NIKE is a participant in the Nonrubber Footwear Industry (SIC 3149), an industry that manufactures all types of footwear except protective rubber and rubber-soled footwear. Its primary business activity takes place in the primary industry subclassification of Athletic Footwear (Hoovers Online).
Within this subclassification NIKE is considered number one with, Reebok running a close second. Hoovers Capsule business reports states that NIKE's 1999 market share of the United States athletic shoe market is 47 percent.
NIKE sells its product through some 20,000 retail stores in the United States, and globally, it sells through independent distributors and licensees in 110 countries. The Athletic Footwear Industry is highly competitive. The market share
data shows NIKE and Reebok as the major players in the industry (Hoovers Online).
2. The Competition and Competitive Forces
Some 240 manufacturers worldwide are involved in this industry. The athletic shoe industry is a highly competitive market that is currently typified by a worldwide product glut in athletic footwear. Buyers seem to be hanging up their athletic shoes in favor of other types of footwear and consumers are turning their backs on the marketing hype, and super-athletes can no longer sell the shoes. In addition, price points are too high and the market is saturated with discount products and
Using Porter's Five Forces analysis, it would have to be asserted that the Power of Suppliers is weak, since the shoes are similar in design and structure, and the materials for them are easily available from a wide variety of sources around the world.
When NIKE started, there was a rather vague and uncertain category of shoe called a "sneaker" and NIKE took that concept and turned it into "athletic shoe." There was basically no competition for what NIKE was offering, and people accepted the fact that NIKE's higher price was necessary for the quality offer...