Originally known as Blue Ribbon Sports, Nike was founded by Phil Knight and Bill Bowerman as an American Multinational Corporation. It has its headquarters situated in Beaverton, Oregon, US. Let’s know about What Is Nike Competitive Advantages?
Nike is supposed to be the world’s biggest purveyor of athletic goods such as shoes, footwear, apparel, and sports equipment. Bill Bowerman was a track and field coach at the University of Oregon and Phil Knight was his former student.
The company’s first retail outlet was opened in 1966 and it went public in 1971. And in today’s world Nike has successfully made its mark as the leading manufacturer of sports apparel and footwear in the industry. Its iconic logo, the ‘Swoosh’ is globally recognized in the current scenario.
Vision and Mission: To bring inspiration and innovation to every athlete in the world. If you have a body you are an athlete.
Competitive Advantages of Nike: What are they?
Nike’s journey towards its massive success did not start with a bed of roses. The invincible abilities of the company resulted in Nike becoming the giant of the athletics accessories industry.
This invincible ability consists of effective marketing strategies, a diverse range of great quality products, good supply chain management, and an unstoppable workforce. Nike is one of those giants that have been able to establish both productivity and differential advantage.
The secret behind this achievement of Nike can be better understood by Porter’s Five Forces Model of Competitive Advantages.
1. Threat of new entrants: There might have been many other rivals in the industry but Nike never lost its position due to its well-established brand name in the market. The regular rivals among athlete wear manufacturers are not an issue to be dealt with. But it is the newcomers with several competitive strategies which might affect the graph adversely.
The new entrants in the market create a threat in the industry as you never know who might take over the industry overnight. They are well aware of the latest tactics which have been in use in the market and some of them even try to experiment with new formulas in the industry.
2. Bargaining power of the consumer: Consumers do not spend on a specific product exclusively for just its physical traits. This is so because it is easily possible that Nike’s product might be just as good as any other brand’s product.
There can be other brands too which manufacture the same quality products. So the question arises, why would a customer be convinced to buy this specific brand’s product only? There are a lot of other points which come into the scene. The purchase of a product depends on various factors such as the position its brand name holds in society, its experience and quality, its superiority of distinct qualities, and the emotional satisfaction it can provide to the consumer.
This is the reason why Nike has been investing heavily in the advertisement and marketing of its brand value. It has also been successful in designing products according to the taste of its customers and grabbing all their affection towards its products.
3. Bargaining power of the supplier: Far Eastern countries have been one of the biggest suppliers working with Nike and they have been a huge backbone to them. Their production facility has given a boost to Nike’s economy.
However, the relations with the Far East now seem to be struggling as they are beginning to produce their goods. There have also been delays in shipping and manufacturing due to socio-political causes. But Nike has stood strong against all odds and created a niche of its own.
4. Threat of substitute products: Since Nike is a sportswear manufacturer its maximum sale is targeted towards professional athletes and sportspersons. So as long as it is dealing with the professionals, they are not going to compromise with substitute products. Nike will be their first choice when it comes to professionals.
5. Competitive Rivalry: When it comes to rivals, Nike is not alone in the industry. Still, it thrives and flourishes due to its cost-effective advantages over rivalry. The economy giant of Nike has proved to be a foundation for its worldwide distribution and marketing.
In the year 2009, the main players in the industry were Nike and Adidas. Though Adidas alone could not level up to a giant like Nike, it merged with Reebok. Reebok recently introduced a wide variety of shoe choices and sponsored sports leagues.
Frequently Asked Questions:
1. What are the subsidiary brands of Nike?
The subsidiary brands of Nike include Hurley, Jordan, Converse, and Cole Hann.
2. Which brands are the present competitors of Nike?
The present competitors of Nike are Puma and Adidas.
3. What is the current brand value of Nike?
The current brand value of Nike from the year 2016 to 2021 is approximately estimated to be 30.44 billion US dollars.
CONCLUSION
Nike is one of the most known names in the automobile industry. The reason for this is the competitive advantage that it holds over the others.
These competitive advantages include innovations, customer satisfaction, and a strong supply chain. These advantages have even kept them in a stable position despite the difficult situation that the industry is going through! Hence, one can quite clearly get as to why they are at the top!
