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 innovation is concentrated on improving the existing products here and there. The improvements to existing design are what seem to drive consumer interest in the products. One speculation as to why the demand for Rollerblade, Inc.’ products has teetered off is that children do not seem to be outside exercising as much as they did ten years ago. This would definitely negatively impact the industry as much of its business is powered by preteens and teenagers.

Although the external environment factors weigh heavily on Rollerblade, Inc.’s ability to expand and grow their business further, some of their problems stem from within the company itself. Firstly, there are still many international markets that have yet to see in-line skates as readily available for purchase. The writer observed this in a recent trip to Europe, where in-line skates are hard to come by and roller-skating is very popular outdoors. Rollerblade, Inc. should possibly consider venturing into new markets to at least test the popularity of their products. Also, marketing the products to suit the culture of buyers would be advisable, especially in the regions of Asia.

Another recommendation for Rollerblade,