Nike, Inc. is a multinational corporation based in the United States with headquarters in Washington County, Oregon. The company is involved in the development, manufacture, marketing, and sales of apparel, footwear, accessories, equipment, and services. Nike is the largest supplier of athletic shoes and apparel in the world (Sage, 2008). The company was found in 1964 by Bill Bowerman and Phil Knight. Nike sells its products under various brand names. Nike is known for its involvement in various sports-related events and sponsoring them. It makes use of high-profile athletes from around the world as ambassadors during sporting events or for its marketing campaigns. The ‘Just Do It’ trademark of Nike is well known across the globe. In 2018, Nike made a revenue of $36.39 billion and had more than 73,000 employees (Nike, 2019).
Following are the four dimensions of the Ansoff Matrix for Nike:
Market Penetration
Market penetration refers to launching existing products in existing markets. Nike does this by aggressively promoting its products using various marketing and advertisement techniques. It sponsors sporting events where its logo and products are displayed. Advertisements are floated through print, electronic, and social media. Nike spends millions of dollars annually on marketing its products across the globe. It also has strategic alliances with other sporting events organizations to promote its products. Nike motivates its users to try its different products during different games and also its sports equipment. It also launches different variants of its existing products to encourage users to try them. Nike also offers promotions and discounts on its existing products. This also helps to boost company sales.
Market Development
Entering into new markets with the help of existing products allows Nike to develop its markets. The main market development technique used by Nike is to geographically expand into new regions that it has not yet tapped into. Countries such as China, India, and Brazil present great potential for market development. The company also develops low-priced variants for different markets of such developing nations. It can leave the high-end variants for its established markets. Nike also develops its markets through new distribution channels. In addition to using authorized retail stores, the company also sells its products online and through other retailers. This allows the company to enhance its sales. The company also develops its markets by focusing on new segments in existing markets by launching variants with different prices targeting different market segments (Barnes, 2011).
Product Development
Nike is well renowned for product development through the design and launch of new products in its existing markets. The first strategy the company is using is launching new products. The company regularly researches and develops new products such as new models of shoes, apparel, and sports equipment. These are new designs, incorporating new functions, offering color variations, and so on. The same goes for all the segments the company operates in. The research and design section of the company performs exceedingly well by beating competitors and leading the market it operates in. The various products the company offers are also offered in different variants. Once a product is launched, its variants follow. The company takes into consideration the feedback of testers and trainers during the product design and testing phase. The new products of the company are launched through extensive marketing and promotions with the help of sports celebrities or other renowned individuals to gain success.
Diversification
Nike has excellent potential to diversify in any dimension it wants. The company has the potential to vertically diversify backward by starting its own manufacturing rather than outsourcing it. It can also horizontally diversify by producing various other products related to the industries it is already working in. It can also follow conglomerate diversification by expanding into other industries such as consumer goods, consumer electronics, automobiles, and so on. The company brand name is successful and allows it leverage to exceed in these diversification opportunities. The company has already horizontally diversified in various ways. However, there is still great potential and the company can do much more. At the same time, Nike needs to evaluate the risks of these strategies before implementing them as diversification strategies are often the riskiest.
References
Barnes, P., 2011. Nike Marketing Analysis. [Online] Available at: https://www.slideshare.net/philipjamesbarnes/nike-marketing-analysis-8675338 [Accessed 30 Dec. 2019].
Nike, 2019. Form 10-K. [Online] Available at: https://materials.proxyvote.com/Approved/654106/20180720/10K_367570/HTML1/default.htm [Accessed 30 Dec. 2019].
Sage, A., 2008. UPDATE 4-Nike profit up but shares tumble on US concerns. [Online] Available at: https://www.reuters.com/article/nike-idUSN2526447020080625 [Accessed 30 Dec. 2019].