eg market shares prices customer loyalty at any time Distribution channels are controlled by existing players High switching costs for customers Threat of Substitutes Threat from substitutes in a sports goods retail industry is high there are many possible substitutes such as the internet chains outside of the city and small specialty stores that sell a small number of sporting goods Competitive Rivalry between Existing Players Competition between existing players is likely to be high There are many players of about the same size Players have similar strategies use of internet allowing customers to buy from other stores There is not much differentiation between players and their products hence there is much price competition Barriers for exit are high eg expensive and highly specialz- ed equipment Note we can state from porters five forces that it is not a very attractive industry to enter The competion is high and survival rate is low In Boston there are more that 50
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