THREAT OF SUBSTITUTES
The company has many brands and substitutes to compete with any other substitute but in 2000 when the company faces criticism by media the company engaged in marketing activities to overcome the negative impact on consumers but it give palace to sale of some substitutes in market. But it was for the limited time because NIKE is the name of Victory. Nike has several competitors who produce substitutes for their products:
• Direct competitors of NIKE are :
Adidas, Fila, Puma, Reebok, New Balance, and One, Umbro
• Indirect competitors of NIKE are:
Non-athletic footwear brands, Crocs, K-swiss, Converse, Sketchers, Timberland.
Company had made very strategic change and it enters into the partnership with President Clintons Apparel Industry Partnership (AIP).The Company also introduced its Corporate Social Relationship Strategy to give strength to itself . It also participated in the Fair Labor Association which has aim to monitor the working conditions of all companies. Several steps are taken by this company regarding environment and need of time.
THREAT OF NEW ENTRANTS
Now days the company has no threat from the new entrants but in 2000 it had faced some situation. Regarding this but overall Nike was a market leader with 45% global market share at the time of criticism and has strong position. Now company has developed its name and market so it has no major threats regarding new entrants. Another major reason that no new entrant is possible that easily is that the cost of production is really very high. So those who are already operating are enough to deal with customer needs. For successful business operation one needs to have high capital which is not accessible easily. The new entrants don’t typically have high capital in the start which results in their market catastrophe.
RIVALRY BETWEEN EXISTING FIRMS IN THE INDUSTRY
Rivalry is the time when different company uses its strategies to pace up and to step forward and compete. It contains:
• Advertisement
• Price Reduction
• Brands Introduction
Although Nike Is best in all but in 2000 when it was the tough time for the Nike. Competition of Nike with its instant competitors like Adidas, Puma, and Fila was very intense. All of the competitors were busy in creating differentiation in their products for the customers. In comparison to the competitors Nike carries a very strong position in the market and thus has very strong brand identity and brand loyalty as well. Celebrity endorsements initiative of Nike was one of the leading things happening to attract ore clients, while it made cutting edge for its customers. But rivalry goes on and healthy rivalry causes Nike to improve day by day.
References
• Nike Annual Reports (2003 & 2005)
• Annual ranking of America’s largest corporations, Magazine: Fortune 500 (2005): cnn.money.com
• www.nikebiz.com (Investor Relations)
• Strategic Management Concepts and Cases; Fred R. David, 10th Ed.
• 10 STEP Marketing Plan for NIKE, Tanya Marie Labrador, October 2010
• Nike 2003 DuDavid Deprey and Jaime Rodriguez Bus 411, May 2006 sting Nadeau, Donatas Sumyla,
• Michael E. Porter. (2008). “The Five Competitive Forces that Shape Strategy”, Harvard Business Review, January, p.86-104.