Nike's Entry Strategy into UK Market

The assignment provides an overview of Nike's business expansion into the UK market. It highlights the company's use of global international strategies and franchising as a market entry mode. The report also discusses the role of social and political factors in shaping the global environment and affecting business decisions.

International Marketing

Table of Contents
INTRODUCTION...........................................................................................................................1
I. Evaluate how some drivers of globalisation help Nike to expand in this new market............1
ii. Critically analyse nature of global environment for Nike......................................................2
Iii. Identifying one specific target market in UK........................................................................3
iv. Presenting one type of global international strategy method which Nike used.....................3
v. Presenting one international market entry strategy.................................................................4
CONCLUSION................................................................................................................................5
RFERENCES...................................................................................................................................6

INTRODUCTION
International Marketing Is the simplest principles of marketing that are applied by more
than one country. The chosen company for this report is Nike which is one the largest retail
company in US and it wants to expand its market in UK with more new products. Report
describe how some drivers of globalisation can help Nike to expand in new market and
identifying the specific target market in UK. Report further explain one type of global
international strategy method that Nike should use and an international market strategy through
which company can use to enter into new market.
I. Evaluate how some drivers of globalisation help Nike to expand in this new market
Technological drivers: This factor shaped up the entire business of Nike in such a
manner that it allowed the company to rapidly globalize its current market in UK (Hult and et.al.,
2018). Therefore, the company has able to manage the work in such a order that it helps to
expand its current business such as through coordinated by technology and using social media a
company able to expand its current business.
International trade: this driver of globalisation helps to encourages and strengthen up
the independence between countries. In this way, the transportation is also help to expand the
current business of the company. For example, the elimination of trade barriers and reduction of
foreign investment restriction that helped to create the global market place.
Political and social drivers: As the stability of political and social reform also affected
the drivers of globalisation (Leonidou and et.al., 2018). As Nike wants to expand its current
business in UK and the country has created many new opportunities which help them to create
more new market and business in UK. Therefore to expand the business in UK helps to generate
more revenue and profit for the welfare of the company.
Competitive drivers: It is one of the most important globalisation driver such that as the
global inter firm competition increases the organization have pressure to play in international
market. Strong interdependences among countries and two way trade and FDI action also support
the drivers and this forces Nike to expand their current market in UK. As the country is well
developed country and to expand the market in this is a great opportunities for Nike and this will
further help it to generate more revenue and profit.
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Market drivers: As domestic market are become more saturated and that is why many
companies have lost the opportunities to expand their business at local market. Therefore, this is
the only reason why Nike chooses global expanding way in order to overcome the situation of
local market (Papadopoulos and Heslop, 2014). Many customers needs and the opportunities in
order to use global marketing channels and then transfer the marketing to some extent are also
help to creates the incentives for many companies in order to choose internationalization.
ii. Critically analyse nature of global environment for Nike
The nature of global environment is different in different countries. Such that as Nike
wants to expand business in UK. Therefore, there are some factor s that affect the company
overall performance which are mentioned below:
 Customer trends: Customers trends and needs are varies from one country to another
and therefore, in UK people taste are also different from US. In this time, as Nike wants
to expand its current business in UK so it is quite necessary for the company to realize
the exact needs of their customers because this only helps them to choose which products
needs to introduce in a market as this will help them to increase the revenue of the
company and then it will also help them to maximized the sales and further expand the
market.
 Social and cultural factors: This factor also present in a region that influence a great
deal of local customers behaviour. In UK, the level of education and age of distribution
this all contributes in the marketing initiatives which are also carried by the Nike in order
to expand in the particular market (Hakansson, 2015). In UK, the power of customers
purchase of products and services often seems quite different from other country
therefore, it is necessary for Nike to introduce the products as per the needs of their
customers.
 Economic factors: The economic stability of the country is also affect the company's
overall performance in such a way that it directly affect the customer behaviour and their
purchase of behaviour. In this emerging market, the company should think twice before
entering into new market. Because there may be chances to reduce earning of their
offering products. Hence the organization has a motive to expand the market in new
country then it also affected by economic factors (Attfield, 2015).
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 Political factors: it is another convention that is also affect the overall operation of the
company and may decline the actual performance. As UK is a developed country and it is
quite necessary for a company to monitor the political condition such as tax policies
which are controlled by the government. Political stability of a region also influence the
company to expand the overall performance.
Iii. Identifying one specific target market in UK
To identify the target market in UK is quite difficult for the company. As Nike is deal
with retail sector and have a lot of variety of products which a company actually offered to the
people of US. But to determine the specific target market in UK, it is recommended that the
target market of Nike is young peoples. Because this age group people generally uses the
products which actually a company offered (Watson and et.al., 2016). Then to position a brand in
the mind of customers is quite necessary to reach in wide range of public.
The young age group people basically uses this type of products which are offered by the
quoted company. And this can be done through many option such as market communication,
displaying hoarding which contain the short introduction of offerings. Social media is another
option which is helpful for the company to let people realize about new offers and this can be
possible only if the company have brand image in market. Displaying advertisements is the
another method which help the company to expand the business in new country.
