E-Business of Nike Company - Case Study Example

Running head: current and future use of internet technologies of nike 12th April Introduction and E-business of Nike Company Internet is used by many customers to look for different brands in the internet. The uses of E-business help the customers to interact with companies that develop different brands that are of high quality and of various tastes and preferences. Nike Company is one of those companies that require encouraging of the use of E-business since competition is stiff comparing with other companies that manufacture underwear products like athlete’s shoes and other clothing. E-business is rising as many businesses frequently tend to sell their products and services online. Nike Company is the world leading designer, marketer and distributor of athletic footwear and other sports products, the company is located in Beaverton, Oregon. Due to competition from other companies like Adidas which is a competitor in the manufacture of athletic products there is need to build deeper consumer connections and to support the overall growth of Nike Company. To make Nike company to be the leading company in the future, E-business must be a concern since the customers should have access to internet and see different brands of products that are available and the prices for the product (Chaffey, 2011). Nike Company must make sure that the prices of athletic wear are cheaper in comparison to the competitors and this can only be done by the use of E-business which will display the prices and different brands of high quality to the customers (Moe, 2013). Nike will decrease profitability in a short period since the company is a new entrant in the market of E-business but as the time goes by; the profit will be increased since many consumers are currently using E-business for business transactions (Schneider, 2006). The power of bargaining that puts the company under pressure and still affects the customer price changes will be reduced since in E-business bargaining powers are reduced as compared to the company dealings with the consumers (Tassabehj, 2003). The bargaining power of the supplier will be increased since the suppliers of raw materials will have to negotiate with the supplier. Nike Company has one weakness that products must be at lower prices as compared with the competitor, and strength of low bargaining powers of consumers and an opportunity of using electronic business transactions but the competitor may lower the prices deeper than Nike Company. E-Marketing Internet marketing is one of the aspects that Nike Company normally uses though the use of social media which has been the most widely used but due to competition in the market thus there is need to introduce the use of E-marketing. The method is concerned with the use of electronic marketing which satisfies the consumer needs and wants through the use of internet. Marketing is used as a medium by the manufacturers of footwear and other athletic products as a trading tool since Nike has to convince the consumers that it is capable of producing brands that are unique in the market and fitting to the consumer. High quality foot wears that are manufactured by Nike must be marketed through the use of electronic marketing (Turban, 2011). Due to time and competition in the market, the methods of marketing have changed and improved significantly, and E-marketing is more efficient and effective method of marketing. The use of modern technology that is used to market products is becoming popular as the technology is advancing, for example, Nike Company usually use Google search engines that they use to advertise their products since a customer need to click on the site and view different products that Nike Company usually offers and their prices. The marketing strategy helps the company to advertise the products through the use of internet and this create awareness of high quality products that the consumer may be willing to buy (Tapscott, 2000). E-marketing is both direct response marketing and indirect elements and the method help to connect business to their consumers. Nike Company can employ the strategy of marketing when opening stores in different areas for example, Nike usually gives contracts to other companies to manufacture the foot wear through the use of electronic marketing and thus Nike attracts new businesses, retains current business partners and still develops the brands identity (Laudon, 2011). The method is important since return on investment (ROI) is achieved after marketing since the consumers will be aware of the brands and those who are willing to be given the contract benefit from the same since the search engine need to be clicked and thus different foot wear and other athletic products are available. Web design Web design is an interactive page that can be used by individuals who want to access information concerning a particular company. Website is created to make sure that company information is displayed where the products and daily routine of the company are clearly displayed on the web page (Lester, 2002). Well designed websites can attract customers to surf more on the site trying to look for different brands that are manufactured by the company on the other hand if the webpage is not designed to be user-friendly, then it will demotivate the consumers from browsing even if the products produced by the company are of high quality and they meet the customer’s expectations. Nike Company is well known for high quality and unique brands of footwear and other athletic products. The use of web design is one of the components which have made the company to be the best producer of high quality footwear since the consumers interact with the webpage where the site is user-friendly to the customers (Zwicky, 2000). The website is of great help to the customers since all the brands are available on the web page thus meeting the need and expectations of the customers (Bates, 2012). The search help the customers to carry online transactions that reduce time to the customers and thus motivating the customers since accessibility is free where one can just search for unique brands and later to undertake the online transactions. Nike is the world largest sports company, which is 30% bigger than the competitor Adidas and this makes Nike to use the web design method as one of marketing strategy. This is based on the fact that the competitor tries to use any marketing method to make sure that the target of Nike is to get 17 years old who spend 20% on their shoes than their adult counterparts (Niederst, 2006). Nike usually updates the website whenever a new brand is introduced in the market thus making sure that the customer’s needs are satisfied fully and this makes Nike to be the best producer of sports shoes. Dead links and confusing navigation is not allowed in the web page and administrators keep close monitoring of the websites. Business-to-business (B2B) Business-to-business describes transaction between businesses such as between a manufacturer and wholesalers or even between wholesalers and retailers. Nike has business-to-business activities since the company must deal with the suppliers. Nike has procurement team that manages procurement process where they contract and select the right supplier thus business to business transactions are well undertaken. Nike is a consumer based company where the firm has to deal with individual customers in the market since the customers are major source of income to the company. The exchange of the product and services takes place as Nike being purchaser and supplier centric (Temporal, 2005). Nike overall volume of B2B transaction is higher than the volume of B2C transaction this is because Nike has a supply chain where a lot of raw materials are supplied to Nike thus being a business to business transaction on the other hand B2C transaction is specifically sale of the finished sports shoes and other athletic products. In simple terms, Nike will have to buy raw materials in large quantity but the output will not be high as the raw material was in the first stage (De Chernatony, 2003). Since Nike has online facilities, the opportunity of carrying business via the internet makes Nike to increase the chances of carrying business either with the suppliers who are either supplying in wholesale or retailers and the customers. The use of technology is a major platform that helps Nike to fulfill the expectation of the customers and increase the chances of lowering competition with the rivals (Nielsen, 2001). The online transactions help the suppliers and again benefit the customers who can still work in partnership with Nike to promote their products. One major characteristic of B2B is buyers concern since the buyers are well versed with the costing levels and specification and this makes Nike to clearly define the brands and target the segment in which the company will operate with (Hoofnagle, 2012). Due to the stiff competition in the production of sports especially from the well established Adidas, it makes Nike to be concerned with B2B transactions. Mobile commerce Mobile commerce is a way that business tends to be carried trough the use of mobile devices, in more realistic manner it is an online shopping experience with the convenience of smartphone or tablets (Tan, 2013). The method is much easier as compared with other online business transactions since ownership of mobile phones like smart phone and tablets are available to many. Nike like other company is one of the companies that are taking use of advanced technology to carry marketing strategies of the company. Mobile interface is less confusing as compared with other online transactions since it allows the customer to navigate with ease and reliability. From the time iphone was launched, mobile commerce has moved from the SMS system to a real application making it available and accessible (Martin, 2012). The bricks and click environment allows the customers to access online shopping without any problem thus, it is efficient and effective since currently ownership of mobile devices is accepted in the market by many. Mobile commerce that is used by Nike has different products and services available for example Nike allows the use of mobile money transfer this is where many transfers can be done via the mobile phones making it easier to purchase thus reducing time. The use of mobile vouchers, coupons and loyalty cards helps Nike customers to present a mobile phone to the point of sale and thus one can pay with it and receive a sport wear that meets his or her needs. The use of mobile commerce in Nike will rise since the customers are young people who normally use mobile devices to carry on transactions thus generating more than 40.8 billion dollars to the company. Conclusion and recommendations Nike is investing more in technology based operations so that consumers need and expectations are attained. This can only be achieved if the consumers significantly emulate online business transactions. competition is stiff in the market segments since Adidas still is specializing on online business transactions because it want to achieve a gap of 20% to 30% between itself and Nike. Due to competition, Nike should ensure that local discounts are available to the customers via online way either mobile commerce or through other ways (Trout, 2004). This is a recommendation that can be beneficial to Nike and has an effect of retaining the customers. Nike will spend a lot of funds in technology based marketing though for the first time it will experience low profit margins and thus if the company was enjoying 100% profit then a reduction of either 4% to 5% must be experienced since the type of marketing is new entrant in the market. Though as time goes, the company will peak and later will it be on the deserved expectation (Protalinksi, 2013). Nike is recommended to use different advertising strategies in order to make the customers be aware of the changes in the company. This can only be done possibly trough the use of Google ads since it is the most effective method that can be used (Garbade, 2011). Nike administrators should make sure that their website is more interactive and user-friendly with customers and make sure that the customers are aware of changes in the company so that confusion is eliminated especially when the customers are using the online transactions. References Bates, C. 2012. Best Practices in Carousel design for Effective Web Marketing. NY: Norton & Co press. Chaffey, D. 2011. E-Business and E-commerce management, Strategy, Implementation and Practice. New York: Prentice Hall. De Chernatony L.2003. Creating Powerful Brands Elsevier/Butterworth. Routledge: Routledge press. Garbade, M. 2011. Differences in Venture Capital Financing of U.S., UK, German and French Information Technology Start-ups A Comparative Empirical Research of the Investment Process on the Venture Capital Firm Level. London: München press. Hoofnagle, C. 2012. Privacy and Modern Advertising: Most US Internet Users Want. Chicago: Chicago press. Laudon .l. 2011. 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