What Gives Nike Its Competive Advantage?

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Introduction

What Gives Nike Its Competive Advantage In this assignment I will investigate what gives Nike its competive advantage, by this I mean the ability for Nike to attract and retain a strong customer base. All companies face fierce competion, I will examine how Nike fights in the market. Companies try to keep their costs as low as possible, this is achieved by efficiency. If you train your workers they can become more efficient this would give you a competive advantage on price (see appendix 1). Companies try to give their product added value this can be done by for instance packaging the product so that it appeals to the customers and stands out from the crowd. A good reputation of a brand will help sell a product, if you put a well known brand on a product it will sell better than the same product with an unknown brand if they were sold side by side (see appendix 2).

Middle

Over the years Nike has built an excellent reputation as a supplier of good quality and affordable sports wear. This has been achieved by Nike offering an extremely wide range of products which appeal to a considerable proportion of the market. Nike is the second most recognized brand in the world behind coca-cola. This has been supported by extensive advertising campaigns. Nike sponsor famous people like Tiger woods who play major golfing competitions in clothing that bear the Nike logo. When people see his clothing and the success of his golf they believe that this is cool and his success is linked to his wearing of Nike clothing. They wish to emulate their sporting star so they also want to be seen wearing similar Nike clothing, this therefore means that more people will purchase Nike products.

Conclusion

All of the people I questioned owned between 10 and 15 Nike products this emphasized the point that they are a very well known company. I asked why do you think Nike had done so well, I left this as an open question, I was given answers like "Nike are cool" "they are value for money" and "their logo looks good" everyone gave a positive answer to this question. Careful examination of the recorded profits and sales of the Nike co-operation show a substantial increase in sales and profits on a year on year basis. The Nike Corporation have adopted a number of successful business strategies e.g. the sponsorship of a number of sporting stars to promote their products. This has helped to maintain the Nike corporation position as a major manufacture and supplier of sports equipment and clothing throughout the world.

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