Risk & Innovation Small Companies in Six Industries: Background Papers Prepared for the NAE Risk and Innovation Study (1996) / Chapter Skim
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7 Outdoor Sporting Goods
7 Outdoor Sporting Goods
Pages 125-142
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From page 125... ...
Perhaps the easiest way to start is with how the industry defines itself. First, the recently formed Outdoor Recreation Coalition of America (ORCA}a trade association "for the human-powered outdoor recreation industry"—lists the following sports as outdoor recreation (Outdoor Recreation Coalition of Amenca, 1993)
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From page 126... ...
The outdoor sporting goods ~ndustry's largest U.S. trade show is the Outdoor Retailer Expo, which is sponsored by Ou~or Retailer magazine and attracts manufacturers who make products that are sold in outdoor specialty stores.
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From page 127... ...
45 40 35 30 25 20 15 10 5 o 43.95 26.14 48 23 20.04 _ ~ ~ ~ P~p~ by ~ 53.04 50 40 30 10 O
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From page 128... ...
Day hiking Camping (primitive) Canoeing and kayaking Bacl~acking Cross country skiing 41% 36% 35o/o 24% 14o/o 14% 10% 7o/o Source: Outdoor Recreation Coalition of America (ORCA)
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From page 129... ...
Jugs/containers Backpacks Electric lights Other Exercise (ALL) Exercise cycles Routing machines Home gyms Treadmills Exercise benches Step climbing machines Cross country ski machines Other retail Exercise~Institutional Firearms and hunting Foolballs and sets Golf (ALL)
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From page 130... ...
1,400 1,330 TOTAL SPORTS EQUIPMENT 12,329 11,588 B SPORTS APPAREL AND FOOTWEAR Sports apparel (ALL)
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From page 131... ...
5,622 5,287 Snowmobiles 285 275 Water scooters 498 357 TOTAL RECREATIONAL TRANSPORT 14,044 12,759 TOTAL SPORTS AND RECREATION 48,323 Source: Outdoor Recreation Coalition of America (ORCA) , 1993 45,877 categories: apparel, footwear, equipment, and retail.
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From page 132... ...
$51 million $51 million Source: Sporting Goodslntelligence, 1994 majority of respondents to the 1993 suIvey are s~d-alone operations (rather than based in shopping maps) with 35 percent operating stores with floor space of between 1,500 and 3,000 square feet, 18 percent in stores with 3,001 to 5,000 square feet, and 23 percent in stores with greater than 5,000 square feet.
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From page 133... ...
For example, martial arts equipment—uniforms, sparing pads, etc.—is sold almost exclusively through instruction-related clubs or teams. Golf equipment and rock-climbing gear sales are reinforced by instruction in combination with facilities (the pro shop at the golf course or the local outdoor specialty retailer Cat offers indoor or outdoor climbing instruction and provides adventure travel promotional material)
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From page 134... ...
Affluent, aging, health-conscious consumers are primarily responsive for the rapid growth in home exercise equipment-cross-country ski machines, treadmills, stationary bicycles, and rowing machines—and the demand for these goods has stimulated steady, incremental innovation in the products to make them more easily usable by novices and to bring prices down. As a final note' the definition of the outdoor sporting goods industry is In a considerable state of flux.
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From page 135... ...
Peter Metcalf president of Black Diamond-a company built around a culture of "extreme" outdoor climbing and skiing—has observed that the company may not be adequately aware of potential customers: He described watching unathletic mothers and fathers belaying their 10-year-old children on Black Diamond's indoor climbing wall in Salt Lake City, Utah, and realizing that neither the parents nor the children were target markets for Black Diamond. rim Wagner, an independent designer in the industry, recently visited about 75 specialty outdoor retailers and observed that the men In the store were browsing ("like they were in a hardware store")
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From page 136... ...
While it is clear that smaller companies are at a disadvantage, some outdoor sporting goods manufacturers do manage to establish relationships chant allow cooperative equipment investment and development with suppliers. While workshop participants agreed about the problem, there were several stones of successful negotiation with both large and smaller suppliers: Sweetwatefs effective relationship with a component supplier on both quality and technological innovation; MageDan's recognition of the need to "sea suppliers" on the product to get them to deliver, and Black Diamond's success at negotiating away a threat from its mayor aluminum supplier to stop providing aluminum for climbing equipment because of product liability concerns.
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From page 137... ...
, in combination USA We likely increasing demands of ever more powerful retailers, going to push the industry to deepen its knowledge of arid capability in, manuring processes? Does the increasing prevalence of dedicated offshore manufacturing and private-label onshore contract manufacturing pose special challenges or bring changes to the industry?
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From page 138... ...
There was Neal venture capital of $2.5 million, substantial attention to developing a unique product and protecting it with patents, substantial simultaneous product and process development, considerable effort in working on technological issues with suppliers (technology trading) so they could provide quality components, an initial public offering to raise an additional $5.
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From page 139... ...
and general sporting goods, the industry is clearly large enough and probably dynamic enough to attract venture capital. Furthermore, simple and inexorable demographic trends are likely to drive industry growth at a rate faster than the overall economy.
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From page 140... ...
In the market segments being served by the newer, successful companies, the growth rates are sustained with equity investments out of the community arid Mom retained earnings, and debt financing is available Dom banks. But because investors are paid abler employees arid owners, the return available to outside investors may be Efficiently alive.
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From page 141... ...
1993. Human Power Outdoor Recreation: 1993 State of the Industry Report.
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