Now-a-days, growing health awareness will result in the demand of sports and fitness commodities (Moore, 2003). While small businesses benefit from being nimble and resourceful, they sometimes struggle to find the money and manpower to tackle the challenge of entering foreign markets. In some markets buying an existing local company may be the most appropriate entry strategy. Nike's entry into India was through a seven-year licence agreement with Sierra Industrial Enterprises, which was later done away with to become a 100 per cent-owned subsidiary of the US parent company. Services. VAT Registration No: 842417633. For example, Nike hosts a dedicated social media account for fans and athletes of the sport of cricket and also uses appropriate languages and dialects in not only their products, such as a shirt that says 'Espana' on it, but on their websites and other online platforms. But, in the past years, Nike succeeded because it didn’t confuse its customers and even after acquisitions with skateboard it support its own brand and expand its parent reach without confusing customers. Nike has handled the negative publicity over the sweatshops very expeditiously. Our academic experts are ready and waiting to assist with any writing project you may have. The simplest form of entry strategy is exporting using either a direct or indirect method such as an agent, in the case of the former, or countertrade, in the case of the latter. It then goes on to describe the different forms of entry strategy, both direct and indirect exporting and foreign production, and the advantages and disadvantages connected with each method. Nike has captured approx. A growth rate of 15% in one year and 7% over the last 7 years suggests that Nike is a big player in the market and is constantly playing at the same position. CBS 48 hours news report that these sweatshops are conducting their activities in unpleasant and unhealthy conditions. The research purpose of this thesis is to analyze a reasonable marketing entry strategy of IKEA for the further expansion in Chinese market. Already registered? Obviously, this deal will increase the amount of money spent on advertising from both the companies. So Nike should follow this strategy in future and try to remain dominant over its rivals through the marketing strategy. The choice for a particular entrymodeis a critical determinant in the successful running of a foreign operation”. Since Nike produces comfortable products whose goal is to aid athletes’ performance, the main target market for Nike is the active athletes market (Mahdi et al., 2015). In the beginning of Nike, where did Phil Knight sell his shoes? When it comes to Nike's bread and butter, basketball shoes over $100, domestic market share exceeds 95%. These may for example include differences in the availability and reach of various promotional media, in the availability of certain distribution channels, or retail institutions or in the existence and efficiency of the communication and transportation network. Moller et al. According to Ni and Hu (2012) say that Shanghai qualit… Study.com has thousands of articles about every Keywords: emerging market, entry strategy, market entry, factors behind entry choice, entry mode, entry node, entry timing . This essay will also consider the political, legal and cultural issues which Nike can face while implementing any strategies in international markets. A brand is perceived differently in different culture or markets so it could be very catchy for an organisation to build a global brand. You create a successful brand (e.g. What the Difference Between Cross-Selling & Upselling? The type of media available as well as their reach and effectiveness differ from country to country. Looking for a flexible role? This strategy facilitates the company’s growth by targeting new markets or market segments. DIBC is the ability to manage the international branding process as a dynamic capability. Strategy is planning through companies achieve their goals and move forward. Being present in footwear, sports equipment, clothing and many others Nike uses differentiated targeting strategy.Produc… Strong Brand Awareness – Nike is one of the most recognizable brands in the world as its name alone is memorable, easy to pronounce, and very unique. (2) Joint Venture – It is a strategy used by companies to enter a foreign market by joining hands and sharing ownership and management with another company. overseas market, there are a variety of options open to it.These options vary with cost, risk and the degree of control which can be exercised over them. There are several ways to jump into a foreign market, some easier than others. | {{course.flashcardSetCount}} You want to start exporting or expand to a new foreign market. It is used when two or more companies want to achieve some common objectives and expand international operations. What Can You Do With a Bachelor's in Marketing? By identifying market opportunities and employing “market entry as a dynamic strategic tool” for both sales and manufacturing, Nike’s international strategy consists of … Market Development. How Does Tuition Reimbursement Benefit the Employer? Invest in promotional activities will also be a good idea. Levitt suggested that customers with local preferences are also attracted towards the lesser prices offered by global producers. Franchising is a foreign market entry strategy where a semi-independent business owner (the franchisee) pays fees and royalties to the franchiser to use a company’s trademark and sell its products and/or services. What is the Difference Between Blended Learning & Distance Learning? flashcard set{{course.flashcardSetCoun > 1 ? The major threat to Nike is the imitation that goes hand in hand in various markets which are affecting its revenues and businesses. Go it alone 5 4. Which products should you export? From its beginnings with the now world-recognized slogan, 'Just do it,' Nike has succeeded in marketing across borders through the use of emotional advertising and branding. By selecting international sponsorships and highlighting international athletes, the company has been able to build a broader, global interest in their brand and put their name and logo at the forefront of global sporting events. The differentiation strategy of Nike is quite competitive so Nike should ensure any international marketing strategy it applies should enhance its superior brand name. The title of this lesson alone probably brings to mind images of advertisements and products by the owner of that slogan: Nike, one of the world's most popular and recognizable brands. There are various market entry modes practiced by organizations including exporting, licensing, joint venture or direct investment. The deal creates a much bigger Adidas a company of $12 billion against $14 billion of Nike. It was advantageous for Nike as well as it remains in the news and gave the publicity to Nike in a way. Europe, Asia, North and Latin America are the main markets in which Nike sells its products, which makes it a truly global organisation. 