Nike and Reebok
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Nike and Reebok are dominant companies in the athletic footwear industry, but the two organizations have enjoyed vastly different success during the 1990s. Nike continues to expand its sales and profitability during a time when Reebok has struggled and lost market share as well as suffered financial downturns. This is a highly competitive market with many small manufacturers and only a small number of large competitors, and Nike has gained market share at Reebok's expense in recent years. This research examines the two organizations, their recent financial performance, their marketing strategies, and evaluates the outlook for both organizations.Reebok International is a multinational company which designs and markets sports and fitness products, including footwear and apparel, as well as similar products for non athletic ("casual") use. Reebok has three major business groups: the Reebok Division, which is responsible for the Reebok brand, the Greg Norman Division, responsible for the Greg Norman brand, and the company's major subsidiary, the Rockport Company, responsible for the Rockport brand, as well as footwear sold under the Ra
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s, and has seen its long-term debt drop nine percent from 1995 to 1996; however, this was done at the expense of short-term obligations, which increased 32 percent during the same period (1996 Nike Annual Report, 1996, p. 18). The company is able to effectively manage its inventory as indicated by its inventory turns (currently running between 6 and 7 turns annually) and it has decreased its days A/R outstanding by 5 days from 1995 to 1996. This indicates that it is making better use of its collection ability in order to obtain money due faster. The company's reliance on short-term financing is evident in its current and quick ratios, which could be stronger, but the company is not at risk in either of these areas at this point.
These figures are important not only because they indicate that the company is able to turn its strategy into financial performance, but because it indicates that the company would be able to obtain additional financing with relative ease, if the need should arise. This would enable Nike to take advantage of opportunities, such as those in the former Soviet Union, or manufacturing opportunities, or the opportunity to acquire additional manufacturing sources.
In addition, the stock market has recogniz
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Approximate Word count = 3408
Approximate Pages = 14 (250 words per page)
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