Free «Nike's Challenge» UK Essay Sample
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Nike’s Challenge: Staying Ahead of the Pack
For a long time Nike has occupied a lead position in the sales of sports attire and footwear. Noteworthy, in its last fiscal year Nike made $30.6 billion in sales. Therefore, due to its figures in sales, the company has the ability to maintain a solid position and challenge its rivals in sports attire and footwear retail (Germano 1). In relation to Nike’s forecasts, it is expected that over a period of three years the revenues will double reaching $7.5 billion (Germano 1). However, a research by Citigroup reports that Nike is facing a tough quarterly comparison since last year, especially in North American regions. Citi’s report shows that Nike is experiencing a major challenge to stay ahead of the pack (Germano 2). Therefore, it is critical for Nike’s management to maintain a desired double-digit growth rate. This is an important way to ensure that Nike’s shares will not be hitin future orders (Germano 2).
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In the Dow Jones Industrial Average, Nike is ranked as the second-best performer as a result of increasing its stock up to 19% in 2015. Notably, maintaining the leisure and style phenomenon has played a significant role in the success of Nike (Sara 2). For instance, the launch of skinny jeans has become a fashion trend since it hit the market. However, it is facing new competition from Spandex. On the other hand, one of the challenges facing Nike is its legacy product – the running footwear. There has been an entry of casual styles at other stores that has provided consumers with alternative choices. Also, executives have remarked that the mid price for running shoes is not performing as well as the company expected (Germano 2)
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Remarkably, the setbacks of Nike are seemingly short-lived enabling it to navigate through the competition from its rivals. The president of the Nike brand, Trevor Edwards, is happy that the demand for athletic shoes is rebounding (Germano 2). For instance, on the playing field, the company has received a lot of buzz from its sponsorship for winners in the major championships including golfer Jordan Spieth, Stephen Cherry and Tom Brandy (Germano 2). In addition, in attempts to secure its position in the sale of sports attire and footwear, Nike has another major task to deal with the retirement of its founder Phil Knight (Germano 3). In particular, at a recent shareholders’ meeting, the election of Knight’s son Travis to the board of directors was ratified (Germano 3).
Factors that led to the dominance of Nike in the sale of athletic shoes.
Nike has adopted a unique marketing strategy that involves forming relationships with the runners (Germano 2). Before the shoes are launched to the market, the company tests them on the runners. In this way the company is able to get significant demand from the athletes under contracts. Secondly, Nike spends a lot of time at track events. This enables the management to collect information in relation to the preferences of runners. Collected information is innovatively interpreted to produce durable and affordable shoes (Germano 2). Although competition is challenging Nike’s position, it is a factor that leads to innovation of footwear that is attractive to consumers. For instance, the Nike shoes have generated high sales because they are light and comfortable (Germano 1).
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Recommendations for Nike to succeed in the 'athleisure' market
The rise of athleisure apparel and footwear is becoming a fast-spreading trend and consumers are adapting to it rapidly. This market could provide a big opportunity for Nike. It means that the company should start producing outfits and shoes that are not purposely meant for sporting activities (Germano 2). These are products that consumers can wear on other occasions such as nights out, for example. Moreover, Nike should continue expanding its assortments that will match the demands of female consumers. Usually, women present a large market for products such as shoes and apparel (Germano 3). Therefore, Nike should take this opportunity to ensure that their new products will be attractive to female consumers. For instance, Nike can launch sneakers that women will feel comfortable in when shopping at the supermarkets and groceries (Germano 2).
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Marketing research methods recommendable to Nike to help it stay abreast of changing consumer tastes
Nike has established a strong brand image, however, it has to make changes in its research methods. On the one hand, the company spends a lot of time at track events to collect information on preferences of the runners (Germano 2). Yet, on the other hand, the research teams should focus on other target groups to enhance a process of market mixing. Secondly, although most of potential customers are aware about Nike products, they are not guided where to find and buy brand items. Therefore, market research should focus on improving company’s access to meet the demands of its target markets (Germano 3). In addition, this will help customers get high quality products in the shortest time. More importantly, timely understanding of potential opportunities will help the company eliminate its own weaknesses. As a result, Nike will have the ability to face its competitors and increase its customers’ base (Germano 2). Nevertheless, executives at Nike should use technological advances to research the increasing needs of consumers. In this way, Nike will be able to launch products of a large scale that are different from its competitors’. Consequently, the position of the company will be improved and will help Nike stay abreast of changing consumer tastes (Germano 1).