1.0 Executive Summary
The primary objective is to increase Li Ning¡¦s overall market share from the current 17% to 20% in 3 years time and defend its first place in China sportswear market against strong competition. To achieve this goal, Li Ning has to improve the customers brand perception, rationalize market segments and invest in Mega cities and first tier cities.
2.0 Situation Analysis
As the dominant local brand in China sports market, Li Ning is facing intense competition from its multinational competitors. Li Ning¡¦s growth rate is 23%p lower than Nike¡¦s and 13%p lower than Adidas¡¦.
Li Ning owns a well-established distribution channel, a powerful R&D team, and broad brand awareness in the China market. All these factors provid Li Ning with the opportunity to achieve a larger market share in China¡¦s booming sporting goods market, which is expected to grow to, conservatively, 55 billion RMB by 2008. 2.1 Market Summary
By focusing on University students and second and third tier cities and by underestimating the stronger purchasing power and trend-setting effect of Mega and first tier cities, Lin Ning has lost market share in the first tier cities. Moreover, other local brands like Anta and Double Star are threatening Li Ning¡¦s market share in second and third tier cities.
On the one hand, Li Ning should keep the current market territory. One the other hand, Li Ning should step into mega- and first tier cities and extend the market segment it is targeting to the population of age 25 to 34, to the portion that has a higher income and is also active in sports.
In terms of brand positioning, Li Ning needs to put international feeling over oriental theme. Though distinctive, the oriental theme is not effective in satisfying customer¡¦s Chinese perception for success, fashion and keeping-ahead. A reinforced international branding could fill customer¡¦s perception