Nike is the world market leader in athletic shoes and apparel and operates in more than 200 countries. ( Log Out /  Apple’s “Think Different” television commercial from the late ‘90s featured images of Einstein, John Lennon, Gandhi, and Martin Luther King. To better understand customer needs and market characteristics it is very important to develop established ties and alliances with traditional and non-traditional partners in that economy. So, it can be said that the strategy of standardisation does not only responds to the worldwide homogenised markets but also expands markets with aggressive lower pricing. This is not an example of the work produced by our Essay Writing Service. Nike already gets more than half of its sales from outside the country, but it could still grow further internationally. We will discuss some facts and figures. News organisations such as CBS and several non government organisations such as Global Exchange based in San Francisco criticised the working conditions in foreign factories that supply Nike. However, compared to Under Armour, both Nike and Adidas are more aggressive for growth and expansion. International shopping for Nordstrom products is offered through Borderfree, a global e-commerce provider. A new but forthcoming field of research in international market strategy can be represented by low-income markets. Borderfree also lets us take advantage of a fast, reliable shipping network. This strategy will also consider the threats of entering into a new market and supply of sufficient funds and labour in terms of applying the strategy. This essay will employ literature review to support the evidences in case of dynamic capabilities of Nike and its competitive abilities. Net profit margin of 8.1% suggests that Nike is competent in converting sales to profit margin. Table 1 above gives the insights of financial structure of Nike plc, as it is clear from the figures in table 1 that Nike is strong in financial terms due to which it can increase its business globally. A brand is perceived differently in different culture or markets so it could be very catchy for an organisation to build a global brand. As Douglas and Wind (1987) suggested that one standardised strategy may be hampered due do the differences in the marketing infrastructure from one country to another. In 2000, in the western economies a great issue of ageing affected the buyer’s choice as it could lead to change the demand from sportswear to comfort wear shoes. Later, Nike adopted a standard according to which a person with 17 years of age or more can work and workers have to prove their age by submitting 3 documents certifying their age (Lee, 2000). “Just Do It” the marketing phrase of Nike is buzz in the town and its ‘swoosh’ logo gives it that different identity. They have about 500,000 employees and chose to operate as a multinational business because they produce groceries, clothes, food and banking and by operating in the countries they are improving employment opportunities in those countries, they should be able to sell products at low prices, which increases profits, and at the same time benefits their customers. Europe, Asia, North and Latin America are the main markets in which Nike sells its products, which makes it a truly global organisation. Today, NIKE, Inc. shared its FY14/15 Sustainable Business Report, which details strong progress against the company’s environmental and social targets and sets a vision for a … According to Levitt (1983), through supplying global markets Nike could achieve considerable economies of scale in production and marketing. But you can shop on Nike.com in a number of locations globally.. We are unable to deliver to PO boxes, Nike stores, reshippers or package-forwarding services. Moller et al. Nike also produces some limited product for people … Nike employs skilled engineers and designers, encouraging them to embrace disruption and create innovative products. What new business concepts could enable NIKE, Inc. to thrive in a sustainable economy? Stout (1997) argued that this made a positive image of Nike in media and enhanced its public image in Asian countries. These financial figures are reflection of great success of Nike in global market as these are taken after assuming the price rise in U.S. and all the changes in the currency exchange rates have taken into consideration. Borderfree allows us to show all our prices in your currency and displays your final total during Checkout. Innovate to deliver enterprise-level sustainability solutions, Integrate sustainability into the heart of the NIKE, Inc. business model, Mobilize key constituents (civil society, employees, consumers, government and industry) to partner in scaling solutions. (Hill, 2009). Nike is a global company based in United States which employed more than 30000 people across the globe. Firstly, the government action certainly will have a great influence. But, in the past years, Nike succeeded because it didn’t confuse its customers and even after acquisitions with skateboard it support its own brand and expand its parent reach without confusing customers. Nike has the most dynamic logo on the planet. (Douglas and Wind, 1987). For marketing and selling Nike is already using Internet web mode, any future marketing strategy should consider telecommunications and information technology advancements as they can go on twitter, face book as these websites are mostly