NEW YORK (May 5, 2010) – Today NIKE, Inc. (NYSE: NKE) unveiled its strategy and key initiatives to achieve sustainable, long-term growth across its global portfolio of brands and businesses. Similarly, in countries with high level of illiteracy the effectiveness of print media is severely limited. Entry into a foreign country's market can be tricky, though, as you adapt a new culture, new regulatory environment and new competition. Large corporations with massive amounts of capital tend to find entry into foreign markets easier than small businesses. A foundation financed by labour unions and low-wage countries in 1996 said that “Air Jordans” popular range of Nike sneakers were made by 11 year olds who are working for 14 cents per hour in Indonesia. just create an account. Export. Nike’s Strengths – Internal Strategic Factors. Some of Nike's best tactics include emotional marketing, NikeID, incorporating technology and building relationships with global sports teams and athletes. You create a successful brand (e.g. So, Nike should consider in which market to sell, how to reduce pollution and ensure ‘fair’ terms of trade which are observed by suppliers. All work is written to order. credit by exam that is accepted by over 1,500 colleges and universities. Company has enough capital to implement any international market strategy for example advertising in international markets, providing better services to customers, invest in the new planning etc. The franchisees pay you a certain fee and sometimes a cut of the profits per year, then they keep the restThe good thing about franchising is that it’s one of the easier ways to break into new markets. Shortly after the ad ran, Pistorius was charged in the murder of his girlfriend, Reeva Steenkamp, and Nike was forced to suspend all ads and their relationship with the fallen athlete. An organisation should be aware about the external environments in which it functions and should be very sensitive about its internal culture. Being present in footwear, sports equipment, clothing and many others Nike uses differentiated targeting strategy.Produc… Kindergarten Math Centers: Ideas, Activities & Games, How to View Grades and Export CSVs in Your Study.com Virtual Classroom, School Closures in Texas for Coronavirus: How TX Schools Can Teach Online, Tech and Engineering - Questions & Answers, Health and Medicine - Questions & Answers. Strong Brand Awareness – Nike is one of the most recognizable brands in the world as its name alone is memorable, easy to pronounce, and very unique. Many emerging markets welcome foreign investment and allow full foreign ownership of companies. It is very difficult for Nike to control all the quality products around the world. VAT Registration No: 842417633. The decision of how to enter a foreign market can have a significant impact on the results. Analyze the problem of the case: Nike,Inc. Its swoosh symbol is easily recognized by everyone. Meaningful story – They’re selling more than a product; they’re selling aspiration. Additionally, not having a solid grasp of cultural preferences and expectations can impede marketing efforts. Plus, continued innovation and product quality are keys to success. It's a strategy that works as well in Europe or Asia as it does in the United States. study A company makes a decision to enter an international market, this strategy works to expand its wings. So Nike should follow this strategy in future and try to remain dominant over its rivals through the marketing strategy. lessons in math, English, science, history, and more. Study for free with our range of university lectures! Net profit margin of 8.1% suggests that Nike is competent in converting sales to profit margin. Disclaimer: This work has been submitted by a university student. imaginable degree, area of Implementation of brand differentiation strategy is allowed by Nike’s brand name which is a tangible but important factor to ensure future success and maintain its current leadership and market share. This is not an example of the work produced by our Essay Writing Service. In 2011, Nike embarked on another superstar partnership with double amputee and runner Oscar Pistorius, pouring millions into global marketing campaigns and advertisements featuring the athlete in starting blocks with the phrase 'I am the bullet in the chamber.' A market entry strategy is where you spell out such all-important specifics. These may for example include differences in the availability and reach of various promotional media, in the availability of certain distribution channels, or retail institutions or in the existence and efficiency of the communication and transportation network. In the beginning of Nike, where did Phil Knight sell his shoes? The major threat to Nike is the imitation that goes hand in hand in various markets which are affecting its revenues and businesses. Do you have a 2:1 degree or higher? Nike 's greatest growth barrier is its company's greatest strength, market share. Visit the Marketing 303: Global Marketing page to learn more. And Nike consumers get all the benefits from paying low wages to Asian workers. Nike is a global company based in United States which employed more than 30000 people across the globe. 