Questions:
• What are the general environmental forces impacting Nike? Use a model to assist in your analysis?
• How strong are the competitive forces in the movie rental marketplace? Do five-forces analysis to support your answer.
• What forces are driving changes in the sports shoe industry? Are the combined impacts of these driving forces likely to be favorable or unfavorable in term of their effects on competitive intensity and future industry profitability?
• Using an appropriate model explain Nike’s strengths and weaknesses. Evaluate capabilities that will give the organization sustainable competitive advantage. What key factors will determine the company’s success in the sports shoe industry in the next 3-5 years?
• What is Nike’s strategy? Which of the five generic competitive strategies fit the competitive approach that Nike is taking? What type of competitive advantage is Nike trying to achieve?
• What does a SWOT analysis of Nike reveal about the overall attractiveness of its situation?
• What 2-3 top priority issues does Nike management need to address
• What recommendations would you make to Nike’s CEO? At a minimum, your recommendations should cover what to do about each of the top priority issues identified in question 9.
What are the general environmental forces impacting Nike? Use a model to assist in your analysis.
The general environment forces which impact NIKE are the External Factors and Threats
How strong are the competitive forces in the movie rental marketplace? Do five-forces analysis to support your answer.
The competitive forces which affect the business can be described with the above diagram.
The major 5 components of the forces are
Barriers to Entry are the factor which shows the difficulty for any new upcoming brand to enter the market. The various factors which affect the barriers to entry are as bellow:-
Knowledge of the product should be studied in a detailed manner. It is important to understand the all the factors affecting the growth and success of the product (David Hunger & Thomas. L. Wheelen, 2011)
Cost Advantage of the product means the cost of the product and what advantage can it provide to the customers in the market. (McCarthey, 1997)It is very essential to fix an appropriate cost for the product so that it proves to be an advantage for the company.
The technology used to manufacture the new product should be the latest and the new technology. (David Hunger & Thomas. L. Wheelen, 2011) If the technology is not updated it will affect the manufacturing as well as the flow of the product sale.
Buyers are the people who play a vital role in the organization history. It is important to have a good amount of buyers in the market; it is also important that they are brand loyal and will continue to use the same product. (Bond, Smith,1996)
Numbers of customers in the market decide the growth of the product. It is essential to have a right group of buyers which will create an image for the product in the market. (McCarthey, 1997) The increasing number of customers will help in the growth of the company.
Buying volumes are the customers who help in the retail and wholesale nature of the business. (David Hunger & Thomas. L. Wheelen, 2011) It is necessary for the organization to understand who will do the bulk selling of the product for the organization.
Differentiation should be created in the product which will help the customer to understand that your product is different from the other product. (Bond, Smith,1996)Differentiation strategy is the best strategy that can be used by the company while entering in the market.
Price elasticity means how price elastic can the product be. (David Hunger & Thomas. L. Wheelen, 2011) It is necessary to understand how much a price can be stretch for the buyer.
Switching cost is the cost which decides the cost of the product when the customer switches its choice from one product to another product.
Number of suppliers is the people who will help the product to reach the correct market. When a product is new it is necessary to supply the product in the right market so as to ensure that the customers are aware about the new product entry. (David Hunger & Thomas. L. Wheelen, 2011)
Size of suppliers means how big is the supplier and how can he take risk of keeping the stock of the new product with him. (McCarthey, 1997) This will decide how big his reach in the market is and how wide can he make the product reach.
Ability to substitute means the ability of the new product to create a substitute in the minds of the customers. (David Hunger & Thomas. L. Wheelen, 2011) It is necessary for the new product to understand the requirement and the expectations of the customer and to react accordingly.
When a new product is launch it is very important that the company provides unique service to the customers with their new product. This will help in creating difference in the minds of customer. (Bond, Smith,1996) Unique service will also include free home delivery service, or cash on delivery etc.
Competitive rivalry means competition creating a difference and a rivalry against your product in the market.
Number of competitors will decide the strength of the competitive rivalry. It is necessary to understand how strong our competitive and how the competitive rivalry will affect their organization are. (Bond, Smith, 1996)
Exit barriers means if a company decides to shut down what will be the difficulties that they will have to face during exit. This will include the machinery cost, the cost invested in the manufactured goods etc.
Industry concentration means how the industry concentrates on new product and one product for its success. (Bond, Smith,1996)It is important to understand the correct market where the demand rises for the product. The company should ensure that the market should never have shortage of the product.
Diversity of competitors is a factor that shows how diversity of the competitor is affecting the growth of our product.
Substitutes of the product are the other products which can take place of our product in case our product cannot fulfil the customers’ expectations. In case of sport shows if NIKE is unable in certain market or it proves to be a default there are many other products like Reebok, puma etc. who can be a substitute for NIKE. (Bond, Smith, 1996)
A customer uses a substitute in case the current product cannot be available, the substitute performance will decide whether the customer wants to continue with the substitute product or want to come back with the previous product.
What forces are driving changes in the sports shoe industry? Are the combined impacts of these driving forces likely to be favorable or unfavorable in term of their effects on competitive intensity and future industry profitability?
