Nike & Adidas

Nike is one of the most successful manufacturers of athletic footwear, competing with Reebok, L.A. Gear and Adidas, as well as with manufacturers of casual footwear. In recent years, the company has expanded into the apparel market, to lessen its dependence on the highly fickle athletic footwear market, and has also seen significant opportunity in the international arena. Nike survived the stagnation in the industry of the early 1990s well, and is now one of the strongest companies in the industry from a financial standpoint. Adidas is a much older brand than Nike, and has suffered through a rift between its founders as well as intense competition from companies such as Nike, but it emerged at the end of the twentieth century as a strong brand in the athletic shoe market. Both Nike and Adidas have brands which are easily recognized around the world. Nike's "swoop" and Adidas' three stripes are protected and enforced by vigilant marketing groups at both companies. However, both companies have also been tainted by the recent labor issues in Asian factories which were brought to light in the late 1990s. This research examines the competitive position of the two companies, their labor issues, and how each company should proceed in coming years.

Nike was begun in 1964 as Blue Ribbon Sports; the name was changed to Nike in 1978. It began as a partnership between an MBA candidate and a former track coach who had manufactured running shoes in his sp

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ment a $38.4 million program designed to reduce its product range by 20 percent, boost its supply chain and improve the company's Internet presence (Fallon, 2000, p. 22). As part of the restructuring program, the company will reduce its product range with cuts coming from both footwear and apparel; these reductions will cost $10.2 million. The company is of the opinion that there are too many products which fail to meet the company's internal goals of sales and profit margins. The company will also be returning to its core message of sports performance rather than focusing on attracting non-athletes. By implementing a new internal system, the company plans to reduce its product lead times by as much as 50 percent in some product categories; this will cost $7.7 million but will have the effect of providing greater flexibility to distributors and retailers. The company is also actively pursuing a Web presence which will focus on a core Internet site and a few key retailers. The Internet investment will cost an additional $5.1 million. In addition, the company is restructuring its management team (including replacing the head of its American subsidiary) at a cost of $5.1 million (Fallon, 2000, p. 22). Current Situation The

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