Nike's Competitive Advantage Strategies

This assignment examines Nike's strategies for maintaining its position as a global leader in the sportswear industry. It delves into potential expansion plans, including wholly owned subsidiaries and product line adjustments. The analysis considers the increasing competition within the soccer market and recommends strategic business plans to ensure Nike's continued success.

Running head: BRAND POWER OF NIKE IN INTERNATIONAL SOCCER MARKET
Brand Power of Nike in International Soccer Market
Name of the Student:
Name of the University:
Author Note:

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BRAND POWER OF NIKE IN INTERNATIONAL SOCCER MARKET
Table of Contents
Introduction:...............................................................................................................................1
Review of the article and identification of relevant facts:.........................................................1
Brand awareness:...................................................................................................................1
Attracting investments:..........................................................................................................2
Determining the root problem:...................................................................................................2
Fierce global competition:......................................................................................................2
Identifying the problem components:........................................................................................3
Generating alternatives:.............................................................................................................3
Evaluating alternatives:..............................................................................................................3
Obtain local resources:...........................................................................................................4
Restructuring product mix to stretch product line upwards and downwards:........................4
Choosing an alternative:.............................................................................................................5
Implementation plan:.................................................................................................................5
Alternative choice:.....................................................................................................................5
Conclusion:................................................................................................................................5
References:.................................................................................................................................6

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BRAND POWER OF NIKE IN INTERNATIONAL SOCCER MARKET
Introduction:
Creating brand awareness plays business generation of the sports companies which
finance expensive sports international events and clubs. The paper would identify one such
sport company in a recent article, identify a problem faced by the company and then go on
identify alternative approaches which the company can adopt to deal with the issue. The
chosen sport is soccer and the chosen sports company is Nike.
Review of the article and identification of relevant facts:
The article is a part of the official news publication by Nike on its website to create
awareness of its extension of association with the Portuguese Football Federation (PFF)
through 2024. The international brand is one of the leading American sports company
sponsoring football matches and million dollar football clubs like Portuguese Football
Federation (news.nike.com, 2018). The company sponsors apparels and sports articles like
footballs of these clubs. This has established Nike as one of the biggest sports brands
internationally which necessitates it to create brand awareness about the new and existing
products. The company due to its international presence faces competition from other
international sports companies like Adidas and Puma. The company also receives
competitions from smaller sports companies which offer sports goods at lower prices and
sponsor smaller sports events (Gonzalez-Brambila, Jenkins & Lloret, 2016). A review of the
article would identify the following relevant facts:
Brand awareness:
The aim of Nike behind publishing the news article is not only to inform the
stakeholders like consumers about its association with PFF but also its boost awareness
about its brand in the international market. This is very important for Nike to retain its

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BRAND POWER OF NIKE IN INTERNATIONAL SOCCER MARKET
top position in the global against international competitors like Adidas and emerging local
sports companies (Huang & Sarigöllü, 2014).
Attracting investments:
The article promotes the brand power of Nike and its association with football clubs
even in foreign countries, thereby advertising its global power. These associations are
actually a part of the business operations of Nike which in turn proves its immense revenue
generation power. These brand strength, international operations and immense revenue
generation power would help the company to attract investments from the American
securities market (Lu, Chang & Chang, 2014).
Determining the root problem:
The analysis of the relevant facts and the discussion above point out to the following
root problem:
Fierce global competition:
The article clearly reveals Nike promotional strategy to assert its brand power in
the global market to counteract the stiff global competition. The American sports
company as pointed out, faces competition from international companies like Adidas and
local emerging sports companies. Moreover, its main competitors like Adidas and Puma are
also public limited companies capable of attracting investment from the market. These
companies are also associated with international sports events and sponsor soccer clubs. They
sell similar product as Nike all over the world and compete with in all its important markets
like Asia and Europe. Thus, the root problem which makes Nike promote its brand
power in the market is the stiff competition for capital and market position which it
encounters in the international market (Gonzalez-Brambila, Jenkins & Lloret, 2016).

