STRATEGIC MANAGEMENT

Strategic Management



Strategic Management Case Study: Nike's dispute with the University of Oregon

Introduction

Nike is a well known company for the apparel, sports equipment and accessories worldwide, the company founded in 1964 in the United States, and now the company has expanded worldwide. Nike products sold in over 45 countries and are well recognised over the world for the variety of products of clothing etc provided to customers. The company has grown enormously over the years by providing services around the world and having a good strategy in growth. Nike has increased its market shares greatly by releasing new products and expanding their production by having factories around the world. They have successfully made use of marketing cause awareness of the products they sell. Their biggest form of marketing is the media field (Miakhel 2009, pp. 13). There are always adverts promoting Nike products by using celebrities endorsing the product in the adverts this is one of many ways they have used to build their reputation in the market and to promote their products and to cause awareness to the consumers.

Q1. Nike Manufacturing in Asia

(a) Porter's Model Strategy

There exists a fierce competition between the major players, engaged in sports manufacturing industry. Michael Porter's works on strategic management had a profound impact on the firms' strategies. One of the models, proposed by him called Porter's Generic Strategy Matrix. The theory of generic strategies was very popular in the early 80s. It describes the three main policy options available to companies wishing to gain a sustainable competitive advantage.

Global Dominance by Costs

A leader by the costs in any market (such as Nike in this case) has the competitive advantage to produce at lower costs. With a focus on costs, a company aims to be the lowest-cost producer in a niche or a particular segment. Nike has built plants in Asian countries such as China; the workforce hired and trained to provide production costs as low as possible. However, reduced production costs do not always lead to low prices (Goldman & Papson 2008, pp. 194). Producers can set their prices in tandem with the competition, exploiting the advantages of a wider margin than their competitors. Some companies, such as Nike, equipped not only to manufacture high quality sports equipments and apparel at low prices, but have the marketing skills and workmanship for use the premium price policy.

Differentiation

Multinational companies, (Nike in this case), have met customer needs by providing cost-effective goods and services that has led Nike to enjoy a sustainable competitive advantage. With a focused differentiation strategy, it creates a competitive advantage through differentiation on a particular niche. This practice has allowed Nike to desensitise prices and focus on generating value for money and a higher margin compared. The advantages of differentiation require manufacturers to segment markets in order to target specific segments, generating a price higher than average (Wokutch 2010, pp. 207). For example, Nike has differentiated its services in Asia, particularly in the East Asian ...