Nike Competitive Advantage

Nike Competitive Advantage

Nike Competitive Advantage

Nike is an international athletic brand that deals with sportswear such as shoes and apparel equipment. The brand is well known for its stylish and great quality products. Besides, the brand is deeply connected with athletics and sports and it strives to inspire sports fans across the world.

Incorporated in 1967, Nike has grown throughout the decades to be the number one brand in the selling of sports-wear and apparel across the world. Its swoosh logo is easily recognizable among the many brands globally. Among the products Nike produces include the following categories; the Jordan Brand, NIKE Basketball, Running, Football (Soccer), Training, and Sportswear. Besides the Jordan brand, other subsidiary brands that Nike owns are Hurley and Converse. The United States provides that largest market for the Nike brand accounting for over 40% of its total sales and accounting for a total of 392 retail stores.

Away from the U.S, the Nike brand still dominates the international markets with a total of 790 retail stores spread across the globe. But how the brand does manage to dominate the international athletic markets that are very competitive? Nike does this by heavily focusing and investing in research and development to produce very innovative products, sportswear, and apparel exclusively made from sustainable materials. Besides, it outsources most of its production.

However, competition in the sportswear industry continues to increase each day and Nike has to step up to stay at the top. In this post, we look at the competitive advantage that Nike has over its competitors.

  • Brand Equity

Brand equity is perhaps the main strength of any brand. Customer experience, customer trust, and customer engagement are among the many factors that when they collaborate they significantly affect brand equity. As such, Nike has managed to build strong customer trust in the market and with their customers. With strong brand equity, Nike has managed to lead its competitors in the sports industry.  Nike is a customer-oriented brand that knows its customers in all aspects.

To keep strong brand equity, Nike has focused on its taste and changing preferences. So, the brand has heavily invested in research, innovation, and marketing which has helped to bring the best designs to the market right before its competitors. The products come in excellent design and quality.

Nike has strived to create robust brand equity. When it comes to product quality, supply chain, or sustainability, the brand has kept a strong focus on accountability, social responsibility, and most importantly, ethics. The high brand equity has seen Nike command stronger financial and market growth for the Nike brand.

  • Global Presence

It is obvious Nike is a global brand that has widely spread retail stores across the world. While the U.S remains its core markets, its supply chain and distribution network is spread globally. With the brand outsourcing most of its products to external suppliers, this only means that the brand commands a bigger market share.

Nike has over 1,180 stores around the world. In the U.S alone, it has 392 stores and the rest are distributed among countries in the world. It has 124 footwear factories and 328 apparel factories that supplied products.  Coupled with global marketing strategies, Nike can dominate the global athletic footwear and apparel market.

The brand sells its products through Nike-owned retail stores, digital platforms, retail accounts, a mix of independent distributors, licensees, and sales representatives in nearly all the countries around the world.

  • Innovation

Innovation can be another source of competitive advantage. Whether a business is dealing with technology, sport, or fashion, innovation provides new leads to tackling challenges. Today, product innovation is so important owing to the quick changing preferences of customers.

With this in mind, Nike has invested in research and development to know more about the customer’s taste and fashion trends. People are increasingly looking for stylish and durable sports, athletics, and leisure products. As such, Nike has mainly focused its strategy on innovation to rival its competitors. It has put more investment to support the innovation processes and strengthen the brand.

  • Marketing

Marketing is a major strength of the Nike brand and provides it with a unique competitive advantage in the global sportswear market. Nike has put in place distinctive global marketing strategies and techniques. Its Swoosh logo is popular and most notable among the numerous brands in the athletic wear industry. It also utilizes a mix of traditional and modern tools and methods in its marketing strategy. For instance, it has robust retail, distribution network, and inshore and online promotions.

When it comes to video marketing, Nike connects with its customers’ emotions uniquely. Its promotional videos are more into striking an emotional connection rather than being about product promotions. The brand believes in the spirit of sports and how sports connect people across the world. As such, it encourages sports lovers through promotional videos.

Besides using online and offline marketing strategies, Nike also uses media releases, sponsorships, and events to market its products. It also uses celebrity endorsements and sponsorships to connect with its customers. Marketing is part and parcel of Nike’s business strategy. As such, it has become an excellent marketer.

  • Product Range

The Nike brand has a wide product range in the market. It offers products in six main categories. These include NIKE Basketball, Training, Sportswear, the Jordan Brand, Running, and Football (Soccer). A wide product range helps in targeting a larger customer base. So, Nike’s diverse product range caters to varied customer segments.

Nike also owns subsidiary brands like Converse, Jordan, and Hurley that also target distinct customer segments and athletic fans. As such, a wide product range of popular products has provided a unique competitive advantage for Nike.

  • Supply Chain and Manufacturing

Over time, Nike has maintained a strong supply chain and manufacturing network that has helped keep the brand popular with agility. For instance, it outsources nearly all of its production. Nonetheless, excellent management of the supply chain and manufacturing networks has helped Nike produce and deliver superior quality sportswear and apparel while keeping the costs affordable.

In the U.S Nike has seven important distribution centers, five in Memphis, Tennessee, and one in Indianapolis, Indiana, and another in Dayton, Tennessee. With well-synchronized manufacturing, retail, and distribution network, Nike can cater to demand better. Better yet is that a well-integrated network allows Nike to focus on innovation and deliver high-quality products to the market.

  • Customer Base

In the sportswear industry, Nike commands the largest customer base of all the athletic and sports shoes and apparel products. Being a global brand, it has a large supply chain, retail, and distribution networks.

Marketing has played a major role in making the Nike brand a global brand. The style, product innovation, and quality have also build Nike’s image in the global arena. Nike’s world-wide presence has resulted in a wide customer base. Although the competition is quite tough, Nike is employing new strategies to offer better products to acquire new customers while maintaining the existing ones. A larger customer base is a significant strength for the Nike brand as it sets it apart from the rest as an exceptional brand.

  • Customer Loyalty

In the 21st century, gaining customer loyalty in any product is very difficult. This is because several aspects including changing customer preferences and competition play a major role in cementing customer loyalty. However, customer-oriented brands such as Nike have been able to command customer loyalty. Therefore, customer loyalty is a strong source of competitive advantage.

Nike has employed several methods to increase customer loyalty. The company has heavily invested in design and quality and employed a greater business strategy that focuses on customer service. Bearing in mind that customer preference changes fast, there is stiff competition among brands. As such, Nike focuses on research and innovation to create new designs and styles to improve the popularity of its products in the market.

Equally, it is also paying attention to its pricing, retail, and marketing strategy to deliver the best products to its customers across the world. As an outstanding brand that prides in the highest popularity and customer loyalty in the sportswear industry, it is no doubt that customer loyalty is a unique competitive advantage that has kept Nike leading its rivals.

Competitive advantage is something that separates the company from other competitors in the same industry. Nike has been able to outshine so many brands in the athletic wear industry because of the competitive advantage that it has over its rivals. We have mentioned some of the main factors that put Nike ahead of its competitors. From a humble beginning, Nike has managed to build and establish a strong brand name among its target customer.

Today, Nike is a multinational brand that is recognized for its premium quality products that are reasonably priced. It is also recognized as the biggest brand in designing, developing, and marketing of sportswear, apparel, and accessories. And with a firm grip on the competitive advantage factors, Nike is deemed to continue leading its competitors in the manufacture of athletic wear and apparel.