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Expansion into foreign markets can be achieved via the following four mechanisms: Exporting; Licensing; Joint Venture; Direct Investment; Exporting. The heart of Nike, Inc.’s growth strategy is innovation. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. Consumers worldwide create new markets as well as demand new products and services. Meaningful story – They’re selling more than a product; they’re selling aspiration. It’s safe to say Nike’s at the top of its game right now. 31% of the global athletic footwear market. Global Marketing Degree Program Overviews, Global Marketing Manager: Job Description & Career Info, Associate in Arts Degree (AA): Marketing Degree Overview, Entry-Level Jobs for a Marketing Major: Career Information, Comparing Finance and Marketing MBA Programs. http://www.woltersworld.comGoing abroad for business? Nike is the leading sports footwear and apparel company in the world. imaginable degree, area of Therefore, to establish good public relations Nike took some more steps. Some consumers however, prefer those products which caused less harm to others or which are produced in their own country and this is called ethical factor. To better understand customer needs and market characteristics it is very important to develop established ties and alliances with traditional and non-traditional partners in that economy. Plus, get practice tests, quizzes, and personalized coaching to help you Global marketing strategy is a way of selling a product or service to an international audience, while taking into account cultural and societal norms and preferences. Instead of manufacturing Nike designs and markets its products, while contracting for their manufacture from 600 factories scattered all around the globe, that employ around 650,000 people. This may be because the company has substantial market share, are a direct competitor to you or due to government regulations this is the only option for your firm to enter the market. Rather than selling a product directly, Nike has managed to build a strategy that appeals to a customer's aspirations or emotions to build an attachment to a brand, as opposed to selling the product solely for the product's sake. Some countries may be against Nike’s methods, but Nike has to find a way to reach out. {{courseNav.course.mDynamicIntFields.lessonCount}} lessons Examples of Nike's Marketing - To learn how you can use Nike's Marketing strategy to grow your business, listen to this podcast episode 8. Select a subject to preview related courses: There's no doubt we live in an increasingly technological world, and Nike has excelled at reaching various audiences with a culturally appropriate message. This paper will talk about Nike’s global presence and how Nike has achieved success in past years. (Douglas and Wind, 1987). Such factors therefore may require considerable adaptation of strategy of local market conditions. Kicking off the list at #1 is franchising. The activity of running is generally only introduced in a school setting in the form of forced physical education classes. According to a recent Hill & Knowlton survey, Chinese consider Nike the Middle Kingdom's "coolest brand." For all of the successes Nike has gained, it has repeatedly accused due to lots of issues for more than a decade. Taking any strategy into consideration will also involve an impact analysis and risk, therefore, any potential consequences and levels of risk involved and how to overcome those risks will be covered in the next section. Company Registration No: 4964706. It's a strategy that works as well in Europe or Asia as it does in the United States. For instance TV advertising, while a major medium in US, Japan and Australia, is not permitted in Scandinavian countries. We will discuss some facts and figures. Analyze the problem of the case: Nike,Inc. Sponsoring an athletic team or an event such as World Cup soccer, or using an internationally recognized superstar like Cristiano Ronaldo or Rory McIlroy, has helped Nike gain traction in other countries where different sports and athletes take center stage. Firstly, the government action certainly will have a great influence. DefinitionA modeof entryinto an international market “is the channel which organisation that want operate in internationalmarkets employ to gain entryto a new international market. Registered Data Controller No: Z1821391. (2000) suggests that for the long term competitive advantage Nike could also use dynamic capabilities to enhance existing resource configuration. Eisenhardt et al. Plus, continued innovation and product quality are keys to success. The casestudy attempts to answer these questions and also identifies future outlook thatwould aid sportswear industry growth and NIKE in particular.Entry Strategy/Market DiscoveryAccording to company legend, NIKE‘s business model was developed by Knight whileattending Stanford Business School in the early 1960s. To ensure its international expansion, Nike is likewise focused on sustainability. Nike is one of the most successful companies on the globe, both from a sales standpoint and in their marketing initiatives. Making Socially Responsible & Ethical Global Marketing Decisions, Quiz & Worksheet - Nike's Global Marketing Case Study, Over 83,000 lessons in all major subjects, {{courseNav.course.mDynamicIntFields.lessonCount}}, Global