Anlysis of the Nike Company Essay Example | Topics and Well Written Essays - 750 words

Anlysis of the Nike Company - Essay Example 14). Economic factors that affect the industry are general economic conditions, anti-dumping duties, restrictions on the transfer of currency, the annual renewal of NTR with Vietnam, availability of import quotas and currency exchange rate fluctuations (NIKE, Inc. 13-14). On the sociological front, athletic footwear and apparel are consumer products and the relative popularity of various sports and fitness activities and changing design trends affect the demand for such products (NIKE, Inc. 11). On the technological front, although design and aesthetics appear to be the most important factor for consumer acceptance of athletic footwear, apparel, and equipment, technical innovation in the design of such products to reduce injury, enhance athletic performance and maximize comfort is also essential to commercial success. Research and development plays a key role in technical innovation (NIKE, Inc. 12). Lastly, factors in the legal and ecological environment that could affect the athleti c footwear, apparel, and equipment industry are non-compliance of environmental, health and safety standards or applicable local law by contractors. This could harm the organization's reputation and have an adverse effect on sales (NIKE, Inc. 12). To the athletic footwear, apparel, and equipment industry, trademark is perhaps the important aspect in the legal environment. Having distinctive marks that are readily identifiable is an important factor in creating a market for goods, in identifying the firm, in distinguishing a firm's goods from those of others, in building a brand, and in a firm's competitive position (NIKE, Inc. 13-14). The intensity of competition is high. The athletic footwear, apparel and equipment industry is keenly competitive in the United States and on a worldwide basis. International players comprise of athletic and leisure shoe companies, athletic and leisure apparel companies, sports equipment companies, and large companies having diversified lines of athletic and leisure shoes, apparel and equipment (NIKE, Inc. 7). Competition also exists for the production capacity of independent manufacturers and for import quota capacity. The industry's product offerings, technologies, marketing expenditures (including advertising and endorsements), pricing, costs of production, and customer service are aspects of intense competition (NIKE, Inc. 11). The bargaining power of suppliers is medium. Suppliers mainly include contract manufacturers and professional athletes and sports teams and leagues to evaluate and promote the products of a firm, and to establish the authenticity of a firm's products wit h consumers (NIKE, Inc. 12). The bargaining power of professional athletes and sports teams and leagues is high. The endorsements of professional athletes and sports teams and leagues such as Tigerwoods, Ronaldo and Michael Jordan (Nike, Inc. online) is important to the marketing and branding of a firm's products. The high bargaining power of professional athletics and sports teams and leagues is mitigated by the low bargaining power of contract manufacturers. Compared to the athletic footwear and apparel industry dominated by a few large organizations such as Nike and Reebok1, there are hundreds of contract manufacturers (NIKE, Inc. 12; Rankine and Ferris 4-5). Besides, the shoes and apparel produced by contract manufacturers are commodities. It is the brand name of the organization that designs, markets, and sells the products that makes the product