Basically their position and differentiation is quite simple: Nike offers high quality sporting goods which their audience is willing to pay a higher premium for. In this generic strategy, the company minimizes production costs to maximize profitability or reduce selling prices. However, over the period of time, it extended its product line to apparels and accessories like clothing, socks, digital devices, eyewear, and equipment for sports. It invests in research and development, to learn about customers’ taste and fashion trends. Nike has achieved compounded annual growth rate (CAGR) of 11% for the period of 5 years i.e. This intensive strategy involves the introduction of new products to grow sales revenues. Additionally, differentiation strategies are most powerful when buyer needs and preferences are too diverse to be satisfied by one product. We realize that the team-mentality that captured the spirit of athletics in the late 1980's and early 1990's has been replaced by a sense of individualism. The company uses its social media accounts to connect directly with their customers and they … Nike's product differentiation strategy is different from its competitors. Simply put, product differentiation is a business strategy in which a firms attempt to gain a competitive advantage by increasing the willingness of customers to pay for the products or services they have to offer. This can be a summation of their competitive advantage: their brand name and the high quality product. The following are the generic competitive strategies implemented in Nike’s combination strategy: Nike’s cost leadership generic strategy sustains competitive advantage based on costs. Competitive Advantage Through Information-Intensive Strategies. We use cookies for website functionality and to combat advertising fraud. Through product innovation, technology development, and high quality products, they are able to differentiate themselves from competitors and build their brand image. Implementation of brand differentiation strategy is allowed by Nike’s brand name which is a tangible but important factor to ensure future success and maintain its current leadership and market share. Essay on Nike’s Market Positioning Strategies Through Nike’s years of existence in the business, it has gained much of the American athletic gear … The Nike strategy is the writing on the wall for retailers large and small that have not figured out how to be collaborative and productive partners for the brands they carry. Based on that strategy, Nike produces its products for athletics in three ways. This type of strategy includes two or more of the generic strategies from Porter’s model. The main objective of this intensive growth plan is to expand the market share of Shoe Company by integrating the latest technologies in the design and quality of its sports shoes (Gregory, 2017). NIKE – Marketing StrategiesReebok and Adidas offer the most intense brand competition. A. The competitive strategy that Nike introduced at the end of the 1990's concentrates on honing the focus of our marketing strategies and product offerings through product differentiation. We are perceived as “fancy” to most manufacturers in the industry. Focused differentiation: Nike also pursues focused differentiation strategy where it focuses on serving the sports segment by providing the best sports products than other players in the segment. A strategic objective based on the cost leadership generic strategy is to grow the company’s competitive advantage through new technologies to reduce production costs. The strategy of Nike is to controlling the marginal customer accounts, reduction of input costs and tight control of labour costs, lower distribution costs. Nike quality and durability is a critical part of their strategy to be able to command high prices for their products. Being the experienced brand with strong foothold, the company uses differentiation as a tool to reduce the pressure by other brands. Porter’s (1980) generic strategies as determinants of strategic group membership and organizational performance. One of Nike’s supporting intensive growth strategies is market development. The product differentiation attributes that Nike pays great attention to are the uncanny product features and the timing of introducing their products to market. Different coaching styles, What is Corporate Training? Business segments in which Nike operates has a large number of local & national players. In the late 1990s, Nike reduced costs and the selling prices of its athletic shoes and other products. As a result, its products have become the favorite of the serious athlete. Nike competes with the company like Lululemon, Puma, Adidas, V.F Corp., athletic UNIQLO and many others. Nike’s primary intensive growth strategy is product development. Nike’s product line is not wide: they offer athletic shoes, workout clothes and a very limited number of additional products. Nike employs many strategies and techniques such as strategic management tools and models, product differentiation, and proper distribution channels. NEW YORK (May 5, 2010) – Today NIKE, Inc. (NYSE: NKE) unveiled its strategy and key initiatives to achieve sustainable, long-term growth across its global portfolio of brands and businesses. A strategic financial objective based on this intensive growth strategy is to improve Nike’s financial risk by entering other industries. Organizational Structure Characteristics (Analysis), Nike Inc. Five Forces Analysis (Porter’s Model), Nike Inc. For example, if your product is more expensive than the competitor selling the standard product, and the consumer doesn't see the added value in your product, they'll likely choose the cheaper option. Required fields are marked *, Copyright © 2020 Marketing91 All Rights Reserved, Marketing Strategy of Nike – Nike Marketing Strategy. SWOT analysis – Here is the SWOT analysis of Nike.