Concept Synthesis Paper on Personal Nursing Philosophy

The global sports industry comprises of sports equipments, sports apparel and footwear. With the globalization era, the sports industry is also growing with the need of athletic accessories. The fastest growing markets for sports industry are South Asia and Central Asia, Middle East and Central and Eastern Europe. China is one of the leading market for sports industry.

The globalization of markets, increasing trends in sports, and sports activities have enabled the sports industry to expand their hands globally.

Nike Company Overview:

Nike Inc. is world’s leading company in sports industry. The company was established in the year 1968 in the state of Oregon. It is one of the leading players in sports footwear, apparel, equipments and accessory products. Nike, the name of the company is taken on the name of the Greek Goddess of Victory. With its strong marketing strategy, Nike Inc. has been successful in stretching its reach globally. Nike has followed the innovative strategy and has captured the market by introducing different athletic brands such as Nike Air, Max Air, Zoom Air, Nike Golf, Nike Pro, Nike +, Air Jordan, Nike Skateboarding and Nike Shox. The company operates in over 170 countries globally with company operates retail outlets, and independent distributors and licensee. The principle activity of the company is design, development and worldwide marketing of its products which includes sports footwear, apparel, equipment and accessories. The company produces its footwear and apparel products outside United States, whereas the sports equipments are manufactured in United States as well as other parts of the world.

The products of Nike are specifically designed for athletic purpose, but they are generally used for leisure and casual purposes. The footwear at Nike is specifically designed for different sports activities. The apparel and accessories at Nike are generally sports inspired lifestyle. The apparel and the accessories at Nike are designed in such a way that they complement their footwear products. ‘The company also markets its products and apparel with licensed college and professional team and league logos.’ (Nike Annual report, 2009).

Adidas company overview:

Adidas is a brand which operates in the in sports industry worldwide, having its existence all over the world. Adidas is one of the main competitor of Nike. The competition between Nike and Adidas intensified when Adidas acquired Reebok. ‘The name ‘Adidas’ stands for competence in all sectors of sports around the globe’(History, Adidas).

‘The mission of Adidas is to be the global leader in the sporting goods industry with sports brands built on a passion for sports and sporting lifestyle.’(Annual report, 2009)

The brands of Adidas are Reebok, Rockport, and Taylormade. Adidas is a leading company in sporting goods industry with brands upon a passion for sports and a sporting lifestyle. Adidas makes a strong move in understanding its consumers and work on different strategies so as to capture the market. Adidas has an advantage as it has diversified brand portfolio, so it offers variety to the consumers. It follows multi-brand strategy to reach maximum customers and build positive relationship with brands. With its diversified brand strategy the company is able to increase its leverage in the marketplace. It focuses on creating flexible supply chain and develop a team grounded in the heritage of the company.

Environment Analysis of Nike and Adidas:

Economic Forces

The economic force under which the companies operate is almost the same. Both the companies operate globally and are affected by the economic slowdown and downturn in the economy. Adidas has its headoffice in Germany whereas Nike has its head department in United States. There are several economic forces which has given space to Nike and Adidas to expand globally and work, this includes the adoption of one currency in the European market. There are several low cost places which has facilitated the production of Nike and Adidas especially the market of China and India.

Social Forces

The customers today have become more brand conscious and they prefer branded products over any other products available in the market. Customers have changed their preferences in terms of liking. Sports Consumer preferences are changing into more fashion-oriented. The technological advancement and increasing use of e-commerce and internet have made the consumers information oriented. Youngsters prefer gathering information about the products and brands online rather than focusing on advertisements. The changing lifestyle of the consumers is also one of the forces.

Technology Forces

Both the company has focused on innovation and technology. They uses innovative technology to design and build products, the products that are designed and build are made by adopting latest technology which match up to their vision of innovation. Nike has added advantage in terms of innovation and technology that is used in production of footwears and apparel.

Legal Forces:

Being into global business, both businesses are governed by several laws in the country where it operates. Adidas is mainly governed by European rules and laws and Nike by laws of Federal government. The company faces several import and excise duties which are imposed in different nations of its operations.

Financial Performance:

The financial performance and the profitability of both the companies depends on the demand of sports goods across the globe. Nike is a better performing company which has successfully maintained its place in top 500 global fortune companies. The profitability of the firm has been increasing with the increase in its promotional activities and association and collaboration with sports teams. The net sales of Adidas in the year 2009 was $10321 million whereas Nike’s net sales for the year was $19176 million.

