Nike's Economic Strategies

Improved Essays
Nike is one of the largest, most profitable companies in the world. Since their inception, they have been using different economic strategies to dominate their particular market. According to Michael Porter, competition in the industry, bargaining power of suppliers, bargaining power of consumers, the threat of new entrants into the market, and the threat of substitute products (1) are all economic forces that impact companies like Nike. For years, Nike has used various business strategies and marketing tools to minimize the impact that these forces have had on them, and have maximized profits as a reward.
Nike has long been known as the premier company in sportswear. Their use of high profile athletes in marketing promotions have helped them capture not only their consumers’ attention, but their business. Because of this, competition in the industry has for the most part been minimal. However, recently Adidas has taken a massive step forward with their marketing approach and footwear lines. Their sponsored athletes have become much more high-profile, and their casual wear has become much more affordable and diverse. As a result, Adidas’s stock has grown 65% over the last 12 months, including 20% in core markets such as North America, Western Europe, and China (2). This new competition
…show more content…
Nike recently received severe backlash from the media and from the public for having a large quantity of their products produced overseas in subpar working conditions (4). It presented a major public relations crisis that if not handled delicately, could have resulted in severe losses. However, Nike has since been able to recover from these hits to their image through positive marketing campaigns and that helped to paint the company in a better light. Because of this, their profitability has remained mostly unaffected, but the impact of consumer opinion proved to be quite

Related Documents

  • Improved Essays

    Nike Oligopoly Analysis

    • 424 Words
    • 2 Pages

    Industry and the organization As part of this project, we have selected the consumer apparel and footwear industry, which is represented by Nike Inc. About the company Nike Inc. is an American multinational corporation that designs, develops and markets sports footwear, apparel and accessories under its brand name. The company was founded in the year 1964 as Blue Ribbon Inc. , but was then named as Nike Inc. in 1970. The company is listed on New York Stock Exchange, under the ticker symbol of ‘NKE’, and is headquartered in Beaverton, Oregon. The dominance of the company in the industry can be cited from the fact that its brand sign ‘SWOOSH’ is valued at $19 Billion.…

    • 424 Words
    • 2 Pages
    Improved Essays
  • Decent Essays

    Nike Incorporation is the worlds leading sporting goods manufacturer. The company produces the sports goods all-inclusive: clothing, footwear, sports equipment and a lot more. The company headquartered in Beaverton, Oregon. Nike with its impressive performance impresses its founder; Bill Bowerman once said the sentence: "As long as you have a body, you are world athletes, and Nike will continue to develop grow."…

    • 219 Words
    • 1 Pages
    Decent Essays
  • Improved Essays

    Nike Stakeholder Analysis

    • 1018 Words
    • 5 Pages

    Nike has the following stakeholders, arranged according to the firm’s prioritization: customers, communities, employees, government, and interest groups. The customers is the stakeholder most important, the customer can help the company by purchasing products producing growth sales revenues with the customer being satisfied by the high quality product and building a relationship with the…

    • 1018 Words
    • 5 Pages
    Improved Essays
  • Improved Essays

    Nike Case Study

    • 970 Words
    • 4 Pages

    What might it have done differently, not just from a public relation perspective, but also from a policy perspective? Ans: Nike could have handled the publicity better, such as after the speech of Phill Knight to improve working conditions it should have done what it said but the problem continued without the Nike trying to solve the problem completely and not many actions toward solving it were done. Nike could have invested in trying to completely eradicate this problem and provide the standard working conditions and publicize this, which would improve its reputation and let Nike concentrate on other important things rather than negative…

    • 970 Words
    • 4 Pages
    Improved Essays
  • Superior Essays

    The company’s focus and vision is to first and foremost “serve the athlete” by providing superior products to the athletes. Nike, Inc. markets these products with intense focus on what an athlete desires, also a product that would suit the general population. The company recognizes that innovation will be what spurs the shift to sustainability. Nike, Inc. have developed three objectives that fall in line with their mission statement; Innovation to serve the athlete, innovation to grow the company and innovation to inspire the…

    • 1835 Words
    • 8 Pages
    Superior Essays
  • Superior Essays

    Typically, Nike is portrayed in a negative light under the public eye for their labor practices, working conditions, and the sometimes questionable athletes they endorse. It is a popular practice for the public to condemn Nike for things that they can only assume to be true; the fact of the matter is that Nike remains exceptionally conscious of its corporate social responsibility, and it strives to better itself as a company in various areas.…

    • 1376 Words
    • 6 Pages
    Superior Essays
  • Decent Essays

    Vertical Analysis Of Nike

    • 2199 Words
    • 9 Pages

    The accrued marketing and advertising change from 77 million to 133 million, causing 73% of growth rate in this account. The major reason for growth would be attributed to the World Cup in Brazil. Nike leaded up the world up by launching 10 team kits that achieving new landmark in performance and sustainability. The Vertical analysis give us the statistics data that 41.79% of total asset is financed by non-owner while 58.21 % of total asset is financed by owner. Compare to the data from 02013, NIKE Inc. tends to increase its financial leverage.…

