Nike's Competitive Analysis, Challenges, and Strategies

This report provides a comprehensive analysis of Nike's competitive position within the global athletic footwear market. It begins with an introduction to business concepts and then dives into a detailed examination of Nike's operations, including its international presence and the strategies it employs. The report utilizes Porter's five forces model to assess the competitive environment, identifying key factors such as competition within the industry, the threat of new entrants, the power of suppliers and buyers, and the threat of substitutes. The report then explores Nike's competitive advantages, focusing on Porter's generic strategies, including cost leadership, differentiation, and focus strategies. Furthermore, the report addresses the challenges Nike faces when conducting business across borders, such as language barriers, cultural differences, and varying legal and regulatory environments. Overall, the report aims to provide insights into Nike's strategic approach to maintaining its market position and addressing the complexities of international business.

Business Project

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................2
PART 1............................................................................................................................................2
1. Comparative analysis of Nike’s Competitive position in various market and explanation of
business activity that results in gaining competitive advantage..................................................2
2. Challenges company is facing which conducting business across border...............................5
PART 2............................................................................................................................................8
Use of appropriate theoretical tools and discussion of needs of company..................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business is on of enterprise which is which are carrying commercial activity in industry to earn
profit. Business are conducted on different level and is differentiated on different basis. On basis
of size they are differentiating on large and small business (BIEDERMANN, LÓPEZ and
TIERZ, 2017). On basis of geographic boundaries, they are dividing in demographic and
international business. Business are adopting different strategies which helps to overcome of
challenges and problems faced by them. There are also various challenges and problems faced by
companies including competitor, language barrier, cultural differences and many more. Nike Plc
is American international organisation which is established by Bill Bowerman in the year 1964.
Company is engaged in designing, pricing and developing different footwears, accessories,
equipment, apparel and services. Nike Plc is one of large suppliers in world of athletic shoes.
Company has large numbers of employees around 75400 which are operating for growth and
success of company in different parts of world. Company is providing innovative products to
their customers in order to increase their satisfaction level (Bourcet and Bovari, 2020). Company
has increased brand value in minds of their customers as they are providing high quality products
to their customers.
This project discusses about comparative environment of company in business activity which
provide them competitive advantages. There is different mode to analyse competitive
environment of company and these include Porter’s five forces model. These model helps to
analyse competitive environment of industry in which company operate. To gain competitive
advantage in market, company need to adopt various strategies which is discussed in Porters
generic strategies. This report includes discussion of challenges faced by company at
international level. Companies are facing various challenges depends of types of business and
their size of company. This project report also includes use of appropriate tools in company to
enhance their business.
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MAIN BODY
PART 1
1. Comparative analysis of Nike’s Competitive position in various market and explanation of
business activity that results in gaining competitive advantage.
Porter’s five forces model: Porter’s five forces model is one of model which is introduced in
the year 1979. Focus of this model is to identify as well as analysation of porter’s five forces
model (Crespin-Mazet, Romestant and Salle, 2019). Within industry which helps to identify
strength and weakness of industry. This model can be applied in Nike Plc which helps them to
assess competitive environment of company. This analysis of Company is mentioned below:
Competition within industry: This is one of five forces of porter’s model which include
various numbers of competitors as well as their ability of organisation to overcome from
competition. If there are large numbers of competitors in organisation and offering various
products, this reduce power of organisation within industry. Nike Plc is sports footwear market
in which competition force indicate performance of company and industry environment is
influenced with competition. There are various external factors which results in strong force of
competition in case of company. These external factors include lower market growth,
aggressiveness of organisations and moderate numbers of companies. There is low market
growth in market in which Nike Plc is operating due to market penetration as well as saturation
in market. This means company is operating in market place where market grow with very low
rate. Companies are competitive with aggressiveness with each other for large market share.
There are moderate numbers of firm but each of these are competing in aggressive way which
create significant impact on Nike Plc. This factor creates strong impact on company in market.
New Entry within industry: Power of a company is also influence with force of new
entry within market (De Stefanis, 2019). If competitors are taking less time as well as cost for
entering in market and compete with other established company, than this factor affect position
of established company in market. There are various external factors related to entry of new firm
within industry on Nike Plc. These include high cost of development of brand economies of sales
and cost of conducting business. Cost of development of brand results in difficulty for new
entrant in industry to compete against established companies like Nike Plc. Companies which are
producing get economies of scale whch reduce their total cot. Nike Plc is producing their predicts
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on large scale as they are operating at international level which provide them competitive
advantage in market. There is also moderate cost for conducting business which create barrier for
new entry. So, Threat from new entry in marketing environment are weak force.
