Nike Analysis
...giant. During its first year, sales for Nike were $8000, but as of November 30th, annual sales for Nike were over 12 billion dollars. (hoover) Although Nike already dominates the sporting world, there are many opportunities for growth. According to our research, key strategic challenges facing Nike are increased competition from Adidas with their technological shoe, the Adidas One, and a potentially fatal inability to enter a new growth market such as the extreme sports market. Our recommendations to help Nike confront these challenges consist of developing a product to remain competitive with Adidas, and also an aggressive move into the extreme sports market.
Our first recommendation for Nike is to develop a shoe that will compete with the new, technologically advanced Adidas One running shoe. The Adidas One, which will be available in March 2005 at a cost of $250 dollars, is a high-end, high-tech athletic shoe. Features of the Adidas One running shoe include sensors that measure how much compression is put on the heel of the shoe with each step, a microprocessor that can adjust the cushion of the heel based upon roughness or softness of the terrain, buttons that allow for different comfort levels to be set, and a lithium-ion battery that last about 100 hours. (time-sporting life) With their new shoe, Adidas threatens to capture some market share in the running shoe segment. This stands to be a substantial amount of lost profits if Nike is not able to compete. Fortunately, Nike is already well established in the athletic shoe industry. It should be able to utilize its strength of brand equity compete effectively with the Adidas One. According to market research from NPD Group, ¡°running is heart and soul of the athletic shoe industry.¡± Americans last year spent over 4.5 billion dollars on running shoes, accounting for 25 percent of all money...
View Full Essay
