Nike’s Challenge: Staying Ahead of the Pack
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Nike’s major challenge is staying ahead of the intense competition that is waiting for the slightest opportunities to overtake it. So far, Nike remains a steadfast market position of the best seller in the sports industry. In its last fiscal year, Nike recorded approximately $30.6 billion in sales to strengthen its place as the world’s best seller of sports attire. However, despite its huge success, Nike faces the challenge of maintaining its lead as more competitors join the industry. Its sales growth faces a tough comparison with the previous year, but analysts report a slight increase in their revenues as well as in the earnings per share. Specifically, a FactSet analysis forecasts that Nike’s revenues have increased slightly from $7.9 billion to $8.2 billion in a year. Its most impressive market region is North America where the company aimed at 15% growth in the orders demanded. Nike’s recent growth has been influenced by its new style – the athleisure phenomenon. Its focus on emerging fashion trends gives it a competitive edge over the rivals. The company has also diversified its portfolio to offer high-end luxurious products that have become common on the runways of New York.
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Despite the sales growth of Nike, the company faces a huge challenge in marketing its brand running footwear that currently does not perform as expected. The poor performance of Nike’s legacy product has made Skechers, its closest competitor in sports-footwear, to boost its ranking and achieve the second place after Nike. Evidently, Nike is not insulated from the competition considering the performance of Skechers. More competitors seek for brand ambassadors among prominent athletes and professional players and thus, create a buzz in the market to increase their share. For Nike to protect its lead, it has to maintain double digits in its growth rate of future orders. It also has to deal with the leadership structure as its founder and chairperson Phil Knight is set to retire next year. The company has laid groundwork for the exit of its influential leader by transferring most of his class “A” shares to another holding company. The company seems set to face the future without him as it already ratified the election of Travis and forwarded his name to the board of directors. Nike’s future depends on how big it will increase its market share and improve the sales growth in its most critical regions.
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Factors that have Facilitated Nike’s Dominance in the Athletic Shoe Market
Nike has become so large and dominant in the athletic shoe market due to several factors. One of them is the stable nature of organizational leadership offered by the founder and chairperson Phil Knight. It has also been able to remain dominant due to the capture of such strategic markets as North American region that has contributed a large share of product sales over the years. Moreover, Nike has become so large due to its strong brand of athletic footwear and clothes marketed by popular athletes. Sticking to the athleisure phenomenon has pushed its brand to great heights. In addition, Nike is expanding to new markets. Nike has also become dominant over the years due to its growing market share in the U.S. Over the past few years, Nike has been able to diversify its product line to cover high-end luxurious products that have become the fashion trend in the U.S.A.
Recommendations for Nike to Succeed in the ‘Athleisure” Market
For Nike to succeed in the athleisure market, it has to move fast to reclaim the declining sales of the running footwear. Its mispriced running shoes have not been performing well and this can hurt its brand in the long run. Therefore, Nike should seek high-profile athletes and soccer clubs to endorse their slow-moving products. Basketball and running have been the major categories that have been used by its competitors due to their strong audience appeal. Nike should provide innovative technologies within the athleisure phenomenon and leverage partnerships with leading athletes like Stephen Curry. Secondly, I would recommend Nike to consider the idea of formulating a strategic plan aimed at capturing new and upcoming markets for the promotion of its athleisure phenomenon. Such markets include the African continent that has a great potential for growth. Lastly, Nike should be able to explore recent fashion trends featured in the athleisure market in order to come up with innovative products that can improve its market share.
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Marketing Research Methods that Nike Should Use to Stay Abreast of the Changing Consumer Tastes
There are various market research methods that are applicable to Nike and can help stay abreast with the changing consumer tastes. These include:
Surveys: Nike should use surveys to analyze sample groups of people in different market regions. In-person surveys are effective in gathering immediate feedback as they have high response rates. Although costly, the method is significant to understanding the fashion trends and different consumer tastes.
Focus groups: Nike should consider using focus groups to get balanced results from different market regions. This method is critical in identifying market segments that have a similar outlook in terms of tastes and preferences.
Field trials: Since Nike benefits from the economies of scale, it should place new products in different stores to test the consumer responses. This method would ensure that the company remains competitive in predicting the ever-changing consumer trends.