For a number of years, Nike Company has been the global frontrunner of athletic shoe sales. Nike Inc. keeps on delivering strong growth. Technological innovation is the company’s growth engine as it continues fueling their success as well as challenging them. The company has placed an emphasis on both the design of its products and the manufacturing processes. The spirit of innovation and constant research has helped Nike Inc. to maintain its lead in the industry and stay ahead of competitors. The company employs designers with a solid engineering background; as such the company retains a competitive advantage by having the best personnel. To encourage innovation among employees the company gives freedom of trying out radical designs which competitors overlook. The Air insole design is one such example.
In essence, innovation facilitates new heights in the company’s performance and raises the bar for their industry. The company center sustainable innovation on their biggest areas of risk and opportunity.They have strived to be competitive through incremental and radical innovation. Nike’s marketing and innovation processes offer a glimpse of their best practices of value co-creation with their clients (Ramaswamy 9). In each sustainability challenge, the company sees a new business opportunity. For instance, Nike has developed superior materials like water-based adhesives by green chemistry that similarly delivers safety and health benefits to the employees. In addition, the company develops and utilizes more sustainable and recycled materials as well as leaner manufacturing processes. Moreover, Nike Company introduced their initial product made by the use of innovative Flyknit technology as well as manufacturing process in 2012. In fact, in 2013, Nike Inc. launched their Flyknit Lunar 1+ running shoe that decreases footwear waste significantly. It is worth noting that the company’s capability to use disruptive technologies such as Flyknit at scale increases their sustainability benefits.
The athletic footwear and apparel industry is highly competitive within the United States and the entire world. Nike Inc. competes globally with numerous competitors such as the sports equipment companies and athletic and leisure apparel companies. The company’s competitors include companies such as Coach, Inc., Puma, Adidas, PVH Corp., Jones Apparel Group Inc., Ross Stores, Inc., among others. The benefit or value that Nike offers to their consumers and their inability to be easily replicated are the two key attributes of their competency (Deng 203). The customers have for a long period associated the image of the company with high-quality products as a result of Nike associating motivational slogans and star athletes with marketing campaigns, which stress sportsmanship, competition, and fitness. The rapid changes in consumer preferences and technology constitute considerable risk factors in the operations of Nike Inc. To help market their products, Nike Inc. contract with influential and prominent coaches, athletes, sports leagues, colleges, and teams to endorse their brands as well as use their products. What’s more, the company sponsors clinics and events as a strategy of marketing their products.
Product innovation has helped Nike stay ahead of the technology curve. Nike has attracted millions of customers worldwide by giving endorsements to elite professional athletes like Tiger Woods, Lebron James, Roger Federer, and Michael Jordan among others. These athletes promote the Company by wearing their brands from head to toe. Nike FuelBand is the recent wristband launched by the company. (Deng 213) It allows users to connect to their smartphones and engage in competitions with their friends. Nike has promoted its brands in different demographic regions by providing different prices to their products. Such marketing strategy has made Nike more versatile than its competitors. Nike Company also has a strong cash flow. The substantial cash flow is used to promote shareholder value. The popularity Nike has gained globally has enabled the company to succeed and beat its competitors in the sportswear market and other related items (Ramaswamy 46)
The commitment to high quality standards is another of Nike’s strategy. Nike ensures that both the materials used for the manufacture of its products and the craftsmanship are above board to guarantee the quality demanded and promised to its customers. To enforce its quality policy retailers are encouraged to accept any defective returns to avoid inconveniencing customers.
The corporate success of Nike has further been increased by the international marketing strategy. The Nike product line has been successful in international markets and has helped increase the company’s market base. The foreign markets have substantially increased the company’s sales, hence increased revenue.
The large internal structure coupled with their financial strength is yet another strength for Nike Inc. The company has been able to keep its production cost down without compromising on quality due to the advantages of economies of scale. With low cost of production the return on investment is high. As an industry leader the company the company is able to bargain for favorable prices for its raw materials. All of these factors translate to higher profits.
Works Cited
Deng, Tianbai. "“Just Done It”---Nike’s New Advertising Plan Facing Global Economic Crisis." International Journal of Business and Management 4.3 (2009): P102.
Ramaswamy, V. Co-creating value through customers' experiences: the Nike case. Strategy & Leadership, (2008). 36(5), 9-14.
