Global Competitive Strategy: Nike Inc

Nike is one of the leading manufacturers and distributors of sports apparel, equipment, and shoes. The US-based company designs, markets, and distributes these sports products in many locations across the world, including the Americas, the Middle East, Asia Pacific, Europe, and Africa. Nike markets its products through brands such as Nike, Jordan, and Converse. The company’s savvy marketing strategies have contributed to its increasing fortunes: Global Competitive Strategy: Nike Inc.

In particular, Nike is known for collaborating with key celebrities in the sports industry to improve brand visibility and influence acceptance in sports circles. The company’s ability to blend innovation with market savviness has helped Nike develop deep ties with customers and, hence, a loyal customer base.

Vulnerability to International Competition

Nike has dominated the sports apparel and fashion industry since its founding as a market leader in the 1970s (Chen, 2024). Throughout this period, the company has built an extensive distribution network globally and a diverse product range. The company’s brand recognition and popular product offerings give it an advantage over other competitors in the industry (Chen, 2024).

In particular, the company’s “just do it” mantra resonates with a majority of its customers, who have since been converted to become loyal followers. Such cultural identity among customers gives Nike a competitive advantage over its industry rivals.

Change in the Competitive Landscape

Adidas is Nike’s main competitor in the industry. Although Adidas is not as popular as Nike, it has carved a niche in lifestyle and performance. Unlike in the past, when sports apparel companies only targeted athletes, Adidas has successfully created and marketed products around lifestyle and performance. There is an increasing demand for sports products in other niches apart from sports, such as streetwear and athleisure.

Besides, technology is also increasingly influencing competition in the industry, with technologies such as 3-D printing technology and smart products such as smartwatches bolstering Adidas’ position (Mahdi et al., 2015). Adidas has, therefore, leveraged technology to challenge Nike’s dominance as a market leader.

Better Exploration of the Company’s Strengths

According to Stonehouse and Minocha (2008), Nike’s success in the global and home markets is dependent on the knowledge of its customers and their motivations, new product design and development, and supply chain management. To bolster its appeal to the athletes’ customer base, Nike will need to market its products as performance-boosting. Competitive athletes want products that will enable them to improve their performance (Stonehouse & Minocha, 2008).

To that end, embracing technology, including fitting shoes and other products that measure performance, will come in handy. On the other hand, collaboration with sports celebrities in the home market (US) will improve the brand’s visibility and acceptance. Globally, the company needs to share its production technology with vetted partners who will then manufacture locally to help reduce final product prices and avoid shortages.

Untapped Resources or Sources of Global Value-Added

Nike has an opportunity to gain an increased market share in the global market by reducing prices. It is worth noting that Nike has uniform pricing across the world despite some countries not being as economically endowed as the US. Such premium pricing contributes to the emergence of imitations of Nike products and reduced sales across developing countries in Africa and the Asia Pacific (Crettez et al., 2018). By localizing manufacturing and forming partnerships with local retailers and manufacturers, Nike stands to benefit from reduced production costs, hence facilitating affordable pricing.

Global Consolidation

Notably, the sports apparel industry is consolidating globally as it becomes increasingly difficult for small industry players to operate alone. One of the leading factors for such consolidation is the growing competition and market saturation. With such competition, the profit margins for firms that operate alone would be significantly low. Given the supply chain dynamics, including the fact that raw materials are sourced from different parts of the world, operational costs could be too high to handle.

Also, the digital transformation marked by the emergence of e-commerce platforms makes it necessary for firms to consolidate to ease logistics and gather customer insights. According to research (Lipson et al., 2020), athleisure and technological incorporation in manufacturing have led to some firms consolidating to stay ahead.

Learning from the Global Strategies of the Leading Competitors

As mentioned earlier, Adidas is the leading Nike competitor; hence, Nike has a lot to learn from its rival. One key lesson from Adidas is its technology incorporation into production processes (Mahdi et al., 2015). Adidas leverages technology to fit shoes with performance-enhancement properties, targeting football, tennis, and basketball players, and anyone with running abilities.

For instance, the A3 energy management technology for footwear that guides an athlete’s foot through every stride has enhanced Adidas’ marketability (Mahdi et al., 2015). Another key lesson that Nike can learn from Adidas is to embrace a business model in which it addresses customer needs rather than investing in product endorsements.

Recommendation/Advice to Nike’s Top Executives

Based on the above insights, one key recommendation for Nike’s top executives is to diversify its production locations. The company’s stringent production policy of not collaborating with others to improve its global supply chain is welcome, but it limits its global sales prospects. To maintain quality and improve the global supply chain, Nike should vet manufacturers from other countries and localize manufacturing.

References

Chen, Y. (2024). A relevant analysis of Nike and its marketing strategies. In Proceedings of the 9th International Conference on Financial Innovation and Economic Development (ICFIED 2024) (pp. 426–434). https://doi.org/10.2991/978-94-6463-408-2_48

Crettez, B., Hayek, N., & Zaccour, G. (2018). Brand imitation: A dynamic-game approach. International Journal of Production Economics, 205, 139–155. https://doi.org/10.1016/j.ijpe.2018.09.010

Lipson, S. M., Stewart, S., & Griffiths, S. (2020). Athleisure: A qualitative investigation of a multi-billion-dollar clothing trend. Body Image, 32(32), 5–13. https://doi.org/10.1016/j.bodyim.2019.10.009

Mahdi, H., Abbas, M., Mazar, T. I., & George, S. (2015). A comparative analysis of strategies and business models of Nike, Inc. and Adidas Group with special reference to competitive advantage in the context of a dynamic and competitive environment. International Journal of Business Management and Economic Research, 6(3), 167–177. https://www.ijbmer.com/docs/volumes/vol6issue3/ijbmer2015060302.pdf

Stonehouse, G., & Minocha, S. (2008). Strategic processes at Nike—making and doing knowledge management. Knowledge and Process Management, 15(1), 24–31. https://doi.org/10.1002/kpm.296

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Critically assess the global competitive strategy of Nike Inc. after providing some limited background information about the company in question:

1. In what ways is the organization vulnerable to international competition?
2. How has the competitive landscape changed in modern years?
3. How can the organization better explore its home-country strengths as it ventures into the global market, redefines its supply chain, attempts to form critical partnerships, and targets international customers?
4. Can you think of any untapped resources or sources of global value-added
5. Why is the industry consolidating globally?
6. What can the company learn from the global strategies of the leading competition/competitors?
7. How would your group advise the CEO, top executives, and managers?
8. Recommendation(s)?
9. APA Referencing