Economic Growth of NIKE

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

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line gives the company efficiencies that are not available to the more traditional retailers. Those efficiencies include more precise inventory management, warehousing and savings throughout the entire price chain (Hoovers Online). 4. Which Companies are in the Strongest/Weakest Positions NIKE's $9.2 billion annual sales dominates the international sports footwear and apparel industry. Saporito (1998) summarized the world competition with this financial analysis, shown in the following table. Table 1/ United States Sales/Market Share COMPANY US SALES (1997) US SHARE NIKE 9.2 billion 47 REEBOK $1.28 billion 16 ADIDAS $500 million 6 FILA $484 million 6 CONVERSE $280 million 3 NEW BALANCE $260 million 3 AIRWALK $255 million 3 KEDS $180 million 2 All of these competitors position themselves against NIKE by focusing more on lifestyle attributes and taking advantage of the "brownshoe" phenomenon. This is the phenomenon in which teenagers and young adults are going for a more rugged leather look. 5. Strategic Moves Rivals May Make Since NIKE is facing public relations problems based on its labor relations in Indon

Category: Economics - E