Watch out Nike, there may be a new leader in sporting apparel coming soon. This is not an overnight transition, however, but stems from several missteps on Nike's part as well as fruitful gambles on behalf of an up-and-coming competitor.
When it comes to sports apparel, one of the major influences on the market are the athletes that are sponsored by each brand. As mentioned in an article by The New York Times, Nike has been the leader in all aspects of sports apparel and "fashion" since 1989, overtaking Reebok and never looking back. They were able to achieve this dominance through inspirational advertising featuring sports superstars, landing exclusive deals with leading sports franchises (most recently the NFL), and worldwide distribution and brand recognition. There is no immediate threat to their commanding market share, however if they continue to rely on that as their greatest selling point and make simple (but critical) errors during contractual agreements which sacrifice their integrity, they may see another brand poised to devour their coveted piece of the pie.
This brand is Under Armour, a relatively new player which has quickly become the number 2 brand, narrowly edging Adidas in 2014. Since then, they have seen their sponsored athletes develop into leaders in their respective sports, most notably Jordan Spieth in the PGA and Stephen Curry in the NBA. While two athletes alone will not be enough for Under Armour to dethrone Nike, the way in which they achieved these successes is a signal of their fortitude and preparedness.
Nike had the opportunity to sign Stephen Curry, now the 2-time reigning MVP and arguably the biggest and best name in the game, but was publicly embarrassed when he chose to go with Under Armour because they didn't know how to pronounce his name correctly. Although this sort of gaffe is uncommon for the industry leader, it does hint that they have lost their focus and need to reevaluate their priorities going forward. Secondly, the case of Jordan Spieth is one of recognizing talent before they are superstars. The keyword here is 'before'. Nike rarely approaches athletes until they have proven that they can bring in a significant following. Under Armour, on the other hand, is in the calculated risk-taking business and spend a great deal of time identifying up-and-coming talent they can sign for a fraction of the cost.
There are many instances of companies who have dominated their respective industries based on breakthrough strategies, but meet their demise in the future because those same strategies fail to adapt to an evolving marketplace. With the introduction of new technology and a change in personal and professional priorities among athletes, just being signed to the "leader in sporting apparel" will not guarantee a partnership. The technology aspect is one where any athlete can reach millions of fans instantly and make a name for themselves. With the right partnership, an athlete can benefit just as much from being the leader of the brand as a brand can from the athlete. Furthermore, the brand can utilize technology to track up-and-coming athletes and trends in the sporting world to enhance their presence in the market.
If Nike continues to follow its own outdated strategy of following the crowd instead of leading it, tomorrow's front-runner will look a lot different from today's.