The Athletic Footwear Market

Paper Summary:

This paper explains that, despite each company's market penetration or strength, all of the competitors have sought to compensate for a decrease in profit margin due to increased competition, called hyper-competition, and decreased demand by moving manufacturing operations abroad. The author points out the actions of the "A Brands" comprised of Nike, Reebok and Adidas as the market leaders and the "B Brands" primarily comprise of Ryka, Fila, Puma, Asics, Mizuno and New Balance, each of which holds less than a one percent market share. The paper concludes that locating or subcontracting to a country where labor is cheap, results in fewer industry jobs for domestic workers and more imported products, creating a market cycle that will be self-perpetuate. Table.

Table of Contents
Global Competition
A Brands
B Brands
Economic Factors
Trade Deficit
Supply and Demand
Conclusion

From the Paper:

"Asics, Inc. has manufacturing locations in China, the Philippines, and Singapore and outsources additional manufacturing plants in India, Indonesia, Malaysia, and Taiwan. The American Sporting Goods Corporation manufactures Avia, Ryka, Brooks, and Apex brand footwear in China. "Approximately 90 per cent of [Puma's] footwear...is sourced from China, Thailand, Malaysia, Vietnam, and Cambodia." Fila, Inc. has most of its manufacturing facilities in Cambodia, China, Indonesia, Malaysia, Thailand, and Vietnam. Mizuno, Corp. outsources its manufacturing facilities to Cambodia, China, Taiwan, and Yugoslavia. The only athletic footwear company that still has the majority of its product manufactured domestically is New Balance Athletic Shoe, Inc.."

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• Case Study # 93155 : "Foot Locker, Inc"

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