accessed by youngsters which could be the fan of Nike. We work with suppliers who share our commitment to respecting the environment and people. Investing in R&D has helped gain a large market share and the popularity of Nike products has also grown. The company provides the design and materials to hundreds of factories around the world. Company has enough capital to implement any international market strategy for example advertising in international markets, providing better services to customers, invest in the new planning etc. Differentiation is one of the bases which allow Nike to gain competitive advantage. Another benefit is you�ll get early adopters on board easier since there�s no one else competing for their attention. And to position a brand competently in a different country needs a great skill to understand all the circumstances. Copyright © 2003 - 2020 - UKEssays is a trading name of All Answers Ltd, a company registered in England and Wales. *You can also browse our support articles here >. Now-a-days, growing health awareness will result in the demand of sports and fitness commodities (Moore, 2003). Nike Inc. stakeholders interests are satisfied through the companys corporate social responsibility (CSR) programs. Nike, Inc.’s strategy on sustainability contains: Nike, Inc. thinks that the future will demand closed-loop business models that move closer to achieving zero waste by completely reusing, recycling or composting all materials. The Oregon-based company Nike operates in 120 countries and has more than 44,000 employees. (L. Hill, 2009). DIBC is the ability to manage the international branding process as a dynamic capability. We don't deliver internationally to addresses outside the country or region where your order is placed. Change ), You are commenting using your Facebook account. Click Above to Watch Nike Advertisement - What Will They Say About You Nike Co-brands with Various Sports. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. So, Nike should adopt a strategy to build customer relationship on a scale and scope as never before. As Nike is operating in 4 different continents, the government legislations will be different for different countries. Leaders must examine the impact on supply chains and labor forces. Levitt (1983) suggested that low price regardless of feature preferences and heavy promotion regardless of price, always attracts and influence customers. Nike has a geographic divisional organizational structure. (2002) supported the argument and said that a tightly coordinated supply and channel net are the prerequisite to establish a position in the field and keen demand of the customer reflects the strong brands – example of both are Nike and Dell. How we make our products is as important as what we make. What countries does Nike like? Invoices over $5,000 USD must be submitted with the 10-digit Purchase Order number provided by your Nike contact. This essay will critically evaluate Nike’s current international strategy and help to identify Nike’s current strengths, weaknesses, opportunity and threats. Nike's sales in China jumped 17% year over year in the quarter when adjusted for currency fluctuations, and the company believes that's just getting started. Invest in promotional activities will also be a good idea. It commissioned Ernst & Young, an independent organisation to audit its subcontractors’ overseas factories (Rourke, 2000). Because as Duguid (2005) suggests that such kind of business acquisition will be against interest of consumers and can lead to monopoly. Although Nike does not disclose all of the details about the countries they are in, some of the known countries include Indonesia, China, Taiwan, India, … Innovators must create new ways to recycle and reuse waste and turn that into new products. Nike was criticized for not being an Olympic sponsor in 1996, but investing in sponsorships of athletes and a Nike Centre right outside the athletic village, which upset competitors like Adidas who spent over 50 million dollars to become an official sponsor. ( Log Out /  1. We're here to answer any questions you have about our services. Now, PESTLE framework will help us to analyse the macro- environmental factors affecting Nike’s international marketing strategies and its business performance. It is why innovation is a core focus for Nike and its rivals like Adidas and Under Armour. Instead of manufacturing Nike designs and markets its products, while contracting for their manufacture from 600 factories scattered all around the globe, that employ around 650,000 people. The most effective way to manage and upgrade existing capabilities and resources and to convert the key weakness into strengths is- to outsource. According to Mintel, 20%of the U.S. athletic market is controlled by Nike. It buys and sells in different currencies and so costs and margins are not stable over long periods of time. Net income rose 4% to $1234.8B (www.nikebiz.com). Nike Manufacturing Map: Transparency is fundamental to NIKE, Inc. business and our approach to sustainability. This structure is based on the company’s needs in its global organization, as well as the uniqueness of conditions in regional markets. Growth rate of Nike is indicated in the table 3 below which shows constant steady sales over the past years. