LA Gear Case Study

Until the 1980s, athletic footwear was sold nearly exclusively to athletes. Children and teenagers were outfitted in "sneakers," canvas shoes which were relatively inexpensive and which could be easily replaced when they wore out. Professional athletes and serious amateur athletes typically purchased shoes which were made for their sports by a few manufacturers, but even adult amateur athletes often used adult sneakers for their leisure time activities.

This situation began to change in the late 1970s when jogging and running became increasingly popular. At the same time, health and fitness were becoming more important to Americans, with the result that health club memberships increased and more Americans began participating in sports as leisure activities. With this increase in sports participation came an increase in demand for shoes wh

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cumen to build a successful company. Although the company is embroiled in a suit with Nike, it has shown that it can meet the technological innovations of its competition. The biggest weakness that the company faces is its inability to find a marketing program that can even approximate the success of Nike's. Failing to generate a memorable slogan or logo, LA Gear continues to struggle to build an image in the market. Financial Resources LA Gear has strong financial resources due in part to its high rate of growth over the last several years. Its current ratio (which measures a company's ability to meet its current obligations without selling long-term assets) is 1.41:1; this compares with a ratio of 2.39:1 in the previous year. The downturn in this measure can be attributed to the upsurge in sales and the associated expenses with that increase. Still, the company is certainly well-positioned to take advantage of market opportunities. Lacking long-term debt, LA Gear also has that financing option available to it in order to pursue additional market opportunities. Distribution Structure At this point, LA Gear uses distributors rather than an inside sales force to gain access to channels. While this process makes sense fo
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Approximate Word count = 2732
Approximate Pages = 11 (250 words per page)

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