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Write a 4 pages paper on nike: the athletic footwear company. The aim of this discussion is to analyze the Nike footwear Company in relation to the Industry – based considerations (the dynamic of five
Write a 4 pages paper on nike: the athletic footwear company. The aim of this discussion is to analyze the Nike footwear Company in relation to the Industry – based considerations (the dynamic of five forces) and Resource-based considerations (VRIO). Industry – based considerations (the dynamic of five forces): Competitive rivalry The use of technology. Pricing. Product promotion. Creativity and innovation. Management of production supply chain. Threat of Entry to the industry Aggressive marketing. High entry capital. Limited access to athletic shoe distribution channels. Brand loyalty. Threat of Retaliation. Power of suppliers Availability of the raw materials. Nature of raw materials. Power of Buyers Bargaining power. Product promotion. Product availability. Product affordability. Summary Nike Footwear Company applies technology in their production thus ensuring the high quality of their products. This give them power in competing with their competitors especially those with limited access to technology. They have also high promoted their product through sponsoring various sports activities. This creates loyalties of their customers especially the celebrated sports personalities who they pay to use their products. A good example of such is Basketball player, Michael Jordan. Basketball fans who adore Jordan always find themselves loyal to Nike. Through creativity and innovation, they have been able to consistently come up with new products. This enables them to satisfy the high demand for new and more user friendly products. Nike has factory outlet stores all over the world. This enhances availability and continuous flow of their products in the market thus helping in developing their customers’ loyalty. They attain loyalty of by the value of their products and the continuous availability of the products in the market. Nike has made entry into the industry hard through intensive marketing. This makes it hard for the new firms because of the grip its brand name has on the consumers. The entry capital into the footwear production industry is also to high thus making it hard for new investors. The new entries can also pose a threat through retaliation. This might occur for example, when a company decides to dope their products. (ROY, 2009). The power of their suppliers is also limited. This is because they have low a large number of willing suppliers. The large number of the willing suppliers is also another factor that leads to the low bargaining power of their clients. Their row materials are manly nylon, rubber, and leather. These are commodities that require the addition of value before being used. for this reason they have the bargaining power over their suppliers because he commodities can not be used without the manufacturing. Nike has bargaining power over their customer. This is because they have few major competitors. This is also because they supply their products through factory outlet that are available globally. This increases the product availability. The use of influential sports personalities in promoting their products also reduces their customer’s bargaining power (CARBASHO, 2010).. Resource-based considerations (VRIO): Resource-based considerations (VRIO) Analysis are a good tool that helps establish whether a resource is of competitive advantage or not.
