Nike Case Study
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Nike Case StudyLauren M. TaylorFort Hays State UniversityAuthor NoteLauren M. Taylor Studying Bachelor’s Degree in Management.Lauren M. Taylor is now a Manager at Avel Flight School.This research was supported in part by Laure M. Taylor.Program.Correspondence concerning this article should be addressed to Lauren M. Taylor, 5900 Oakwood Drive, Lisle, IL 60532Contact: [email protected] Nike Case StudyThere have been many controversial articles written and debates had on which brand is better, Nike or Adidas. There are several other brands in the soccer world as well, such as Puma, Lotto and Joma however when someone thinks of the top two brand names in soccer, Adidas and Nike is usually what comes to mind. Parker states (2014) “Whether on the field of play, on social media or emblazoned on replica kit, it is clear that Nike and Adidas crush the competition when it comes to sports branding” However one point that separates the two apart is which brand is better in the specific area of soccer (known to the rest of the world as football) and not just in all athletics department in general. The following paragraphs describes which company will do better in the long run, recommendation to both companies on how to improve their competitive strategies, possible ethical issues, 6 terms that are implicitly in the case and communication connection based on a made up scenario.Nike or Adidas which will Dominate Global Soccer in the Long TermAfter reviewing both strategies, I believe that Adidas will dominate the global soccer market in the long term. Long term being a relative term since the statements we are basing our conclusion off of are from 2006 and there has been two another world cup since the data provided. I have played competitive soccer since I was 4 years old, and have firsthand experience in being on teams sponsored by Adidas and Nike. After having worn and dealt with both of these brands, I believe that Adidas not only has better quality gear but they are what soccer has stood for the last 60+ yeas. Typically when someone thinks of Nike, soccer is not the first thing that comes to mind, but possibly basketball or American football. This is because Nike has been more associated with those sports over soccer as well as being more of an “American” brand. However when you think of the classy 3 white strips known to Adidas, soccer is usually what comes to mind for the rest of the world.  Katje states (2014) “Adidas has seen its soccer sales skyrocket recently, including impressive gains in Latin America, which will continue with a strong Argentina showing. In the recent first quarter, total sales were up 27%. Sales in Latin America were up 19%, including a gain of 50% in the market in that region. This follows a fourth quarter that saw sales up 35%, including a gain of 32% in Latin America.” Even though recently Nike has started to give Adidas a run for its money in the soccer world, I personally do not think they will ever beat Adidas in this sport. Adidas started off as a soccer company and still today is mainly a soccer company, with an extremely loyal and passionate customer base that not only loves the brand but the soccer players who wear the brand. Levy states (2014) “For many consumers, wearing Nike or Adidas is akin to telling the world you are fan of Cristiano Ronaldo or Lionel Messi.” Adidas has some of the highest paying, well know soccer players in the world wearing their gear. For this reason they have been and always will be on top in the soccer world.
Suggestions to Improve Competitive StrategyThe recommendations that I have for each company to improve their competitive strategies are as follows. For Adidas they could improve their advertising campaigns. For instance every world cup Nike comes out with amazing inspirational videos and Adidas always seems to fall short on this aspect. Nike’s videos are the ones that people talk about and remember. Barnes states (2014) “Nike: Nike’s mini-movie, “The Last Game” has 55 million hits, and counting. “Winner Stays” has more than 82 million online views. Adidas: “The Dream,” featuring an original tune by Kanye West, has less than half that, with 36 million views. Its “House Match” spot is hovering around 17 million.” This shows just how many more people are watching Nikes than Adidas, regardless of the fact that Adidas is actually the sole sponsor of the World Cup. Another recommendation that I have for Adidas is to expand their horizons in all athletic departments not just soccer if they want to get more of an overall fan base and gain additional customer loyalty, especially in the United States. This is something that Nike is known for. For Nike if they are wanting to try and beat Adidas at soccer specifically they need to focus more efforts into that specific sport. Nike is known more for basketball and American football than they are soccer, which they have only just recently attempted to start doing in the last couple of years. Mcduling states (2014) “Nike’s soccer business has been booming. During its earnings last month the company disclosed that its “global football” division generated $2.3 billion in revenue last year, up 21% from a year earlier, and about double the pace of revenue growth for the broader company. Adidas has said it expects to generate a record €2 billion ($2.7 billion) in soccer revenue this year.” My other recommendation for Nike is they needs to try to be recognizable throughout the world and not just the United States. Parker states (2014) “Between them the two leading brands command a value of more than $25bn. Over the years they have carved up their own territories – Nike in the Americas and Adidas in Europe and Asia.” Soccer in America has only just starting to become popular in about the last 10 years. Where in the U.K and the rest of the world it has been the most popular sport to play and watch for centuries. If both of these companies work on improving these competitive strategies, it would take then a long way.Possible Ethical IssuesDo I think there are any ethical issues in Nike’s attempts to undermine Adidas official sponsorship of the World cup; no I do not. The reasons being as follows. Adidas is going to be the sponsor of the World Cup for a long to come. Eliot states (2014) “No matter how hard Nike tries, though, it will have to wait awhile to get an official contract with FIFA. USA Today reports that Adidas recently extended its contract with FIFA, which includes designing the official ball and selling official World Cup memorabilia, through 2030 for a mere $70 million per four years.” With that being said without Nike there really wouldn’t be any threats to Adidas products from major competing companies. Therefore Adidas really would have no reason to have competitive pricing. With Nike right on their backs at every turn, it give a competitive edge to both companies prices and give the average person a chance to be able to afford both companies products. Nike during the World Cup is known for selling their products at a very low price or even give products away for free to get more people to wear their products and therefor giving them more free advertising. Nike is not doing anything illegal and in my eyes the more people who can get introduced into the soccer world greedless of what brand gets them interested the better.  By giving their products away at a very low cost or for free, this gives under privileged people who normally would not be able to afford the products a change to be able to have them.