Nike Company does not only dominate the U. S. Market, but also dominates the worldwide athletic footwear industry with 22. 51 percent market share in 1991, which increased to 33 per cent by 1999. A report released by Andrew Young for 12 manufactures of Nike shoes in 1997 showed that Nike was doing a good job with its code of conduct and favorable factories. It had shown a very high growth prospects and it was not documented in any reports of abuse. Economic and financial crisis brought structuring of the economy, new standards for businesses and liberalization increased global competition.
This was paramount for Nike Inc. to restructure in order to seek out new profit zones and create new business models which are focused on profitable customers and based on profitability, efficiency, productivity and quality (Nike Inc. , 2010). According to Landrum & Boje (2001) Nike core competencies seem to be research and development, marketing and globalization. In 1997 Nike spent 13 % of net revenues on research and development. Nike’s management analyzes its internal environment and makes decisions based on that analysis.
The company’s decision to revamp its apparel division to be more fashion savvy resulted from its marketing research which has also helped it to focus on the high end market while increasing its market share in the middle and low price ranges in an attempt to broaden Nike’s product spectrum. The corporate culture created by Nike is very adaptive in the global market. It is rich with employee loyalty and team spirit. Its marketing campaign which focus more on the image rather than just product advertising, led to the ‘Just Do It’ mantra. Nike has since then striven towards an inner culture that reflects this mantra.
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The new Nike is not just about shoes but about promoting a lifestyle (Enderle et al, 2000). With increase in competition and the desire for growth, Nike Inc has moved its production to countries where the cost of production will be low. This has made the company to manufacture the majority of their shoes in South Korea and Taiwan since the early 1970’s as they are low wage countries. This strategy could have worked against them as criticisms increased, but their stand to stick on Italy, Taiwan and Philippines, despite higher wages and introduction of unionized labor rights, really worked to improve the image of the company (Rekers, 2004).
Conclusion Nike Core competencies have enabled it develop adaptive systems for the global market place. This has ranged from positioning themselves strategically in different markets, integrating cultures, and constant reviews of their strategies based on their research. This has worked for the company to give it an upper hand in the industry over its main competitor: Reebok Company. More is still to be done to deal with emerging issues and trends so as to maintain market leadership.
- Enderle, K. Hirsch, D. Micka, L. Saving, B. Shah, S. & Szerwinski, T. , (2000) Strategic Analysis of Nike Inc.
- Retrieved 12 May 2010, from http://condor. depaul. edu/~aalmaney/StrategicAnalysisofNike. htm Landrum, N. E. , & Boje, D. M. , (2001) Kairos: Strategies just in time in the Asian athletic footwear industry. Retrieved 12 May 2010 from, http://cbae. nmsu. edu/~dboje/papers/chapter_6_Nike_Kairos_Landrum_Boje. htm Nike, Inc. (2010) NIKE, Inc. Introduces 2015 Global Growth Strategy. Retrieved 12 May 2010 from http://www. nikebiz. com/media/pr/2010/05/5_NikeInvestorMeeting. html Rekers, M. G. , (2004) Build on Your Core Competencies. Retrieved 12 May 2010 from, http://www. powerhomebiz. com/vol144/competencies. htm
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