Competitive advantage Analysis 2022

Management
Competitive Advantage
Student’s name
8/23/2019

Competitive Advantage 1
Introduction
Strategic development tools mainly comprises of SWOT analysis, Pestle analysis, Porters five
force model and Ansoff matrix which helps the organization to determine the present and future
environment conditions and accordingly they set the future strategies to win over the
competition. These strategic development tools can be applied to any business types such as
small, medium, large, which help in creating and generating the future planning tools to generate
success for longer period of time. These tools basically highlights about the internal as well as
external environment which in future helps the company to set its strategies accordingly and
further leads to the success and increment in reputation of the organization in long run (Cadle,
Paul, & Turner,2014).
Ansoff matrix
Ansoff matrix is one of the strategic development tools, which helps the companies for looking
more opportunities to grow and helps in generating more of income for the business through the
expansion of the new products and the services or by selecting into the new market. Hence, this
strategy helps the company to evaluate the market opportunities to increase or leads to an
increment in sales by adoption of alternative combinations for the new market (Ansoff, et al,
2018).
Product development strategy of Nike highlights about the innovation applied through the new
designs for shoes and related products. New technologies help in augmenting the product and
helps in facing the future competition. In this aspect, Nike applies differentiation generic
competitive strategy through product innovations. In order to upsurge the market share of Nike
they use through innovative technologies to design their sport shoes, apparel and equipment’s.
Market penetration strategy helps the business to grow by sales revenue in the existing
markets. As this, strategy helps in empowering Nike to apply the market penetration strategy on
the basis of product affordability. This strategic approach helps Nike to market presence by
growing the number of authorized retailers. Moreover, certain financial objectives in relation to
this strategy help Nike in increasing the sales revenue in the current market (Darroch, 2014).

Competitive Advantage 2
Market development strategy facilitates the business’s growth by majorly aiming the new
market as well as the new market segments, In this, companies tries to invest in novel
technologies to settle into a new marketplace, new segment. In terms of Nike, they apply the
differentiation strategy, which aids the business to enter into new market based on product
desirability. Now, Nike on this basis tries to enter into Africa as well as Middle East companies
to generate more success.
Diversification strategy mainly highlights about the development of the new businesses to
achieve growth. Nike in this concern, do support this strategy by introducing apparels and sports
equipment’s. At initial, Nike only was dealing in sport shoes. Such diversification from shoes to
clothes leads to the success of the organization in log run. Moreover, this growth strategy is to
advance the financial risks by entering into the other businesses (Ansoff, et al, 2018).
Porter five force model –
Porter five-force model is the strategic development tool, which is applied by the organization to
determine the intensity of the competition in the industry and to judge the profitability level of
the organization. It mainly comprises of threat to new entrant, threat of substitutes, bargaining
power of the suppliers and the buyers and lastly, threat of competition (Chapman, 2011)
Competition in industry- The biggest competitor of Zara is Forver21, gap and H and M.
However, Zara supply chain model is super receptive. Other brand mainly takes around months
to launch its products but Zara in this context responds speedy to the continuously varying
fashion needs and put forward the new clothing in every two weeks.
Potential of new entrant into business is higher in terms of Zara because of the fast developing
fashion trade and clothes with the affordable prices with the higher quality. However, in the case
of Zara the brand equity of the firm and its sales sequence makes them to earn more reputation
and attracts customers according to the changing trends. The main benefit to Zara that they build
their real estate business at the major locations for it outlets. Hence, in this perspective risk to
Zara is comparatively low than to its competitors (Van Vught, & Huisman, 2014).