Power of suppliers: Power of supplier is another force in Porter’s five forces model
which indicate powers of supplier to raise cost of their raw material (Ganzarain, Markuerkiaga
and Igartua, 2019). This power of supplier is depending on availability of numbers of suppliers
and uniqueness of raw material provided by them, cost of organisation to switch with another
supplier. There are various external factors related to power of suppliers which create impact on
Nike Plc. Supplier’s power can be affected with overall supply, large population and size of an
individual suppliers. Large supply reduces impact of single suppliers on business of Nike Plc. In
the same way large numbers of suppliers in industry minimise impact of demand of individual
suppliers on company like Nike Plc. So, power of suppliers creates less risk for company in
marketing environment.
Power of buyers: Power of buyer include ability of customers to drive up and down
prices is among five forces. This factor is affected with numbers of customers an organisation
has, importance of customers for company and cost of new customers. Customer of Nike Plc
create direct impact on performance of company There are sone of factors which create impact
on power of buyers including low switching cost, moderate substitute available in market and
small size for individual buyer. There is low switching cost which make it easy for customers to
buy products form other company than Nike Plc. Moderate availability of substitute allow buyer
to buy sometimes with other companies. So, power of buyer creates moderate force for company
in marketing environment.
Threat of substitute: Threat of substitute is another force to analyse competitive
environment of organisation (Giudici, Guerini and Rossi-Lamastra, 2018). Substitute products
are used by customers in place of company’s products which is threat for company as it allows
customers to switch to another products. There are different external factors which create impact
on threat of substitute on Nike Plc. These include moderate availability of substitute,
performance of each substitute and lower switching cost. Availability of different substitute
impose force on Nike Plc as customer has alternative for product of Nike Plc. On the other hand,
customer has moderate likelihood for substitute product as these substitutes perform moderately.
So, threat of substitute product creates moderate threat for business of Nike Plc.
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Competitive advantage: Competitive advantage is factor that helps firm to service and produce
their products and service effectively in compare to their competitors. Competitive strategy is
adopted by organisation which helps them to compete with other market players in market.
Competitive strategy adopted by Nike include Porter’s generic strategies which helps firm to
overcome of competition in market and effectively serve their target market.
Porter’s generic Strategies: Porter’s generic strategies is introduced by Michel Porter in the
year 1980 which include determination of strategies of organisation (Hobbs and Petit, 2017).
Michel Porter include three main competitive strategies adopted by organisation. These strategies
adopted by Nike Plc are mentioned below:
Cost leadership: Cost leadership is one of leadership strategies which provide competitive
advantage to firm as it allows them to saves cost of company. This strategy allow company to
target large market and offer low prices in market (Turner, 2016). Company can adopt two
option in this leadership as they can reduce their cost to low and offer competitive market
whereas other option includes keep prices low with low cost to capture more market share. In
both of options, company needs to reduce their cost. To implement this strategy in organisation,
company have sufficient investment, skilled labour and low cost. Nike Plc can implement this
strategy as it provides them competitive advantage in market and allow them to capture more
market share.
Differentiation: Differentiation strategy is one of strategy which include targeting broad
market firm ned to adopt uniqueness in their product which helps them to differentiate their
product from those of competitors product. This also helps company to make their product
exclusive and more attractive than products offered by competitors. But this strategy can be
success when company has strong research nod development, ability to maintain high quality
products and innovation. For this strategy effective marketing is necessary as it helps company to
send message of company related to benefit of unique and innovative products. It is important for
organisation to be flexible enough to adapt changes and overcome of competition in market by
offering unique products. Nike Plc can adopt differentiation strategies which helps to provide
them competitive advantage and also helps to satisfy needs of customers by understanding their
changing needs. It also helps them to attract more customers towards firm and increase their
market share.
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Focus strategies: Focus strategies is one of competitive strategy which is concerned with
niche market and also understand market dynamics (Larsson, 2018). It also includes
understanding of unique customers needs and development of unique and low cost products. Aim
of this strategy is develop low cost product with unique feature and This strategy helps to serve
market effectively and build brand loyalty among customers. This also results in making
particular segment less attractive. This helps Nike Plc to make their market segment more
attractive and also provide them competitive advantage. This strategy is focused with focusing
on particular segment which helps them in effectively serve their target customers.
2. Challenges company is facing which conducting business across border
Companies face different challenges while conduiting their operation at different level.
These challenges are related to cost, finance and working environment, skills of employees,
competition and many more (Nadeem, 2020). These challenges create significant impact on cost
of business and their profitability level. Impact of these challenges on business can be more
serious if business is conducted across borders. Business and trading operated across geographic
boundaries of company are consider at international business. Business are domestic level face
challenges but it can be more serious at international level. At global level, business need to
consider rules and regulation of government of more than one country. It also increases cost of
company as company need to communicate message of their brand, uniqueness of their products.
These activities increase cost of company and also reduce profitability level of organisation.
