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We're here to answer any questions you have about our services. Under Armour, founded in 1996, has successfully entered the high-performance apparel industry. Two key aspects of this strategy include their large-scale brand recognition and product innovation. Thus it has acompetitive advantage of … Nike delivers innovative products, experiences and services to inspire athletes. Competitive advantage is what makes an entity's products or services more desirable to customers than that of any other rival. Nike is a customer-oriented brand that knows its customers in all aspects. Reebok deals with NFL for designing and marketing all on-field uniforms. After takeover both the companies Reebok and Adidas have strong position to compete with Nike in North America. For instance, it has robust retail, distribution network, and inshore and online promotions. 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. As such, it encourages sports lovers through promotional videos. The high brand equity has seen Nike command stronger financial and market growth for the Nike brand. From a humble beginning, Nike has managed to build and establish a strong brand name among its target customer. Though Adidas web site is slightly more favourable in user friendly functionalities, it lags behind on Nike’s overall site appearance. Adidas; Adidas formerly known as Dassler Brother Shoes is the designer, manufacturer and marketer of shoes, clothing and accessories. Reference this. Reebok, offering more choice of shoe, introducing endorsement by sports personalities, sponsoring sporting leagues. 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. So, Nike’s diverse product range caters to varied customer segments. Copyright © 2003 - 2020 - UKEssays is a trading name of All Answers Ltd, a company registered in England and Wales. The focus of their company is to make legal and humane working conditions. Another advantage is scale, the cost savings associated with a larger corporate size. Today Nike has a strong network of retailers in 200 countries worldwide through distributors, licensees and subsidiaries. When markets are reaching saturation, new markets need to be identified to prevent decline in sales. Porter’s model helps to understand the sources of Nike’s sustainable competitive advantage over its rivals. Besides using online and offline marketing strategies, Nike also uses media releases, sponsorships, and events to market its products. Nike’s most valuable asset is undoubtedly its brand. Apart from a competition from regular rivals, there are many a time new comers equipped with lots of strategies to conquer others. Adidas have recovered from the problems that plagued them, and have a good product mix, covering a wide range of sports. Porter’s model helps to understand the sources of Nike’s sustainable competitive advantage over its rivals. Nike has various competitive advantages outlined below. Here we will conduct a detailed analysis of Nike competitors. A recommendation is for Nike Inc. to prioritize investment in product development to ensure competitive advantage. This is because several aspects including changing customer preferences and competition play a major role in cementing customer loyalty. The brand is well known for its stylish and great quality products. Adidas is on its way to launch a new innovative campaign praising the team spirit. But how the brand does manage to dominate the international athletic markets that are very competitive? To overpower competition, Nike’s safest bet is to design innovative products that are tailored according to the needs of athletes. To compete with powerhouse Nike, Adidas merged with Reebok. Nike is doing what is … Away from the U.S, the Nike brand still dominates the international markets with a total of 790 retail stores spread across the globe. Management sees the digital business, which grew sales 36% year over year last quarter, emerging as one of Nike's competitive advantages. It greatly focuses on quality of products for customers. However, surprise when reviewing its differentiation strategy it . Nike maintained a GuruFocus business predictability rank of four stars, suggesting consistent revenue and … Equally, it is also paying attention to its pricing, retail, and marketing strategy to deliver the best products to its customers across the world. Start with: Competitive advantage simply means what the company is best at. NIKE is the largest seller of athletic footwear and athletic apparel in the world.The Company creates designs for men, women and children. Within the USA there are 18000 stores that retail Nike products. Its Swoosh logo is popular and most notable among the numerous brands in the athletic wear industry. Nonetheless, excellent management of the supply chain and manufacturing networks has helped Nike produce and deliver superior quality sportswear and apparel while keeping the costs affordable. Competitive advantages can … Marketing is a major strength of the Nike brand and provides it with a unique competitive advantage in the global sportswear market. Its prices are a bit high as compared to other competitors but it has made many sales than th… 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. Nike has done some restructuring to help gain competitive advantage. It has put more investment to support the innovation processes and strengthen the brand. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. All work is written to order. The products come in excellent design and quality. Nike has patents on some of its products but they are not well organized (Ahmed et al, 2016). Superior Marketing Capabilities – Nike has excellent marketing campaigns. When required for professional use there is no substitute goods, but as a fashion item there are many other goods that could be purchased. The brand heavily relies on demand generation expense. Marketing has played a major role in making the Nike brand a global brand. Start with: Competitive advantage simply means what the company is best at. 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. Marketing is part and parcel of Nike’s business strategy. Adidas … Among the products Nike produces include the following categories; the Jordan Brand, NIKE Basketball, Running, Football (Soccer), Training, and Sportswear. Sustainable competitive advantage is when one company’s value creating products are impossible to imitate by its competitors. Company Registration No: 4964706. Nike’s Supply Chain System too had played a major role in establishing Nike’s competitive advantage. To keep strong brand equity, Nike has focused on its taste and changing preferences. Its promotional videos are more into striking an emotional connection rather than being about product promotions. This attitude of the company helps in eliminating and meeting any threat and provides a competitive advantage. The company’s global reputation — a key source of competitive advantage — was at stake. 