Capstone Essay Example | Topics and Well Written Essays - 2000 words - 1

Capstone - Essay Example When promoting their products, they make extensive use of celebrities as product ambassadors, which lends to their products and hence their consumers a sense of glamour and makes the consumer’s feel like some part of the celebrity’s skills rub off on them with the product usage. Nike target’s the common man who is interested in sports and fitness and banks on his skills and has a winning attitude. The brand also promotes hard work and competition and this is reflected through their promotional advertisements. Nike’s vision is â€Å"to  carry on the legacy of innovative thinking, whether  to develop products that help athletes of every level of ability reach their potential, or to create business opportunities that set Nike apart from the competition and provide value for our shareholders†. According to Nike’s vision for the future, they keep introducing innovative products in the market. Like, recently, they are going to launch the Nike à ¢â‚¬Å"Studio Wrap† in 2013, which are fashionable ‘barely there’ shoes, designed for people who are more into modern studio workouts like dance, Pilates and yoga. These shoes are the picture perfect mix of innovation, style and athletic requirements. Products like these by Nike help everyday and professional athletes the support and motivation to stick to a healthy lifestyle and to excel in their chosen field of sports. Nike products create additional value for its customers by adding style to the equation; all Nike products are aesthetically pleasing, yet high quality, innovative sportswear. 2. Analyze the five (5) forces of competition to determine how they impact the company. A big job to be done by the company’s strategists is to deal with its competitors; however that’s not all that their duties encompass. According to Porters’s theory there are four other forces that need to be taken into consideration. Following is a diagram outlining t he relationship between these five forces of competition. (Harvard Business Review Magazine, 2008) Originally published in 1979, Porter’s article talks about external forces that a company has to consider when planning competitive strategy. Namely, these include the bargaining power of producers, the bargaining power of consumers, indirect competition by substitute products, threat of new entrants due to barriers of entry and the rivalry between the existing players in the market in the specified category. (Harvard Business Review, Magazine, 2008). In Nike’s specific case, the business is lucrative and highly profitable and thus new entrants are common. This would reduce market share and profit levels but Nike stays on top of its game due to its immense goodwill in the market, its reputation, product quality and innovative techniques. However strategists have to remain on their toes to make sure that the company’s strategy doesn’t lag and allow new entran ts to gain on Nike’s expense. This requires them to continually innovate product design, establish strong customer relationships and loyalty, invest in research and development, invest in employee training, improve distribution and most importantly patent their designs and products to protect them from competitors. Using these precautions will mostly eliminate the threat of new market entrants. Threat from substitutes is low, because Nike provides essential gear for athletes and sports men and women which cannot really be substituted by other product, especially in the shoe category. Other sports gear