Sports Industry

Strategic ManagementAssignment No.1, Industry Analysis of Export Oriented Sports Industry of Sialkot

Prepared By:Syed Imran Haider (10123027)Ali Ahmad Cheema (10123006)Rana Adeel Touqeer (10123002)Muhammad Salman (10123……MBA (3 years)Section A

Submitted To:Mr. Irfan Mahmood

Industry

A classification that refers to a group of companies that are related in terms of their primary

business activities. In modern economies, there are dozens of different industry classifications,

which are typically grouped into larger categories called sectors

Sialkot Sports Industry

The city of Sialkot has been a centre of excellence for the production of sports goods for more

than 100 years. The first record of manufacturing of sports goods in Sialkot can be traced back to

1883 with the products such as cricket bats, hockey sticks, polo sticks etc. In 1918, a football

was added and was supplied to British Army stationed at Singapore. Today the Sports Goods

sector of Sialkot is at its climax as it has acquired an important place in international trade of

sports goods.

Presently the Sports Goods Industry of Sialkot is supplying products to almost every country of

the world, directly or indirectly. The products are mostly made for international markets and

have received worldwide recognition because of the quality that goes into the selection of raw

material, design, manufacturing processes and delivery to the customers.

Some of the world renowned brands who are sourcing a large portion of their supplies of sports

goods from Sialkot are:

Adidas

Nike

Puma

Select

Lotto

Umbro

Mitre

Sialkot Sports Industry Page 2

Micassa

Diadora

Wilsons

Decathlon

More than 200,000 people are directly employed in the sports goods sector exporting sports

goods worth US$ 450 millions annually from around 2,400 companies.

Sialkot caters more than 70% of total world demand for hand-stitched inflatable soccer balls i.e.

around 40 million balls annually worth US$ 210 million. During the peak season, which repeats

after 4 years on the occasion of FIFA World Cup, the production of inflatable balls exceeds 60

million per annum. These balls are produced by a workforce of around 60,000.

The sports goods sector also has a very strong international presence in the market. Before

China’s massive entry into international trade a few years ago, Pakistan was the world’s largest

exporter of gloves used by motor bikers, goalkeepers, baseball, boxing, shooting etc. Currently

the exports value of gloves reaches to US$ 50 million per annum.

Today a skilled workforce of more than 10,000 employees is directly engaged in the production

of sportswear and its exports value reaches to US$ 100 million per annum.

Source: http://punjab.gov.pk/sialkot_key_industry


http://punjab.gov.pk/sialkot_key_industry

Porter’s Five Force Model:

Porter identified five competitive forces that shape every single industry and market. These

forces help us to analyze everything from the intensity of competition to the profitability and

attractiveness of an industry


Threat of New Entrants

The easier it is for new companies to enter the industry, the more competition there will be.

Factors that can limit the threat of new entrants are known as barriers to entry. Some of the

barriers to entry in this industry is discussed below:

Perfect Competition:

Now there is no threat of new entrant because the industry is already going in the perfect

competition so the survival of new company in the industry is very difficult so that’s why

nobody will be come with a heavy investment in the industry.

Pakistan Economic Situation:

situation of Pakistan’s Economy is very serious. The prices of every thing are so high because

the price of Petrol is increase day by day.

Energy Crises

The industry is also face the different crises like, Short Fall of Energy, Short Fall of GAS.

Market is already in competition so nobody can’t take risk.


Barriers to entry in Sialkot Sports

Industry

High Fixed Cost

Pakistan Economic Situation

Energy Crises

Perfect Competition

http://www.investopedia.com/terms/b/barrierstoentry.asp

High Fixed Cost:

Huge capital is needed to be invested in order to come in this industry due to purchasing of

costly machinery so there are less chances for new entrants to come in this industry due to high

initial investment.

Bargaining Power of Buyers:

Bargaining power of buyers means how much buyer or customer is responsible for gain of a

business or how much business is depended on a customer or group of customers There are

common two type of buyers in Sialkot Sports Industry, one of them is International Buyers and

other one is National Buyers (Exports):

The international buyer has more bargaining power than national buyers because most of sports

goods are exported outside the country and most of the profit of the industry is depended upon


Sialkot Sports Industry Buyers

National Buyers

Less Bargaining Power

International Buyers

(Exports)

More Bargaining

Power

exports. It we lose international buyers, we will lose most of the profits because international

buyers also have options of buying from other seller around the world.

Bargaining Power of Suppliers:

If the industry has only one major supplier and no available alternatives, , the supplier has great

bargaining power. There are many suppliers of Sialkot Sports Industry located in Pakistan which

provides raw material to the industry like wood, leather and yarn.

so the industry can switch from one supplier to other supplier easily. Thus the bargaining power

of supplier is very low because industry is not depended upon one or few supplier.

Threat of Substitute

A common substitute of physical game is computer game. The demand for sports goods can be

affected by computer game due to change in trend of the people i.e. switching form physical

games to computer games. Industry is growing day by day and this substitute has following sub

categories:

Online Games

Downloadable computer game Industry

Industry Rivalry

Sports Industry of Pakistan is in a perfect competition. Because so many Competitors, Buyers

and Suppliers are in the Industry and they are adopting the new strategies, they are adopting the


Less Bargaining Power

Sialkot Sports Industry Suppliers

Large in Quantity

new technologies for the competition because if any company provide the best quality of

product, that will lead in the Industry. Actually, all these things like, quality, time of delivery etc

are developed the Brand Name and if any company has a strong Brand Name that can be cash

their Name.

After the Porter’s Five Forces Analysis, the Industry is attractive for international buyers because

they have high bargaining power as the major source of revenue for Sialkot sports industry is

exports. Pakistan is earning the so any foreign currency through export of goods.. Export of these

goods can be expanding to different countries. The Bargaining power of suppliers is very low

which means that this industry can get inexpensive and on time raw material which leads to low

cost strategy thus, this is an industry in which the average sports firm can expect to earn an

attractive return over the long run


Documents

Sports Industry