It invests in research and development, to learn about customers’ taste and fashion trends. The combined cost leadership and differentiation generic strategies boost Nike’s performance in the global industry. Essay on Nike’s Market Positioning Strategies Through Nike’s years of existence in the business, it has gained much of the American athletic gear … See our Privacy Policy page to find out more about cookies or to switch them off. Nike targets customers from different age groups and middle / upper-middle or upper-income social groups. Let's stay in touch :), Your email address will not be published. The combined cost leadership and differentiation generic strategies boost Nike’s performance in the global industry” (Gregory). A suitable strategic financial objective based on this intensive growth strategy is to increase Nike’s market share through cutting-edge technologies integrated in the design of sports shoes, apparel and equipment. Porter’s (1980) generic strategies as determinants of strategic group membership and organizational performance. The Nike strategy is the writing on the wall for retailers large and small that have not figured out how to be collaborative and productive partners for the brands they carry. The reason why Nike, Inc. has gained a competitive advantage over other companies is that it undertakes an evaluation process, which involves evaluation of resources, clarification of goals, defining customers and examining competitors. To follow successfully the differentiation strategy Nike decided to focus on investing in their R&D department: they focus on individual benefits such as newest technology of producing clothes that let the skin breathe, footwear specific structure allowing to avoid or reduce injury and get the maximum comfort, new electronic devices helping people to stay healthy and active. Nike incorporates a business level strategy that most resembles a differentiation strategy. A differentiation strategy doesn't necessarily guarantee that consumers will find the value that separates your product from other, standard options. Through differentiation generic strategy, Nike positions its product offerings in a way to stand out and be different from the available alternatives. In order for Nike to sustain its global competitive position as the world’s leading designer, marketer and distributor of athletic footwear, apparel and accessories, it adopted a differentiation competitive strategy (Ghauri and Cateora, 2014). Firstly, it manufactures for three different segments of people: men, women and children. For example, the company integrates cutting-edge designs for its shoes. Product and usage-based positioning are used by Nike to create the image in mind of the consumers. The cost leadership generic competitive strategy empowers Nike to penetrate markets based on product affordability. Additionally, differentiation strategies are most powerful when buyer needs and preferences are too diverse to be satisfied by one product. SWOT analysis – Here is the SWOT analysis of Nike. For creating such value it uses the following resources – This generic competitive strategy helped the company regain its competitiveness, especially against Adidas. Strategy and Competitors. Factors such as quality, performance, reliability, competitive pricing, connect with the consumer plays the critical role for the companies operating in this business. There are 697 Nike brand factory stores, 106 inline stores and 99 converse stores and 29 Hurley stores globally. Segmentation, targeting, positioning in the Marketing strategy of Nike –, Competitive advantage in the Marketing strategy of Nike –, BCG Matrix in the Marketing strategy of Nike –, Distribution strategy in the Marketing strategy of Nike –, Brand equity in the Marketing strategy of Nike –, Competitive analysis in the Marketing strategy of Nike –, Market analysis in the Marketing strategy of Nike –, Customer analysis in the Marketing strategy of Nike –, What is coaching? Definition: Differentiation strategy, as the name suggests, is the strategy that aims to distinguish a product or service, from other similar products, offered by the competitors in the market.It entails development of a product or service, that is unique for the customers, in terms of product design, features, brand image, quality, or customer service. Nike’s primary strategy that is the reason for its unique value proposition is its innovativeness. Their latest boots, of course, are made of the most perfect materials. … For example, Nike’s mission statement highlights innovation applied through new designs for shoes and related products. The athletic wear brand announced yesterday a plan to focus its organizational resources going forward on 40 key retail partners and its own consumer direct efforts while pulling back from “undifferentiated” channels of distribution. The adoption of differentiation as a secondary generic strategy allows Nike to expand the customer base by emphasizing over the unique product features. Differentiation strategy Nike relies more on the differentiation strategy and presumably it is the strategy where they excel. Nike’s differentiation strategy is to establish the company as the standard in athletic wear. Differentiation strategy … Lego It may seem now like a foregone conclusion that The Lego Movie would be a huge hit, but anyone who’s seen a great book, comic or toy turns into a terrible movie knows better. Customers of Nike ranges from individual customers to companies. It is why innovation is a core focus for Nike and its rivals like Adidas and Under Armour. A value proposition is something a company provide its target customers that help in giving them a better result of choosing the company. It is a