Proposal to Reduce Competition and Increase Sales
However, in recent times, the company has been witnessing a decline in the number of product sales in all the open stores worldwide. Reports from the most recent earnings of the company revealed the potential predicament awaiting the company. The problems are attributed to a number of factors which if not countered, they may have a devastating effect on the future of the company. One of the major problems facing Nike Company is stiff competition from companies that produce similar products. Despite the fact that Nike is considered to be substantially larger than the competitive companies, both have the ability to cut into the fractions of the market share that is owned by Nike and this is what hinders the growth of this company.
Based on location, almost every company is competing for the best location and space. Moreover, Nike faces competition for the endorsement of superstars. Even though Nike is leading in terms of superstar endorsement, other companies have superstar endorsements and therefore become potential competitors of Nike. “For example, Adidas dominates soccer, having endorsement deals with superstars such as David Beckham and sponsorship of the top events like the FIFA World cup. ” Nike is also competing with the competitor companies for the lowest prices with the aim of grabbing more clients. Since they are required to help the specific type of clients, Nike needs to focus on their market niche. They can simply do this by embedding relevant technology into their services and products by interrelating one service or product to another.
However, this increases the cost on the side of their customers because it doesn’t follow the competitors’ strategy of “low-cost leadership”. For Nike Company to develop its market with the purpose of eliminating or rather reducing the competition, it needs to involve its market and the market segments. Alongside product development, the company should apply the market development intensive growth strategy. This is possible if they focus their strategy on the cost value of the product in comparison to other similar products in the existing markets. This strategy will help create a perceived value among its customers and potential customers. In comparison to other products, this strategy puts focus on cost savings. Another reason to justify why this strategy has a higher chance of success is that market segmentation gives room for business to compete in other areas apart from price alone.
For example, “car manufacturer may differentiate its line of cars as an image enhancer or status symbol while other companies focus on cost savings (Li, 124). A car manufacturer may differentiate its line of cars as an image enhancer or status symbol while other companies focus on cost savings. Small businesses can focus the differentiation strategy on the quality” and design of their products and gain a competitive advantage in the market without decreasing their price. ” Apart from using market segmentation to reduce or completely eliminate competition, Nike should also adopt niche marketing. Niche marketing is in a way related to market segmentation because the company leverages its expertise in areas which stand out from the competitors. By adopting this strategy, Nike will be focusing more on specialized areas to assist them to distinguish their business.
Niche marketing has an advantage that is not provided by generalized marketing where market competition is still. With niche marketing, Nike will experience less competition for the viable clients who purchase their products. Also, niche marketing comes to brand loyalty. In the event that Nike adopts Niche Marketing, they will be in the best position to build brand loyalty. With this strategy, the company will be able to provide its clients with services and products that they desire (Robinson, 30). While executing this process, Nike will be able to understand the type of marketing message that appeals to the group. For example, by selling shoes and apparel customized for athletes, segmentation will help them design apparel and shoes that specifically meet the needs of athletes of specific sports category (Shani, 40).
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