Table of Contents INTRODUCTION...........................................................................................................................1 TASK...............................................................................................................................................1 CONCLUSION................................................................................................................................7 REFERENCES...............................................................................................................................8
INTRODUCTION Macro economic factors relates to the factors affecting the business environment. The macro economics factors can be political , social, legal and economic factors. These factors can lead the company to achieve the desired goals, also these factors can effect the companies in adverse ways. The report includes the potential change in the Macro environment forces of Nike. The company Nike is a brand which deals in sports apparels, sports shoes and various sports and fitness equipments. The report will include the strategies designed by Nike for sustainable competitive advantage over its competitors. Also the report will study the segmentation, targeting and positioning of the customer in the market. The report will include the branding of Nike's product and also the focus of company on increasing the efficiency of brand in the competitive market. Furthermore report will include the opportunities for growth in the organizations macro environment. The external environment in Nike determines the type of product, the quality of product , the customers to whom product is sold and also the economic environment in which the products are to be sold. TASK A) The company’s strategies for sustainable competitive advantage, segmentation and branding Nike's Sustainable competitive advantage Now a days, company Nike is earning more as compared to its earlier results. This increase in earning capacity of company is reflective of the numerous advantages it have over its competition. Though there is tough competition in the sports apparels market, Nike have survived and created a brand image of its own and have competed in the global market to achieve its desired success. Nike uses various techniques and tactics in its policies to compete in global market. The company have introduced new products to increase its customer satisfaction and also to improve its product from the other companies dealing in sports items. The company Nike work with a goal to providebetter customer satisfactionand services by proving better sports items. The close competitor of Nike is Adidas both deals with the manufacturing of sports apparel in market (Ahmad and et.al., 2016). Nike's growth scale increases as it keep reinvesting its earning in the market. Therefore Nike's scale provide a big advantage from its competitors as their is continuesreinvestinggross 1
margin upside back in the business. Nike invest its earning in the business expansion through the technological advancement and use of new technologies. Nike's ability toinnovateis the second bigger advantage available to the company against its competitors. The company have introduced many new innovations in order to achieve its growth and success in the company. Nike produces customer base sports apparels according to the age group which are very stylish and have different colour options. This makes the company stand out from its competitors (Baporikar, 2017) . Nike's focus on thelow cost of productionhelps the company in gaining control over the market and competing with its competitors. Nike's new products have created a benchmark in sports apparel in the world. Segmentation, targeting and positioning in Nike The product offered by the company needs to be divided according to the needs and requirements of the customers. Therefore the same thing cannot be sold to the elder person and a young person. There is wide difference between the age group of people. Likewise their can be many segmentation in the market in regards to the demand of product in the market. The company Nike provides wide ranger of products to fulfil the needs of their customer inn different segmentations. SEGMENTATION It is the division of the customers according to the various segments of company. Therefore the customers are segmented in the six market segments which are demographic variables,psychographicprofile,behaviouralstyle,geographicvariables,socio-economic variables and benefits available (Chaffey and Ellis-Chadwick, 2019) . Although, having many segments in the market Nike mainly focuses on “ all athletes” in the global market the market segments of customers are explained below- Demographic variables- these are the segmentation on the basis of demographic positions in the country. Psycho graphic profile- it relates to the customer behaviour regarding the product sold and there use by the company Nike. Behavioural style- the behaviour of customers relates to the segmentation of the customers which focus on the taste and preference of that person. 2
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Geographic variables- this relates to the geographical factors and location of the customers effecting to the customers need of product. Socio-economic variables- these are the factors which are effected by the social environment of the country and the customers living in the country. Nike products and designs are widely affected by the social preferences of customers (Crittenden and Crittenden, 2015) . Benefits available- also the benefits offered by the company Nike to its customers also segments the people and provide a different customer base to the company. TARGETING Target marketing is the next step after the market segmentation. It is the process in which the company systematically chooses the segments that will allow the company to achieve its goals effectively. The target market helps the company Nike in focusing on the specialised product and also determine the increase or decrease the production of product and services. Nike evaluates its customer segments inthe market can chooses in sequence the customers segment for the production