Essentially, the major aim of business is to gain competitive advantage over the other rival competitors in order to remain viable in the market (Kotler 1999). Porter in his ‘competitive strategy’ suggested cost leadership as well as differentiation as viable tools that…
People from various places across the globe have different tastes for different products hence the need to satisfy these as a way of gaining competitive advantage globally. The other competitive priority for Nike is the need to be cognisant of the changes in consumer behaviour. Consumer wants and needs are different from various parts of the globe hence the need to make an effort to identify and satisfy these so as to be able to remain viable.
The cost advantage is another competitive priority for Nike. This is seen as a strategy that is meant to bring goods of an acceptable quality to the market with comparatively lower production costs than its competitors (Strydom 2004). This is achieved through careful and effective management of the cost drivers for the business where it seeks to be a low cost producer while at the same time retaining competitive advantage (Strydom 2004). The other competitive priority that can be adopted by Nike is differentiation. According to Porter (1985:120), differentiation is “the process when the company provides something unique that is valuable to buyers beyond simply offering low price.” Thus, differentiation strategy is mainly concerned with identifying unique features about a particular product that have a broad perceived value in the market.
2. Nike should reduce product proliferation in an attempt to reduce their supply chain complexity and costs. Product proliferation suggests that there is a rapid growth of a particular product which may be counter-productive as far as demand and supply are concerned. According to the law of demand and supply, when there is high demand the price is likely to go up and this means an increase in the production of new products where costs are likely to be recovered while at the same time an increase in supply will lower the prices (Kotler 1999). Oversupply of products can result in ...
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