Nike – Project of Business Analysis

Company introduction:

Nike is known as the worldwide leader in the sports market since 1990, Nike was founded in 1992. Nike now has a
portfolio of different subsidiaries. The footwear is designed for men and women. Nike is the perfect shoes for athletes; the comfort wear for every athlete, the advertisement of the brand is always related to the emotions of the people. An advertisement uses themes, determination and inspiration, and the performance of consumers. (Christian Baker, 2014).
In the pandemic situation of corona virus, everyone has been affected by this virus especially businesses. Nike also affected by the virus, the first country where Nike affected by the virus is China after that the North America and Europe outlets are also starting to close and the all business of Nike is relying on the digital platform where it can be selling online and offering it products through different websites or stores online. However, the expense and maintenance of the outlets are also giving loss for some reasons. The company is operated by a digital platform, when the virus is just started in China; Nike is providing the ‘Nike Training Club workouts’ which boost
its sales and 80% engagement. This training motivates consumers to stay active in their homes and give them the
power to fight with the virus.
The digital business of Nike is starting in 2017 when it launches the ‘Consumer direct offense’ including the products and some partners like Foot Locker. Footlocker is a retailer of sneakers having 3000 stores all over the world and earn at about $8 billion in revenue and two third portions are Nike. So, with the help of these partners and digital applications, Nike is trying to overcome the loss for the Covid 19. (Bowman, 2020) (Gilliland, 2020)

Justification:

The Digital world provides the opportunity to the business to cover their losses and get their sales high by giving the online services to the consumer. Nike also works for the costumer to make their products available at online platform. When there was closing of Nike first time in China they are facing loss but when they started the online business there and they are showing the Nike training Club Videos to the consumers who motivates to buy the product after watching the enthusiastic workout videos providing by the Nike. Problem is all about the COVID 19 and how Nike overcomes from the entire problem which they are or they will be face in the future. Most of the companies of the world are facing the losses for billions in the lockdown but to recover that lockdown is the main thing.
In the mid of the February,  as Covid 19 come across in all over the world, Nike shut down more than 5000 and 7000 of the stores which are partner operated so it was the loss time for the Nike but the loss was recover from the online business. In these February the growth is more than 30% from the last year, that’s mean the Nike is getting more profit than the physical business but the online platform give the limit to the business and the growth and profit is in limit, so the limit is 5%.
Nike quickly adopted the digital market place and engaged with them in apps like Nike training club, which offer the members to the home workout.

Techniques and Tools:

Strategy Analysis

Dropped the subscription fee

Nike has the strategy to drop the subscription fee of the NTC Premium, which is providing the streaming videos of
the workouts and they are also providing the tips to the experts of workout which are really helpful in the lockdown and provide the guidance to them according to their flexibility. Nike app, Nike Training Club app (NTC) and Nike running club (NRC) app, the social channels and nike.com also the podcast which is known as the “Trained podcast”, they all giving the offers to the customers on the tip of their fingers about the movement about their health and nutrition and much more.

Focusing on direct to consumer Channel

Direct to consumer is the strategy which is providing the strong relationship between the consumer and Nike. It is a powerful strategy because it is the way to get the opinion from the customers and get their reviews and feedback of the product. This is a key in the world of business that consumer can share the ideas and feedback directly to the brand which they are using, what they are feeling about the brand and the personality.
As the brand and personality has a strong relationship between one another and the costumer wants to choose those products which matches with their personality, the one who are daring and want to use comfortable brands are comfortable to use the product which give them comfort however the person who are having a rough personality like to use the rough products which are hard and strong. So, this strategy is also working in the Covid 19 situation and the focus to direct to consumer is working that costumers are easy to order and receive the products and can express their opinion easily on the platform of Nike.

Few Retail Partners

There are few partners of the Nike by which they are collaborating with the consumers and earn profit. The retail partners Foot Locker and Nordstrom helped them to grow and the strategy is helping them as their sales are increasing and the digital initiative looks like successful. It is the huge responsibility to cooperate with the partners is having the satisfying result but Nike have a strong strategy to manage this entire situation.

