Facing adversity and striving for revival: The 1980s
In the early 1980s, Nike was highly profitable and continued to play the role of a specialized manufacturer of athletic shoes in the United States, yet it did not own a single production facility in the country. Soon after, fierce competition from its top rival, Reebok, emerged. Founded in 1981 and led by its founder and CEO Paul Fireman, Reebok burst onto the scene as a dark horse, launching innovative and powerful sneakers that successfully captured part of the market. By the mid-1980s, Reebok had become a formidable competitor to Nike. In 1987, Reebok took a significant step forward, achieving sales of $991 million and a 30% market share, thus claiming the throne as the leader in the athletic shoe market. Nike followed behind with $597 million in sales and an 18% market share.
The key issues and opportunities in the rivalry between Nike and Reebok lay in the changing nature of target markets and the essence of design orientation. In other words, what young people (teens and young adults) were buying was no longer just athletic shoes but also the "fashion statement" they represented. Both giants in the footwear industry realized that, to expand the market size, they would need to shift the concept of specialized athletic shoes toward a broader audience of teenagers and young adults who sought "fashion." Reebok seized the opportunity first, entering this golden market with superior products and aggressive public relations campaigns, delivering a heavy blow to Nike. Reebok's CEO, Paul Fireman, once publicly criticized Nike: "Knight is just a shoemaker who mistakenly thinks he's a great sportsman." Knight responded dismissively: "I hate Reebok because its R&D system is nothing more than a copy machine."
To counter Reebok’s provocation, Nike made a firm decision to invest heavily in the research and design of new products. One of the most iconic products of this era was the "Air Shoe," introduced at the end of the 1980s. Commentator John Horan published his views on the Nike Air Shoe in a U.S. sports industry journal: "It's actually a simple and easy-to-understand shoe-making technology—just inject air into the sole, forming a cushion with elasticity." The Nike Air Shoe was officially launched in the early 1990s and achieved unprecedented success.
Thus, the 1980s was a period when Nike faced severe challenges and sought revival. During this time, Nike endured intense competitive pressure in the market and established the strategic focus for future product research and development. So, for our MJ, the 1980s marked a critical turning point for Nike, shaping its evolution in response to adversity.