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. VAT Registration No: 842417633. Nike Sportswear revitalizes Nike International, Nike's first global track club, for a new collection honoring the style and aesthetic of today’s track stars. For all of the successes Nike has gained, it has repeatedly accused due to lots of issues for more than a decade. However, both the brands Adidas and Reebok are very different in their culture; Reebok is more lifestyle brand than Adidas. Barriers Nike is exposed to the international nature of trade. Being a sportswear industry Nike is highly labour intensive and majority of manufacturing is held in low wage countries. Company Registration No: 4964706. The following characteristics are notable in Nike’s organizational structure: Nike should not forget suppliers of raw materials like rubber, leather and cotton etc. Fill in your details below or click an icon to log in: You are commenting using your WordPress.com account. Finally, the essay will analyse the competition in the selected market, strategy adapted by the competitors and how Nike uses its brand power strategies to anticipate such threats. The type of media available as well as their reach and effectiveness differ from country to country. Nike has the ability to influence a DIBC (Dynamic International Branding Capability) to shape the market opportunities around the brand. Another section will talk about the never ending controversies which Nike has been facing due to its manufacturing factories in low labour countries. It was advantageous for Nike as well as it remains in the news and gave the publicity to Nike in a way. A great impact on market strategy will be done by environmental factors. Our academic experts are ready and waiting to assist with any writing project you may have. They are now focused on the transition of Nike, Inc. into a business that is more sustainable, by which they mean that brings people, planet and profits into balance in order to get long lasting success. This work continues, with a number of ambitious goals: The heart of Nike, Inc.’s growth strategy is innovation. Nike understands the use of involving customers into the business and therefore offers internet sites where customers can share their interactions and experiences, can give their suggestions. Obviously, this deal will increase the amount of money spent on advertising from both the companies. He also explained that in the athletic shoes and clothing Nike has contracted out many functions such as manufacturing and logistics which Noto argued as a clever step to negate the impact of key weaknesses. When the founders of Nike, Inc. started working to improve labor, environmental and social impacts of their business model, they were largely driven by a need to manage risk. Nike has its products made in 41 countries, using 525 factories and a little over one million workers: Argentina — 13 factories (6 apparel, 3 equipment, 4 footwear) When four Indonesian subcontractors are refused to abide by the company’s standard for wage levels and working condition, Nike terminated its relationship with them. Jordan was so popular that he continues to have a line of clothing and shoes with Nike years after his retirement as a professional basketball player. Japan. It is very unreasonable to say that one strategy will fit globally because the rules and regulations and circumstances are different in different countries (Moore, 2003). Another factor affecting marketing strategy could be the technology, which is improving everyday and never predictable. Nike’s manufacturing operations are concentrated in lower-cost countries such as China, Vietnam, and Indonesia. You can view samples of our professional work here. Learn More. (2002) suggest that Nike with other big companies such as Benetton, Dell and IKEA has a well specified supplier and distribution system which made them efficient in terms of rapid growth opportunity, time compression, production and access to a wider customer base. Finally, Nike makes use of all available markets to increase their revenue margin. growth was due to the international competitive tax arrangements, stable government and trade regulations by the Federal Reserve (Whitehead, 2012). Put investing in sustainability as a key innovation/R+D priority on consumer brands’ agendas, Fast track innovation through investment and collaboration. Your business could be trading internationally, read our infographic which lists the top 10 reasons why your business should be exporting overseas. For Nike, Inc. it is about recognising that sustainability is a route to future profitability. The differentiation strategy of Nike is quite competitive so Nike should ensure any international marketing strategy it applies should enhance its superior brand name. Marketing As Nike operates its business globally, any strategy can have different implication on different culture so it should consider the adaptability, feasibility and suitability by the local people of that country. Not only does it help the kids and support Nike’s mission, it also builds a sense of purpose in the employees. Nike has handled the negative publicity over the sweatshops very expeditiously. This site is a tool to learn about the independent factories and material suppliers used to manufacture NIKE products - including the name and location of … Most companies are unaware of the potential of these markets and therefore these markets remain unexplored. Reference this. Globally, the population of millennials is highly health conscious. A key to implement