Nike is a leading sportswear company whose resources and capabilities allow it to successfully pursue its strategic direction. Nike sees its strategy in extending its customer base to include people all over the world that is why the company focuses on international expansion. Other strategic goals of the company include delivering superb customer experience, generating a stable revenue flow well above the Nike’s expenses, adopting value-based approach to the company’s pricing strategy and focus on innovations that allows it to be number one in its field.
The resource base due to which Nike successfully pursues its strategic direction comprises a number of loyal suppliers and a well-developed logistics chain, so that the company’s expenses on raw materials are one of the lowest in the industry. In terms of capabilities, it largely uses innovation and engages into research – an option that make its products more attractive and adds to Nike’s competitive advantage.
Competitive advantage is those characteristics, properties of the product that create a certain superiority for the enterprise over its competitors, and for the consumer – a rational combination of consumer characteristics of the product. Superiority is evaluated in comparison, therefore it is a relative characteristic and is conditioned by various factors. There are two opposing views on the sources of sustainable competitive advantage: some economists consider “a firm’s internal resources to the primary source of long-term competitive advantage” while others believe that “a firm’s competitive advantage is derived from external market forces and the firm’s market side position” (Pratama et al., 2022, p. 3064). Speaking about internal resources, Nike has a develop network of suppliers as well as an array of its own brand shops that operate in many countries of the world (Pratama et al., 2022). An increased penetration into the global market allows the company to save costs and generate stable profits unsurpassed by any of its rivals. External market forces that define the company’s competitive advantage comprise customers’ fascination with brand and premium quality products produced by the company. Indeed, brand equity and focus on quality and innovations are among the key competitive advantages of Nike company.
The competitive advantage is essential in business since it lets companies significantly widen their customer base, which, in its turn, results in revenue and profit increase. Sustainable company advantage largely contributes to the company’s long-term growth since it allows to attract more loyal clients to the company’s production thus generating a stable money inflow. Establishing a sustainable competitive advantage for Nike requires a continued emphasis on the development of Nike’s own brand stores, which allows the company to make its operations more profitable.
Secondly, pursuing Nike’s sustainable competitive advantage presupposes father expansion into the Asian market, a densely populated region that can be a source of consumer base growth. Thirdly, developing technology and innovations allows the company to promote its product using gadgets, mobile applications, ahead of all competitors in this direction. Finally, partnerships with streaming services like Spotify help the company to provide customers with unique experience. Nowadays buying Nike goods, a customer receives not only superb quality products, but also additional services that make the purchase more attractive. Thus, using Nike’s application, the customer may enjoy the automatic selection of music for the desired running rhythm. Given all the above-mentioned facts, Nike company remains one of the most sustainable and fast growing companies in the world.
References
Pratama, A. Z., Sutopo, W., Hisjam, M., & Istiqomah, S. (2022). Comparative study of global business strategy: Lessons learned from excellent sports-wear companies (Nike and Adidas). Proceedings of the International Conference on Industrial Engineering and Operations Management Istanbul, Turkey, pp. 3062-3071. Web.