brand made for the youth and its logo and slogan reflect the same young energy. In the late 1990s, Nike reduced costs and the selling prices of its athletic shoes and other products. Nike has special marketing tactics and has been dominating the whole sports market already for decades. Nike uses differentiation in combination with the cost leadership strategy to achieve growth objectives. Its strategy is based on innovation, as NIKE tries continuously to balance its products between sport and fashion. Nike, Inc. is a marketer of sports apparel and athletic shoes. So I see this less as a bold move and more a strategic necessity. Athleisure products have grown increasingly popular in recent years. March 6, 2018 By Hitesh Bhasin Tagged With: Strategic Marketing Articles. Nike had regained control of the market in both the footwear and ... Current Strategies i. Nike had regained control of the market in both the footwear and ... Current Strategies i. 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. Strategies of Nike. However, the saturation of Nike stores and retailers around the world means that this intensive strategy has only a supporting role in the company’s growth. In this strategy, the company grows by increasing sales revenues in existing markets. The combined cost leadership and differentiation generic strategies boost Nike’s performance in the global industry” (Gregory). In the late 1990s, Nike reduced costs and the selling prices of its athletic shoes and other products. Nike Inc. practice the form follows value. The main objective of this intensive growth plan is to expand the market share of Shoe Company by integrating the latest technologies in the design and quality of its sports shoes (Gregory, 2017). “ Also, Nike’s differentiation generic strategy provides unique products. Through product innovation, technology development, and high quality products, they are able to differentiate themselves from competitors and build their brand image. Product Development. This can be a summation of their competitive advantage: their brand name and the high quality product. Nike has subsidiaries such as Converse, Hurley and Jordan for driving growth with the help of the different brands. Leadership and Differentiation Strategies Laura Allard November 21, 2010 William Hogan Management Cases Upper Iowa University Abstract This paper discusses Low-Cost Leadership and Differentiation business strategies.The paper explains what each strategy is and how they can be applied, utilized and maximized as strategies for a company. Founded in 1964, Nike Inc. has grown to become one of the biggest players in the global athletic shoes, apparel and equipment market. Macro Analysis PESTLE Analysis is the framework used to scan the organisation's external macro environment (OxLearn, 2013). PESTLE standing for Political, Economic, Social, Technological, Legal and Environmental. Nike’s strong focus on innovation is tied to its business strategy. The major threat to Nike is the imitation that goes hand in hand in various markets which are affecting its revenues and businesses. The competitive strategy that Nike introduced at the end of the 1990's concentrates on honing the focus of our marketing strategies and product offerings through product differentiation. Nike spends more than most companies in the industry on R&D in order to differentiate its athletic shoes from its competitors in terms of performance. For example, the company integrates cutting-edge designs for its shoes. Types and benefits, Value Added Tax – Definition, Meaning, Examples, Advantages and Disadvantages of VAT. Nike Marketing Strategy #2: The ‘Hit the Road Jack’ Hack that Helped Phil Knight Generate Over $1B in 15 Years. Varadarajan, P., & Dillon, W. R. (1982). A strategic objective based on the cost leadership generic strategy is to grow the company’s competitive advantage through new technologies to reduce production costs. For example, the company integrates cutting-edge designs for its shoes. The Nike brand and its offering are Stars in the BCG matrix while Converse, Hurley and Jordan are the question mark in the BCG matrix due to their presence in the limited countries. Implementation of brand differentiation strategy is allowed by Nike’s brand name which is a tangible but important factor to ensure future success and maintain its current leadership and market share. Market Penetration. NIKE’s mission statement is very straightforward. Intensive growth strategies: A closer examination. Thus, this intensive strategy supports Nike’s differentiation generic competitive strategy via product innovation. For example, Nike increases its stores and retailers in the United States to sell more athletic shoes to American consumers. In the Nike world it’s all about brand and brand doesn’t benefit from a lack of differentiation or association with weak partners. Nike’s secondary intensive growth strategy is market penetration. Nike believes the “pyramid influence” that the preferences of a small percentage of top athletes influence the product and brand choice. This severe competition made Nike to do its best and to be a winner in the vast market. Nike’s primary intensive growth strategy is product development. Business Strategy We use customer loyalty to distinguish ourselves from our competition. This is how they work, the design is super innovative and this does not only refer to the boots. The generic strategy trap. Before this, the sentence “It was a 90-minute infomercial and it was awesome” could never have been written. It also gives endless chances for customer segmentation and product differentiation, the pillars of any marketing strategy. It is these qualities that attract consumers to them. Competitive Advantage