Competitive Analysis
The chief competitors to Nike are Adidas, Reebok, Under Armor and Puma and the minor competitors are ASICS and VANS. In accordance with Porter’s 5 Forces, Nike has faced competition by using different and distinct capabilities in marketing. One attribute to such capability is its value or benefit offered to its customers. The intensity of competition from its competitors is high for each firm competes in various key areas of business. For example, Adidas has loyal customers who are soccer players, while Nike has high loyal customers who are athletes. The intimidation of substitutes is very high in this market. The substitutes can range from a top-notch brand to a local brand, in which consumers have the liberty to choose per their needs. There are open opportunities for new competition from new entrants, but may not be a threat because this industry requires a huge capital investment and R&D facilities which is a hurdle when compare to a well-developed firm like Nike. The bargaining power of the buyer that defines the business competitiveness is low for Nike as they provide a wide range of goods thus limiting the bargaining powers of the consumers. The bargaining power of suppliers as well is low, for the raw materials required by Nike are available that do not cost a fortune to procure. Nike is at the liberty to choose from a wide choice of suppliers that benefit their plans.
Environmental Analysis
Nike has shown a great strong progress in battling the
Nike started to open up manufacturing factories in countries like Indonesia, Pakistan and Vietnam. Due to the wants of Nike to increase their revenue they tried to outsource the labor of their products since labor work in the US is very high and expensive. This was a bad idea due to that Indonesia pays their workers extremely low wages. Pakistan doesn’t have an age limit for them to be able to legally to work so many children in Pakistan were making
Obviously, there is a big number of driving forces in the athletic footwear industry. Each of these driving forces has different impacts—some of them can have a more considerable effect than others on figuring out how much cross-company differences influence market shares and a number of units sold. The first line of most influential factors includes comparative prices, S/Q ratings, and a number of models offered among the footwear competitors. These three most important competitive forces affect customer decisions of which athletic footwear brand to choose. Furthermore, the decisions of customers whether to purchase one brand or another are also influenced by such forces as advertising, celebrity endorsements, the number of independent retail
In this paper, we present an elaborate analysis of the marketing mix employed by Nike in its marketing strategy. The marketing mix is conducted on the basis of the concept of "marketing mix" which is usually referred to as the "4Ps" as an important means of effectively interpreting as well as translating the marketing strategy into practice as noted by Bennett (1997).A recommendation is also provided.
Companies like Under Armour, Nike and Adidas/Reebok have high threats of substitute´s products. These companies share the sport apparel industry and are vulnerable to competitive pressure from the actions of buyers whenever they view that their products can be substituted for others. The availability of substitutes invites the costumer to compare performance, features, and ease of use as well as price. Under Armour’s major competitors are Nike and Adidas/Reebok because they have a similar or competing product offerings. The top sport apparel brands offer similar products and that is why each one of them needs to keep a high standard and produce good quality products in order for customers to keep buying their product.
As Nike is a multibillion dollar company, Nike has its own way of recruiting new potential employees. As the same time, there will be some weaknesses in its company’s recruitment and selection policies and procedures. Nike, Inc. has boundless chances to fuel beneficial development and further bolstering drive good fortune. Nike’s pioneers work consistently to guarantee Nike, Inc. understands its potential by rousing each one of its more than 40,000 workers to understand their potential. Human Resources experts at Nike, Inc. work as stewards of association adequacy, ability and change. The capacity attempts to guarantee that Nike, Inc. has capable, differing and comprehensive groups composed viably against Nike's greatest
As the brand name of Nike continue to soar, other companies in the industry; learning from the success Nike has experienced, start focusing more on brand development to keep up with the increasing levels of competition. These companies resort to brand maintenance, which has become the main target in this industry due to product differentiation made by Nike. Nike, being market-advantaged, produces an extensive range of products, through which it gains a balanced level of profits. This has influenced rival companies to initiate a new range of products in their businesses too. Previously these companies had high risks of failing in business, if their single products did not appeal to the market. Due to the impact of Nike’s business strategy, the other companies are also enlarging their product range,
Nike’s main strategy revolves around product branding. Their brand compromises of a swoosh logo which is accompanied by a message of “just do it”. The logo was imprinted on all of their products with the message developed to express the individuality of their target group. The branding was further promoted by Nike’s relentless approach on the quality of their product as demonstrated when considering overseas business opportunities, quality must not be compromised in order to do so. This ensures consumer satisfaction and loyalty towards Nike.
The company I am presenting is Nike which was founded in 1965 by the athlete Phil Knight. Nike is a well known brand which is selling its products worldwide and has 36% of the market share.
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.
The strength of the competitive forces vary among the Under Armour, Nike, and The Adidas Group. The buyer bargaining power of Under Armour, is somewhat weak. Under Armour’s growth strategy entails, “Securing
The athletic shoe industry will be first analyzed by the Porter’s Five Forces framework. The well-known Porter’s Five Forces is a model that analyzes an industry and helps firms develop a business strategy. The five forces model focuses on six forces that will determine the attractiveness of this industry: (1) the risk of entry by potential competitors, (2) the intensity of rivalry among established companies within an industry, (3) the bargaining power of buyers, (4) the bargaining power of suppliers, (5) the closeness of substitutes to an industry 's products, and (6) the power of complement providers (Hill, Jones, & Schilling, 2015).
Competition is very fierce due to the number of companies competing for sales. Lots of money goes to marketing and promotions using various channels to reach the young demographic group of consumers who spend the most money on Nike’s products. Growth is slowing down in the athletic footwear industry. But new markets are emerging with high growth rates. These markets include extreme sports market and the corporate merchandise market.
The sportswear industry is very price sensitive and most competitors prices are about the same. Nike sells its products in Nike shops and the selling of its products direct to the consumers conflicts with other resellers of the brand. Most of Nike’s earnings are derived from selling into retailers.
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
Mythology to society is just ancient past, but essentially it’s not. It’s thriving and very alive. Take a trip to your local mall and check the footwear department of any sporting store and there you’ll find the goddess. The name Nike characterizes the goddess who exemplified victory on the battlefield. In retrospect, if persons were asked the name Nike, Greek mythology is least expected to arise. The name Nike is now renowned as the most iconic brands around the globe. Though, not many people know the story it all began selling shoes from the trunk of a car. The crazy idea that emanated from Phil Knight that grew to become the global phenomenon today. This study will give insight into the creation, growth, and evolution of Nike.