value of the item, and lower customs brokers' fees. Japan assesses a three percent consumption tax which is due at the time of import declaration; this tax is based on the value of the product and the import duty ("Country Commercial Guide," 1996, p. 16).
Nike dominates the athletic footwear industry, although Reebok is also a strong participant. Other competitors include L.A. Gear and Adidas; each of these competitors has a strong presence in Japan, as well. Nike has a strong financial position relative to the industry as a whole, with higher gross margins and significantly higher net profits than its competition. In addition, its long-term debt is well beneath the industry average, since it has eliminated nearly all of its long-term obligations. Nike also has the advantage of having strong brand recognition for its products, a position which it intends to maintain through its use of sponsorship of international soccer teams who perform well in competition (Carini, 1998, p. 1681M). Although this industry is characterized by high levels of competition for the consumer's dollar, Nike has demonstrated an ability to compete effectively (DeSalvo, 1998, p. 1).
Nike also faces competition from Japanese companies, including Asics and Mizuno, who do not have the same market share and who cannot generate the same level of demand for products, but who are able, nonetheless, to bring products to market efficiently. It is competition from these companies that recently led Nike Japan to invest
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