Competitive Challenge Nike

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With widely globalization movement, managers in MNCs have to be continually involved into the challenges that mainly include competitive and collaborative challenge. Facing the challenges, Nike has always been a leading sports product organization. Thus, it is meaningful to analyze Nike’s global success which will benefit from obtaining relevant international management issues.

The aim of this project is to reveal Nike’s competitive advantages in global market and especially focus on company strategies in Chinese market. In order to achieve practical guidance, some theoretical tools will be adopted.

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The project will firstly introduce a literature review which provides the underpinning and explanation of these analysis tools. In the following, Nike company analysis will be discussed into four aspects. The first aspect will examine the national business environment of Nike in the USA by using Porter’s diamond. In the second and third section, Bartlett and Ghoshal’s theory will be used to analyze both the competitive challenge and the collaborative challenge of Nike in China. Hofstede culture dimensions will be adopted to analyze the cultural challenge Nike is confronted. Finally, it comes to the conclusion.

1.2 Company overview

Through an investment of $500 each by Phil Knight and Bill Bowerman, the company (then called Blue Ribbon Sports–BLS) was founded in 1964.It has evolved from an importer and distributor of running shoes to the world biggest leader of athletic footwear.

Our business model today is basically the same as our model in 1964.It is that we invest our money in design, development, marketing and sales and then contract with other companies to manufacture our products. Knight developed Nike’s business model when he was attending Stanford Business School in the early 1960s.He realized that most leading footwear companies

were still producing their own shoes in higher-cost countries like the United States and Germany while he US consumer appliance and electronic markets, were starting to be taken over by lower-cost, high-quality Japanese producers. Knight believed that Blue Ribbon Sports could sell in a lower price by distributing its production to Japanese producers to break into this market. So Blue Ribbon Sports began to import high-tech sports shoes from Onitsuka Tiger of Japan. BLS began to have its own branches of shoes, as sales increased to almost $2 million in the early 1970s. The company officially changed its name to Nike, Inc. in 1978.At the beginning time Nike developed a strong working relationship with two Japanese shoe manufacturers, Nippon Rubber and Nihon-Koyo, but as a combination of a tighter labor market, the impact of the first Oil. Crisis on Japan’s economy, and a shift in the dollar/yen exchange rate in the 1970s, Nike began to search for other producers. Nike established its own shoe factories in Maine and New Hampshire to develop a reliable and high-quality production to supply its growing domestic market during these same years.

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