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nike competitive advantage

The three major competitive advantages are differentiation, cost and response. Under Armour, founded in 1996, has successfully entered the high-performance apparel industry. The brand heavily relies on demand generation expense. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com. Even though difficulties in entering the new market because of the single currency and the trade rules, consumer sales outside of the United States exceeded sales in the United States in 2003 with only 43% of the company’s sales coming from the US. Our academic experts are ready and waiting to assist with any writing project you may have. Among the products Nike produces include the following categories; the Jordan Brand, NIKE Basketball, Running, Football (Soccer), Training, and Sportswear. “To bring inspiration and innovation to every athlete in the World.”, “To represent the highest service standard within and beyond our industry, building loyal consumer relationships around the world.”. The style, product innovation, and quality have also build Nike’s image in the global arena. Free resources to assist you with your university studies! Here we will conduct a detailed analysis of Nike competitors. One can observe that over the last few years, Adidas has been slowly eroding the market share from Nike. Bargaining power of suppliers: How dependent is the business on its suppliers? As such, it encourages sports lovers through promotional videos. Being the greatest sports company of footwear and apparel, it is having largest cost advantages over competition. Today, Nike is a multinational brand that is recognized for its premium quality products that are reasonably priced. They remain flexible, and … However, customer-oriented brands such as Nike have been able to command customer loyalty. Competitive advantages can … NIKE has a good control on production cost. Nike has invested in research and development. Show More. The buyers of sports footwear and hence their thinking have changed in the past decade. With the brand outsourcing most of its products to external suppliers, this only means that the brand commands a bigger market share. Nike sustains competitive advantage based on cost strictly due to the company minimizing production cost so they are able to maximize profitability or even able to lower the selling prices. Nike needs to manufacture and sale all its products which has gained patent before the right expires. However, competition in the sportswear industry continues to increase each day and Nike has to step up to stay at the top. Competitive advantage is what makes an entity's products or services more desirable to customers than that of any other rival. Competitive Advantage. the United States, the Americas, Asia Pacific and Europe, Middle East and Africa (EMEA). Its swoosh logo is easily recognizable among the many brands globally. To attract more customers, nikeid.com allowed them to design and personalise their brand resulting more than 3, 00,000 unique visitors a day. Nike has close to $29 billion in revenues, almost twice its closest competitor, Adidas AG. Threat of new entrance: Last year, Nike made about $9.5 billion in revenues, of which 59% came from footwear sales and 29% from apparel. Do you have a 2:1 degree or higher? As such, a wide product range of popular products has provided a unique competitive advantage for Nike. get custom paper. Nike Competitive Advantage. Nike vs Adidas: Market Share . From a humble beginning, Nike has managed to build … Brand equity is perhaps the main strength of any brand. Nike is an international athletic brand that deals with sportswear such as shoes and apparel equipment. As such, Nike has mainly focused its strategy on innovation to rival its competitors. The way Nike smells the opportunities and the way it approaches problems makes it unconquerable. To export a reference to this article please select a referencing stye below: If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: Our academic writing and marking services can help you! It is officially sorcerer of couple of university teams and presently assisting them in making their on-field outfits. Their reputation then grew, and all athletes wanted to know about this new clothing idea. It offers products in six main categories. These are well established channels. Nike Inc. is very good at adapting to the changing markets. Nike has been able to outshine so many brands in the athletic wear industry because of the competitive advantage that it has over its rivals. The focus of their company is to make legal and humane working conditions. We’re supporting our suppliers in developing predictive, agile, resilient and integrated HRM capabilities. Reebok deals with NFL for designing and marketing all on-field uniforms. Nike maintained a GuruFocus business predictability rank of four stars, suggesting consistent revenue and … Competitive advantage in the Marketing strategy of Nike – Outsourced Manufacturing Units: Nike receives footwear from more than 140 factories located in 13 countries across the globe. Today, product innovation is so important owing to the quick changing preferences of customers. Branding. By altering marketing to the customer needs, Nike has been the most successful player in the past and continues to be today. Although there are now problems arising from these factories, they are switching to making their own goods, labour and political unrest causes delays in manufacturing and shipping of the goods. This is because several aspects including changing customer preferences and competition play a major role in cementing customer loyalty. How Nike has become the biggest player of the game? After takeover both the companies Reebok and Adidas have strong position to compete with Nike in North America. To compete with powerhouse Nike, Adidas merged with Reebok. Nike’s cost leadership generic strategy sustains competitive advantage based on costs. