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Strategy Management

  • Date Submitted: 03/19/2016 12:44 AM
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Since Nike was competing in such an industry which was mature in business life cycle and naturally,
there was immense competition to attract and retain the customer in order to increase profitability.
However, Nike did not play price wars in that competition since it would reduce profitability for
industry and the players in it. Nike, to combat, the competitors followed nonprice competition
strategy in order to maintain and increase its market share and profitability.
Product development (improving product design): Generally, the state of the art refers to the
highest level of development which is somewhat related to product develoment. Because product
development means the creation of improved products. Here,Nike focused more on product quality
to differentiate in the industry. Nike followed this strategy to maintain and increase its relative
competitive position in the expanding market and as a result, its market share soared in 1998. In the
same year, when Nike confronted a sudden decline in sales, it came up with its new line of shoes for
soccer market and perfected their design over time which really turned out to be profitable step.
Developing the product became again crucial for Nike which reflected with the advertising message
that soccer shoes are sleeker and fit the foot more snugly. As a result, they made profit out of it. So,
Nike put efforts on product design for each market segment it is serving including the acquired ones
whether it be the althletic shoe, dress shoe, athletic apparel etc. Still it is focusing more on develping
new and improved products in new segments so that it can maintain and increase its upward trend
in ROIC.
Market penetration ( expanding market share): Since Nike concentrated more on expanding market
share in its existing product markets and also promoted its shoes through heavy marketing, it can be
assumed that Nike pursued market penetration strategy. It cam into several contracts with...


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