A SWOT analysis for Nike and there strategic capability
Sustainable competitive advantage refers to the combination of elements of business strategy, which provides a company with substantial advantage over existing and future competitors (McLeish 2010). Since the current economic environment is characterized by increased competition, companies have no choice but to establish and maintain high levels of competitive advantage in order for their products to survive in the market and enjoy continuous profitability. The foundation of a firm’s competitive advantage is based on the available resources, company’s capabilities and the core competencies of a company (Hitt, Ireland & Hoskisson 2009). Company’s resources refer to a broad concept which encompasses the physical, human, social and organizational phenomena. An organization’s resources may either be tangible; physical assets which can be easily quantified or intangible; assets that are deeply rooted within the organization’s structure having accumulated over a long period of time. Intangible assets provide a company with increased competitive advantage since they are relatively difficult for competitors to imitate. Hence, an organization should heavily invest in intangible assets in order to achieve sustainable competitive advantage.
In a firm, capabilities exist when the available resources are purposefully integrated to achieve the pre determined tasks and objectives of the firm (Hitt, Ireland & Hoskisson 2009). Capabilities emerge from unique set of skills and knowledge possessed by the employees and evolves over time through constant development and transmission to the human capital within the firm. A firm’s core competencies are its capabilities that serve as a source of competitive advantage over its rivals. They are unique and distinguish a company from the rest of its competition in the industry by portraying the firm’s personality. Core competencies in firms develop over time through the process of accumulating and learning how to efficiently utilize various resources and capabilities. This often leads to innovations and inventions which promote efficiency within organizations. Sustained competitive advantage can only be achieved when rival firms are unable to imitate or duplicate a firm’s benefits of its strategies (Hitt, Ireland & Hoskisson 2009). Therefore, companies should seek to maintain high levels of competitive advantage through their capabilities, core competencies, and efficient use of the available resources.
目的和目标--Aims and Objectives
Nike, a Unites States based company which develops and supplies sports footwear, and apparel across the globe is a good example of a company that has established and maintained its competitive advantage through the above criteria. One of the major goals of NIKE is product innovation and product improvement (Lamb, Hair & McDaniel 2008). Through this innovation and constant product improvement, the company seeks to create business opportunities that set it apart from the rest of its competitors. Nike operates in more that 160 countries and employs an approximate one million people both directly and indirectly around the world (Nike 2010). This results in an increased need for the company to maintain its competitive advantage through its suppliers, shippers and other service provider who are in contact with final consumers. The company’s current competitive strategies are deemed relatively efficient since it remains as one of the most profitable companies in the industry. This is primarily due to Nike’s ability to withstand competition from other major firms in the industry such as Adidas and Puma through extensive strategic planning which has promoted its continuous ability to deliver unrivalled products in the global market.
The following study focuses on Nike’s strategy to achieve and maintain competitive advantage in the global market through strategic application of its capabilities as well as efficient utilization of both tangible and intangible resources within the company.
耐克的SWOT战略分析--SWOT Analysis for Nike
Nike is a highly successful developer and supplier of athletic and sports wear and by 1998, the company controlled over 40% of the footwear market in the United States (Vogel 2006). Its strength lies in its brand name and reputation for high quality products and innovation. The company has gained world wide recognition for its innovative marketing strategies which features sports icons such as Tiger Woods and Michael Jordan. Being a very highly competitive organization, Nike’s move to sponsor top athletes in Olympic Games as a move to counter Reebok’s strategy of sponsoring the Atlanta Olympic Games was a clear indication of the company’s superior strategic planning which consequently earned it world wide recognition (Adam 2009). Nike’s brand name and the Nike’s ‘Swoosh’ have gained high recognition in the world market and it is widely acknowledged as the number one sports wear brand in the world (Adam 2009).
However, contrary to the practice of most modern organization, Nike does not embrace the culture of diversity. Even though the organization deals with diversified range of sports wear, the company’s income is heavily dependent on the sports wear market share which renders it highly vulnerable to rapid market changes. Nike’s labour conditions raised a lot of concerns when the media unveiled incidences of labour exploitation and child labour in the contractor factories and this negatively impacted on the image of the company. In 1996, life magazine published a story about child labour in Pakistan which featured a young boy stitching a Nike Soccer ball (Vogel 2006). Further, a report released by Earnest & Young in 1997 revealing that the workers in Vietnam producing Nike products were constantly exposed to hazardous materials proved more damaging to the company’s image in an age when foreign labour abuses had become the major focus of human rights movements.
Nike’s opportunities range from the Company’s global recognition which provides it with greater opportunities to venture into new markets. Nike can also diversify its processes by developing other sports related products such as sunglasses and jewellery which would increase the company’s revenue and profit margins. In addition, the company has an opportunity to capitalize on its Nike + technology in which a sensor placed on Nike’s foot ware interacts with Apple’s IPod to record distance covered as well as the calories burned by a runner (Kimball and Lussier 2009).
Threats: It is difficult to achieve price standardization in a global economic environment characterized by massive economic and currency fluctuations. Nike sells its products in different regions which are characterized by economic instabilities and this considerably reduces the profit margins (Adam 2009). The textile industry is also associated with some level of environment degradation. Therefore, Nike has to strive higher in order to acquire and maintain an eco friendly reputation. The retail sector has also become increasingly competitive with rival companies reducing prices as a means of attracting a larger consumer base. This poses a potential external threat to Nike as a response to such price changes may reduce the company’s profitability. Nike also faces a major threat emanating from the Adidas-Reebok merger. Adidas-Reebok signed contracts with NBA and NFI for apparel business which threatened to overtake the competitive advantage possessed by Nike.
耐克的自身能力对于其竞争优势的贡献--Nike Capabilities and Their Contribution to Its Competitive Advantage
Michael Porter identified five competitive forces that are present in any competitive environment (Lussier & Kimball 2009). There exists rivalry among competing firms in the same industry and the firms compete for customers through price, quality and speed. Nike faces competition from Adidas-Reebok, Puma, and Fila and the company has to develop strategies through which it can overcome such competition. Potential development of substitute products and entry by new competitors also poses a major threat to the overall performance of a company. Bargaining power of a firm’s suppliers is therefore essential in determining its eventual returns. For instance, Nike uses private contractors to develop various products which awards them a great deal of power over these plants since it can easily switch factories (Lussier & Kimball 2009). Consumer satisfaction is the key to long term success of a business. Nike largely depends on its consumers for its profitability. Consequently, the company continues to offer high quality and appealing products in order to enhance consumer loyalty. In order to achieve and maintain competitive advantage, strategies applied by Nike must translate to capabilities of the firm and its external environment. Strategic planning highly facilitates in the creation of competitive advantage within the organization. This entails the strategic application of Nike’s unique capabilities and core competencies to the company’s advantage.
EG1hao
