Strategic Management: NIKE

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Nike’s core competence

Nike was founded by Phil Knight and Bill Bowerman in 1964 with an initial idea of producing sports shoes. The success of Nike can be attributed to the desire of its core founder, Coach Bowerman, who was interested in providing his athletes with better sports gears giving them a competitive edge. Nike utilized its marketing strategy through is a core competence of creating heroes. This aspect means that the major focus of Nike is to harmonize its available skills and resources in providing possible access in various markets to make it distinguishable among other players. Besides, the core competence of Nike is its major business aspect while other functions such as manufacturing and retailing are not strategic and are normally outsourced.

Nike built its core competence through identification of extraordinary athletes who could guarantee success despite the odds; identify them before their talents are explored, engage them in a contract, and create the products which are linked to the athlete’s area of specialization. To achieve their core competence, Nike would promote its products, through the signed athlete and the sponsored team which would consequently contribute to the relative increase in the value of the product as perceived by the potential customers compared with its rivals. When the brand, Nike Air, became famous, the company was able to capture over 50 percent of the market share, and a year later it was able to sign the greatest basketball player.

Despite all this achievement Nike was very keen and followed the VRIO attributes in its conducts. In the journey of securing its competitive advantage, Nike maintains valuable product and approach that has been the leading brand in sports wares. By selecting to providing sports shoes for the athletes makes this product is valuable all over the world. Nike’s products are imperfectly imitable by using the waffle-type sole that is lighter than the traditional shoes and has a better traction. Besides, the company has been able to achieve the VRIO attributes by having a rare product that provides unbeatable completion in the market. Finally, Nike’s products are organized to capture the value. Comparing with its competitors, Nike produced higher proceeds of $30 billion, Adidas revenue was $19, and Armour had only $3 which indicates the great capture of value and success of Nikes products.

Nike’s Approach might turn to weakness

Nike’s unique competitiveness in sports market has enabled it to dominate games after the other creating a strong perceived value to its customer. By concentrating of the athletes whose seem to have a promising future, Nike has been able to provide differentiated products comparing with competitors. Although these strategies and core competence have gained Nike much competitive advantage, the main strength that it has concentrated on has caused it loss the customer loyalty. In most of the cases when engaging and interacting with its heroes, the latter have been associated with misconduct and immorality that has turned on the public outcry. In most instances, Nike’s stars are accused of bribery scandals, animal cruelty, money laundry, and rape charges.

Despite the fact that these scandals from its heroes, much has not happened so as to affect the brand of Nike significantly. Over the years, Nike has and still is the market leader of sports shoes and apparel industry with a market...