Athletic Shoes Industry

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Athletic Shoes Industry
Strategy Comparison Report of
Nike, Inc. and Adidas AG
wei
4/30/2010

ABSTRACT
This report is an analysis of the athletic shoes industry on both a global and U.S. market. This report is to analyze the external and internal issues facing this athletic shoes industry, and the companies that operate within it. This analysis includes a comparison of Nike, Inc. and Adidas AG who are footwear manufacturers in the world. However, Nike spent thirty years developing from the challenger position change to the challenged from Adidas. Rivalry among business firms grew more intense as the economy develops. This report will compare competitive advantages and distinctive competencies between two companies, and conclude with some challenges for future research. Understanding the key in athletic shoes industry will help them to find the right capabilities and strategies useful to overcome economic challenges, take advantage of opportunities, and become great successful in the future.

KETWORDS: Athletic shoes industry, Nike, Inc., Adidas AG, Strategy, Marketing Strategy.

INTRODUCTION:
Athletic shoes is a name for the footwear primarily designed for sports or other forms of physical exercise. Most of the time, the athletic shoes is used for running, basketball, tennis or football. Everyone needs athletic shoes when they do sports because athletic shoes can help players avoid injuries. Also, you can wear athletic shoes appropriate to any activities. Another advantage is that they are more comfortable than other kinds of shoes. The purposes of the report are to find the information to understand the strategies of these two athletic shoes companies, Nike, Inc and Adidas AG. The report investigates the external and internal environments for these two companies. The external analysis will include the overview of the athletic shoes industry and find the opportunities and threats for both of them. This report uses Porter’s five forces, macro-environment factors and strategic groups to investigation their business model, and uses analysis internal information to find the performed to identify sources of strengths, weaknesses, competitive advantages, and core competencies for both companies. Various research resources will be used the information the report need. The publications, books, company report and the company websites of Nike and Adidas, all of which supply great deal of pertinent information to finish this report.

EXTERNAL INDUSTRY ANALYSIS
Current Strategic issues
Most of customers are worried about the price about the athletic shoes. Most of times they believe athletic shoes of different brands are roughly the same. The cost advantage is the most significant and basic competitive advantage in the athletic shoes industry. So there are two major issues facing the athletic shoes industry today that can impact athletic shoes companies’ strategies. The first is new competitors enter the fray in the low wage cost countries because athletic shoes have low entered levels. New enter tries to exactly copy the design to make the products. These products have the high power cost advantage. Most of these products look like the other brands, but these don’t have any technology functions. The second is all companies understand and want to have the cost advantage. They believe the low price can help them to gain more market share. Some brand companies establish their factories in the developing countries such as China in order to make the low cost products, and gain the competitive advantage. This is the basic strategy for athletic shoes company survives in this industry. Globalization is another issue that the athletic shoes market faces. The U.S. market is the largest market in the past 50 years, but its market is highly competitive and almost saturated at present. Most athletic shoes industry companies want to find the new market, such as Asian. Asian has approximately 4 billion people, and it hosts...
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