Through Nike’s years of existence in the business, it has gained much of the American athletic gear and apparel market with 40% as well as 34% of the worldwide market. The company positioned itself as a high-end athletic lifestyle company which made impact to a lot of the youth today. Most of the profits that the company obtained have been from outside the United States with over 52%. Likewise, the company also depends on its apparel lines which is then outsourced in over 600 factories scattered over the world due to United States import restrictions.
Majority of the company expansion as well as positioning efforts and overseas activities have mostly been influenced by the quota restrictions of the United States. The company benefited a lot from these by going into new markets and spreading company awareness ("The Merchants of Cool", 2001). Restructuring is expected to take place within the company as World Trade Organization agreements are expected to be implemented. Likewise, Nike currently seeks out to cut its overseas factories in move to further enhance profitability ("The Merchants of Cool", 2001).
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Competition, coupled with the declining profitability margins in the industry, as well as the saturation of players they sponsor in the retailing industry are among the major issues that Nike continues to address. In order to stay afloat in the industry, Nike has already started the restructuring measures for the company by trimming down the sales force and shutting down some factories overseas to sustain their current profits.
Another strategy is through the company move to seek out exclusivity among their multinational suppliers and trimming down sponsorship deals. This is brought about by the priority of secrecy of technological advances that the company may have as well as to avoid their competitors from copying new products and concepts. But this move by Nike is contrasted by the own suppliers diversification schemes. The company has also been experiencing a repercussion in its current marketing strategies which promptly worked to their advantage in the past decades.
Nowadays, the company became very known that it reached the point where everybody is into it and it appears not unique anymore, especially with the younger segments of the market which accounts for most of the company’s cash cows. The changing preferences of their key market demographic prompted the company to rethink their strategies. They also have realized that they have foregone several market opportunities and underestimated threats.
Nike then is working hard in order to further analyze the market and set out company goals according to what the consumers want. This way they could better sustain Nike’s growth and position themselves in a conventional way. The company saw that there is a current need to narrow down the saturated brand instead of just lurking ahead and eating itself from within. This new strategy is the rationale behind Nike’s acquisition of smaller company brands in order to cater to the lower price sensitive segments of the market.
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