Product Development. Diversification can support Nike’s generic competitive strategy of differentiation through new businesses that supply materials for product innovation in the athletic shoes, apparel and equipment business. A generic strategy, according to Michael Porter, defines how a business achieves and maintains its competitiveness. Glazer, R. (1999). This strategy adds an aura to Nike’s products. Focused differentiation: Nike also pursues focused differentiation strategy where it focuses on serving the sports segment by providing the best sports products than other players in the segment. The apparel, athletic footwear and sports equipment industry are highly competitive due to the presence of a large number of local and international players. March 6, 2018 By Hitesh Bhasin Tagged With: Strategic Marketing Articles. 2.1.2.1 How Nike uses differentiation strategy? New Balance appears to have a better differentiation strategy than Nike because they succeed in a niche market where they are … Business Strategy We use customer loyalty to distinguish ourselves from our competition. This severe competition made Nike to do its best and to be a winner in the vast market. Low Cost and Differentiation Strategies. As a result, its products have become the favorite of the serious athlete. The following are the generic competitive strategies implemented in Nike’s combination strategy: Nike’s cost leadership generic strategy sustains competitive advantage based on costs. Through differentiation generic strategy, Nike positions its product offerings in a way to stand out and be different from the available alternatives. The combined cost leadership and differentiation generic strategies boost Nike’s performance in the global industry” (Gregory). “ Also, Nike’s differentiation generic strategy provides unique products. The brand in the formof an intangible resource is very important for current and future success of NIKE, asit allows NIKE to implement a product differentiation strategy to maintain its currentmarket share. Additionally, differentiation strategies are most powerful when buyer needs and preferences are too diverse to be satisfied by one product. The main objective of this intensive growth plan is to expand the market share of Shoe Company by integrating the latest technologies in the design and quality of its sports shoes (Gregory, 2017). Simply put, product differentiation is a business strategy in which a firms attempt to gain a competitive advantage by increasing the willingness of customers to pay for the products or services they have to offer. Therefore Nike tries to portray a brand image of quality and performance. Innovation is one of the ways of Nike for going ahead and providing new technologies for all kinds of goods they create. The competitive strategy that Nike introduced at the end of the 1990's concentrates on honing the focus of our marketing strategies and product offerings through product differentiation. It invests in research and development, to learn about customers’ taste and fashion trends. Product and usage-based positioning are used by Nike to create the image in mind of the consumers. A. Firstly, it manufactures for three different segments of people: men, women and children. The adoption of differentiation as a secondary generic strategy allows Nike to expand the customer base by emphasizing over the unique product features. Establish Your Mission. Nike is the well-known brand globally and its association with the various sports events such as Cricket world cup, FIFA cup, Olympics and many others has helped the company in creating high TOMA (top of mind awareness) and brand pull. For example, the company integrates cutting-edge designs for its shoes. Factors such as quality, performance, reliability, competitive pricing, connect with the consumer plays the critical role for the companies operating in this business. A strategic objective linked to market penetration is to increase Nike’s market presence by increasing the number of authorized retailers. It is why innovation is a core focus for Nike and its rivals like Adidas and Under Armour. Founded in 1967 Nike has emerged as the most preferred footwear company for the athletes. Nike mainly concentrates on the sportswear for the sports person and also concentrates on the style of the product how it looks! For example, the company integrates cutting-edge designs for its shoes. Customers of Nike ranges from individual customers to companies. Nike’s marketing strategy has remained a subject of study. “ Also, Nike’s differentiation generic strategy provides unique products. Nike, Inc. uses Michael Porters strategies for competitive advantage such as cost leadership, focus, and differentiation (Johnson & Scholes, 2008). The reason why Nike, Inc. has gained a competitive advantage over other companies is that it undertakes an evaluation process, which involves evaluation of resources, clarification of goals, defining customers and examining competitors. Here are the Top Nike Competitors. Nike uses psychographic segmentation variables to make its offerings more attractive to the target customers. For GDPR compliance, we do not use personally identifiable information to serve ads in the EU and the EEA. This strategy facilitates the company’s growth by targeting new markets or market segments. So Nike contracted with many athletes’ spokesperson, professional teams and college athletic teams to advertise and promote their products to customers. The corresponding intensive strategies grow Nike’s global sports shoes, apparel and equipment business. Porter’s (1980) generic strategies as determinants of strategic group membership and organizational performance. The company uses its social media accounts to connect directly with their customers and they … Initially, the Nike brand was on athletic shoes only. However, over the period of time, it extended its product line to apparels and accessories like clothing, socks, digital devices, eyewear, and equipment for sports. Let's stay in touch :), Your email address will not be published. The Nike strategy is the writing on the wall for retailers large and small that have not figured out how to be collaborative and productive partners for the brands they carry. Nike’s strong focus on innovation is tied to its business strategy. We offer high quality goods at an acceptable price. Parnell, J. Differentiation strategy by Nike is used to gain market share advantage in the broad foot ware market. The strategy is achieved by producing consumer goods and services that customers perceive to be of high quality or have added unique features. 2.The marketing strategy of Nike. The basic strategy of Nike is to provide the customers with good quality products. Nike’s differentiation strategy is to establish the company as the standard in athletic wear. In this blog post, we shall discuss the positioning and segmentation strategies of the genius of the marketing Nike. A differentiation strategy doesn't necessarily guarantee that consumers will find the value that separates your product from other, standard options. By referring to legendary track-and field coach Bill Bowerman’s quotation, NIKE states that the vision of their company is “To bring inspiration and innovation to every athlete in the world.” Keywords: Nike, strategy, product differentiation, innovative and outsourcing.
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