by Matthew Y
Chapter 1 Section 1.2
By Matthew Yang
In an article from ArticleBlast.com, Yvonne Miller explains why Nike is the biggest shoe company in the world and how it has a competitive advantage over its competitors. Phil Knight, the founder of the Nike, started the Nike brand in the back of his car in the 1960s, and by the 70s Blue Ribbon Sports became Nike, and the rest is history. Nike is successful and known throughout the world, and has sponsored many great athletes and events around the world, like Michael Jordan and the recent World Cup 2010. Competitors like Reebok and Adidas, are nowhere near the success Nike has accomplished throughout the years. By sponsoring big sports events, big star athletes, having great quality shoes, and allowing customers to create their own shoe has brought Nike to the top in the shoe industry.
In section 1.2 in chapter 1, Michael Porter’s Five Forces Model, buyer power, supplier power, threat of substitute product or services, threat of new entrants, and rivalry among other competitors applies to Nike’s condition in the market today. Nike has more buyer and supplier power than any shoe company today, by creating loyal customers and retailing at all most every shoe store in the world, it has the power to out shine its competitors. Although Nike doesn’t have the cheapest prices, there isn’t much threat of newer competitors or products that offer the same services because of how the big the company has gotten in the past years and the name recognition it has among consumers. Also, Nike has control of their market and is doing well with their competitors who offer the same products as them. Nike follows one of three of Porter’s three generic strategies to the fullest, being able to offer a broad differentiation strategy. An example is the ability to allow their customers to customize their own shoes to their liking, which none of their competitors offer at the moment.
From the beginning and the status it is in today, Nike has come a long way and has became very successful despite the efforts of its competitors to keep up. Nike, in my book, has accomplished all of Porter’s Five Forces and one of three generic strategies. By sponsoring more big star athletes and huge sports events, Nike will continue to dominate among its competitors.
Miller, Yvonne. (2010, January 18). Seeking competitive advantage in a changing global economy. Retrieved August 30, 2010. From www.articleblast.com: http://www.articleblast.com/Advertising_and_Marketing/General/Seeking_competitive_advantage_in_a_changing_global_economy/