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. These are well established channels. In this generic strategy, the company minimizes production costs to maximize profitability or reduce selling prices. – Supply chain management: Its excellent supply chain management is also a key source of competitive advantage for the brand. Based on this Five Forces Analysis, it is also recommended that Nike Inc. must implement strategies to attract and retain more customers, so as to minimize the effects of substitution in the sports footwear industry environment. Outsourcing of the manufacturing helps the company in keeping its operational cost low and at the same time focus its competencies on sales and marketing activities to drive the sales. Whether a business is dealing with technology, sport, or fashion, innovation provides new leads to tackling challenges. Bargaining power of suppliers: How dependent is the business on its suppliers? 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. Being a global brand, it has a large supply chain, retail, and distribution networks. The Nike brand has a wide product range in the market. 2 Literature Review. Nike has strived to create robust brand equity. When it comes to video marketing, Nike connects with its customers’ emotions uniquely. Nike has close to $29 billion in revenues, almost twice its closest competitor, Adidas AG. A … To attract more customers, nikeid.com allowed them to design and personalise their brand resulting more than 3, 00,000 unique visitors a day. Well, they JUST DID IT and are doing it. Nike successfully fought against this socio-political issue and wisely maintain its brand name. While the U.S remains its core markets, its supply chain and distribution network is spread globally. 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. Free resources to assist you with your university studies! Nike has invested in research and development. Apart from them, it is investing in sustainability and the creation of sustainable products to increase the popularity of … Registered Data Controller No: Z1821391. Nike has done some restructuring to help gain competitive advantage. Its large economy supports it in distribution and marketing over its rivals. Nike sensed that scenario and wisely put its eye on EU market. Similarly, continuous innovations like Air Max range of shoes had widened the gap between Nike and other brands. 2.1 Porter’s national competitive advantage Competitive advantage is a set of unique features of a company and its products that are perceived by the target market as significant and superior to the competition. “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.”. Today, product innovation is so important owing to the quick changing preferences of customers. As such, a wide product range of popular products has provided a unique competitive advantage for Nike. 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. Nike spent $3.5 Billion specifically on marketing and demand generation in fiscal year 2020. Register to read the introduction… Does the company need to defend itself against new competition? Nike is doing what is required by law and also what is expected of a leader. NIKE brand apparel is also manufactured almost entirely outside of the United States, in 34different countries. It is obvious Nike is a global brand that has widely spread retail stores across the world. It achieved competitive advantage by adding value in its products. Nike needs to manufacture and sale all its products which has gained patent before the right expires. The brand has built several sources of competitive advantage which include technology, marketing, supply chain as well as product design and quality. Nike has over 1,180 stores around the world. Outsourced Manufacturing Units: Nike receives footwear from more than 140 factories located in 13 countries across the globe. You can view samples of our professional work here. Professional stylists are ready to give you personalized recommendations tailored to your unique needs. 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. Well, they JUST DID IT and are doing it. Registered office: Venture House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ. Nike Competitive Advantage. This is the reason NIKE continues to lead in innovation and technology infootwear, apparel, and equipment.The first better ratio is COGS/sales. distributors, licensees and subsidiaries innearly 200 countries. Nike’s brands have turn out to be to be very strong as compared to others such as Reebok and Puma. In this alone shows the real power of a winning strategy it is a strong factor in the company’s competitiveness. Quick and appropriate decisions at write time, use of brand name, goodwill- therefore increases its CSF (critical success factor) to succeed. How it successfully captured almost half of the market in sport sector and still the giant? It also uses celebrity endorsements and sponsorships to connect with its customers. We have mentioned some of the main factors that put Nike ahead of its competitors. They take every opportunity to change for the best. Besides, the brand is deeply connected with athletics and sports and it strives to inspire sports fans across the world. Today, Nike is a multinational brand that is recognized for its premium quality products that are reasonably priced. Company has strong growth potential for 2017. 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. In this post, we look at the competitive advantage that Nike has over its competitors. Nike Competitive Advantage 1089 Words | 5 Pages. The style, product innovation, and quality have also build Nike’s image in the global arena. In the late 1990s, Nike reduced costs and the selling prices of its athletic shoes and other products. 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. 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. Competitive rivalry within an industry. Competitive advantage is something that separates the company from other competitors in the same industry. Better yet is that a well-integrated network allows Nike to focus on innovation and deliver high-quality products to the market. The brand believes in the spirit of sports and how sports connect people across the world. The three major competitive advantages are differentiation, cost and response. The brand has successfully utilized social media and marketing campaigns to target more customers. Nike’s world-wide presence has resulted in a wide customer base. Being the greatest sports company of footwear and apparel, it is having largest cost advantages over competition. By altering marketing to the customer needs, Nike has been the most successful player in the past and continues to be today. 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