Essay Analysis of Nike by Porter Five Forces Model

1433 Words Aug 13th, 2010 6 Pages
Family name Bao First name Cheng ( Steven )
The analysis of Nike in athletic footwear market based on porter’s Five forces model

1. Introduction
One and a half months ago, the biggest athletic event in the world ultimately drew its curtains after a pitched one-month-long battle, which saw thirty-two teams vying for the roll of honor of being crowned the final kings of football – the World Champions – and earn bragging rights for four years at least. It was not only a world war among 32 national teams, but also a white war among several major sponsors. Concentrating on those big-name stars, spectators would easily find that Adidas and Nike became the largest winners among various brands, obtaining the
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Though Nike cannot wantonly raise the price of their products under stress of other competitors, the earning yield and its market position can hardly be influenced by the minority group of suppliers and customers.

Another threat is coming from the potential new entrants. However, the high barrier to entry, as well as the limited remaining market share and market growth, gives rise to the flinch of other manufactors. With the lowest market share and lowest market growth, new entrants are just to keep the dogs as the BCG matrix shows(BCG Matrix, 1968).

A brief utimateness can be drawn up that the destructive power outside the footwear industry hardly exists and can seldom influence the market share and profitability of Nike.

2.3 The rivalry among existing competitors

According to the Commerzbank Equity Research(28th Feb,2008), NIKE was the clear market leader, with 31% of the global athletic footwear market in 2007, followed by ADIDAS and PUMA, occupying 16% and 7% of the market respectively. It is true that NIKE is still the leader in the athletic footwear market though the challenges are enormous.

According to the Black Book-Nike & Reebok(Sanford C.Bernstein & Co.LLC, 2001), “one of the company’s biggest competitive advantages is the focus, dedication and relative homogeneity of the manager team, though it is occasionally a weakness as well.” Yet

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