Background·NIKE, Inc. has grown to be the world’s largest marketer ofathletic footwear·Nike produces a wide range of sports equipment such asrunning shoes, footwear, sportswear and sports equipment’s ·Nike’s strategy and key initiatives is to achievesustainable, long-term growth across its global portfolio of brands and businesses. •As Nikeis a multinational business therefore laws may affect its distribution ofproducts. ••The taxsystems in other countries are very competitive therefore as Nike is aninternational business they have to follow accordingly. •Thegrowth and advancement have adverse effects on Nike due to recession.••••As wellas the local economy, Nike growth also have an affect within the internationaleconomy • •Worldwideincreases in health consciousness means that’s there is more demand in sportsapparel•Due to constant change in customers buying habits Nikewill need to focus on these elements and make changes •Interms of economic innovation and segmentation Nike applies its marketinginformation systems effectively.
••Nikecreates products that are Innovative and advanced which fulfils the requirementof its consumers. Strengths•Nike isa leading brand for sports shoes•Ccompanylogo that enhances the recognition of the brand globally•Strongcontrol over its distribution channel•Innovativedesigns in footwear• Opportunities •Eexpansionof product into sports wear and sunglasses. •environmentfriendly programmes•Productdevelopment•Newinnovation and technology• Weaknesses•Theretail sector is very price sensitive•Lack ofstable production units•Verymuch dependent upon its share of footwear market•Highprice of products due to premium brand••• Threats•Competitionpressure from Adidas and Under Amour•Competitorsfocusing on niche market segments.•Expansioninto developing markets.•• •Thebargaining power of Nike’s buyers is low to moderate. •Theswitching costs for customers are low.•Nikefocuses on performance and design.
•Competitionin the athletic footwear industry is very strong. •Majorcompetitors of Nike are Adidas, Under Armor and Rebook.•Thethreat of substitute products is moderate for Nike. •Thereare number of competing brands that create similar products as Nike.•Thereare several brands that offer lower price substitute products. Strategy•In order to reach out to a wider audience Nike’s strategyis to use celebrity athletes to endorse their products . •For their advertisement of products Nike uses athletes assponsors. Structure•Acrossthe world Nike has over 47,000 branches over 100 different countries •Nikemaintain its management and organization effectively.
Systems•Research,development and advertising campaigns are the main systems that Nike uses ••Skills•Nikesstrongest skill is to advertise and market products to a high standard than itscompetitors•Nikeacquire the best athletes to promote and wear certain products on commercials. SharedvaluesNike’svalue is to produce top quality athletic footwear.Nikeaims to build relationships around trust and respect••Style •Nike implements a lifestyle wear for their employees.•In order to create competitive spirit for employees Nikeincorporates sports within management Staff• Nike employs 74,00 employees worldwide. •Staff have experience and good knowledge about the companyand the industries in which it operates • •It is crucial for Nike toimplement these strategies within the company•It is clear from the internal and external strategy thatNike’s biggest competitor is Adidas.
•From the strategies options 2 in the best out of the threestrategy to implement within he business. Implementation Nike operate in a highly competitive sport shoes apparel.In the past 7 years have been able to remain as the market leader in the shoeapparel industry. In order to still compete in the marker Nike should adopt newstrategies. However Nike have been experiencing Slow sales growth due to highlevel of competition. In order to stay as the market leader Nike should adoptstrategies that enables Nike to differentiate and increase sales.
By focusing on the implementation strategy of option 2Nike is able to focus on its digital investments. Nike can sell more itemsdirectly to consumers online, which is convenient and fast. In order to speedup product development Nike could minimize time needed to get new products onshelves. Many consumers have started shopping online due to itsconvenience. Nike could focus on this strategy to increase its sales growth. In terms of traditional customer segmentation strategy therise of e-commerce has resulted in a transformation for online shopping.
Nike’s strategy meets the expectation however the risksare of reducing costs of operation requires time investment extensive research.The strategy is feasibility as it targets a wideraudience. It is relatively easier to sustain the strategy as it lowers on theoperational costs. Competitor Analysis The sports wear and apparel industry is vey competitive.Nike’s major competitors are Adidas, Under Armour and Rebook. Nike provideshigher quality of product and services in comparison to its competitors.
Nike’s biggest threat is Adidas as they offer the similarproduct with lower pricing strategy. Therefore in terms of pricing Nike’sproducts are relatively higher than its competitors. Strategicissues Issue1: Due to high competition from Adidas and Under Armour Nikes cuts jobs as sales growth slows. Issue2: Inventory problems which has had a negative impact onthe company.
Digitalinvestments, Focus on increasing its digital sales strategy to drive salesthrough Nike.com.Manufacturing revolution,focusing on innovative material and assembly procedures.