External Environment Analysis Report
By: Hussayn Jivraj ()
This report is compiled to analyze and understand the outdoor sportswear market in the UK. It is compiled to provide the reader with the information that affects the market via a PESTEL analysis, as well as its market size in the UK. Based upon data from previous years of this particular market, provided by a market report done by Keynote, I have also calculated a fairly stable growth forecast for the industry.
This report is conducted by doing a PESTEL analysis to identify in particular two factors that have can considerably impact a UK based business including its future within the next three years which are a good indicator whether the business will be successful or not. By doing the PESTEL analysis, I have come to the conclusion that the following two factors that will have a large impact, the first being Social and the second being Economic. With regards to the social aspect, the lifestyle of most people in the last 10 years has vastly changed to being a more active society. The views of others on outdoor activities and the health issues that have arisen in many people that have caused people to change their lifestyles and the importance of these changes. From the economic perspective in the past 7 years the world economy hasn’t been the best hence affecting the disposal income of consumers. The scope of the product has to be looked at to analyse just how successful the business will be. Finally, the demand of the product will have an adverse affect on the success of the business.
For this report, it was also important to explore the opportunities of such a business where there is profit to be made. First being a route into manufacturing adventure gear that can be used in conjunction with their clothing. Secondly, being an outdoor clothing company, they could go into supplying their outdoor gear to adventure camps that can use them. I have also analysed 1 main threat to this business being competition from established brands.
Table Of Contents
2. PESTEL Analysis
Importance of Information
Consumer Disposable Income
Outdoor Adventure Gear
Outdoor Gear Rental
Competition From Established Brands
4. Figure To Summarize Key Findings
For this report as mentioned earlier in the abstract, an estimate for the outdoor adventure clothing market size has been ascertained as well as a fairly accurate estimate of the next 3 years in the industry.
Source: Key Note
Figure 1: The UK Market for Sportswear by Sector by Value at Current Prices (£m at rsp). 2008-2012
From the above diagram, we can ascertain that sports clothing occupies majority of the sector of sportswear. In 2012, sports clothing made up £3.523 billion, roughly about 71% of the market of which, outdoor pursuit wear made up £865 million roughly 26.1% of the sports clothing market. (Key Note)
Between 2010-2012, there was an average increase in the sports clothing market of 3.63% per year and hence a 0.58% increase per year in outdoor adventure clothing (Key Note, 2013), using this value, the forecast for the following three years 2014, 2015 and 2016 would be £875million, £880million and £885million respectively, this would only be possible if there is a stable growth in the industry. The growth in this sector of the industry has been fairly consistent over the last 4 years and from this I can take that the growth in the following years along with the change in lifestyle of consumers and the growing economy that the growth will be fairly stable in the years to come.
References: Figure 1: Key Note. (2013). Sports Clothing & Footwear Market Report 2013.Available: http://www.keynote.co.uk/market-intelligence/view/product/10828/sports-clothing-%26-footwear/chapter/4/market-definition#. Last accessed 5th March 2014.
Key Note. (2013). Sports Clothing & Footwear Market Report 2013.Available: http://www.keynote.co.uk/market-intelligence/view/product/10828/sports-clothing-%26-footwear/chapter/4/market-definition#. Last accessed 5th March 2014.
BBC. (2014). Obesity quadruples to nearly one billion in developing world. Available: http://www.bbc.co.uk/news/health-25576400. Last accessed 5th March 2014.
Image: Ascend. (2012). Outdoor Wear. Available: http://ascend.netpaths.net/images/steep_climbing_lg.jpg. Last accessed 4th March 2014.
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