Sample Essay on Athletic Footwear Industry

Athletic Footwear Industry

There are different generic names used to describe an athletic shoe. This is the footwear primarily designed for sports or any other kinds of physical exercise. However, the athletic shoe has recently has become a great design for casual day to day activities. The athletic footwear industry has gone through a lot of developments to guarantee customer satisfaction. Athletic shoe companies have a complex and rich history that dates back to 1800s and have evolved tremendously to enjoy the great reputation they hold today.

The Liverpool Rubber Company developed the Plimsoll shoe in 1830s, The J.W Foster Company designed their shoes in 1895 while the Keds where available from 1916. The widely reputed Converse All Stars shoes came into existence in 1917, the Adi Dassler were available from 1936. Adidas shoes dominated the market from 1950s, while Nike built its legacy from 1970s.  By 1980 Air Jordans’ became the best shoes for every shoe-lover out there. Nike is the finest 21st century shoe and has dominated the sports landscape like no other athletic footwear.

The United States market for athletic footwear is the largest on global platform. The athletic shoe is highly dependent on fashion trends in the market, customer preferences and other factors that related to fashion world. Nevertheless, the athletic footwear industry is also quite segmented into men, women and kids shoes. The total size of the US shoe market in terms of revenue is approximately $53.7 billion and 82.8% is contributed by Nike, Inc. and Adidas. Nike dominates the market with a larger market share of 47.1% although it is younger than Adidas.

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A forecast by economic analyst show that the Global athletic footwear market will grow at a 1.75% rate over the period of 2012 to 2016. The market enjoys a high average gross margin of approximately 45% due to low input cost of raw materials. The premium pricing of the finished products in the industry has also contributed to the rapid growth in revenue. The athletic footwear industry has experienced major growth especially in the three major footwear categories.  The running category has the highest market share of about 35%, but the basketball category is growing rapidly as compared with other categories. Recently, the basketball footwear category gained approximately 2.9% points in market share.

Basketball footwear category also enjoys much higher margins and Nike has been benefiting from the market immensely. For instance, the Jordan brand has contributed about 58% of the revenues collected in the entire basketball category in the United States. Its sponsorship deals with basketball greats like LeBron James and Kevin Durant will further increase the sales of Nike footwear. Famous sporting events have contributed greatly to the sale of athletic footwear. Events like FIFA World Cup, UEFA Championship, Olympics, National Football League and others have helped athletic footwear companies boost their revenues and improve global economy.

Majority of the athletic footwear companies are seeking opportunities worldwide to provide their clients with finest designs. Nike and Adidas are the core beneficiaries as they cover a wide market. They enjoy a quasi-duo-poly as they have a market share of about 65%. Competition is fierce in the athletic footwear industry as smaller companies are coming up and trying to go at the larger manufacturers. The overall outlook of the athletic shoe industry is positive and they is a lot to expect from the existing and emerging footwear manufacturers.

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