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BRAND POWER OF NIKE IN INTERNATIONAL SOCCER MARKET
Identifying the problem components:
The above discussion identifies the following problem components which make Nike
publish articles to promote and strengthen its brand awareness:
1. Competition for investment.
2. Competition for consumer base and revenue generation
3. Competition for resources
Generating alternatives:
A study of the business operations of Nike reveals the following alternatives which
Nike can adopt to outshine its international and local competitors:
1. Forming wholly owned subsidiaries which would be public limited companies listed on the
several big resident stock exchanges in the host countries.
2. Obtaining local resources.
3. Restructuring product mix to stretch product line upwards and downwards.
Evaluating alternatives:
The following section would evaluate the alternatives on the basis of their outcomes
against the identified problem components:
Forming wholly owned subsidiaries listed on top stock exchanges in host countries:
Nike in order to generate capital in the host countries can establish wholly owned
subsidiaries which would be public limited companies listed on the top resident stock
exchanges in its host countries. This would enable Nike unlike its international competitors
like Adidas which are only listed on the home country stock exchanges, raise capital even in

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BRAND POWER OF NIKE IN INTERNATIONAL SOCCER MARKET
the host countries (Adeyinka-Ojo & Nair, 2016). This would allow Nike to generate more
capital compared to its competitors and diversify its risks, thus making it financially more
stable.
Obtain local resources:
The wholly owned subsidiaries of Nike should obtain resources from local suppliers
which would allow it to reduce its cost of production. It can be evaluated that this strategy
would allow Nike to gain more dominance over local markets compared to its international
competitors. The company can also acquire local sports companies that would lessen its local
competition. This would allow the company to win over its competitors over access to
resources which would allow it to keep its cost of production low (Shen, 2014).
Restructuring product mix to stretch product line upwards and downwards:
Nike should restructure its product mix to gain dominance over both low and high
class consumer bases, thus generating more revenue compared to its competitors. The
American company should offer sports products like football using both down-stretch and up-
stretch product strategies. The up-stretch strategy would allow the company to serve premium
customers and generate high revenue, thus competing with international competitors like
Adidas (Ward, 2016). The down-stretch strategy would enable Nike to sell its products to the
middle class customers and earn revenue. Thus, restructuring of product line would enable
Nike to gain market domination compared to its competitors.

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BRAND POWER OF NIKE IN INTERNATIONAL SOCCER MARKET
Choosing an alternative:
The above analysis shows that the fittest alternative which Nike can opt for gaining
competitive advantage in the market is opening of wholly owned subsidiaries which would be
public limited company (Adeyinka-Ojo & Nair, 2016).
Implementation plan:
Nike should implement the plan by opening wholly owned subsidiaries in host
countries. Then the company should list the companies on the leading stock exchanges in
these host countries. It must also bring the required changes in its capital structure to get
listed and operate in securities markets of its host countries (Hertzel, Lowengrub &
Melvin, 2015).
Alternative choice:
Nike can alternatively expand its product line downward and upward. It can then opt
for the wholly owned subsidiary option at a later stage.
Conclusion:
It can be concluded from the article and the discussion that competition is among the
biggest challenges multinational organisations like Nike encounter. The soccer market has
become extremely competitive and it is recommended that Nike must form a strategic
business plan by taking into consideration several alternative plans. It must then choose the
best plan and use it as a strategy to maintain its global position.

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BRAND POWER OF NIKE IN INTERNATIONAL SOCCER MARKET
References:
Adeyinka-Ojo, S., & Nair, V. (2016). Destination Branding Framework in Tourism
Research: A State-of-the-Art Gap Analysis.
Gonzalez-Brambila, C., Jenkins, M., & Lloret, A. (2016). Challenges for scholarly business
research in Latin America. Journal of Business Research, 69(2), 383-387.
Hertzel, M. G., Lowengrub, P., & Melvin, M. (2015). Information, announcement, and listing
effects of ADR programs and German-US stock market integration.
Huang, R., & Sarigöllü, E. (2014). How brand awareness relates to market outcome, brand
equity, and the marketing mix. In Fashion Branding and Consumer Behaviors (pp.
113-132). Springer New York.
Lu, L. C., Chang, W. P., & Chang, H. H. (2014). Consumer attitudes toward blogger’s
sponsored recommendations and purchase intention: The effect of sponsorship type,
product type, and brand awareness. Computers in Human Behavior, 34, 258-266.
Nike and Portugal (FPF) Extend Partnership. (2018). Nike News. Retrieved 25 January 2018,
from https://news.nike.com/news/nike-and-portugal-fpf-extend-partnership
Shen, B. (2014). Sustainable fashion supply chain: Lessons from H&M. Sustainability, 6(9),
6236-6249.
Ward, J. (2016). Keeping the family business healthy: How to plan for continuing growth,
profitability, and family leadership. Springer.