Nike is a very competitive organization founder Phil Knight was often
quoted saying that "Business is war without bullets" Nike has a
healthy dislike of competitors. At the Atlanta Olympics Reebok (one of Nikes competitors)
took the expense to sponsor the games and Nike did not. Nike decided to take
another approach they sponsored the top athletes and gained valuable coverage.
Nike has many athletes under contract from retired to new to the sports
world they go as far back with Bo Jackson a multi-sport athlete to Michael
Jordan to Derek Jeter, Tiger Woods, Lebron James, and even rapper Kanye West.
Nike chooses these sport icons to increase their fan base. Who in the 80s
through the 90s who was interested in sports did not know about Mike? chances
are even if you didn’t know the sport he played or even the man himself you
knew about his sneakers Air Jordan ranging with different color ways even
getting into trouble with the NBA because of his Ones also known as the Banned
ones they were "banned from the NBA" but this didn’t stop Jordan or
Nike from advertising their shoes. Every game Jordan wore the shoe he was given
a fine and Nike was happy to pay it off. His shoes became so popular that they
began making the Air Jordan twos, threes, fours, fives all the way until 23.
The Nike company still makes the same Jordan’s same color way using them as retro’s
which the older population may remember and gives them chance to purchase the
sneaker again to relive their childhood.
Strategy;
Reebok, Addias and New Balance are the main competitors for Nike. However,
like other corporations Nike not only manufacture sneakers they also make
socks, basketball shorts, shirts and sweatpants. With Nike ID you can design
your own shirt, shoes and even shorts to meet your standards this gave the advantage
against other companies.
Strengths
·
Nike is recognized for being the number one sportswear
in the world.
·
Nike is constantly trying to improve its product
with constant research and development. It is quite evident regarding its evolving
and innovative product range.
·
They manufacture high quality at the lowest prices
possible. If prices rise due to price hike then the production process is made
cheaper by changing the place of production.
·
Nike employs more than 30,000 people
worldwide.
·
Nike uses fly wire materials in order to make the
manufactured shoes lighter and more controllable.
Weaknesses
·
Nike is still heavily dependent on its share of the
footwear market, even with its wide range of sportswear. If anything ever happens
to the footwear market it would have a massive effect on Nike leaving it
vulnerable.
·
The retail sector is price sensitive. Retailers
often try to offer customers and equal product but cheaper in price which
pushes the low price competition onto Nike.
Opportunities
·
Product
development offers Nike many opportunities. The brand is fiercely defended by
its owners whom truly believe that Nike is not a fashion brand. However, like
it or not, consumers that wear Nike product do not always buy it to participate
in sport. Some would argue that in youth culture especially, Nike is a fashion
brand. This creates its own opportunities, since product could become
unfashionable before it wears out i.e. consumers need to replace shoes.
·
There
is also the opportunity to develop products such as sport wear, sunglasses and jewelry.
Such high value items do tend to have associated with them, high profits.
·
The
business could also be developed internationally, building upon its strong
global brand recognition. There are many markets that have the disposable
income to spend on high value sports goods. For example, emerging markets such
as China and India have a new richer generation of consumers. There are also global
marketing events that can be utilized to support the brand such as the World
Cup (soccer) and The Olympics.
Threats
·
Nike
is exposed to the international nature of trade. It buys and sells in different
currencies and so costs and margins are not stable over long periods of time.
Such an exposure could mean that Nike may be manufacturing and/or selling at a
loss. This is an issue that faces all global brands.
·
The
market for sports shoes and garments is very competitive. The model developed
by Phil Knight in his Stamford Business School days (high value branded product
manufactured at a low cost) is now commonly used and to an extent is no longer
a basis for sustainable competitive advantage. Competitors are developing
alternative brands to take away Nike's market share.
·
As
discussed above in weaknesses, the retail sector is becoming price competitive.
This ultimately means that consumers are shopping around for a better deal. So
if one store charges a price for a pair of sports shoes, the consumer could go
to the store along the street to compare prices for the exactly the same item,
and buy the cheaper of the two. Such consumer price sensitivity is a potential
external threat to Nike.
Marketing mix Nikes four Ps
Product
·
Nike has all range of products from sports footwear,
apparel, accessories and equipment. Initially they faced problems as they were
only targeting only sports persons. However, very soon they revised their strategy
as they observed the changing trends.
Price
·
Is often based on the competitors,
·
Is based on size and type of shoe
Placement
·
Have individual stores as well as available at
shopping malls and department stores selling shoes all around the world
·
Have more than 20,000 retailers in 200 countries
·
Sell its products through individuals
·
Customer service all around the world
Promotion
·
Electronic and mass media social networks and TV
commercials
These cards were given to the consumer in the box of the Air Jordan shoe they purchased a different card for the different shoes.
Nike classifies
itself as the athletic shoe industry. With the competition on its back (Asics,
Reebok, and Adidas) Nike is still on top of them in the athletic foot wear
share of 47%. Nike owns other additional brands such as Cole Haan, Hurley
International, Umbro, Converse, and how could you forget the Jordan brand. Nike
does not only offer footwear they also design sporting equipment such as
cleats, shoulder pads, basketball shorts not only for sporting goods they also
have casual clothing for everyday use. Converse also known as the “Chuck Taylor”
sells for about $40-$60 which most people would want to pay for a pair of
sneakers on the other hand other sneakers from Nike can cost up to $235
depending on the shoe you choose. Nike shows love to the Soccer fans with the
Umbro brand. For people that aren’t too much into the sneaker world Nike has
Cole Haan for dress shoes. Nike even takes care of the surfers with their
Hurley International. 
Nike being the
leader and the most demand for athletic footwear industry, Nike has to deal
with the customers in which they build so much hype about a sneaker and only
make a certain amount. This has led to people camping out for sneakers for days
outside of a Foot Locker, Nike town and other companies that sell their
products. With “Camping” there is bound to be fights people trampled, getting
robbed etc. . . What Nike decided to do after finding out what was going on in
the street. They came up with a new system of waiting for sneakers it is called
“Twitter RSVP” it’s not really fair but with the majority of customers that buy
sneakers are young Nike thought that they should have a Twitter account because
of the hype around that, problem is not everybody has a Twitter account. The
way this works is Nike stores around the country would tweet a hash-tag and you
would have to message them back with the information: Product hash-tag, Full
name, and size. Once this is done Nike would respond on a first come first
serve basis with the time that Nike said to purchase the item.
