Mrinal Raj

G15032/GMP A
Global Competitive Advantage : Nike
Introduction
Nike was founded in the year 1964 as Blue Ribbon Sports by Phil Knight and Bower
Man. In the year 1978,the company changed its name to Nike who is the Greek
goddess of victory. Nike has business in Athletic shoes,Apparels,Sports equipment
and accessories. Currently the revenue is US $ 19.2 billion and employee strength is
close to 45000 persons. Nike initially operated as a distributor of Japanese
Shoemaker Onitsuka Tiger.
How Nike has sustained Global Competitive Advantage ?
Nike is world's most popular shoemaker much ahead of Adidas which had acquired
Reebok in 2005. The battle for top spot in athletic shoes between Reebok and Nike
stretched over three decades and has created a celebrity athlete culture in the
modern society. Paul fireman from Boston University took over his family's sporting
goods business and licensed British made sneakers Reebok for Northern America.
Reebok initially sold white leather women's aerobic shoes and it strongly penetrated
the jogging shoes market for women. Fireman acquired the complete company and
made it public in 1984.Nike was positioned to cater to male customers and completely
missed women's sneakers market. In 1987 Reebok took lead in the market share and
Nike struggled to maintain the market share.
Nike later on created superior value by using celebrity endorsers like Mike Jordan to
penetrate the market. The idea behind using a celebrity endorser is that the celebrity
image is embedded into the end user's mind and will cause the user to associate Nike
with the endorser. When consumers translated these ideologies,Jordan's high brand
value was endorsed as Nike's swoosh and the logo built a huge brand image. Jordan
was a great spokesperson who connected with audiences and with great popularity of
Michael,Nike surged ahead. Reebok tried to gain momentum by signing Shaquille
O'Neil. Nike continued to use great athletes that included the likes of Pete
Sampras,Andre Agassi and even Tiger Woods making Reebok look smaller in
comparison to Nike.
Today, to cater to the global market and keep costs less, Nike has opened 669
factories in 43 countries around the world. It manufactures keeping both the global
and local clientele in mind ensuring sustainable competitive advantage.