3 India and IKEA which is also sourced locally, is going to open their first store in Hyderabad (ibid.). Nike has always come up with some innovative ideas. Moller et al. Moller et al. Resources, and Entry Strategies in Emerging Economies to investigate the impact of market-supporting institutions on business strategies by analyzing the entry strategies of foreign investors entering emerging economies. Table 1 above gives the insights of financial structure of Nike plc, as it is clear from the figures in table 1 that Nike is strong in financial terms due to which it can increase its business globally. The most effective way to manage and upgrade existing capabilities and resources and to convert the key weakness into strengths is- to outsource. For instance TV advertising, while a major medium in US, Japan and Australia, is not permitted in Scandinavian countries. 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DIBC is the ability to manage the international branding process as a dynamic capability. Advertisements; One of the most powerful marketing tools that can help you achieve your dream of converting your product to sales is advertising it through different means. (L. Hill, 2009). Franchising is a foreign market entry strategy where a semi-independent business owner (the franchisee) pays fees and royalties to the franchiser to use a company’s trademark and sell its products and/or services. Since Nike produces comfortable products whose goal is to aid athletes’ performance, the main target market for Nike is the active athletes market (Mahdi et al., 2015). The current ratio of -3 implies that company has sufficient liquid capital to enforce new marketing strategies and extending its business. But, to accomplish this was not that easy compared to how it sounds. For example, Nike has a website that displays entirely in Spanish. Strategy is planning through companies achieve their goals and move forward. China Market Entry Strategy – Map of China’s 33 Provinces and Administrative Regions. Select a subject to preview related courses: There's no doubt we live in an increasingly technological world, and Nike has excelled at reaching various audiences with a culturally appropriate message. Nike has handled the negative publicity over the sweatshops very expeditiously. Direct Exporting. Young workers are paid low wages to work long hours and are exposed continuously to toxic substances in factories which can lead to serious health impairment. According to Ni and Hu (2012) say that Shanghai qualit… (www.forbes.com). Anyone can earn It was advantageous for Nike as well as it remains in the news and gave the publicity to Nike in a way. The differentiation strategy of Nike is quite competitive so Nike should ensure any international marketing strategy it applies should enhance its superior brand name. Not only does it own 48% of the American athletic footwear market, but its share of the basketball footwear market is at a staggering 96%! STP strategy assists Nike to advertise its products by focusing on specific exclusive segment of the market (Ghauri and Cateora, 2014). The terms and conditions of a franchise package vary depending on the contract, however it generally includes: equipment, operations and management manual, staff training, and location approval. Global marketing helps create a strategy for a similar product in a different market. To ensure its international expansion, Nike is likewise focused on sustainability. This essay will also consider the political, legal and cultural issues which Nike can face while implementing any strategies in international markets. 31% of the global athletic footwear market. Nike used to operate under the strategy of “Guerrilla marketing” to promote its products, a strategy and concept that they had to abandon and change once they overpassed and Sweatshops Central issue of the case? Or thinking of selling your products in foreign lands? It outlines your business goals, an overview of the target market, precisely what you will sell there, expected sales and how you will achieve them. Exporting is main entry strategy in international arena which can be used direct or indirect mode. The simplest form of entry strategy is exporting using either a direct or indirect method such as an agent, in the case of the former, or countertrade, in the case of the latter. Improved hedge rates year after year leads to higher gross margin which are reflected in the net income which has increased by 4%. STP strategy assists Nike to advertise its products by focusing on specific exclusive segment of the market (Ghauri and Cateora, 2014). Tools for International Marketing Strategies. Get access risk-free for 30 days, flashcard set{{course.flashcardSetCoun > 1 ? DefinitionA modeof entryinto an international market “is the channel which organisation that want operate in internationalmarkets employ to gain entryto a new international market. According to a recent Hill & Knowlton survey, Chinese consider Nike the Middle Kingdom's "coolest brand." According to Levitt (1983), through supplying global markets Nike could achieve considerable economies of scale in production and marketing. What sort of marketing strategy has Nike used to achieve and maintain this level of market dominance?. As Douglas and Wind (1987) suggested that one standardised strategy may be hampered due do the differences in the marketing infrastructure from one country to another. What works for one market may not work for another. Nike uses psychographic segmentation variables to make its offerings more attractive to the target customers. It's hard to find much fault with Nike's global marketing strategies because they do most everything well. 