Nike has been the dominating sneaker company in the entire world with bringing so many new shoes to the market frequently, keeping sneakerheads and athletes on the edge of their seat to snatch the newest Nike sneaker release. But recently, the hype for Nike has been starting decrease. Nike’s dominance has started to decrease with declining sales and people showing less interest.
In 2016, in more than a decade, did not have the top selling sneaker in the US, which was the Adidas Retro Superstar. This made Nike cut 2% of their labor, about 1,400 people. Adidas products have been making their products more scarce, so it will mean more to sneakerheads that they are more collectible than Nike shoes. This also gives Adidas a shortage in their products since they had a high demand in the last year, with the NMD and Yeezy shoes being the most popular.
People are predicting that Nike will go down hill while Adidas will keep rising in the sneaker community by identifying problems Nike creates. Nike thought of an opportunity cost by releasing workers to save more money for the company, instead of trying to follow trends. They are also giving customers more discounts on shoes people do not care for, which also decreases the company’s value. The marginal cost of this is not making trending type shoes, which will lose some customers. But the marginal benefit of making shoes less scarce can increase sales by lowering prices.
Overall, Nike needs to jump on the wagon by creating more fashionable and casual sneakers rather than sticking to workout and basketball shoes. They need to listen to their customers and try to out beat their main competition right now, Adidas. Nike has not been beat yet, but if they keep up these problems they create, they will fail and be a forgotten company. That is why Nike’s dominance has started to decrease because of their declining sales and people showing less interest towards the company.
Bain, Marc. “Nike is still the king of the sneaker industry, but even great empires can fall.” Quartz, Quartz, 6 Sept. 2017, qz.com/1067801/nikes-iron-grip-on-the-sneaker-market-is-slipping/. Accessed 18 Sept. 2017.
Brown, V. (2017). NIKE, Inc. (NKE): What are the Technicals Saying? – Economics and money. [online] Economicsandmoney.com. Available at: https://economicsandmoney.com/2017/09/15/nike-inc-nke-what-are-the-technicals-saying-2/ [Accessed 18 Sep. 2017].