    • 2199 Words
    • 9 Pages
    Decent Essays
  • Improved Essays

    Nike Executive Summary

    • 879 Words
    • 4 Pages

    EXECUTIVE SUMMARY This report focuses several aspect on how to uplift the sales of the product, we strike for innovation that grows the company, serves the athlete and to deliver inspiration to others. We will provide the elements of the 4 P’s which are price, promotion, place and product to improve the company NIKE designs, develops and markets high quality footwear, apparel, equipment and accessory products worldwide. NIKE, Inc. is dedicated to inspiring every athlete to reach their full potential. The company was founded on January 25, 1964, as Blue Ribbon Sports by Bill Bowerman and Phil Knight, and officially became Nike, Inc. on May 30, 1971.Nike sponsors many high-profile athletes and sports teams around the world, with the highly recognized trademarks of “Just Do It” and the Swoosh logo.…

    • 879 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    *”If you haive a body, you are an athlete.” Nike Company’s lays a lot of strategies to aim their immediate users, athletes and all sportsmen. These targeting techniques include product sponsorship by professional and well known athletic team, college sports team as well as celebrity athletes. This marketing strategy of Nike is particularly successful as of its capability to reach many athletes.…

    • 884 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    As a major competitor of Nike, Adidas needs to spend more money on advertising. In doing this, Adidas needs to be innovative. One way for Adidas to do this is by following the trends in technology.…

    • 899 Words
    • 4 Pages
    Improved Essays
  • Superior Essays

    Changes affecting customer behavior can ultimately affect sales of products. Nike targets the social values of achievement, self-actualization, individualism, and conformity with slogans as “Just Do It!” becoming a cornerstone of Nike advertisements. Because Nike targets individuals in athletic fields, they find it necessary to attack the emotions of success and self-fulfillment. Over the past few years Nike has faced a number of issues including problems with their corporate image and since the resignation of the CEO William Perez, Nike has managed to turn this around with new management and better marketing decisions.…

    • 1913 Words
    • 8 Pages
    Superior Essays
  • Improved Essays

    Nike Ethical Issues

    • 1380 Words
    • 6 Pages

    In a narrative format, discuss the key facts and critical issues in the case. Using valid peer-reviewed sources on the Internet, update any dated facts in this case with more current information. Nike has had bad publicity in the past with the workforce, low wage, abuse of workers, and scrutiny over not being concerned about the environment. The list of challenges they have faced relates to social responsibility, however, they stated they were guilty of those actions they, and asked how do we improve. Those efforts helped them better their publicity for the good and have made huge difference in the way the company is controlled and works behind the scenes now (Ferrell, Fraedrich, & Ferrell, 2011).…

    • 1380 Words
    • 6 Pages
    Improved Essays
  • Superior Essays

    Nike Case Study Summary

    • 1659 Words
    • 7 Pages

    On July 5, 2001, a portfolio manager at NorthPoint Group, Kimi Ford is considering buying some shares of Nike for the fund she manages, NorthPoint Large-Cap Fund. This fund mostly invests in Fortune 500 companies, and it’s top holdings include; ExxonMobil, General Motors, McDonald’s and 3M. Nike’s share price had declined since the beginning of the year. Since 1997, Nike’s revenues had plateaued around $9 billion, while net income had fallen from almost $800 million to $580 million, and their market share in athletic shoes had dropped from 48 percent in 1997 to 42 percent in 2000. In a meeting held on June 28, 2001, management announced plans to grow performance.…

    • 1659 Words
    • 7 Pages
    Superior Essays
  • Great Essays

    Nike Sweatshops Case Study

    • 1206 Words
    • 5 Pages

    Introduction Nike, Inc. is a supplier of footwear, clothing, sportswear, and equipment supplier based in the United States . Nike came into existence in 1964 as a company and the earlier name of the company was Blue Ribbon Sports. After being in operation for 10 years, Blue Ribbon sports changed its name to Nike in 1978. Nike is the name of the Greek winged goddess of Victory. After “displacing Adidas in the early 1980s and Reebok in the early 1990s, Nike has become the largest and most important athletic shoe company in the world” (Locke, Qin & Brause, 2006).…

    • 1206 Words
    • 5 Pages
    Great Essays
  • Great Essays

    Public relations entails the process of managing how information is spread between organizations and the public (Holtz,1999) . It often involves an organization gaining exposure to the public through the use of topics of interest as well as news item which do not need direct payment . The aim of having a public relations strategy is to gradually persuade the prospective customers , members of the public , partners , employees , investors and the stakeholders to uphold a particular perception about the company’s leaderships , products and business decisions(Holtz,1999) . Nike Inc which is based in Oregon , United States , is the globe’s leading designer , marketer as well as distributor of…

    • 1425 Words
    • 6 Pages
    Great Essays