Emotional Advertisement

Nikes strategy to use emotional branding and advertisement to give the emotional touch between the shoes and the person. The campaign is starting with the aim to unite all of us in “new normal.” Along with the branding the tag line which is using by the Nike is so much related with the enthusiasm and emotion of the people.
Those tag lines motivate towards the brand and the perfection of that tagline and actions are the reason of increasing sales. Likewise the strategy which are using to motivate the people during the lockdown and online sales are bringing up by the reasons of the advertisement and the facilities like the app and the workouts which is
perfect with the comfort of the Nike shoes. (Du, 2020)

Shopping

The problem is also arises when the people who don’t like the online shopping and want to buy the products by physically come to the outlet. The 40% of the people like outdoor shopping which gives the satisfaction and happiness to them. Nike has to manage this challenge of the customers who are not willing to buy the product online but the loyal customer and want to do shopping from the Nike.

Competitor

The competitor will make difficult situation to any brand. The Nike competitor, Addidas is also an international brand which always gives the difficult competition to the Nike. The Nike should use the competitive advantage on it otherwise it will also giving the loss to the Nike if the consumer switch to the Addidas.

INVESTIGATE THE SITUATION:

1. The investigation of the situation analysis is that crisis of the corona virus can or cannot overcome with the Nike. The people who like to buy the products by going to the shopping is the challenge of the Nike. The people
   either come to the store or do the online shopping but the loyal customers and willing customers who want to buy the product by coming on the store at this time is challenging situation for the Nike. So, it is depends on the Nike that what it is doing to manage this entire situation.
2. The other part is to manage the proper advertisement like Nike is following from the different years. But to maintain it in this critical situation is possible for Nike or not.
3. The other situation is that the few outlets of Nike are providing the profit or should it more increase if Nike collaborates with other partners, and adding the other partners in the chain in a lockdown period is giving the advantage to the Nike or Disadvantage.
4. The drop in the subscription fee means the loss is bearing by the company and the expense on making the videos and gives training to the costumers the expense of the trainer and all the things which are involving in the expense of the apps.
5. The direct to consumer goal should achieve by the Nike or it will give create a barrier to communication between the consumer and the brand.
6. Nike should have an eye on his competitor that what strategies are they following, if they are better than Nike so it will be difficult situation for the Nike to overcome especially in the virus situation.
7. The pricing strategy should also be changed according to the situation and the target market, so Nike should manage the prices and providing the quality material so it will give relaxation to the consumers so they can easily afford and using the brand comfortably and being loyal to Nike. (Bain, 2020)

PERSPECTIVE:

The perspective is based on the several judgments and observations.

People who are not like the online shopping can create the loss to the company because the quantity is more than enough and the Virus is on ongoing situation means they should take care of that consumer, the question which are arises here that the people who do not like will move towards the online shopping or Nike will make some arrangements to that type of costumers because presenting the comfortable brand means giving the comfortable to the costumer so they can enjoy the brand and get the satisfaction.
The Other point is to giving the direct to consumer strategy, this will need to analyze because the consumer face to face communication is always better than any communication, so it is a challenge to the Nike to make every possible situation to make communication better with the consumer, otherwise it will create a loss in this situation of virus.
Advertisement is a strong marketing tool which is used to make familiar of the brand. The emotional branding can play the positive role or negative role in the journey of Nike. This process will need to analyze for the future because motivation is necessary but the situation should be according to the situation.
Sometimes, Partnership giving the benefit to the outlet or store but sometime it will give the loss to the business. Adding of new people in the business or doing business by them is giving profit or loss to the Nike. The Nike should understand and take decision about the partners.
The competitor is difficult obstacle of business that is competing with you in every step of business. If the competitor make better strategies than you that means you are facing the loss and the greatest loss. To get success always be with your competitor or one step forward.

