1. Business Strategy Concepts & Nike Inc.
Nike generic strategy for competitive advantage emphasizes product mix diversity. Nike
analyzes what products should be handled and what characteristics should meet to aim success.
When applying a competitive strategy, the product plays a role as a link between supply and
demand, so the success is determined by the ability of the company to overtake the competition
and of course, by the quality of the product from the client’s perspective. Nike adapts their
products to different markets, striving for diversity and reaching all kind of consumers. To keep
its position in the market and competitive advantage over other players in the same industry,
Nike must safeguard that its business strategy and intensive growth strategies are always suited
to current business conditions.
1.1 Nike’s Business Strategy and Intensive Growth Strategies:
Business Strategy:
Nike’s strategy is competitive advantage based on costs. In this strategy, the company
minimizes production costs striving to maximize profitability. In other words, Nike’s generic
strategy is to increase sales by offering a great product at accessible cost. Nike needs to keep its
prices as low as to its competency and ensure that the product is appealing to the consumer. To
reach all markets, Nike reduces the costs and the selling prices of its athletic shoes and other
products, and it helps the company to maintain its competitiveness, especially against other
Second, because of the current distribution network and infrastructure that Nike had in place for its high-end
The company can ensure that it can compete effectively by market share, product quality, product life cycle, customer loyalty, competition's capacity utilization, technological know-how, control over suppliers, and distributors.
Attracts customers with other preferences and may compete broadly in the industry by branching out in new locations
Quality: Nike’s places strong emphasis on the quality of their products by reinforcing their tight measurement on their supplier’s performance. The company has long been known for their superior quality, reliability, and excellent designs. Furthermore, they capitalized on their high quality by investing heavily in marketing initiatives to increase brand loyalty and strengthen consumer confidence, which ultimately increases the consumer utility of their products. Creating a team of Nike Scientists devoted to continuously improving the quality of their products was only one part of their strategy. They also invested heavily in a quality control system known as the InfinityQS, which helps them identify areas of issue and monitor the overall quality of their products. (InfinityQS)
The factors that drive Nike’s decision to stick with its current organizational structure include its well-established brand name in the industry. The company positioned itself as a brand
Nike is the leading and yet renowned supplier of athletic apparel and shoes. The company controls close to 33% of the global athletic shoe market (Dogiamis & Vijayashanker,2009).Nike was founded by Bill Power and Phil Knight in 1962 as a Blue Ribbon Support and then was later on renamed to Nike in the year 1968 (Patrow,2003).The company supplies very high quality product in close to 100 countries with major markets being located in the U.S,U,K, Asia Pacific as well as in the Americas. The company has managed to attain its lead and legendary position via the application of innovative and yet attractive product design which is backed by quality production as well as well crafted marketing strategies.
Brands use different strategies to create competitive advantages to beat with their rivals. Some companies use “Overall Cost Leadership” to increase profit by reducing costs and increase market share by lowering price. Some companies use “Focus Strategies” to select a group of market and tailor its strategy to serve that group. The others use “Product Differentiation” as a strategy to obtain a premium price by making unique products. Nike, with its differentiation strategy, the company is continuing to separate its self from the competitors by using its superior technology and innovation. This paper mainly discusses on the company’s product differentiation and analysis how the company using this strategy to build its brand image and become a market leader in sportswear industry. A brief discuss about Nike competitive advantage which related to its broad differentiation aspect and the company product life cycle are also presented on this paper.
They rely on technical innovation and high quality products to compete in the market for their products
I have chosen Nike to produce an analysis on. It is important for a company as large as Nike to keep abreast of their strategies and to remain competitive. Here is some background
Before the Internet era, Nike had already established itself. It had done well though TV ads and celebrities getting on board like Bo Jackson. However, when the new era came, it changed everything for Nike. They needed to be able to change with the new era. If millions of people use Facebook, IG, and Twitter, Nike needed to expose themselves in those areas as well. Therefore, they became more up-to-date, and gained more attention that way with the millennial crowd. This allowed Nike to become more holistic in the modern world. This new community created insane amounts of data, which Nike used to track behaviors, creates online groups of Nike fans, and builds meaningful relationships between the brand and its customers. Nike adopted a range of digital exercises such as a strong emphasis on storytelling, being an authentic brand, understanding and communication with customers on their terms, being extraordinary and shareable, and allowing complete customization.
Nike’s mission is to “bring inspiration and innovation to every athlete in the world.” while also stating that “if you have a body, you are an athlete”. (Nike, n.d.). Now if you will look at the strategy that Nike employs, it is totally in sync with its mission statement. It’s the new technology that they innovate and employ in their products that sets them apart from competition in addition to excellent understanding of how to keep customers engaged and change with needs of time. Nikes strategy based on readings of Thompson, Peteraf, Gamble, & Strickland (2018) is “Outcompeting rivals on the
To compete within this market a constant string of creative new invention using newer technology to appeal to the consumer has to take place. Nike fortunately has such brand recognition and customer loyalty along with numerous patents on materials and designs that they can continue to hold onto the lead and seem to continue to grow into other market segments using brand line extensions as well. They
Nike has been a model company for innovation and growth over the years as a leading manufacturer of athletic footwear, clothing and equipment around the world. Much has been made about how Nike has achieved such success and whether or not this success is sustainable. By analyzing Nike using Porter’s five forces, one can see just how they achieved success according to this model and how they will sustain it when looking towards the future. Nike also has been able to implement unique pricing and advertising strategies to keep them at the forefront of their respective industry, leading the way for competitors and peers to attempt to follow. Porter’s five forces will demonstrate how Nike is set up in the current industry and whether there should be a cause for concern or stability in the company’s future.
A comprehensive analysis, using market data and market research, allows us to assess all areas affecting Nike’s strategic direction:
There are numerous definitions of competitive strategy; whether, it was defined by a scholar, a textbook, or a dictionary source, it is not the same. A source may refer to this subject as a competitive strategy or a competitive advantage. Therefore, this subject is difficult to understand and then apply to a company. The Five Generic Competitive Strategies that Michael E. Porter developed are not really five strategies, more like five with subsets under them. Nike does not fit neatly into a specific strategy. The first factor within the competitive strategy as described in the Essentials of Strategic Management textbook is a broad target market or a narrow target market. The second factor considers