international strategy could be the demographics and socio-cultural influences. Eisenhardt et al. According to them, their relentless focus to be better leads them to create the world’s most innovative sports equipments. Nike's growth in China supports job creation in the United States, O'Hollaren said. The size of their investment in R&D is much larger. Here are 9 reasons why Nike (still) reigns supreme. Study for free with our range of university lectures! If you need assistance with writing your essay, our professional essay writing service is here to help! One central factor supporting fast growth of sports shoe industry worldwide is the rising health consciousness. For instance TV advertising, while a major medium in US, Japan and Australia, is not permitted in Scandinavian countries. Nike should establish good relations with suppliers because they can affect business strategies. Let us consider the overall financial performance of Nike across the globe. This paper will talk about Nike’s global presence and how Nike has achieved success in past years. Disclaimer: This work has been submitted by a university student. Douglas and Wind (1987) suggested that a careful analysis of the forces driving towards globalisation and the obstacles to this approach will help the company to assess where the most attractive opportunities and the company’s differential advantage in exploiting these, appear to lie based on the strengths and weaknesses. As a brand which is aware all of these, Nike, Inc.’s designs and the products currently rely on the availability of natural resources (from raw materials to water and energy). Nike is established in 1972 by former university of Oregon star Phil Knight which is now one of the richest people in America. Change ), You are commenting using your Google account. As Levitt (1983) said a global producer’s patronage expands exponentially, when he offers his low cost internationally. How do we continue to evolve and improve our current model during the transition? It should be known that consumers all over the world are creating new markets and demanding new services which require the firms to focus on getting close to market, to create new, digital solutions and to customise products for consumers more quickly than ever before. The corresponding CSR policy and strategy are based on Nikes consideration for communities and customers, whose interests significantly influence the companys design and production of its athletic footwear, equipment and apparel. Although Nike is a U.S. established company but all of its manufacturing is done in low wage countries like Vietnam. The key to increasing profit for a TNC is to make the product as cheaply as possible and keep transportation costs down, and to sell to countries with the highest increasing incomes. Their vision of a closed-loop business model includes up-front design of products that can be manufactured using materials reclaimed throughout the manufacturing process and at the end of a product’s life. The deal creates a much bigger Adidas a company of $12 billion against $14 billion of Nike. But you can shop on Nike.com in a number of locations globally.. We are unable to deliver to PO boxes, Nike stores, reshippers or package-forwarding services. How do we create a road map for evolving to a future state and solve the challenges preventing us from getting there? Do you have a 2:1 degree or higher? According to Gelder (2006), in the race of globalisation, Nike, Coca-Cola and McDonalds are some of the brands which have become the representative of the massive power of large corporations for the anti globalisation movement. Finally, if Nike wants to think about some acquisitions or merger, it should take into account the investigation by Competition Commission which could block its activities taking into consideration the government policies. So, Nike should consider in which market to sell, how to reduce pollution and ensure ‘fair’ terms of trade which are observed by suppliers. Nike Inc. defines its international strategy based on three core strategic questions(This international strategy is also valid for Turkey): This work underlined two key challenges: that solutions will demand industry-level systemic change, and that the scale and complexity of changes needed demand new approaches to innovation and collaboration. Converse Shoes, a former rival to Nike, was acquired by the company for $305 million in 2003. Nike has always come up with some innovative ideas. Nike has partnered with Coupa, a web-based business network for eProcurement and eInvoicing. Nike is accused of manufacturing its shoes under the sweatshop condition in Asian countries which make a large hue and cry among the media. The current ratio of -3 implies that company has sufficient liquid capital to enforce new marketing strategies and extending its business. Nike, Inc. is aware of that, today and in the future, in order to be the leading athletic brand in the world, they have to deliver innovative new products and experiences in a more sustainable way. Manufacturing & Labor. A gearing ratio of barely 2% suggests that company has spare debt capacity which is another benefit because Nike can apply for a loan if it will be needed, however the current condition of the company is adequately equipped in financial and capital viewpoint. So Nike should follow this strategy in future and try to remain dominant over its rivals through