Athletic shoe manufacturers must balance the costs of labor, raw materials, purchasing quantities, competitor strategies, shipping, import tariffs, and technological advancements. In an effort to keeps costs down, the industry has been looking to overseas sourcing. The training shoe manufacturing has shifted their financial investment from South Korea and Taiwan, now considered to be higher-cost production locations, to lower-cost ones such as Indonesia, Thailand and China. The trend has been for trainer companies to continue to use the same Korean and Taiwanese manufacturers, who have set up and manage production plants in the new geographic locations. They are also able to profit from beneficial trade and tariff agreements, wherever they exist.
Favorable legislation regarding foreign manufacturing has led to a big increase in foreign sourcing. In order to diversify supply and production lines, manufacturers have spread out their operations over many areas to avoid over concentration in one region. With this strategy, if one country or region experiences problems that interrupt production, the affected company is not completely out of options and can still accomplish production.
Distribution channels dictate who a company's customer will be and how they will get the product. The footwear companies must choose their channels carefully because they want to make the product available, yet remain true to their image and goals. Retailers account for the largest percentage of sales, so