Nike Inc. was
established in the 1960s. Today, Nike is one of the major players in the industry
for sports shoes and clothing. The generic strategy defines how can a company
reach and preserves its competitiveness. The company’s growth strategy can show
that the company is focusing on making an innovative change to the business. In
order for Nike to keep its position and advantage in the industry, the company
must make sure that its strategies are always well matched to the present
business environments. The strategies that are used by Nike Inc.’s is the cost
leadership strategy and the differentiation generic strategy. For the
cost leadership strategy, Nike cuts production costs to offer consumers a lower
price for all of their products. To compete with Adidas, this cost leadership
strategy assisted the company gains back its competitiveness. For
differentiation strategy, Nike Inc. keeps creating inimitable products for their
consumers. The company mixes special cutting edge designs for their shoes. Both
the cost leadership strategy and the differentiation strategies can help the
company to improve as a whole. The cost leadership strategy is to help the
company to gain its competitiveness from present trends and lessen the costs. Moreover,
the goals for differentiation strategy is to increase the company’s profit from
shoes. Even though the company is trying to make
changes to improve themselves, there are still some issues that can hurt them. The
first issue would be the changes of the new lifestyle, such as the consumers are
becoming more health and fitness conscious. That means Nike Inc. have to reposition
themselves in the industry. Another issue is that the products might go out of
style. The company needs to follow the trend as close as possible. Also, Nike
needs to focus more on appeal the women consumers, since their purchasing power
is increasing, and they tend to spend more time and budget for shopping than men.
In addition, they need to beware of other strong competitors that are selling
similar sports clothing to target women.
Adidas is older than Nike, it was established in the 1940s. Adidas’s
strategies are very similar to Nike’s. Adidas is also use the
cost leadership strategy and the differentiation strategy, but Adidas focuses more on the
differentiation part. Innovate and create new products to compete with other
competitors in the industry is Adidas’s corporate level strategy. Moreover,
Adidas uses a multi brand strategy to give them the competitive advantage. To
keep an inimitable identity, the company has a diverse portfolio that helped
them to cater all parts of the market. Adidas spends most of their money on marketing
and distribution channels in different countries. The company also uses e commerce
to make purchase much more convenient for customers. Their supply chain is closely
communicated and hence it helps them to customize their products which appeal
to a wide range of customers. In addition, Adidas’s culture forces employees to
be innovative with the use of the latest technology to produce new products. By
using technologies, they produce products that improve performances of players.
The sports that the company focus on are football, basketball and training
small problems can turn into a disaster. The first issue that the company have would be making
products without considering the American tastes. America has a very different mindset comparing to Germany.
Adidas did not listen to the retailers’ and consumers’ feedback on what American
prefers. The company is now working to bring more American trend of its
products. Another issue is that Adidas lost endorsement deals
to its competitor, Nike. Michael
Jordan’s brand is still creating billions of dollars in profits for Nike.
Nike has endorsed more American sports players than Adidas does.
In addition, the
company’s product turnaround is very slow.