Marketing

Instructions – Marketing post-module INDIVIDUAL assignment

POST-MODULE INDIVIDUAL ASSIGNMENT – NIKE

Due date: Monday, 23 May 2022 (23:55 London, UK time) 

In class, we discussed the following key takeaways from the cases we studied: radical decentralization, enfranchisement, digitalization/disruption, the Strategic Value Vision, Blue Ocean Strategy, Disruption (Christensen), Servitization, and value gaps.

Please select one of these frameworks and use it to analyze an organization with which you are familiar.  As a result of your analysis, what do you conclude about your organization?

Not to exceed 5 pages, 12 point font, standard margins.

ANSWER

NIKE Blue Ocean Strategies

The Blue Ocean strategy is a business strategy focused on developing new products in a market that does not exist in competition (Leavy, 2018). In this strategy, the business aims to ensure that all the products they are producing will receive low competition and, if possible, no competition. When using this strategy, the company gets involved in searching unique places within an already existing market that has received less attention or a completely distinct market and starts producing the products. This allows the company to have a base where it can shape the markets, including the pricing of the products, as there are limited pricing pressures. In the current market, due to high competition, the pricing of goods has been used as a toll of competition as companies struggle to lower the cost of production that is aimed at helping them offer high quality to their customers at a reduced price. In a study by (De Giovanni  & Zaccour, 2019), they report that customers will always look for a product of high quality and one that is priced at a lower price. With that in mind, this has shifted pricing in many industries as companies are left with no option but to enjoy little profits being contributed by the pricing strategies that have been implemented.

Nike is one company that has considered Blue ocean strategies to maximize their sales in return record-high number of profits (Pidun, 2019). Nike has engaged in various activities that showcase its engagement in the Blue ocean strategy. Nike has taken part in reconstructing the market boundaries. Nike has created a higher competition than its existing competitors, such as Adidas, which gives it a high consideration in terms of market share. In the sports industry, customers will always look at the price and quality being offered.

Furthermore, they will also consider the designs that are being made. In this case, Nike has considered offering unique designs that cannot be imitated by its competitors and also hold a unique supply chain that helps it get a high-quality material that allows them to provide high quality at a reduced price which when its competitors imitate, they will end up having loses (Chan & Leung, 2020). With this cost-effectiveness, the company has achieved differentiation that assures its success. The Blue ocean strategy is all about differentiation. By ensuring that a company can differentiate its services and a core that cannot be quickly initiated, the company’s success is achieved.

Nike has continued to pursue new innovative technologies to ensure that they get beyond the customers’ expectations. Customer value is of the top considerations when designing products. Nike believes more in providing that they attain high customer satisfaction, which is only recorded if the customers get the value of what they have purchased. After getting customer satisfaction, they then work on ensuring that they maintain customer loyalty. Having the assurance that a specific demographic will always consider its products when in need has helped the company be more distinguished and achieve the blue ocean strategy. This strategy has helped the company record a high number of sales despite the tough economic times. Focusing on the existing customer who the company is more assured of their participation and support helps the company have sales even when the economic times are hard. It is a challenge to capture new clients within this difficult financial time.

The company has also focused on developing new products such as performance hijab, which are designed in a sport-like manner. This creates a new target audience for Muslims. Even though Muslims spend their time wearing Hijabs, they also have a sense of fashion; hence developing something that meets their need that other companies have not yet considered gives Nike a competitive advantage. Furthermore, in its production, Nike has also considered protecting the planet’s future. Nike has considered using materials that can quickly decompose when subjected to. In much research, it has been a high alert that sports shoes are dumped in the ocean and in water sources where the soles cannot decompose, posing a significant threat to the ecosystem. By being greener in its productions, Nike has included a section within which it will attract all the environmentally conscious people obsessed with using products that adhere to protecting the environment. Through this, Nike has proved to society that it can do the one which was based on the impossible. Through this, the company has also shown care to the athletes as it claims that it has been able to reduce the effects that the athletes face due to rapid climatic change. This increases their competitive advantage when it comes to being proffered by the athletes while making purchases.

Through the blue strategies, the company has included more technological developments, such as developing medical foot wares that help improve blood circulation. The company considered the sports medical section, which has received less attention. In many of the companies, they have considered sports for athletics, everyday wear, and fashion. However, only a few companies have considered developing sportswear with a health advantage. Upon realizing that when the products are launched, they can quickly sell due to their uniqueness, the company has been able to incase its sales due to the increased customer audience.

In conclusion, Nike is a company that has focused on getting more innovative and developing products that will help the company surpass its expectations hence high customer satisfaction. Nike acknowledges that there is high competition in the sportswear field, hence the need to explore and develop unique products with less competition to get through the competition. By considering the blue ocean strategy, the company has received high customer satisfaction due to the increased differentiation and beat out the competition. Nike has showcased its ability to care for the customers, be innovative, and showcase its capabilities to go an extra mile to increase its customer audience. Furthermore, Nike also showcases the importance of sharing the different perspectives in innovating through eth same product. This is a strategy that has received less consideration within many industries. If it is emulated through the various industries, it will be easy to improve the existing products that focus on satisfying the different needs of the customers. With this in mind, it will create a market with diverse products that meet all the needs and increase the urge for companies to carry out further research and develop more products hence being effective.

References

Chan, H. L., Wei, X., Guo, S., & Leung, W. H. (2020). Corporate social responsibility (CSR) in fashion supply chains: A multi-methodological study. Transportation Research Part E: Logistics and Transportation Review, 142, 102063.

De Giovanni, P., & Zaccour, G. (2019). Optimal quality improvements and pricing strategies with active and passive product returns. Omega, 88, 248-262.

Leavy, B. (2018). Value innovation and how to successfully incubate “blue ocean” initiatives. Strategy & Leadership.

Pidun, U. (2019). Corporate growth strategy. In Corporate Strategy (pp. 95-126). Springer Gabler, Wiesbaden.