process. The customers segment is chosen based on size , reachability and behavioural variables. The company Nike targets professional athletes and sporty individual providing them specialized and innovative products (Enquist and et.al., 2015). POSITIONING The final steps in of STP concerning the market decisions is the positioning. Nike has positioned has positioned its brand as the market leader of sports equipments. As the company is able to provide high quality of products ans services in the market.The company focuses on providing the products targeted in the targeting and providing the customers their desired goals. Above all company have focused on the fashion concerning the different age groups and providing varieties of products in the sports item according to the age differentiation of market. Therefore the company innovates new ideas and strategies to increase the product differentiation in the global marketing and also increasing its customers. Branding The company Nike is having a strong brand image in the global market. Also the company is constantly working to achieve more targeted areas. The products provided by the company Nike is of very good quality available in the market among its competitors (Hickman and Silva, 2018). Nike's products are available almost everywhere even online, where consumers could purchase company's products instantly. There is availability of online shopping options 3
which facilitates the customers to order their required products online. Also people believes that use of branded products can increase their status in the society. For example an individual wears Nike's limited edition indicated that he/she belongs to the upper class. The company produces specialised products according to the requirements and cultural environment of the people in the market. Nike constantly attracts the best athletes from all sports and signs contracts that bring enormous profitability to the business. Branding of the company helps the company in the acquisition of the greater customer base by providing products and services as required. This helps the company in achieving organizational targets by the company Nike in the global market. B) The potential impacts on the Nike'scustomer behaviour There are many factors which can effect the companies working capacity and also the customer base in the market. Customers buying decisions can be changed by many factors which can be psychological,social,cultural and personal factors(Schaltegger and Burritt, 2018). Nike's customers can have varied buying decisions according to their needs and changing circumstances of the customers behaviour. The various factors can be explained below- Psychological factors-through the advertising campaigns and headlines which gives a sense of freedom and motivation to the customers in achieving the fitness targets of sports persons. The customers of Nike feel the sporty spirit with the use of various sports apparel. This is an psychological factor which widely effects on the minds and needs of the customer for making a buying decisions. Also within the change in the customers taste and preferences there is also a change in the company sale and thereby effecting the overall results in the earning capacity of the company Nike. Social factor-Social factors also have effects on the buying decisions of the company Nike. The decisions makingof Nike's customer are highly influenced by the use of those products which the sports idol uses (Taneja and et.al., 2016) . People have perception regarding the use of same brands products which their sports idol use that they will become like them. Therefore the customers are widely influenced by their reference groups, opinion leaders and family concerning their buying decisions. Cultural factors-Cultural factors can also effect the customers choice and preferences. As the cultural factor is very delicate there can be both positive and negative impact on the Nike's sales. Therefore company aims on the different market segments on the bases of location. Nike's produces the product according to the taste and preferences of customers in the particular 4
region. The company have widespread research on the customers interests based on their cultural attribute,which affects the buying audience through commercials. For example in India, there are large number of fans of cricket players, so the company produces sports products according to that. Personal factors-there are many personal factors too which affects the customers choice of products. The various person al factors which effects customers choice can be age, gender, lifestyle,occupationandpersonalityofthepersonbuyingproduct.Nike'sinfluencesits customers through the unique fashion styles and trendy sports equipment. Also the company offers varieties in the sports equipments and sports apparel according to the age and requirements of sports persons which they feel unique and attractive (Zokaei and et.al., 2016) . Therefore, Nike cope up with the various factors affecting the buying decisions of customers in market. C) Opportunities for growth within the Nike’s MACRO environments. The companies are effected by the factors within the organization and also the various factors relating to the external factors in which the company is operating. These factors effects widely on the production and selling capacities of the company. The external factors relates to the companies external areas which can be social , environmental and legal factors. To evaluate the factors relating to external environment Nike can use pestle. The includes various factors. Political-the political factors relates to the political landscape in which a business is set up. Also the political factor includes the government influence on the remote or macro- environment of businesses. The political external factors determine some of Nike's strategies- stable political climate in major markets, expanding free trade policies and also improving government support for the improvement in infrastructure (Nike's competitive advantage,2018) . Economic-Nike's business performance is widely affected by the economic environment of the state where the business is to be operated. Nike sells its athletic footwear, equipments and apparel to the various economies according to the country. Through pestle Nike evaluates the underlying economic factors in the economies. The significant external factors determining Nike's performance are economic stability of developed markets, rapid growth of developing markets and slowdown of the Chinese economy. Social-social issues impact the attractiveness of Nike's athletic shoes, apparel and equipment. The various social factors which affect the business environment are increasing 5