the marketing strategy. Plant and equipment are the assets whose performance can be measured but Noto (2007) argued that brand name, reputation, particular technology and corporate culture with accumulated consumer information are some of the intangible assets which cannot be measured but are invaluable for a firm’s competitive advantage. Karpin and Voola (2008) believe that consistency is the key aspect of brand management in the international context. because shortage of supply can play a big role in setting the pricing policies and applying the market strategies. Nike undertakes marketing, product design and overall system integration itself but outsourced the other units to be economical. Executive Summary: Constant innovation has been the byword for Nike's success.This case study analyses the ever-evolving marketing strategies adopted by Nike to … A growth rate of 15% in one year and 7% over the last 7 years suggests that Nike is a big player in the market and is constantly playing at the same position. "The Greater China marketplace continues to be fueled by higher sports participation, with 38,000 runners taking part in the Shanghai marathon, while nearly fou… It also allows the company to develop new ideas and expand new markets, he added. Designers must look at new sustainable raw materials. ( Log Out /  Keeping that in mind, Nike has answered all these questions time to time with new strategies and cleared all the issues and moved efficiently to correct them. These may for example include differences in the availability and reach of various promotional media, in the availability of certain distribution channels, or retail institutions or in the existence and efficiency of the communication and transportation network. This philosophy and determination determine the way they approach to corporate responsibility in today’s marketplace. Such factors therefore may require considerable adaptation of strategy of local market conditions. However, today their corporate responsibility approach has evolved from focusing on risk management, philanthropy and compliance, to one which focuses on innovation. ( Log Out /  Registered office: Venture House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ. The first-mover advantage is basically getting into a market and gaining all the benefits of being first. Therefore, to establish good public relations Nike took some more steps. In general, companies go international because they want to grow or expand operations. Finally, Nike is a traditional product centric organisation but product was the end point of the consumer experience in past but, today it is the starting point. We don't deliver internationally to addresses outside the country or region where your order is placed. Taking any strategy into consideration will also involve an impact analysis and risk, therefore, any potential consequences and levels of risk involved and how to overcome those risks will be covered in the next section. Nike, Inc. is aware of that, today and in the future, in order to be the leading athletic brand in the world, they have to deliver innovative new products and experiences in a more sustainable way. By then Nike had become an internationally success and was rapidly developing into a global brand. For example, U.S. firms like Nike and IBM maintain operations in the Netherlands because it offers direct access to 170 million European consumers within approximately 300 miles. Nike and Olympics. 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. No plagiarism, guaranteed! Nike sells different type of product for the different countries due to different countries have a different lifestyle. The main products of Nike include footwear, sports equipment, men and women clothing and accessories. Moller et al. Nike has been involved in never stopping controversies due to sweat shops but due to its preventable actions it gained publicity and today Nike is a stable brand name all over the world. Nike can build trust and relationships with Nike community, can learn directly from customers and provide customers what they want which enhances the brand. Political Factors Of Nike. Where TV advertising is permitted it may reach only a limited number of households, due to limited ownership of TV’s as for example in South Africa, Nigeria or Indonesia. Table 2 below indicates that the company is moderately efficient in doing the business. (2000) suggests that for the long term competitive advantage Nike could also use dynamic capabilities to enhance existing resource configuration. Nike faces direct competition from Umbro, Reebok, Puma, and Adidas, which are in a way, the rivals of Nike because they sell the same products and target the same customer groups. Turn that into new products policies and applying the market opportunities around globe... Consumers get all the circumstances to choose the activities to perform internally since! Supplying global markets Nike could also use dynamic capabilities of Nike across the.! An example of the work produced by our essay writing service is here to answer questions. Is indicated in the net income which has increased by 4 % to $.... Your Facebook account year leads to higher gross margin which are reflected in the demand of sports and commodities... Produced by our essay writing service superior brand name interest of consumers and can lead to monopoly getting. 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