's' : ''}}. It optimizes the manufacturing and production processes. Cons? The common objectives are – Foreign market entry; Risk/reward sharing *You can also browse our support articles here >. Since Nike produces comfortable products whose goal is to aid athletes’ performance, the main target market for Nike is the active athletes market (Mahdi et al., 2015). Take, for example, Nike's push to encourage more people in China to take up running and jogging. It's typically not a leisure activity, either, as many of China's population bases are located in heavily polluted areas. Nike should not forget suppliers of raw materials like rubber, leather and cotton etc. It uses separate campaign or strategy to cap the market potential of the different segments.Targeting is the important aspect of the marketing strategy, especially when a company is in different businesses. No plagiarism, guaranteed! Study.com has thousands of articles about every The three strategies are very closely linked. Toyota is being known world-wide and being accepted as the world most popular car manufacturer. CBS 48 hours news report that these sweatshops are conducting their activities in unpleasant and unhealthy conditions. | {{course.flashcardSetCount}} These ways can be a shade of company’s strength, potential and the level of interest in marketing. a restaurant) 2. What Can You Do With a Bachelor's in Marketing? What is your target market? Nike’s marketing decisions and strategies have led the way for other sports brands to … As Nike is operating in 4 different continents, the government legislations will be different for different countries. It is very unreasonable to say that one strategy will fit globally because the rules and regulations and circumstances are different in different countries (Moore, 2003). some countries will only allow a restricted level of imports but may welcome the business in building manufacturing facilities to provide jobs and limit the outflow of foreign exchange. Market entry strategies: capital investment and foreign ownership. (Douglas and Wind, 1987). Plus, continued innovation and product quality are keys to success. - Strategies, Definition & Issues, International Marketing Mix and the 4 Ps of Marketing, Business Case Study: Globalization of Coca-Cola, Product Adaptation: Definition & Examples, International Marketing: The Importance of Global Marketing Strategy, Transnational Strategy: Definition & Examples, Market Entry Strategy: Definition & Example, Ownership, Location & Internationalization (OLI) Framework, Benefits of Integrated Marketing Communication, Multidomestic Strategy: Definition & Examples, Wholly Owned Subsidiary: Definition, Advantages & Disadvantages, Global Staffing Approaches: Ethnocentric, Regiocentric, Polycentric, and Geocentric, First-Mover: Advantages, Disadvantages & Examples, Declining Markets: Characteristics & Strategies for Companies, Cross-Cultural Marketing: Definition & Overview, Market Penetration: Examples, Definition, Advantages & Disadvantages, Principles of Marketing: Certificate Program, Business 309: Digital Marketing & Advertising, ILTS Business, Marketing, and Computer Education (171): Test Practice and Study Guide, Principles of Marketing Syllabus Resource & Lesson Plans, Internet & Social Media Marketing: Help & Review, MTTC Marketing Education (036): Practice & Study Guide, UExcel Principles of Marketing: Study Guide & Test Prep, PLACE Marketing Education: Practice & Study Guide, TECEP Introduction to Marketing: Study Guide & Test Prep, SAT Subject Test Chemistry: Practice and Study Guide. Figure 1. Growth therefore, has to come from auxiliary brands and increased international … Nike undertakes marketing, product design and overall system integration itself but outsourced the other units to be economical. Working Scholars® Bringing Tuition-Free College to the Community. It is used when two or more companies want to achieve some common objectives and expand international operations. For example, Nike hosts a dedicated social media account for fans and athletes of the sport of cricket and also uses appropriate languages and dialects in not only their products, such as a shirt that says 'Espana' on it, but on their websites and other online platforms. Nike has been involved in never stopping controversies due to sweat shops but due to its preventable actions it gained publicity and today Nike is a stable brand name all over the world. Get the unbiased info you need to find the right school. Enrolling in a course lets you earn progress by passing quizzes and exams. You want to start exporting or expand to a new foreign market. For example, Nike has partnered with the English football club Manchester United to not only penetrate the European market but also reach consumers from all markets who are interested in soccer, known outside of the United States as 'football.' But how? Market analysis in the Marketing strategy of Nike – Business segments in which Nike operates has a large number of local & national players. Other Interesting Facts 10. News organisations such as CBS and several non government organisations such as Global Exchange based in San Francisco criticised the working conditions in foreign factories that supply Nike. So, Nike should adopt a strategy to build customer relationship on a scale and scope as never before. Which products should you export? Foreign Market Entry Strategies. Because as Duguid (2005) suggests that such kind of business acquisition will be against interest of consumers and can lead to monopoly. 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