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. If you need assistance with writing your essay, our professional essay writing service is here to help! Within the USA there are 18000 stores that retail Nike products. Marketing has played a major role in making the Nike brand a global brand. The United States provides that largest market for the Nike brand accounting for over 40% of its total sales and accounting for a total of 392 retail stores. The product might be as good as, or better than, the competitor’s; but as long as the consumer perceives the product to be not superior or not different from others, the product can’t become successful. NIKE is the largest seller of athletic footwear and athletic apparel in the world.The Company creates designs for men, women and children. By following this law, Nike is investing heavily and successfully in marketing its product. It is also recognized as the biggest brand in designing, developing, and marketing of sportswear, apparel, and accessories. Adidas is on its way to launch a new innovative campaign praising the team spirit. Using production facilities in the Far East has given Nike economies of scale. Roots to competitive advantage: It is obvious that it wasn’t a red carpet journey for Nike. How it successfully captured almost half of the market in sport sector and still the giant? Sustainable competitive advantage is when one company’s value creating products are impossible to imitate by its competitors. Its Swoosh logo is popular and most notable among the numerous brands in the athletic wear industry. Bearing in mind that customer preference changes fast, there is stiff competition among brands. http://3.bp.blogspot.com/_TjMfUmrr8Gs/SxPoEUasjEI/AAAAAAAAAFI/Az-8n9gq07U/s1600/…………..NIKE_Swoosh.gif. Price and product differentiation, an impact the swoosh logo has created, greater benefit (utility) to customers are a few reason why company is still there. Company Registration No: 4964706. Over time, Nike has maintained a strong supply chain and manufacturing network that has helped keep the brand popular with agility. Besides, it outsources most of its production. Registered Data Controller No: Z1821391. In the U.S Nike has seven important distribution centers, five in Memphis, Tennessee, and one in Indianapolis, Indiana, and another in Dayton, Tennessee. VAT Registration No: 842417633. Well, they JUST DID IT and are doing it. Adidas … Consumers don’t just buy a product for its attributes. Nike offers give away to customers, tickets, sales, sponsorships and … Though Adidas web site is slightly more favourable in user friendly functionalities, it lags behind on Nike’s overall site appearance. The aim of this project is to reveal Nike’s competitive advantages in global market and especially focus on company strategies in Chinese market. Nike has been able to outshine so many brands in the athletic wear industry because of the competitive advantage that it has over its rivals. It is obvious Nike is a global brand that has widely spread retail stores across the world. A recommendation is for Nike Inc. to prioritize investment in product development to ensure competitive advantage. It achieved competitive advantage by adding value in its products. Company often seeks to achieve both productivity and differential advantages but few succeed. As an outstanding brand that prides in the highest popularity and customer loyalty in the sportswear industry, it is no doubt that customer loyalty is a unique competitive advantage that has kept Nike leading its rivals. We could see that multiple activities have played a role in building a competitive advantage. Adidas has six products priced at about 25000 and Nike has only one. These tactics proved to be a good practice to drag youth attention. Top Nike Competitors. Its large economy supports it in distribution and marketing over its rivals. https://notesmatic.com/2018/12/nike-sources-of-competitive-advantage Nike’s brands have turn out to be to be very strong as compared to others such as Reebok and Puma. Marketing is a major strength of the Nike brand and provides it with a unique competitive advantage in the global sportswear market. Roots to competitive advantage: It is obvious that it wasn’t a red carpet journey for Nike. Nike Competitive Advantage just from $13,9 / page. Study for free with our range of university lectures! Being a global brand, it has a large supply chain, retail, and distribution networks. Nike Inc. is very good at adapting to the changing markets. In the 21st century, gaining customer loyalty in any product is very difficult. Incorporated in 1967, Nike has grown throughout the decades to be the number one brand in the selling of sports-wear and apparel across the world. For instance, it outsources nearly all of its production. 2.1 Porter’s national competitive advantage Professional stylists are ready to give you personalized recommendations tailored to your unique needs. Reebok, offering more choice of shoe, introducing endorsement by sports personalities, sponsoring sporting leagues. In the sportswear industry, Nike commands the largest customer base of all the athletic and sports shoes and apparel products. The brand has built several sources of competitive advantage which include technology, marketing, supply chain as well as product design and quality. Nike has various competitive advantages outlined below. NIKE Competitive Advantages Nike as a global company known worldwide that makes a large range of products for athletes including shoes and apparel as well as equipment sustained its competitive advantage through effective knowledge management. Its prices are a bit high as compared to other competitors but it has made many sales than th… Nike successfully fought against this socio-political issue and wisely maintain its brand name. Competitive Rivalry or Competition with Nike … Two key aspects of this strategy include their large-scale brand recognition and product innovation. Nike made sure to capitalize on location as a competitive advantage, locking up premier retail real estate on Michigan Avenue in Chicago, Union Square in San Francisco, and about every other prime location in the top 50 cities in the world. We have mentioned some of the main factors that put Nike ahead of its