Strategic Analysis of Nike

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Nike Case Analysis Nike is a world's leading supplier of athletic shoes and apparel. The company was founded in 1964, when it was selling shoes to athletes. It grow rapidly through the 1970’s, and expanded its product lines to produce footwear in the categories of running, training, basketball, casual shoes, and kids shoes. As the bloom faded from the domestic athletic footwear market, the company entered active apparel market in 1978. Nike made a series of strategic decisions in 1970’s and early 1980’s, which made it one of the most successful sportswear and equipment suppliers in the world. The Company’s strategic goal was to maximize its profit in a long run. It was successful because it was able to identify, develop and match…show more content…
Sourcing helped to reduce the cost of the footwear during 1970’s and later active apparel in 1980’s. The key to the success of the sourcing strategy was the company’s ability to find and develop contract factories, closely monitor the quality, and forecast production needs effectively. Besides, Nike also sought to diversify sourcing to minimize political risk and to reflect changing economies. R&D Strategy To maintain its strong position at the top of the pyramid, Nike emphasized on the innovation of technology. In 1978, the company opened a research and development center in Exeter, New Hampshire. The R&D center worked very closely with the athletes and the marketing department. Nike spent $5.7 million on R&D in 1982, significantly more than its competitors. One result of the increasingly sophisticated research was the patented Air-Sole. By enhancing the R&D, the company wanted to design and build the best shoe for every product level. Expansion Strategy Nike Apparel In early 1980’s, the athletic footwear market was maturing. Price competition was becoming more severe. “For the first time, there is more product out there than demand for it”, a leading consultant mentioned in the case. To cope with this change, Nike expanded into a new market

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