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Nike: Competitive Advantages
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Sample from the document:
Biggest threat for NIKE
The greatest threat for NIKE is the inevitable stiff competition from other sports brand,
especially Adidas. NIKE operates in the sports shoe and garment industry which is one of the
most competitive marketplaces. For a company to succeed in competition there is a
continuous need to develop new products with higher quality than its competitors. The
dynamic needs and demands of consumers serve as a challenge to the management.
Competitors like Adidas and Puma are developing alternative brands to take away NIKE's
market share. They compete with Nike in product design, quality, technology, advertising
and competitive price.
Significance of Five force analysis
Porter’s five forces of competition framework view the profitability of an industry as
determined by the five forces of competitive pressure. It is a simple but powerful tool for
understanding where power lies in a business situation. It helps a firm in understanding its
current strength in the industry. It also brings into light the strengths of the competitors. With
a clear understanding of where power lies, a firm can take reasonable advantage of a situation
of strength, improve a situation of weakness, grab the opportunities and keep away from
taking wrong steps. This makes it an important part of planning a strategy for any firm in any
industry. At the same time, the tool helps in identifying whether new products, services have
any future prospect and the potential to be profitable.
Five forces analysis for NIKE:
- Threat of entry (Low-moderate)
- Threat of Substitute (LOW)
- Supplier Power (Low)
- Buyer Power (High)
- Rivalry (HIGH)