competitors. In the late 1990s, Nike reduced costs and the selling prices of its athletic shoes and other products. Start with: Competitive advantage simply means what the company is best at. Another advantage is scale, the cost savings associated with a larger corporate size. Competitive rivalry within an industry. It affects the business more or less in a negative manner. Copyright © 2003 - 2020 - UKEssays is a trading name of All Answers Ltd, a company registered in England and Wales. Show More . Nike is a customer-oriented brand that knows its customers in all aspects. Nike’s most valuable asset is undoubtedly its brand. Nike has strived to create robust brand equity. According to the geographic location,Nike has segmented the international market. So, Nike’s diverse product range caters to varied customer segments. They buy it for the experience, value and the emotional benefit that the particular product provides. The main raw materials used in NIKE footwear are rubber, plastic compounds, and foamcushioning materials, nylon, leather, canvas, and polyurethane films used for cushioningcomponents. Besides, the brand is deeply connected with athletics and sports and it strives to inspire sports fans across the world. The way Nike smells the opportunities and the way it approaches problems makes it unconquerable. COMPETITIVE ADVANTAGE Companies all seek a competitive advantage, as that will give them the opportunity to sustain profits that exceeds the average in their industry. This is the reason NIKE continues to lead in innovation and technology infootwear, apparel, and equipment.The first better ratio is COGS/sales. So, the brand has heavily invested in research, innovation, and marketing which has helped to bring the best designs to the market right before its competitors. The Nike brand has a wide product range in the market. Nike offers a “Shop with a Stylist” feature, the perfect way to make the most out of your store visit. When markets are reaching saturation, new markets need to be identified to prevent decline in sales. Nike’s Supply Chain System too had played a major role in establishing Nike’s competitive advantage. Whether a business is dealing with technology, sport, or fashion, innovation provides new leads to tackling challenges. In addition other sportswear manufacturers also expand their portfolio. The brand is well known for its stylish and great quality products. Sustainable competitive advantage is when one company’s value creating products are impossible to imitate by its competitors. Nike has done some restructuring to help gain competitive advantage. The brand sells its products through Nike-owned retail stores, digital platforms, retail accounts, a mix of independent distributors, licensees, and sales representatives in nearly all the countries around the world. In this alone shows the real power of a winning strategy it is a strong factor in the company’s competitiveness. Some of the competitive advantages are explained asfollows:i) High product quality: The R&D of NIKE results in the competitive advantage of innovationand high product quality. As such, Nike focuses on research and innovation to create new designs and styles to improve the popularity of its products in the market. The products come in excellent design and quality. The sneaker giant can simply outspend other sports-apparel retailers, Siegel wrote in … Disclaimer: This work has been submitted by a university student. Marketing is part and parcel of Nike’s business strategy. It is a function of the competitive advantage of costefficiency. Strong human resources policies and capable, qualified management are essential for all Nike suppliers to be compliant with the law and our Code Leadership Standards. We have mentioned some of the main factors that put Nike ahead of its competitors. This attitude of the company helps in eliminating and meeting any threat and provides a competitive advantage. From a humble beginning, Nike has managed to build and establish a strong brand name among its target customer. Outsourced Manufacturing Units: Nike receives footwear from more than 140 factories located in 13 countries across the globe. Coupled with global marketing strategies, Nike can dominate the global athletic footwear and apparel market. We have developed guidance and tools they can use to improve Human Resources Management (HRM) in their factories. To keep strong brand equity, Nike has focused on its taste and changing preferences. Quick and appropriate decisions at write time, use of brand name, goodwill- therefore increases its CSF (critical success factor) to succeed. However, surprise when reviewing its differentiation strategy it . The brand believes in the spirit of sports and how sports connect people across the world. And with a firm grip on the competitive advantage factors, Nike is deemed to continue leading its competitors in the manufacture of athletic wear and apparel. Therefore, customer loyalty is a strong source of competitive advantage. Nike is doing what is required by law and also what is expected of a leader. Better yet is that a well-integrated network allows Nike to focus on innovation and deliver high-quality products to the market. Competitive Advantage: Nike’s competitive advantage over other brands in the athletic footwear and apparel industry is shown through their differentiation strategy, which helps them to incorporate value and uniqueness in all of its products. The company’s global reputation — a key source of competitive advantage — was at stake. When required for professional use there is no substitute goods, but as a fashion item there are many other goods that could be purchased. Competitive advantage is something that separates the company from other competitors in the same industry. This generic competitive strategy helped the company regain its competitiveness, especially … For instance, it has robust retail, distribution network, and inshore and online promotions. The Competitive Advantage of Nike. Nike has patents on some of its products but they are not well organized (Ahmed et al, 2016). 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