They also face problems related to managing team at international level. Nike Plc is one of
international organisation which area providing their products and service in different nation.
There are different challenges face by company in international business environment including
managing team, language barrier, different culture, values and belief, different laws and so on.
Some of challenges face by company in different countries are as follows:
Language: Language is one of barrier international business as people of different
countries are speaking different language (Neary, 2019). It is impossible for a person to
understand all these languages which helps to create problems for business. While doing
business at international level, individual need to communicate with people to make contact and
for this language create barrier. While conducting business at international level, organisation
also need to hire employees from different countries where again language create barrier. This
language problems do not allow owner and employees to communicate effectively. This
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language also create problem in preparing catalogues and price list as these can be prepared in
foreign languages. Advertisement and promotional activities are also conducted in different
languages in different counties. Nike Plc is one of organisation which are conducting business at
international level. These businesses are facing language problems in company as there are
different languages in different countries.
Cultural differences: Cultural differences are also create challenge for company which
are trading at international level (Orage, 2018). Cultural differences are important issues in
international business as there are different culture in different industry. These cultures are
related to values, belief of people. There are some gesture and action which are used in one
country are different in another country. Organisation which are conducting their business at
international level in different countries need to consider these cultural differences as it can
create negative impact on their business. Some time any wrong move by company can create
problems for them in international market as it hurt feeling and religious belief of people. This
situation even results in boycott of products of company in that country. Nike Plc is one of
organisation which are conducting their nation in various countries. This results in cultural
differences in organisation as they need to consider cultural belief, values and region values of
people of that countries.
Increasing regulation: There is increasing regulation in some countries for international
business which create problems for business. These regulations are imposed by government on
that countries which also sometimes create trade barrier on international business (Sanchez, Finn
and Mendez, 2021). There are some factors relate to regulation which create problems for
international business. These are labour related law, trade restriction, taxation, environmental
laws and many more. Government instability is another factor which also create problems for
business as new government made changes in their existing policy. For example, Brexit is also
become reason of new rules and regulation in UK and Europe. This create problems for various
international business in both countries. Organisation also need to follow environment laws in
that countries as some government has made initiate to protect to environment. Government also
impose laws related to labour like minimum wages laws, health and safety laws, equality laws.
All these laws impose by government create problems for business as it increases cost of
company and also, they need to made changes in policies of company. There is other regulation
for international business which also create burden on Enterprise. Nike Plc is one of enterprise
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which are conducting business at international level. They need to follow these rules and
regulation for company.
Availability of finance and increasing cost: International organisation require more
finance in compare to domestic business. There are various sources of finance for business
including loan, investors and other sources (Sandulli, Ferraris and Bresciani, 2017). Some times
organisation fails to raise money for conduiting their operation in different parts of world. It is
difficult for companies to raise funds for their operation as it increases their total cost of
operation and create burden of interest on organisation. There is also increasing in cost of
company as at international level, more resources required, more production is needed, more
employees are needed for business. This cost create burden on organisation as they need to more
spent on advertising activities. Nike Plc is one of organisation which are providing their products
and service at international level. To increase awareness of their products and communicate
message of company they need to spend on promotional activities. To bear these costs, they
require funds which they can raise form different sources. There are various sources which has
different cost and benefit that is selected by company as per suitability for their organisation.
Managing team at global: To conduct operation at global level, company hire
employees from different parts of world (Schnegg, Möller and Stoll, 2019). These employees are
working at different workplace of company established in different countries. To manage every
employee as team, it difficult for company as there are various issues occur including language
barrier, time zone, different level of technology and cultural differences. To build as well as
maintain good relation with employees working at different parts of world, organisation need to
facilitate check-in and video conferencing platform which helps them in interacting with their
employees. If managers maintain good relation and maintain check-in, it increases possibility of
engagement of employees with enterprise. So, international business creates problems in Nike
Plc related to interaction among team and also problems in managing team as all team are
focusing on their own department goals and teams in organisation. Due to global pandemic, this
problem become more serious as employees are working from home which create robles of
interaction.
Currency exchange and inflation rate: There is different value for different currency and
also value of currency is also constantly fluctuating. Currency cannot remain of same among as
value of current is changing due to inflation rate. It is important for company to understand and
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has knowledge of exchange rate. Exchange rate refers to value of currency between two nations.
It is necessary for companies to monitor rate of inflation. Inflation rate refers to those rates which
are prices level with in economy that is increase day by day and can be expressed in percentage
term. Inflation rates are different for different countries and also create impact on cost of
company like for material, labour as well as pricing of products (Telnova and Bykova, 2020).
Understanding as well as following these inflation as well as exchange provide various important
information to related to products and service of company in different parts of world. Nike Plc
need to consider inflation as well as exchange rates as it increases impact on cost of company as
well as price of products of company. These create difference of prices of products of company
in different parts of world.