The needs are:

1. Competitive advantage
2. Strong communication
3. Partnership Relationship
4. Loyal customers
5. Stable Advertisement

Requirements:

1. Always win a competitive advantage by observing the competitors or make strong business ideas on it.
2. Strong communication system which can be continuing by online system and consumer can get satisfaction.
3. To maintain the partners and giving a chance to the new one for increase market share.
4. Advertisement according to the situation and sentiments of the people.
5. Make proper arrangement for the costumer who want outdoor shopping, can arrange the meetings with the customer at their homes or convince them to do online shopping with the same facilitates and enjoyment which they are facing in the outdoor shopping. This is the most important point of analyze and need proper attention to save the sales and revenue of the brand. (Iulia Cristina, 2018)

Comments and observation:

The comments and observation for the problem arises are as follows:

1. the competitive advantage is taking by no one, both of the companies using the unique system and using different strategies to compete on a level Nike is providing the quality and comfort to the athletes, as their main motive is to provide the comfortable shoes by which the players can take part in the competition and can do their best strategies. Nike has to maintain the competition with addidas in this Covid 19 situation and using different business strategies to deal with it.
2. Strong communication with the costumers in lockdown but in this situation the communication can be irritating and weak because of no face to face interaction. The Nike should make another app or add other features to their app to make interaction stronger with the consumers and they can satisfy with the new feature and consumers feel free to communicate with them.
3. Partnership can be the better way to increase in the sales and revenues to sell our products on other large retail stores. But in Corona virus the partners also faces some type of loss for which they are losing their sales. So, in this situation the loss which is facing from the partners to not sale the product in this critical situation of
   virus? Moreover, adding more partner to the chain in this situation is also risk taking step by the management, if they can manage the risk and make partners to those brands which have more powerful system and can increase their sales, so they should focus on that and give a chance to them.
4. The problem of loyal customer who did not want to communicate with the brand online. To give them the services at home can be the better idea and they can also manage the face to face communication with the consumer but from all of the countries the brand should make available their team at every place to communicate with them and make product available along with them, which is required by the consumer in this crisis.
5. The emotional advertisement can be the competitive advantage because emotion is the reason to increase the sales and they can motivate the consumer and can communicate them with emotional advertisement.
6. The price factor is also have to maintain in this situation because lockdown give losses to the people and it
   should be according to their target market. The price factor should be according to the situation so it can
   affordable by the people.
   (Pratap, 2019)

SWOT analysis:

EVALUATION:

According to the project, the Nike is the main global brand which is providing quality and comfort to the consumer.
The competitive advantage which are in the form of the presence of the brand, the image and customer loyalty and innovation should be maintain by the Nike in this situation if they cannot pay focus to it, it will give them losses and to cover that loss Nike will loss the competitive advantage and can lose customer loyalty. Having the strong communication with the consumer who did not want online facilities should treat with the different strategies along with the same quality.
It is required for the brand to evaluate and make intellectual ideas which can bring the solution to them. The other point of view which needs to discuss here is to manage the relationship with the partner and to discuss either they want to make more flexible partnership or continue with the same partners. Both of the decision is this situation needs to evaluate and can give them a profit or loss. Loyal customers which are not interested in the online shopping have need some evaluation and they cannot let them go in this situation. To analyze the ideas for that the brand should need proper plan and implementation and giving the best services as well as the satisfaction of coming on the store. They can make better use of online services to convince the consumer to buy the online products. So, they can manage all their loyal customers.
The advertisement is the emotional which is related to the emotions of the customer who are in love with the customers and related to different sports, it is necessary of the Nike to give the special products and giving the innovative ideas in this situation to use the situation according to them.

Recommendation:

Nike should take care of their situation and they could not face loss, they should analyze the situation and different points on which the investigation needs on the required points. Their innovative ideas and competitive ideas and advantage can save them from the different crisis and situation like the virus and strong management should manage the entire crisis.

Bibliography

Bain, M. (2020). The lessons Nike learned in China during the coronavirus out break. Quartz.

Bowman, J. (2020). 3 Reasons why Nike can overcome the coronavirus crisis. The Motley Fool.

Christian Baker, P. F. (2014). Nike incorporated Crisis Mangement Plan. Initial Press Release.

Du, D. (2020). Nike: Overcoming the Coronavirus Crisisi with Digital Ecosystem. Digital Innovation and transformation.

Gilliland, N. (2020). How Nike is striking the right tone with its response to Covid 19. EconLEARN.

Iulia Cristina. (2018). 3 brands in crisis. Brand Minds.

Pratap, A. (2019). Strategic Analysis of Nike Corporation. notesmatic.