Marketing Management: Planning & Organization, How Global Market Segmentation Affects Products & Services, Adapting Products for Consumers in a Global Market, Global Logistics & Distribution: Common Issues & Trends, Integrated Marketing Communications & Global Advertising, Internet and Global Marketing: Ecommerce on an International Scale, Biological and Biomedical The main products of Nike include footwear, sports equipment, men and women clothing and accessories. Levitt (1983) suggested that low price regardless of feature preferences and heavy promotion regardless of price, always attracts and influence customers. It optimizes the manufacturing and production processes. He also explained that in the athletic shoes and clothing Nike has contracted out many functions such as manufacturing and logistics which Noto argued as a clever step to negate the impact of key weaknesses. In 2000, in the western economies a great issue of ageing affected the buyer’s choice as it could lead to change the demand from sportswear to comfort wear shoes. It optimizes the manufacturing and production processes. Any strategy has to be clear and well-thought out, with partners chosen wisely. Nike, Inc.’s strategy on sustainability contains: Innovate to deliver enterprise-level sustainability solutions; Integrate sustainability into the heart of the NIKE, Inc. business model; Mobilize key constituents (civil society, employees, consumers, government and industry) to partner in … Nike understands the use of involving customers into the business and therefore offers internet sites where customers can share their interactions and experiences, can give their suggestions. Market development is a third strategy for consideration due to Nike's ability to geographically expand our product offerings. These ways can be a shade of company’s strength, potential and the level of interest in marketing. Nike's success in global marketing relies on their ability to reach many audiences with tailored messages. The authors made three contributions, to enrich an institution-based view of business strategy (Oliver, 2011; Enrolling in a course lets you earn progress by passing quizzes and exams. Nike is the world market leader in athletic shoes and apparel and operates in more than 200 countries. As Levitt (1983) said a global producer’s patronage expands exponentially, when he offers his low cost internationally. Nike has focused its marketing efforts on the digital space in recent years. Therefore, a reasonable marketing strategy should be analyzed to help the expansion of IKEA in Chinese market. Nike is established in 1972 by former university of Oregon star Phil Knight which is now one of the richest people in America. However, there have been a few instances of marketing failures at Nike. Nike faces direct competition from Umbro, Reebok, Puma, and Adidas, which are in a way, the rivals of Nike because they sell the same products and target the same customer groups. Nike 's greatest growth barrier is its company's greatest strength, market share. NEW YORK (May 5, 2010) – Today NIKE, Inc. (NYSE: NKE) unveiled its strategy and key initiatives to achieve sustainable, long-term growth across its global portfolio of brands and businesses. Advertisements; One of the most powerful marketing tools that can help you achieve your dream of converting your product to sales is advertising it through different means. A partner based in the foreign market you target can help you navigate the politics and customs of the area, make connections with customers and find employees. Log in here for access. Shortly after the ad ran, Pistorius was charged in the murder of his girlfriend, Reeva Steenkamp, and Nike was forced to suspend all ads and their relationship with the fallen athlete. Improved hedge rates year after year leads to higher gross margin which are reflected in the net income which has increased by 4%. Dong said through localization in the Chinese market, Nike will draw inspiration to develop a stronger and competitive edge in the global market, the report said. Appealing to basic human emotion and desire knows no boundary. Executive Summary: Constant innovation has been the byword for Nike's success.This case study analyses the ever-evolving marketing strategies adopted by Nike to become a … For marketing and selling Nike is already using Internet web mode, any future marketing strategy should consider telecommunications and information technology advancements as they can go on twitter, face book as these websites are mostly accessed by youngsters which could be the fan of Nike. Copyright © 2003 - 2020 - UKEssays is a trading name of All Answers Ltd, a company registered in England and Wales. A company’s aim to international market can require minimal investment and be limited to infreq… 3 India and IKEA which is also sourced locally, is going to open their first store in Hyderabad (ibid.). Entry into a foreign country's market can be tricky, though, as you adapt a new culture, new regulatory environment and new competition. China Market Entry Strategy – Map of China’s 33 Provinces and Administrative Regions. April 2010; Journal of East-West Business 16(2):146-170; DOI: 10.1080/10669868.2010.486104. As Nike is operating in 4 different continents, the government legislations will be different for different countries. Most companies are unaware of the potential of these markets and therefore these markets remain unexplored. Although Nike is a U.S. established company but all of its manufacturing is done in low wage countries like Vietnam. Other Interesting Facts 10. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com. Its swoosh symbol is easily recognized by everyone. Market analysis in the Marketing strategy of Nike – Business segments in which Nike operates has a large number of local & national players. Export. Direct Exporting. Nike has captured approx. Nike has involved in a serious of quality scandals in China. The current acquisition of Reebok by Adidas makes this competition more intense. A key to implement international strategy could be the demographics and socio-cultural influences. Businesses may have to use different market entry methods for different countries i.e. and Sweatshops Central issue of the case? From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. One of Nike’s supporting intensive growth strategies is market development. It is very unreasonable to say that one strategy will fit globally because the rules and regulations and circumstances are different in different countries (Moore, 2003). Plant and equipment are the assets whose performance can be measured but Noto (2007) argued that brand name, reputation, particular technology and corporate culture with accumulated consumer information are some of the intangible assets which cannot be measured but are invaluable for a firm’s competitive advantage. But, to accomplish this was not that easy compared to how it sounds. This section will investigate either joint venture or FDI- as the most suitable market entry strategy for Nike Inc to gain the overseas distribution into the market of Finland. Create an account to start this course today. Joint Venture or FDI as the market entry strategy. 31% of the global athletic footwear market. Even though the market gets bigger and bigger as the number of targeted countries increases, but the tools used for promotion are the same. Cultural differences can also impede a country’s success. succeed. Nike is a global brand and has adapted and been the pioneers towards change in the market. Nike has succeeded over the years in presenting its products in a way that resonates with an audience no matter where they're located. All rights reserved. As Douglas and Wind (1987) suggested that one standardised strategy may be hampered due do the differences in the marketing infrastructure from one country to another. Many products had been recall due to low quality and some products have been caused injury to consumers in China. Young workers are paid low wages to work long hours and are exposed continuously to toxic substances in factories which can lead to serious health impairment. In general, Nike has used all the marketing campaigns possible in the past but it should consider the availability of resources in the different country. Market entry strategies: capital investment and foreign ownership. He suggested that for high quality of products most of the people around the world are ready to compromise their preferences in product features, functions and design. Nike’s marketing decisions and strategies have led the way for other sports brands to … credit by exam that is accepted by over 1,500 colleges and universities. A foundation financed by labour unions and low-wage countries in 1996 said that “Air Jordans” popular range of Nike sneakers were made by 11 year olds who are working for 14 cents per hour in Indonesia. Now, PESTLE framework will help us to analyse the macro- environmental factors affecting Nike’s international marketing strategies and its business performance. Pros? This is what we called as Toyotaism. Exporting is main entry strategy in international arena which can be used direct or indirect mode. If you need assistance with writing your essay, our professional essay writing service is here to help! Nike’s target market is largely consumers ages 15–45. But how? Table 1 above gives the insights of financial structure of Nike plc, as it is clear from the figures in table 1 that Nike is strong in financial terms due to which it can increase its business globally. Partner with a global commercial solutions provider 6 How to choose 7 References 7 About the author 8 Table of contents. What works for one market may not work for another. Nike's Values 9. An error occurred trying to load this video. Franchising is commonly used and a largely successful method of cross border market entry, however … How to Become a College Professor: Education and Career Roadmap, Director of Nursing: Duties, Requirements and Responsibilities, Job Description of an Elevator Repair or Service Technician, Educational Media Specialist Job Description and Requirements, Forensic Photographer Job Description and Training Requirements, Salary and Career Information for a Dump Truck Driver, Global Market Research Strategies & Overview, Marketing Case Study: Nike's Global Marketing Strategies, CSET Business Subtest II (176): Practice & Study Guide, CSET Business Subtest I (175): Practice & Study Guide, DSST Business Mathematics: Study Guide & Test Prep, Sales Mix: Definition, Formula & Variance Analysis. In this article, we’ll look at Nike’s target markets. Nike is one of the pioneers of the manufacturing outsourcing strategy. Nike has seen many ups and downs in the market and understands the value co-creation with customers. Growth rate of Nike is indicated in the table 3 below which shows constant steady sales over the past years. (Carr, 2005). Where TV advertising is permitted it may reach only a limited number of households, due to limited ownership of TV’s as for example in South Africa, Nigeria or Indonesia. You allow business owners to open their own branches of your restaurant, aka franchises 3. As a member, you'll also get unlimited access to over 83,000 References Nike's Strategy to Become the Leader in their Market. Large corporations with massive amounts of capital tend to find entry into foreign markets easier than small businesses. Nike used to operate under the strategy of “Guerrilla marketing” to promote its products, a strategy and concept that they had to abandon and change once they overpassed The franchisees pay you a certain fee and sometimes a cut of the profits per year, then they keep the restThe good thing about franchising is that it’s one of the easier ways to break into new markets. *You can also browse our support articles here >. An organisation should be aware about the external environments in which it functions and should be very sensitive about its internal culture. It is used when two or more companies want to achieve some common objectives and expand international operations. , either, as many of China ’ s strength, market.. Still remain focused on sustainability need to find a way products by focusing on specific segment. Their activities in that culture, and personalized coaching to help 's greatest strength, potential and the of! 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