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Nike’s Business Level Strategies: How They Have Changed The Nature Of Industry Competition

981 words - 4 pages

Business level strategies are plans that a firm forms to describe and project how it intends to build a sustainable competitive advantage, over its competitors in a discrete market (Furrer, 2010, p. 1). These strategies have changed the nature of competition in industries, and paved way for further developments in product quality and cost. Business level strategies employed by Nike work mainly in two forms, that is, competitive strategies and corporative strategies (Furner, 2010, p. 1). By looking at the different business level strategies Nike has employed, this essay will explain how it has had such a massive impact in the Sports and Apparel industry it now leads.
Nike has been in existence for some reasonable period of time, since 1957 when Phil Knight and Bill Bowerman came up with the idea of making quality shoes (Dermesropian, Drago, & Lopez, 2004). It borrows its name from an ancient Greek goddess, Nike, which translates to mean victory (Dermesropian et al., 2004). Nike has now evolved into a global company that deals in the process of designing, developing, and marketing of the apparels, sports products and footwear, among others to a global network of markets.
Nike possesses a leading position as a supplier of sports products in the international market. The Sports and Apparel industry is the most competitive, characterized with participants like Reebok, Addidas, and so forth (Lipsey, 2006, p. 103). Nike having been around for some time has managed to outdo its rivals by having an immense possession of competition in this industry brought about by the unique business level strategy it has. Nikes business level strategy has three major components, that is, cost leadership, management of industry segment and product differentiation.
Product differentiation is a strategy used by firms, to make their products be perceived as unique in the market for purposes of obtaining a premium price (Furrer, 2010, p. 6). This strategy is a major component of Nike’s business strategic level plan. In applying this strategy, Nike has attained a great deal of consumer insight, which it uses to offer uniquely designed premium products to the athletes. Still on product differentiation, Nike focuses more on research and development at a greater level. These unique features to Nike, have transformed the competition levels in this competitive industry, leading to a trend of a paradigm shift in the market. Most consumers opt for Nike branded sports products and apparels, at the expense of the other brand names.
As the brand name of Nike continue to soar, other companies in the industry; learning from the success Nike has experienced, start focusing more on brand development to keep up with the increasing levels of competition. These companies resort to brand maintenance, which has become the main target in this industry due to product differentiation made by Nike. Nike, being market-advantaged, produces an extensive range of products, through which it...

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