PART 2
Use of appropriate theoretical tools and discussion of needs of company
Need of changes: There are various need to made changes in organisation as there are
changes in customers requirement, market, policies of government. These changes are required
as customers wants to but high-quality product at competitive prices. They also focus on image,
brand value of company while buying products form company. So, it is important for company
to made changes in their organisation (Toledano-O’Farrill, 2017). They also need to made
changes in their organisation structure, policy of company to understanding need to their
employees which helps them to motivate employee and also increase their engagement. Changes
are important in organisation to increase their sustainability in environment. Nike Plc is one of
organisation which are performing in international market. Company has increase brand value
and good reputation in minds of their customers. They are facing various problems like
increasing competition in industry. They need to made changes to overcome of these problems as
company need to made changes in technologies to improve effectively of their organisation.
They also need to make changes in life cycle of organisation to access to growth and profitability
for business.
Meet stakeholders need: Stakeholder refers to parties who has interest in an organisation
which are affected by or impact on business. There are different stakeholders of company which
include shareholder, suppliers, employees, customers, competitors (Yasin Ar, 2020). These
shareholders have interest in enterprise and also has power to influence operation of company in
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organisation. These different shareholders have different expectation as well as need of
company. Shareholder are expected from organisation to increase their income by performing
well in market. Customers are expected to get high quality products at competitive prices form
organisation. They also want to buy products which are fulfilling their needs and wants and also
provide them additional services. Suppliers are expected to good high prices for their raw
material and regular order for company with regular payment. Competitors are expected to
compete in ethical manner with another organisation. Employees are expected to get job security
and regular salaries form organisation. Nike Plc is meeting need of different stakeholder as
company is competing in ethical manner with other players conducting their operation in
organisation. They are also working in increase income of their shareholder as well as investors.
Enterprise is also order for raw material to suppliers and providing payment to them on time.
Company is taking care of employees and understanding needs of their customers by providing
them qualitative products.
Strategies: Companies are adopting different strategies in organisation to overcome of
competition and increase their market share (Yamin and Sim, 2016). They are also adopting
competitive strategies like differentiation strategies, cost leadership and focus strategies. Nike
Plc is adopting focus strategies by offering different product at reasonable prices to their
customers. They are also adopting different marketing strategies like social media and digital
marketing which helps to increase awareness of products of company and also allow them to
communicate with other market players.
Efficiency: Company has increased efficiency as they are operating at international level.
To sell products and service in global market and compete with well established competitors in
market, Nike Plc need to be efficient and also work for constantly improving these efficiencies
which provide competitive advantage.
Future of company: Nike Plc is effectively serving to their customers and made changes
at per changing need of customers. Company is also adopting innovative technology in their
organisation which improve their efficiency and also increase profitability of organisation. These
efficiencies and effectiveness of organisation helps them to capture more market share in future.
Sustainability: Nike Plc is one of organisation which is understanding needs of customers
and providing products as per requirement of their customers (Yang, Yu and Zhu, 2020). Nike
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Plc is providing high quality product with increase brand value at affordable prices to their
customers. These helps company to sustain in competitive environment.
CONCLUSION
From above mentioned project report, it can be concluded that business is operating for purpose
of satisfying needs and wants of their customers and for purpose of earning profit. Business are
divided on different basis and are facing different challenges. On basis of geographic boundaries,
they are dividing in demographic and international business. Business are adopting different
strategies which helps to overcome of challenges and problems faced by them. There are also
various challenges and problems faced by companies including competitor, language barrier,
cultural differences and many more. To analyse competitive environment of business, firm can
adopt porter’s five forces model which include different forces which create threat for business
in market place. These factors include threat of new entry, competition within industry, threat of
substitute products, bargaining power of buyers and suppliers. Competitive strategy is adopted
by organisation which helps them to compete with other market players in market. Competitive
strategy adopted by different companies include Porter’s generic strategies which helps firm to
overcome of competition in market and effectively serve their target market. There are various
problems faced by organisation at global level, business need to consider rules and regulation of
government of more than one country. It also increases cost of company as company need to
communicate message of their brand, uniqueness of their products. These activities increase cost
of company and also reduce profitability level of organisation. They also face problems related
to managing team at international level. There are various need to made changes in organisation
as there are changes in customers requirement, market, policies of government. These changes
are required as customers wants to but high-quality product at competitive prices. They also
focus on image, brand value of company while buying products form company. Organisation use
different tool in business which helps them to increase values of business. They adopt various
changes in organisation that results in increased efficiency and sustainability in market.
Enterprise also need to made changes which helps them to meet expectations of needs of
stakeholders. There are different stakeholders in firm which include customers, suppliers,
employees, shareholders and competitors. Company needs to meets needs and expectation of
these stakeholders are they can create impact on profitability of business.
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