g success as it has invested in research and development as well as innovative advertising to generate strong loyalty to its products. Its low-cost structure has recently come under some scrutiny as the company faces adverse publicity regarding labor practices in Asia, but this policy of producing shoes overseas keeps the company's cost structure in line with the industry as a whole. As the market leader, Nike can also command favorable terms from its suppliers.
Because athletic footwear is generally worn by non athletes, substitute products in the form of other types of casual shoes pose a threat to the industry. Timberland, for example, markets "rugged" footwear designed to appeal to consumers who want to exhibit an active lifestyle focused not on sports, but on outdoor activity. As with athletic footwear, many of Timberland's consumers are not actively engaged in the activities for which the footwear is designed (Chappell, 1998, p. 1666). Because of the fashion element of the market, the f
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