Case Study: Rollerblade
When Rollerblade, Inc. first started up, they had to overcome the obstacles with any new venture company, only no one had ever seen or heard of their in-line skate product. At this time, everyone was still using traditional roller skates, but the idea of in-line skates was not easily adopted right away. Rollerblade, Inc. eventually became a very profitable company with their in-line skates, however, today they seem to have grown to an elephant (profit growth is at a near standstill). This is largely due to increased competition in the industry as well as a loss of interest in the once widely popular hobby.
In-line skates were developed in the mid-1980s, but the basic concept of rolling wheels attached to a boot is much older. Earlier roller skates had wheels of wood, plastic, or steel, arranged in pairs. Modern day in-line skates have wheels made out of polyurethane plastic arranged in a line so that the gliding action is much like that of an ice skating blade. Sometimes this type of skate is called a rollerblade, although this is a trademark name and refers only to Rollerblade’s brand of skates.
In 1990, Rollerblade reported retail sales of more than $100 million and in 1991 controlled about 70% of the in-line skating market. Ultra-Wheels claimed about 20% of the market. Since its heyday, however, Rollerblade has lost market share to many competitors, an indication of the widespread popularity of in-line skates. The market for in-line skates was around $1 billion in 1995, compared to $200 million in 1992. Shortly after 1998, the market began to decline and is currently in a relatively unmoving state. A lot of the in-line skate industry’s current problems arise from the loss of popularity in the hobby starting in 1998 and dropping through 2001. There is still a large demand for Rollerblade products; however, the market is flooded with competitors. At this point, the hobby’s industry is late in its product lifecycle stage, and thus, most growth and
In-line skates were developed in the mid-1980s, but the basic concept of rolling wheels attached to a boot is much older. Earlier roller skates had wheels of wood, plastic, or steel, arranged in pairs. Modern day in-line skates have wheels made out of polyurethane plastic arranged in a line so that the gliding action is much like that of an ice skating blade. Sometimes this type of skate is called a rollerblade, although this is a trademark name and refers only to Rollerblade’s brand of skates.
In 1990, Rollerblade reported retail sales of more than $100 million and in 1991 controlled about 70% of the in-line skating market. Ultra-Wheels claimed about 20% of the market. Since its heyday, however, Rollerblade has lost market share to many competitors, an indication of the widespread popularity of in-line skates. The market for in-line skates was around $1 billion in 1995, compared to $200 million in 1992. Shortly after 1998, the market began to decline and is currently in a relatively unmoving state. A lot of the in-line skate industry’s current problems arise from the loss of popularity in the hobby starting in 1998 and dropping through 2001. There is still a large demand for Rollerblade products; however, the market is flooded with competitors. At this point, the hobby’s industry is late in its product lifecycle stage, and thus, most growth and