As Nike wants to establish its new unit in new country and for this purpose, as per their
offered products, company chooses the people whose age is in between 20 to 50 because it
posses those kind of products which is used by this age group people (Ruiz-Pava and Forero-
Pineda, 2018). Hence the company chooses this in order to generate more revenue and creates
more profit. To determine the strategy of different market It is quite necessary for the Nike to
first identify the target market of the company. Because this will also help to let realize the exact
market which is useful for a company so that it will help them to expand its current market and
then establish new unit in other country.
iv. Presenting one type of global international strategy method which Nike used
Global strategy is consider the best method in order to expand the current business in new
country such as Nike is US based company and now it wants to establish its unit in UK.
Therefore, choosing global strategy method is quite beneficial for the company and this
strategies are differ from domestic business strategy. Many of them uses global strategy in order
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to treat global market as a huge domestic market. Hence they also sell the same products and also
uses same marketing strategy in all over at global market where the company operates. In
addition to this, most strategic product development and investment or marketing decision are
also centralized at global level (Baker, 2014). But on the other side, these global companies also
generally delegate the local market and their decision for local market business units. Therefore,
they all sell the same products in all markets by using same marketing and communication
strategies. These practices are helpful to uses in order to expand the current business market.
The business are also uses this market strategy in order to operates their unit in current
market. As Nike is also wants to expand their current business into further level of success and
chooses UK as a market strategy option and this will also help them to uses this entry option.
Many global companies are also helpful in order to expand their current business in further level
of success (Zeriti and et.al., 2014.). Using global strategy as a international market option, Nike
also made some minor modifications to their offered products and services which made the
company in next level of success. Moreover, the global strategies are also be very effective for
firms whose products as well as services of the firms are also hidden from the customer point of
view and in this way it will be helpful for the company in order to maximizes the product
business and services. The local variances are also varies from one level to another and it can be
possible and successful for Nike of the company are dealing with the same products which it
offer in US and the same way it should be offer in UK also.
v. Presenting one international market entry strategy
There are many market entry strategy such as direct export, indirect export, licensing. But
among all Franchising is consider the best method for Nike in order to expand their current
business in UK. In this method the organization put together a package of successful ingredients
which are made in their home market and then franchise this package to oversees the investors
(Madanoglu and Castrogiovanni, 2018). In this type of market entry strategy, Nike should make
franchising with other and that company help out by providing training and marketing the
services or products.
Using Franchising as a market entry strategy method will be helpful for Nike because it is
one of the most common method that is gaining popularity across the world. If Nike choosing
chooses this but make sure that another company has a good brand in market and they earn a
good reputation in market and should know the ways in which they can promote a new product
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(Argyres, Bercovitz and Zanarone, 2016). Another biggest advantage of using this method is
such that it does not need any extra or huge investment from the franchise and further build a
reputable brand name and then earn a franchise fee.
As Nike is one of the largest company at global level and then at that time choosing best
market entry option among all is the most difficult task. But Franchising is most suitable option
for Nike in order to expand a current business into an international market. This method is
without any risk of starting a new business at grand level, though UK is completely unknown
country for the company that is why using franchising as an entry mode is most suitable form of
entry strategy (Franchising, 2018). Moreover, it also have many benefits such that it helps Nike
to understand the current political as well as social condition of UK. On the other side, it has
been critically evaluated that while using franchising as an option of market strategy creates
issue of control such that Nike is not responsible for hiring and training the employees. Overall it
does not helpful to take overall or final decisions where to locate a business and even to expand a
business in next level will also creates hurdles in the path of progress.
CONCLUSION
By summing up above report it has been concluded that Nike is one of the most
successful company and now it wants to established in UK. Report also concluded some drivers
of globalisation such as competitive drivers, market, political and social drivers that help a
company to expand the business. Further it also concluded that the nature of global environment
is also varies and it is affected by social and political factors. To expand the current business,
Nike chooses peoples whose age is varies between 20 to 50 age group. In addition to this it also
opt global international strategy and Franchising as a market entry mode.
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RFERENCES
Books and Journals
Argyres, N., Bercovitz, J. and Zanarone, G., 2016. The role of relational contracts in inter-firm
relationships: theory and evidence on multiunit franchising.
Attfield, R., 2015. Ethics of the global environment. Edinburgh University Press.
Baker, M. J., 2014. Marketing strategy and management. Macmillan International Higher
Education.
Hakansson, H., 2015. Industrial Technological Development (Routledge Revivals): A Network
Approach. Routledge.
Hult, G. T. M. and et.al., 2018. Addressing endogeneity in international marketing applications
of partial least squares structural equation modeling. Journal of International
Marketing. 26(3). pp.1-21.
Leonidou, L. C. and et.al., 2018. International marketing research: A state-of-the-art review and
the way forward. In Advances in Global Marketing(pp. 3-33). Springer, Cham.
Madanoglu, M. and Castrogiovanni, G. J., 2018. Franchising proportion and network
failure. Small Business Economics. 50(4). pp.697-715.
Papadopoulos, N. and Heslop, L. A., 2014. Product-country images: Impact and role in
international marketing. Routledge.
Ruiz-Pava, G. and Forero-Pineda, C., 2018. Internal and external search strategies of innovative
firms: the role of the target market. Journal of Knowledge Management.
Watson, J. E. and et.al., 2016. Catastrophic declines in wilderness areas undermine global
environment targets. Current Biology. 26(21). pp.2929-2934.
Zeriti, A. and et.al., 2014. Sustainable export marketing strategy fit and performance. Journal of
International Marketing. 22(4). pp.44-66.
Online
Franchising. 2018. [Online] Available
through:<https://www.businesswire.com/news/home/20180410005826/en/Perfect-
Market-Entry-Strategies-Enter-International-Markets>.
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