Monthly Archives: October 2015

Aside from small “changes in technology,” hockey sticks remain undifferentiated at face value, with little besides from stick graphics that separates each respective stick. (Willful Caboose)

by: Tyler Chiu

10/18/2015

For the past half-decade, leading ice hockey equipment manufacturers such as Bauer Hockey, Reebok-CCM, Easton, Sherwood, Graf and Warrior have charged susceptible consumers ludicrous premiums for their respective products and services. Eager and equally as delusional parents expend upwards of $1500 annually on his or her child’s hockey equipment, notwithstanding the knowledge of the blatant fact that costly equipment will neither bolster his or her child to stardom, let alone enable the child to reach the National Hockey League. Led by industry-powerhouse Bauer’s reporting of growing revenues of over $112.9 million (Q4 2014) from a $86.7 million figure (Q4 2013), firms across the board continue to reap the profits from a select group of wealthy consumers. In recent times, nevertheless, the supposition that hockey has become an exclusive and elitist sport has become undoubtedly true, with enrollment at youth levels dwindling at an alarming rate.

Points of differentiation are non-existent between the individual lower end products that each companies provides. On the behemoth hockey equipment retailer’s website hockeymonkey.com, it is unmistakable that a multitude of firms have yet to differentiate their respective products, leading firms to drastically cut respective prices. Failure to differentiate in the long-term will lead to an inability to charge greater premiums than competitors, thereby decreasing profit margins and making survival difficult. (Hockey Monkey)

Although the hockey equipment industry continues to demonstrate healthy growth and hints at alleged sustainability, the growing competition between firms in a crowded market to harness the financial capital of a consumer’s wallet will lead to the intensification of rivalry and an eventual industry shakeout. Alongside the overabundance of undifferentiated products available and the emergence of professional teams re-selling pro-grade used equipment, the growth of the hockey equipment industry will unequivocally come to a halt without any substantial growth of the youth hockey population. According to Porter and his five forces model that serve as analysis for an industry, the industry shakeout that will result from sluggish demand growth will leave all but two or three firms standing from the original big six firms. The firm that will be the most capable in creating new-found points of differences will ensure its long-term survival in this cut-throat industry. Alas, time will inexorably dictate the result.

Alex Morgan fights off a defender in a 2013 contest against the Washington Spirit. Her team, the Portland Thorns, operates under the same organization as the Portland Timbers of the MLS, the men’s equivalent of the female team. (Oregon Live)

by: Tyler Chiu

10/04/2015

The National Women’s Soccer League is the highest level of women’s professional soccer in the United States, organized by the US Soccer Federation and its subsequent Major League Soccer sponsors. The league is the present product of two defunct women’s leagues, with the first league suffering harrowing losses of over $100 million USD before finally folding. Fortunately, the current NWSL has found sufficient success in its past three years of operation, primarily due to its adoption of the European model of partnering with a men’s professional league. Nevertheless, the NWSL inexorably runs with risk of travelling the same path of its past two successors notwithstanding the success of the 2015 FIFA Women’s World Cup. This supposition is unequivocally true because of the NWSL’s inability to adopt one or more of Porter’s Generic Strategies and differentiate itself from the plethora of professional sports leagues in the United States.

Abby Wambach, the face of women’s soccer, celebrates her team’s World Cup victory in Vancouver this past summer. Despite the tournament’s gargantuan success, the domestic NWSL league has continued failed to acquire an additional sponsor. (The Guardian)

At face value, the NWSL seems to attempt incorporate a cost leadership strategy with its operationally efficient  distribution of salaries, remunerating its players with a stipend of approximately minimum wage ($6000-$30,000.) However, the league’s teams are required to remunerate a multitude of staff, personnel and administration, which efficaciously eats up most of the match day revenue that the teams produce. With extraordinarily low salaries, the NWSL also runs the risk of losing its top-tier players (human capital) to its European counterparts and losing its players in general to more lucrative 9-5 office employment. On the differentiation front, the NWSL has failed to cater to neither a younger niche market (Narrow Market Segment) nor the growing industry as a whole (Broad) because of its inability to differentiate the on and off-field product from the immensely successful NCAA women’s soccer and the MLS men equivalent, thereby making the notion of charging its spectators a greater premium preposterous.

Young US superstar Kristie Mewis sizes up her opponent in an international match against Brazil. She, among a multitude of others, has chosen to pursue her career overseas at Bayern Munich in Germany. (The Soccer Desk)

Even with globally recognized assets such as Alex Morgan and Carli Lloyd available at the league’s disposal, the league has failed to translate the exciting on-field product into a revenue generating stream. In the past, a lack of resources and sponsorships made the folding of the previous two women’s leagues excusable. The NWSL must develop a Porter strategy in order to survive the capricious nature of professional sports. Otherwise, it will eventually dig its own grave alongside its two infamous predecessors.

A substantial factor of Android’s previous success (2012) was its revolutionary screen size. Today, the iPhone has nullified such previous advantages. (Inquirer)

by: Tyler Chiu

10/04/2015

Since 2012, the Android smartphone has dominated the OS smartphone markets in the United States unmolested, crushing the sales of the Apple’s iPhone and nearly obliterating the Windows phone completely.  Nevertheless, Apple finally reclaimed its title in the fourth quarter of 2014 when iOS devices accounted for 47.7% of the American smartphone market, a 0.01% victory over all the Android OEM devices combined. As of October 2015, Apple continues to maintain its double digit lead over the next leading smartphone manufacturer Samsung thanks to the unparalleled success of the iPhone 6 and its big brother, the iPhone 6 Plus. To make matters worse for Google’s operating system, Android’s overall share in the big 5 European market shrank by 3.8% during the same time frame of iOS’s resurgence in the American market, giving analysts the justification of an Android decline.

A forecast by the German market research institute GFK SE displays the smartphone market growth projection for the 2015 annum. The trend that is impending is the overtaking of the growth in the smartphone market by emerging markets. (GFK SE)

Although Android is seemingly in a strenuous predicament, the solution to their problem is exceedingly simple. The growth of the inexpensive smartphone is ineluctable with the emergence of the accessibility to technology in developing countries such as India, Pakistan and Indonesia. With a multitude of smartphones ranging from $30-$50 provided by companies such as BLU, the majority of the working class that receives a stipend upwards of $2000 will be able to afford such new-found luxury. Ultimately, Google needs to overcome this minor speed bump via the decrease of the licensing fees of the operating system that are incurred through third-party specialist firms, thus allowing companies within emerging markets to overcome this crucial barrier to entry and effectively increasing the distribution, sales and market share of the inexpensive Android smartphone worldwide.