Business Level Strategies Corporate Leve

Table of Contents
Nike Introduction.....................................................................................................................2
Products:.................................................................................................................................2
Corporate Level Strategy of Nike:..........................................................................................3
Porter’s Five Forces for Nike.................................................................................................4
Ansoff Matrix of NIKE..........................................................................................................4
Business Level Strategy:..........................................................................................................5
Nike’s Generic Strategy (Porter’s Model)..............................................................................5
Functional level strategy:........................................................................................................6
1
Nike Introduction
Nike's Mission Statement: To bring inspiration and innovation to every athlete in the world.
Nike, originally known as Blue Ribbon Sports (BRS), was founded by University of
Oregon track athlete Phil Knight and his coach Bill Bowerman in January 1964. The
company initially operated as a distributor for Japanese shoe maker Onitsuka
Tiger (now ASICS), making most sales at track meets out of Knight's automobile.
In 1964, in its first year in business, BRS sold 1,300 pairs of Japanese running shoes grossing
$8,000. By 1965 the fledgling company had acquired a full-time employee, and sales had
reached $20,000. In 1966, BRS opened its first retail store in California. In 1967, due to
rapidly increasing sales, BRS expanded retail and distribution operations on the East Coast,
in Wellesley, Massachusetts.
By 1971, the relationship between BRS and Onitsuka Tiger was nearing an end. BRS
prepared to launch its own line of footwear, which would bear the Swoosh newly designed
by Carolyn Davidson. The Swoosh was first used by Nike on June 18, 1971, and was
registered with the U.S. Patent and Trademark Office on January 22, 1974.
Products:
Primary product focus is athletic footwear designed for specific-sport or leisure use. We also
sell athletic apparel carrying the same trademarks and brand names as many of our footwear
lines. The most popular product categories include the following:
 Running
 Basketball
 Cross-Training
 Outdoor Activities
 Tennis
 Golf
 Soccer
 Baseball
 Football
 Bicycling
 Volleyball
 Wrestling
 Cheerleading
 Aquatic Activities
 Auto Racing
2
Corporate Level Strategy of Nike:
The major product of Nike that yields the biggest share of income is shoes and apparel. With
minor products, the company uses the same distribution channels, technological, and other
resources. Their primary product focus is athletic footwear designed for specific-sport and/or
leisure uses. Nike must pay close attention to manufacturing and supply chain diversification
also. Recent global economic crisis and uncertainties increased importance of such
diversification. This enables Nike to get the best deals and decrease risks.
Supplier diversity is a very important part of the success a business generates. Due to
Nike’s customers being on a worldwide scale, the company must create a very broad base of
suppliers in order to generate the revenues they are aiming for.
3
Porter’s Five Forces for Nike
Ansoff Matrix of NIKE
Business Level Strategy:

Nike’s Generic Strategy (Porter’s Model)
4
Nike Inc. uses a combination strategy for its competitive advantage. This type of strategy
includes two or more of the generic strategies from Porter’s model. The following are the
generic competitive strategies implemented in Nike’s combination strategy:
1. Cost Leadership Strategy

2. Differentiation Strategy
Nike incorporates a business level strategy that most resembles a differentiation strategy.

Through product innovation, technology development, and high quality products, they are
able to differentiate themselves from competitors and build their brand image.
Overall cost leadership is not something that Nike looks to utilize. Their products are
higher end prices that customers are willing to pay for because they see value and unique
qualities in them. Through Nike ID and other personalization procedures, such as college
sponsorships, Nike enhances the perception that the product they provide is one of a kind and
specialized for the customer wants and needs.
Nike does not utilize a focus strategy either, as they have a wide market segment,
from clothing, to shoes, to sporting equipment, and is sold around the globe. Rather, they
look to be the best in the industry in all of these areas. The non-price attributes that Nike
attributes to their products, such as the swoosh and the "Just Do It" motto are something that
customers see value in and separate their products from competitors.
They also have a number of high profile athletes that they sponsor and use as brand
images, which has a big impact on the buyer base. Athletes like Tiger Woods, Rory McIlroy,
Michael Jordan, and Lance Armstrong all have enhanced the value of Nike, even though
times of trouble with Tiger and Lance. Because they have built up their reputation so much,
and because their products are high quality and viewed as valuable, they do not lose their
buyers.
By focusing on a differentiation strategy, Nike takes on a lot of investment into

research and development, as well as technology innovation, in order to always have the
upper hand on the competition. In this way, they can patent a lot of their products and
materials, helping to create the sustainable competitive advantage that they want to achieve.
5
Functional level strategy:
Nike’s functional level strategies include focuses on research and development as well as
intense marketing. Through product innovation and marketing, Nike can continue to be
successful. By making sure that they stay ahead of competitors and in touch with what
consumers want and need, Nike maintains the industry leader position. Overall, Nike has a
clear strategic direction. They have stayed on course with the quality and performance that
they provide to customers and in turn have created a kind of brand loyalty that is seen rarely
in a high priced industry.
6
Primary activities Supportive activities
 Inbound logistics  Firm infrastructure

 Low production cost  Empowerment of top management
 Inventory control and reduce inventory risk due to efficient supply chain  Great financial discipline with low debt
 Focus on product design  String brand, product, delivery and support
 Efficient network structure of operation management  Effective compliance process
 No heavy metal or glue used  Great management and efficient corporate strategy globally
 Outbound logistics
 Blend of new hires and promotion
 Strong control over own distribution channel

 High ethical values among employees
 Good supplier relation

 Well monitored labor audit add brand audits
 Ability of forward integration  Technology development

 Use of strong service to support and manage supply chain projects  Great product technology motion analysis, metabolic rate, blood
 Marketing and sales work
 Brand recognition and reputation

 Air sole technology expert
 Higher allocation on marketing budget

 Touch screen technology in stores allowing customers to design
 Strong customer base shoes of choice.
 Diversity/variety of products offered online

 Huge sale through e-commerce
 Services
 Procurement
 Use of it to improve customer service

 Just in time strategy as finished goods are shipped as soon as they
 Great product quality resulting in increased customer satisfaction

are ready for sale
 Touch screen technology in stores allowing customers to design shoes

 Buffer and satisfy stock in hand
of choice

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Table of Contents

Ansoff Matrix of NIKE

Business Level Strategy:

1. Cost Leadership Strategy

Nike incorporates a business level strategy that most resembles a differentiation strategy.

By focusing on a differentiation strategy, Nike takes on a lot of investment into

 Inbound logistics  Firm infrastructure

 Strong control over own distribution channel

 Good supplier relation

 Ability of forward integration  Technology development

 Marketing and sales work

 Brand recognition and reputation

 Higher allocation on marketing budget

 Strong customer base shoes of choice.

 Diversity/variety of products offered online

 Use of it to improve customer service

 Great product quality resulting in increased customer satisfaction

 Touch screen technology in stores allowing customers to design shoes

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