Nike is one of the most successful manufacturers of athletic footwear and apparel in the world, competing with Reebok, L.A. Gear and Adidas, as well as with manufacturers of casual footwear. In recent years, the company has expanded into the apparel market, to lessen its dependence on the highly fickle athletic footwear market, and has also seen significant opportunity in the international arena. However, the company must now faces challenges which did not exist in this industry only a few years ago. The recent upheaval in financial markets in Asia (one of Nike's primary markets) has brought into question the company's ability to continue its global expansion plans. In addition, there is currently a worldwide glut of shoes, causing price and profit pressure throughout the industry. This research considers Nike's current strategic position with regard to Japan.
Japan is a densely populated island nation which boasts one of the strongest economies in today's global market. The country has a high literacy rate and a strong emphasis on the group rather than the individual. The group can be the family, company or country, but individual needs are traditionally subjugated to those of the group. Business relationships are critical to success in Japan as business is rarely conducted with individuals who are not personally known to the principals ("Background Notes," 1998, pp. 2, 5). As consumers, the Japanese have a high affinity for American goods and used Nike footwear has found a particularly lucrative market (along with used Levi jeans and Hawaiian shirts). This secondary market for used goods is also supported by a strong market for new athletic shoes (Tedeschi, 1998, p. 18).
Tariff rates in Japan are among the lowest in the world with a simplified tariff system for imported freight worth less than 100,000 yen. This simplified system includes easy determination of tariff rates, shorter processing time for determining the ...