Through Information-Intensive Strategies. Focused differentiation: Nike also pursues focused differentiation strategy where it focuses on serving the sports segment by providing the best sports products than other players in the segment. Aside from foot wear, the company boasts of products such as clothing, equipment, and even accessories. The generic business strategy for NIKE is a product differentiation strategy. Alongside product development, the company applies the market development intensive growth strategy by investing in new technologies to penetrate new market segments, such as segments composed of bodybuilders. NEW YORK (May 5, 2010) – Today NIKE, Inc. (NYSE: NKE) unveiled its strategy and key initiatives to achieve sustainable, long-term growth across its global portfolio of brands and businesses. To keep its position and competitive advantage, Nike must ensure that its generic strategy and intensive growth strategies are always suited to current business conditions. Starting from its Swoosh logo to the famous ‘Just Do it Slogan’, these are important factors differentiating it from its competitors. Nike implemented this intensive strategy in its early years, such as when it introduced apparel and sports equipment to its product mix. Nike always was the good competitor for the other companies continuously. By focusing on their product line, they are able to produce high quality products that meet customer expectations. Market Development. People are looking for stylish and durable products. Nike’s differentiation generic strategy provides unique products. As a result, its products have become the favorite of the serious athlete. The product differentiation attributes that Nike pays great attention to are the uncanny product features and the timing of introducing their products to market. Nike competes with the company like Lululemon, Puma, Adidas, V.F Corp., athletic UNIQLO and many others. Nike Inc. uses a combination strategy for its competitive advantage. Cite this page. Business Strategy We use customer loyalty to distinguish ourselves from our competition. Hire a subject expert to help you with Nike’s Market Positioning Strategies. Strong product portfolio:  Nike have strong product portfolio as being present in various interrelated business segments is helping the company in retaining its customers and provide a bundled products to them. The basic strategy of Nike is to provide the customers with good quality products. Mission- “To bring inspiration and innovation to every athlete in the world”. Athleisure products have grown increasingly popular in recent years. Also, Nike is in the industry which is by and large affected by the product life cycle which means that sometimes it’s very difficult for the company to respond to the fad timely. Differentiation strategy by Nike is used to gain market share advantage in the broad foot ware market. Diversification is the least significant in Nike’s intensive strategies for growth. For example, Nike enters new markets in Africa and the Middle East to increase its shoe sales revenues. Nike spends more than most companies in the industry on R&D in order to differentiate its athletic shoes from its competitors in terms of performance. Nike receives footwear from more than 140 factories located in 13 countries across the globe. NIKE’sstrategy is consistent with its business level strategy of product differentiation and expansion.In this scenario NIKE will embrace the key success factor of it distinctive marketing capabilities,innovation and distribution capability.Thus expansion in the emerging new markets and new segments of consumers will providegrowth opportunities for NIKE.The scenarios explained above are … In product development, these products remain attractive despite changing consumer preferences. Nike’s marketing strategy has remained a subject of study. Nike Inc.’s generic strategy (based on Michael Porter’s model) is appropriate for its diverse product lines, ensuring competitive advantage. Required fields are marked *, Copyright © 2020 Marketing91 All Rights Reserved, Marketing Strategy of Nike – Nike Marketing Strategy. This strategy involves developing new businesses to achieve growth. Nike’s differentiation generic strategy provides unique products. In contrast, Nike, Inc. uses the Leader R&D strategy as detailed below. Your email address will not be published. New evidence in the generic strategy and business performance debate: A research note. Parnell, J. The lemonade stand owner represents the epitome of the scrappy entrepreneur. Also, Nike’s differentiation generic strategy provides unique products. Overall cost leadership is not something that Nike looks to utilize. For example, the company integrates cutting-edge designs for its shoes. We are perceived as “fancy” to most manufacturers in the industry. Organizational Structure Characteristics (Analysis), Nike Inc. Five Forces Analysis (Porter’s Model), Nike Inc. We use cookies for website functionality and to combat advertising fraud. Versatility as the strength of Nike goes beyond its basic function of impact protection such that Nike can shape and tuned to cater the demands of athletes in a detailed manner. It uses separate campaign or strategy to cap the market potential of the different segments.Targeting is the important aspect of the marketing strategy, especially when a company is in different businesses. Across the globe sentence “ it was awesome ” could never have been.!, apparel and athletic shoes and other products, as Nike tries to. Help in giving them a better result of choosing the company enter markets! The global industry ” ( Gregory ) may not be reproduced, distributed or. 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