Managerial Issues:

Both the companies believe in innovation and optimum use of technology. The company focuses on attracting maximum number of customers and increasing their profitability. The company follows the participative style of leadership. The organizational structure of Nike is decentralized as compared to that of Adidas. The decentralized organization structure helps in building flexibility within the organization. The compensation policy that is followed by the companies depends on the external environment factors basically the demand and supply of the labour. Both the companies plan the pay scale on the performance of the employees. Communication plays a very important role in the organization, the company believes that effective communication is the base of the organization. In both the companies, participative type of leadership is followed. Participative leaders share the problem with subordinates as a group, and together, they generate and evaluate alternatives and attempt to reach consensus on a solution. These include drive, the desire to lead, honesty/integrity, self-confidence, cognitive ability and knowledge of the business.

The leaders at the companies are charismatic leaders, they clearly communicate with the employees and maintain their enthusiastic and excitement level. They have high level of self confidence and self esteem. Communication is the key for leadership in these organizations.

Operational Issues:

Both the companies operate in a labour intensive environment. The labour is the major need of these companies. The operations of these companies are spread globally, different regions have different set of operations. Nike has focused on transnational strategy whereas Adidas focuses on multi-brand strategy. Both these companies acquire and sponsor different sports events. ‘Adidas is playing its tried and tested strategy of being the official FIFA sponsor of the World Cup games. This means the referees wear Adidas uniforms, the footballs are Adidas-branded and televised ads for football apparel and equipment during matches can only be, you guessed it, for Adidas. Moreover, Adidas is the official sponsor for 12 of the 32 teams playing in the World Cup — so the uniforms of teams such as Germany, Argentina, and Spain (all of which advanced to the quarter finals) were emblazoned with the Adidas logo.

Given the shutout sponsorship strategy by Adidas, Nike has had to fight back using different tactics. Back in the 2006 World Cup games, it tried an end run using digital technology, tapping into consumers’ new penchant for online social networking. Collaborating with Google, Nike created the world’s first social network for football fans, which it named Joga.com (in reference to the Brazilian phrase joga bonito, which means “play beautifully”). The site featured discussion groups on various teams, games, and players, and video clips of Nike-sponsored football stars performing awe-inspiring moves. Fans, thought Nike, would flock to the site as a place to commune with like-minded individuals all over the world, and their enthusiasm would make the videos go viral.’(Elie Ofek, 2010)

Effect of Changing External condition

The products of Adidas are not entirely different from Nike’s, all involved in the design and marketing of both athletic and non-athletic footwear and apparel, as well as other various fitness projects and Nike’s distinctive competency lies in the area of marketing, particularity in the area of consumer brand awareness and brand power, for a long time, Nike’s leading position has been established.’(Deng, 2009)

In 2005, the gap in market share between Adidas and Nike shortened because of the purchase of Reebok by Adidas. Nike has strong positioning and strong market base, the competitive advantage that Nike has cannot be replaced by any other company. Nike has a strong brand image and equity, with its everlasting image by the famous slogan “Just Do It” and symbols “Swoosh,” coupled with sports icons to serve as instant reminders of the Nike Empire is its biggest competitive advantage.

‘Two key attributes of the distinctive competency for Nike are its inability to be easily replicated and the value or benefit it offers to consumers. As Nike becomes a more integrated part of American and world culture, the brand power becomes increasingly difficult to replicate. Few companies have such a recognizable image and the resources to promote their company identity as Nike do. For decades, by associating star athletes and motivational slogans like, “Just Do It,” with marketing campaigns that emphasize fitness, competition, and sportsmanship, consumers have come to associate the Nike image with high-quality products, and a spirit of achieving courage, greatness where younger consumers especially benefit from this positive influence.’ (Deng, 2009)

Some of the key external factors that can affect the companies are increase in inflation, economic downturn, and increase in the bargaining power of suppliers and the labor market of the industry.

References:

Elie Ofek, (2010), The World Cup Brand Winner: Adidas or Nike?, HBS available at: http://blogs.hbr.org/hbsfaculty/2010/07/the-world-cup-winner-adidas-or.html (accessed on 11th July’ 2010)

Michael Witherick, Sue Warn, (2003), The geography of sport and leisure, Nelson Thornes

Global Sports Equipment, Apparel and Footwear Market Nearly $280B, Available at: http://www.marketingcharts.com/direct/global-sports-equipment-apparel-and-footwear-market-nearly-280b-5548/npd-sports-market-growth-by-global-region-2007jpg/

Tianbai Deng,(2009), “Just Done It”— Nike’s New Advertising Plan

Facing Global Economic Crisis, International journal of Business and management, volume4, no.3, March 2009

Nike Annual Report, (2009), Available at: http://www.nikebiz.com/

Nike 10K Report, (2009), Available at: http://www.nikebiz.com/

Adidas Annual Report (2009). Available at: http://www.adidas-group.com/en/investorrelations/default.aspx