Case Analysis #2

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School

West Texas A&M University *

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Course

4315

Subject

Management

Date

Apr 3, 2024

Type

docx

Pages

5

Uploaded by AgentKangarooPerson994

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Nike’s Core Competency: The Risky Business of Creating Heroes West Teas A&M University MGT-4315-01
Question 1 Nike’s core competency, “to create heroes,” is associated with identifying and promoting unknown athletes who can inspire and motivate others to obtain athletic greatness. To build this core competency, Nike has offered endorsement deals or contracts with future athletes to enhance public awareness and increase brand values within the sports fields. Also, Nike has created and improved innovative products for athletic and lifestyle footwear, which has made Nike a top leader in the athletic shoe and apparel industry. Personally, Nike’s core competency obeys all of the VRIO criteria: Valuable : Nike’s core competency is to motivate and innovate heroes, enhance brand recognition, foster consumer loyalty, and increase sales and revenues. Rare:  Nike’s long history has collaborated with top superstars/athletes. For example, one of the biggest endorsement deals was with Michael Jordan, the greatest basketball player who created the Air Jordan 1, which was exclusive apparel and remains popular today.  Imitation:  While other competitors have attempted to copy Nike’s strategy and threat to Nike, it is challenging to achieve success and brand recognition.  Organized to Capture Value:  Its clear organizational structure and activities to find expertise in creating heroes that develop high-quality products and capture the values of excellent athletes.  Question 2 Icarus paradox refers to a situation when a firm’s strength becomes its downfall. Nike has successfully built and maintained its core competency and gained a sustainable competitive advantage, leading to potential risks or the Icarus paradox. One of the most significant potential risks Nike has been facing would be scandals and personal problems in their athlete partnerships.
For instance, Tiger Wood was accused of affairs in 2009, but Nike continued to resign after his scandal, which would negatively affect the brand image and sales. It is not clear whether this tipping point has already occurred. However, controversial celebrities would bring consumer attraction and drive sales. Nike’s sales doubled from $2.76 billion to $9.19 billion between 1995 and 1997 after signing a five-year sponsorship deal with Tiger Wood in 1996 (Rodini, 2024). Question 3 To reframe Nike's core competency of "creating heroes," Nike can expand its marketing approach or strategy diversely, including influencers from different fields, such as music and content creators who have an inspiring impact on social media platforms like TikTok or Instagram and tend to share positive momentum which might mitigate potential risks related to controversial athletes (2023, November 1). Additionally, Nike should leverage the meaning of "creating heroes" in its marketing campaigns where everybody, even ordinary people, can be heroes daily. It would inspire and connect with more consumers in different levels of status where their stories to overcome challenges and gain greatness can build strong relationships with their target audience and reinforce their branding. Question 4 As a competitor of Nike, understanding and exploiting Nike's vulnerability and weakness would help gain market share and enhance the brand. One of Nike's potential vulnerabilities would be controversial endorsement deals with celebrities, which could impact its brand reputation and business growth. Therefore, Nike's competitors should focus on social responsibility and ethical practices to minimize unexpected situations and scandals from their brand representatives. Besides, they need to invest more in innovation in product development, such as innovative technologies and high-quality materials, to produce unique products at
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