Question

What implications does the launch of the One Line shoe by Nike have on the sporting goods industry?

The launch of the One Line shoe by Nike had significant implications on the sporting goods industry. Firstly, it introduced a new, affordable product into the market, which likely attracted a broader consumer base. Secondly, it set a new reference point for import duties, potentially affecting the cost structure of other companies in the industry. Lastly, it sparked a legal battle that brought attention to alleged underhanded practices within the industry, possibly leading to changes in competition and regulation.

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Finally, in 1980, I told the team, we need to do something crazy: we need to 'American Selling Price' ourselves. We launched a cheap new running shoe, the One Line, a knockoff with nylon uppers and a simple logo, manufactured at a plant in the U.S. We priced it low, just above cost. Now, customs officials would have to use this 'competitor' shoe as a new reference point in deciding our import duty. That was the opening move to get the feds' attention. Next, we launched a TV commercial telling the story of the little Oregon company fighting the big bad government: a runner on a lonely road, with a voiceover talking about patriotism, liberty, and the American way. Finally, the closing move—we filed a $25 million antitrust suit in the U.S. District Court for the Southern District of New York, alleging that our competitors were using underhanded practices to try to drive us out of business. At that point, the government initiated settlement talks. In spring 1980 the lawyers agreed on a fin...

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