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 Ralph Lauren brand. The company is listed on the New York Stock Exchange, and competes primarily with Nike in the Reebok division. Like Nike, Reebok is listed on the New York Stock Exchange.
Reebok's recent financial performance has been lackluster. Sales have remained flat over the past several years, but the company's net profit has actually declined. This indicates that the company's cost structure may be inefficient, or that the company is unable to manage its resources such that it is able to realize a profit on its activities. Long-term, this could represent a significant problem for the company, which has also suffered a loss of market share relative to Nike in recent years (Chappell 1666).
The company is in a strong financial position with regard to its liquidity, but its long-term bo...