Using an appropriate model explain Nike’s strengths and weaknesses. Evaluate capabilities that will give the organization sustainable competitive advantage. What key factors will determine the company’s success in the sports shoe industry in the next 3-5 years?
The business model describes how the organization will operate in creating, communication and delivering the value to the end consumers in order to achieve organizational objectives. The business model gives detailed description about different organizational operations. It describes about company’s mission and vision, financial planning along with different financial parameters description and sources of funds, technologies used, marketing mix strategies, product details and services offered and about the future plans. (Bond, Smith,1996)It also provides detailed information about the business environment in which the firms operates and analysis of the competition in industry along with their core competence and their competitive strategies.
The main strength of the NIKE customers is they are brand loyal. The customers of NIKE tend to stay with NIKE for a long time and are satisfied customers.
The customers of NIKE are aware about the new product range and are always updated about the discounts or offers which are carried out by the NIKE outlets.
NIKE is exclusive of sportswear, they include sports shoes, sport accessories etc. But according to my study they should exclusively remain for sports because they will lose their identity if they try to expand their range outside sports.
Prices of NIKE are a bit at a higher range. This should come down a bit so that they acquire middle class crowd also. (Bond, Smith,1996)They should of decrease the price too much because if they do so even the lower class people will start using so and the brand will get affected. If they want to spread their range at the ground level they can do it with certain products and see the response before doing it for all the products.
What is Nike’s strategy? Which of the five generic competitive strategies fit the competitive approach that Nike is taking? What type of competitive advantage is Nike trying to achieve?
Strategic Management and diversification basically relates to how an organisation works on developing its strategies and try to improve the status as well as profitability of the organisation. (McCarthey, 1997) Strategic management helps to understand the business and in which aspects the business should involve changes. It is very important for the business to change according to the upgrading market and change the product accordingly. (David Hunger & Thomas. L. Wheelen, 2011) Diversification is a type of strategy which involves how the product can be diversified than the other product and features. It differentiates the product by adding new product features or by adding technology to it. Strategic management also focuses on research and development along with the other strategies. They involve focus strategy where the business is focus on a particular target market. Strategic management also helps to gain reputation in the market about the business and to gin customer loyalty. It also helps the business to understand how socially the business is important in terms of strategic decision making. Strategic management is basically strategy formulation; this is done both externally and internally to the organisation. (Bond, Smith,1996)Strategies are designed to improve the business performances with the help of external opportunities. It basically focuses on accepting the opportunities and decreasing the threats of the business. It also involves scanning of the environment and studying the changes happening in the environment so as to change our business prospects accordingly. (David Hunger & Thomas. L. Wheelen, 2011) Corporate diversification includes the strategies which can capture or improve the risk involve in the businesses, should also analyse the returns on the business, the strategy should determine the dispersion of the returns which are captured in the reports. The corporate strategies should maximize the value incurred in the business. It should also concentrate on the sufficiency of the revenue.
What does a SWOT analysis of Nike reveal about the overall attractiveness of its situation?
SWOT Analysis of the Nike Reveals about all the factors of NIKE’s production and their working. The attractive situation which they have created in the minds of the customers as well as internally within the organization is the Recycle Policy which they follow. (Bond, Smith,1996) All the products that are manufactured with NIKE use materials which can be recycled. This is very attractive in customer point of view because most of the customers prefer buying products which are eco-friendly.
They will also feel that by buying products which can be recycled they are helping the organization and the environment to be eco-friendly and will feel positive about the same. This will increase the brand loyalty of the customers towards the product.
What 2-3 top priority issues does Nike management need to address
2-3 top priority issue which NIKE management should address is
What recommendations would you make to Nike’s CEO? At a minimum, your recommendations should cover what to do about each of the top priority issues identified in question 9.
Recommendation: – there should be a feedback system wherein the exclusive outlets of NIKE can gather feedback from the customers about their satisfaction level from the current product and what other changes will they like to make in the product.
This will also help the company to understand what changes they can make in the upgraded product to make it better and to fulfill the customer demands. This will help increase the brand loyalty of the customers towards the brand and the customer will also feel happy when the see the company asking their feedback on the products they sell.
Understanding the wear and tear of the product can be done by including some questions in the questionnaire of the feedback form. This will help the company to understand what is the life span of the product starting from when the customer buys the product till the time he discards the product. This can decide upon the manufacturing cycle of the certain product. We can also judge the time when the customers will again walking at the outlet to buy the same product. Since it is very necessary that the customer walkin frequency should be often the company can think of new product variety or to decrease the life span.
Conclusion
Strategic management also focuses on research and development along with the other strategies. They involve focus strategy where the business is focus on a particular target market. Strategic management also helps to gain reputation in the market about the business and to gin customer loyalty. It also helps the business to understand how socially the business is important in terms of strategic decision making. Strategic management is basically strategy formulation; this is done both externally and internally to the organisation.Strategies are designed to improve the business performances with the help of external opportunities. Hence NIKE should study various strategic pillars and decide upon the strategy which should be used for the growth and progress of the organisation and to give a perfect competition to the competitors.
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