Nike Five Forces

Topics: Athletic shoe, Nike, Inc., Michael Jordan Pages: 5 (1567 words) Published: December 4, 2007
Five Forces Model
(Highly Negative. Range from 1-5)

Rivalry (3)
1. How many companies in industry?
As Nike is an international company that has their product selling worldwide, they have countless of competitors, including many domestic local firm. However, not all of these companies have the power to compete with Nike, only a few international companies are Nike¡¦s major competitors, for instance, Adidas and Reebok.

2. How do they compete each other in term of 4P marketing strategy Product: As an athletic shoes producer, they try to provide better quality and more comfortable shoes that fit to the sport player through research and development. By claiming their shoes meet the physics need of different sports, which help the sport player to maximize their ability by protecting them and reduce the sport harm.

Price: They have pricing strategy for different group of consumer. The price of their shoes varies depending on the type of the shoes, the feature of the shoes, and even design and edition matter. The shoes can be price at a standard price where most customers can afford. Yet some special feature shoes are specially design and created for premium customer who can afford to pay a higher price. For this reason they can capture different group and level of customer.

Place: They opened discount factory outlet stores in rural areas and retail stores in urban shopping center. By selling different kind of product in different places help them to meet the different need of the customers. On the other hand, they also sell their product online, where customer can purchase their product at anywhere and anytime. All this make them be able to maximize their gain.

Promotion: Promotion doesn¡¦t only mean discount in prices, as they cooperate with Super Sport Star to let these famous player to present their product for them, sometime they held up event to give the customers the chance to meet with these super sport player by providing a chance to draw for the ticket after the customer purchasing amount meet the requirement. This will help the company to boost their sales, which at the same time can further promote their brand as an advertisement.

Customer (2)
Even though many believe customer is the greatest and customer should have the absolute power, in this case, Nike has absolute power over customer, where customer has low bargaining power. This can be proved by study many cases where Nike make their customer angry and claim that they will refuse to buy Nike product. An example will be mention here. Two years ago Nike claim that they have successfully invite Michael Jordan, the king of Basketball to Taiwan. Nike said they will arrange a meeting for their customers to see Michael Jordan at a close distance by held an event for the fans. But the condition is ticked is required for the entrance of the event, and this ticket will be draw by Nike, and only customer who buy Nike product till certain amount have the right to participate in this draw. This announcement simply make all Taiwanese crazy and start buying a lot of Nike product just to exchange for a chance to won the ticket at the draw. Yet greater expectation comes with greater disappointment. When Michael Jordan comes to Taiwan and attend this event, he only stays for few minutes then leave, leaving many lucky fans who get the ticket by the draw shock and angry. The customer starts to question Nike about this extremely short events and these angry customer gather together to sign up for boycotting Nike.

However, after Nike come out to apologize, and give a promise of ¡§claim for these 700 lucky customers have the right to be first invited when Nike arrange NBA star to Taiwan next time; customer who purchase the Jordan product for this event can return the product and get refund unconditionally; promise to take care and maintain 30 basketball court in the society¡¨, nothing seem to happen anymore.

Even though the first two weeks after the events...
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