Marketing Mistakes and Successes, 12th Edition

CHAPTER TWENTY-TWO

Nike: Is It an Unassailable Powerhouse Brand?

By the late 1970s and early 1980s, Nike had wrested first place in the athletic shoe industry from Adidas, the firm that had been supreme since the 1936 Olympics, when Jesse Owens wearing Adidas shoes won his medals in front of Hitler, Germany, and the world.

In the early 1980s, Reebok emerged as Nike's major competitor, becoming No. 1 in this industry by 1987. But Nike fought back, and three years later had regained the top-dog position. By the latter 1990s and into the new millennium, Nike decisively pulled away in revenues and profitability. By 2008, its revenues reached $16 billion a year, and no one else could touch this largest sports footwear and apparel company in the world. Or are they untouchable? In the constant battle for market share Adidas, with the acquisition of Reebok, emerged as the second largest sportswear manufacturer in the world. Can they challenge Nike's dominance? And what about this new upstart Under Armour?

But let us start twenty-five years ago when Nike had some tough competition, and see if we can determine how it so outdistanced its nearest rival, Reebok.

REEBOK

History

The ancestor to Reebok goes back to the 1890s when Joseph William Foster made himself the first known running shoes with spikes. By 1895, he was hand-making shoes for top runners around the world. In 1958 two of the founder's grandsons started a companion company, which they named—fittingly, they thought—after an African ...