This paper examines the strategies adopted by Nike, Under Armour and Gatorade in their

business operations to give them competitive advantages to thrive in their work industries.
What competitive strategies are the companies discussed in this case pursuing?
The three companies adopted various competitive strategies to keep them ahead of the curve as
far their competitors were concerned:
 Product Differentiation
Product Differentiation is the process of distinguishing a product or service from others to make
them more attractive to a particular target market. The smart cap bottle product from Gatorade
for example gave notifications on steps to take to avoid dehydration.
 Focus On Market Niche
Market niche focus describes the use of information system to enable a focused strategy on a
single market space or niche.
 Strengthen Customer And Supplier Intimacy
This strategy refers to the use of information systems to develop strong ties and loyalty with
customers and suppliers. After acquainting the clients with their products, there is a deeper
relationship that is formed with the consumers to keep them loyal to their brands.
How are information technology and smart products related to these strategies? Describe
the role of information technology in these products
Product Differentiation
The introduction of variations of informations technology and smart products has aided firms to
produce unique products. These products are tailored to make them stand out of the competition.
The Nike + Sports Watch GPS keeps track of location, pace, distance and calories burnt. The
average sports watch manufactured does not offer these unique add on services. On a
competitive level, the Nike + watch will kill any competition its rival and potential rivals can
offer. The Nike+ product in this instance differentiates itself and stands out in the sports watch
industry.

Focus On Market Niche

The companies employed the use of information technology with their smart products to focus
on a market niche. Their products are solely intended for a particular market segmentation.
Gatorade wants to focus on a smaller group out of a larger market. Gatorade began testing the
smart-cap bottle with Brazil’s national soccer team ahead of the 2014 World Cup and is testing a
new version with the Boston Celtics basketball team and FC Barcelona soccer squad. In the
field-tested prototypes, flashing lights tell players when they need to hydrate. Users can
customize the smart caps with their name, team logo, and number. (Laudon and Laudon, 2017, p.
130). The various add on services on the products increases cost for customers. The target groups
narrows to high earning/ individuals with surplus income who can afford such sophisticated
products.
Strengthen Customer and Supplier Intimacy
Nike believes technology is revolutionizing its relationship with consumers, turning it into a
company that provides services as well as products. In the past, when you bought a product, that
was the end of the relationship with the company. Now, the purchase of any Nike product has
become the beginning of the company’s relationship with the consumer. The deeper the
relationship, the more consumers will embrace and stay loyal to the Nike brand. (Laudon and
Laudon, 2017, p. 130). Companies truly believe it is extra work and costly to engage new
customers. This strategy always makes them find innovative ways to keep their existing
customers.

The impact of smart, Internet-connected products is just now being understood. Smart products
offer new functionality, greater reliability, and more intense use of products while providing
detailed information that can be used to improve both the products and the customer experience.
They expand opportunities for product and service differentiation. When you buy a wearable
digital health product, you not only get the product itself, you also get a host of services available
from the manufacturer’s cloud servers. Smart products increase rivalry among firms that will
either innovate or lose customers to competitors. Smart products generally raise switching costs
and inhibit new entrants to a market because existing customers are trapped in the dominant
firm’s software environment. (Laudon and Laudon, 2017, p. 129)

Are there any ethical issues raised by these smart products such as their impact on
consumer privacy?
Explain your answer

Yes indeed ethical issues are raised by these smart products as far as consumer privacy is
concerned.
For example, MapMyFitness collects data about a user’s name, e-mail address, birth date,
location,
performance, and profile if the user connects to the app using social media. Under Armour does
not sell identifiable personal data about individuals to third parties but does provide advertisers
with aggregate information about app users. Under Armour is hoping that daily use of its
smartphone apps will build stronger ties to customers that will lead to stronger sales of its own
apparel, footwear, and other athletic gear. (Laudon and Laudon, 2017, p. 130)

Ethical issues raised by these products has to do with the security threat associated with the leaks
of personal information. People would not want to associate with products that tend not take
security consciousness that serious. They would rather avoid such products. There is that aspect
of third parties buying these consumer data for targeted advertisements. Potential clients would
have trust issues with firms who trade off customers’ personal information Regarding the
property right on data and information, the difficulties will appear from the correct identification
of the authors – for example, an answer to the question” Who is the owner of the data retrieved
by the sensors of the objects connected to the Nike+ SportWatch GPS?” When the information is
personal, things get more serious. The ethical lapses will make the boundaries between the public
and private space be invisible, and people will not know where their information ends up. The
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Big Brother type surveillance, namely monitoring the individuals without them being aware of it
will be possible. The objects will be equipped with sensors which will allow them to”see”,”hear”
or even “smell”. The data registered by the sensors will be sent in great quantities and in
different ways through networks, which will bring prejudice to the individual private life.
(Popescul & Georgescu, Internet of Things – Some Ethical Issues, 2014 p.5)

By means of sophisticated technologies, the geographic place where a person is and his
movements from one place to another can be easily found without his knowledge. The
information collected from a chip implanted with the person’s consent (for medical purposes)
might be maliciously used. There might be profiles/accounts created for individuals depending
on their activity culture and evil outsiders might make decisions related to them. The digital
divide will increase with smart products usage, and it will be understood only by experts. It is
debatable whether there is possible a fair distribution of benefits and costs as well as the real
presence of equal opportunities in accessing ethical privacy issues. Moreover, the
communication from one device to another will influence people’s lives in ways which are hard
to imagine as long as there will not be a coherent, legal and democratic frame to appropriately
describe the limits of personal data.

In conclusion, the impact of smart, Internet-connected products is just now being understood.
Smart products offer new functionality, greater reliability, and more intense use of products
while providing detailed information that can be used to improve both the products and the
customer experience. (Laudon and Laudon, 2017, p. 129).