Nike Case Study
Nike owns Cole Haan, Converse, Umbro and Hurley Brands so these brands cannot be considered as competitors even though they have significant market shares, they are included in Nike’s. Competition in this industry is high and the trend is increasing, Nike’s biggest competitors are Adidas International and Reebok which is owned by Adidas. Today in 2001, the top 5 players in the industry are Nike, Adidas, Reebok, New Balance and Puma. Nike's share of the U.S. athletic-shoe market has slipped from 48% in 1997 to 42% in 2000. This was caused by the fact that Nike ignored a very important segment in the U.S. footwear market, the 60-to-90$ a pair sneaker segment. This segment represents 40 to 60% of Nike’s revenue but in the recent years they have been focusing too much on new technologies( such as Shox lines which cost $143/ pair) and lost market share in the midpriced arena. This caused a loss of 15% in their sales in the last quarter. Competitors such as Reebok International Ltd and New Balance saw their sales grow respectively by 3.4% and 25% this year. Nike’s market share is expected to drop by 6% by the end of the year. Since 1999, New Balance has gained a significant market share in the U.S footwear market, it went from 7% in 1999 to 9% in 2000. At the same time, Nike has been losing customers dropping from 43% to 40% last year. The area Nike dominates the most is the $100+ sneaker market, but competitors such as Reebok and And One are trying to access this market. Even though the sales in the whole US footwear market have dropped 11%, Nike increased its sales by 1.5% in the last quarter. If we compare it to last year results, this increase is weaker than previous quarters where sales have increased by 7%, this is due to the new fierce competition the company is facing. Competitors’ description:
Adidas- German based Adidas is the second largest manufacturer of athletic equipment, footwear , and apparel in the world. Adidas AG is the largest...
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