LA Gear competes in the athletic and casual footwear market, a market that is dominated by Nike. In the past several years, the company has encountered financial difficulties, a loss of focus in its marketing, and a shrinking market share. These factors have been exacerbated by several changes in management and the withdrawal of the company's single largest investor. This research considers the current state of the industry as a whole and LA Gear's position with the industry in particular.
Industry Analysis-Recent Performance
The domestic footwear market encountered four years of stagnation that ended in the mid-1990s. During that time, Nike adopted a strategic position of maintaining low inventory levels, with the result that the company kept low inventory costs and outperformed the rest of the market (Dukesherer 4). Sales declines in the company's overseas markets, including France, Germany and Japan, also put downward pressure on the company's overall growth and revenue potential during that time.
Buyers of athletic footwear are often not using the shoes for athletic purposes. Today, athletic footwear has become acceptable attire for many casual situations, and some consumers buy several pairs a month in order to remain fashionable (Chappell 1666). Consumers are not typically loyal to a particular brand, but are instead interested in the appearance of the shoes and the perceived image that the shoes have in the market. Those consumers who purchase shoes for athletic use are interested in technology to the point that it brings additional benefit to the consumer, but are not necessarily interested in technology for its own sake. Buyers are not a homogeneous group, but can be reached through television and print advertisements which are typically repeated on a regular basis to introduce new styles and keep consumers brand aware.
Like other companies in the industry, LA Gear uses contractors, primarily located in th...