Nike's Economic Strategies

Nike is one of the largest, most profitable companies in the world. Since their inception, they have been using different economic strategies to dominate their particular market. According to Michael Porter, competition in the industry, bargaining power of suppliers, bargaining power of consumers, the threat of new entrants into the market, and the threat of substitute products (1) are all economic forces that impact companies like Nike. For years, Nike has used various business strategies and marketing tools to minimize the impact that these forces have had on them, and have maximized profits as a reward.
Nike has long been known as the premier company in sportswear. Their use of high profile athletes in marketing promotions have helped them capture not only their consumers’ attention, but their business. Because of this, competition in the industry has for the most part been minimal. However, recently Adidas has taken a massive step forward with their marketing approach and footwear lines. Their sponsored athletes have become much more high-profile, and their casual wear has become much more affordable and diverse. As a result, Adidas’s stock has grown 65% over the last 12 months, including 20% in core markets such as North America, Western Europe, and China (2). This new competition …show more content…
Nike recently received severe backlash from the media and from the public for having a large quantity of their products produced overseas in subpar working conditions (4). It presented a major public relations crisis that if not handled delicately, could have resulted in severe losses. However, Nike has since been able to recover from these hits to their image through positive marketing campaigns and that helped to paint the company in a better light. Because of this, their profitability has remained mostly unaffected, but the impact of consumer opinion proved to be quite