Economics of the Hockey Equipment industry?
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05-26-2010, 05:30 PM
Join Date: Jul 2007
Location: St Paul, MN
Well the market fits an oligopoly to a T, so it should practically write itself.
I'd imagine you'd want to try and get some insight as to the costs of production, especially overseas, since that's going to be a large barrier to entry for new firms. Also look into the NHL brand usage fees because a huge part of sales is due to athlete endorsement and usage, and that's another big barrier to entry.
For pricing, see if you can find the retail prices for one piece sticks going back for the last 10 years...should see a pretty steady escalation in price to demonstrate the price-setting model.
Also look into the mergers that have taken place...Reebok buying up CCM, Jofa, and KOHO, Mission buying up Itech and then being bought by Bauer which was bought by Nike, Sherwood buying TPS, etc.
As for the market, my guess is entry level sticks weren't really a big deal until OPS came around, and over the last few years that's probably been a big area of growth. Best to talk to hockey shops and find out their percentage of units sold, revenue, and profit margin for those different price points.
The real miracle would be convincing these people to give you info though!
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