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individual wealth in developing countries, increasing emphasis on product safety and also improving positive attitudes towards leisure among the customers of the company. Nike have considerable opportunities for product development and business growth (Ahmad and et.al., 2016). Technological-Thesearethefactorswhichrelatestothedevelopmentinthe technological conditions of the business. These technological advancement can have a major impact on the development of the companythrough the development of its products and services. The following are the technological external factors which affect Nike are increasing researchanddevelopmentamongthecompetitorsofthecompany,rapidtechnological obsolescence and widespread use of mobile technology (Baporikar, 2017) . Legal-legal terms influence businesses like Nike. In Nike's case, the various legal factors which affect the functioning of the company. In Nike's case, the following legal external factors are important in the sports shoes, apparel and equipments- improving employment law in developing countries, expanding consumer law in developing countries and also expanding health and safety regulations. Environment-these factors relates to the various environmental factors effecting the company and its functioning. The various factors which influence Nike's external environment are- expanding environmental law, climate changes and increasing sustainability strategies among firms. These factors can be both positive and negative for the growth Nike (Chaffey and Ellis-Chadwick, 2019) . Opportunities for growth for Nike Through the pestle analysis Nike can evaluate various threats and opportunities by the company. These factors are responsible for the growth and development of the company. On the other hand some factors can result in the degradation of the companies capabilities thereby effecting the earning capacity of Nike. With the evaluation of Nike through pestle it is evaluated that company have opportunity through the social external factor which relates to theincreasing of the individual wealth in developing countries. Through the development of wealth in the developing countries there are opportunities of more wealth expenditure on the sports apparel, sports shoes and equipment (Crittenden and Crittenden, 2015) . 6
Also with the widespreaduse of mobile technologywhich is technological external factor of Nike. This is also from one of theopportunities by the company. The mobile networking is widely used by Nike to advertise for their products and also helps the company in informing widespread number of people regarding the comping of any sports apparel, sports shoes and any other fitness product. The advertising through the mobile network is most effective source of advertising (Enquist and et.al., 2015) . CONCLUSION The report, concludes that there are two major factors in the economy which effects the functioning of the company which are micro and macro economics. The company Nike is widely affected by the macro economics factors which includes political, environmental, legal, social , technological and economic environment. The report, concludes that Nike opted for the strategies which involves the segmentation, targeting and positioning of the market customers and providing goods and services according to their needs. The report states that the segmentation of the market helps the company Nike in the evaluation of the different group of the persons according to their needs and also their age groups. Furthermore, report states that the branding of company Nike is important for the increase in the sale of its products. Also the report includes that Nike uses innovative ideas and strategies to compete from the its competitors in the global market. Also the report, states that there are growth opportunities in the macro environment of Nike by the increasing of individual wealth in the developing countries also the use of mobile networking is a social advantage to the company. Nike makes its plans and policies to develop its business in global market. 7
REFERENCES Books and journals Ahmad, N. S. and et.al., 2016. The impact of social media content marketing (SMCM) towards brand health.Procedia Economics and Finance.37.pp.331-336. Baporikar,N.,2017.BusinessExcellenceStrategiesforSMESustainabilityinIndia.In Managerial Strategies and Solutions for Business Success in Asia(pp. 61-78). IGI Global. Chaffey, D. and Ellis-Chadwick, F., 2019.Digital marketing. Pearson UK. Chaffey, D. and Smith, P. R., 2017.Digital marketing excellence: planning, optimizing and integrating online marketing. Taylor & Francis. Crittenden, V. and Crittenden, W., 2015. Digital and social media marketing in business education: Implications for the marketing curriculum. Enquist, B. and et.al., 2015. The paradigm shift to Business Excellence 2.0.International Journal of Quality and Service Sciences.7.(2/3). pp.321-333. Hickman, C. R. and Silva, M. A., 2018.Creating excellence: Managing corporate culture, strategy, and change in the new age. Routledge. Schaltegger,S.andBurritt,R.,2018.Businesscasesandcorporateengagementwith sustainability:Differentiatingethicalmotivations.JournalofBusinessEthics.147(2). pp.241-259. Taneja, S. and et.al., 2016. Leaping innovation barriers to small business longevity.Journal of Business Strategy.37.(3). pp.44-51. Zokaei, K. and et.al., 2016.Creating a lean and green business system: techniques for improving profits and sustainability. Productivity Press. ONLINE Nike'scompetitiveadvantage.2018.[online].Availablethrough. <https://www.businessinsider.in/nikes-competitive-advantage-is-a-lot-like-amazons/ articleshow/64798603.cms> 8