This research analyzes the strategic position of Nike, Inc. The time frame of the case is 1992.
At the beginning of 1992, Nike was the world leader in the athletic shoe market in terms of overall market share. Nike was not the market share leader in each global regional market, nor was Nike the market share leader in each segment of the athletic shoe market. Nike's primary objective, however, was to become the global market share leader overall, in each region, and in each segment.
At the beginning of 1992, Nike was organized as a marketing and research and development company that depended on independent contracting firms to produce the goods developed and marketed by Nike. It is this organizational focus that is at the heart of both Nike's strength and the company's vulnerability. The major problems and issues confronting Nike at the beginning of 1992 were as follows:
1. Marketing and research and development:
a. Distribution. A key Nike objective is the development of control of the distribution of the company's products on a global basis. While the company has made significant gains in this area, problems remain.
b. Product/target market relationship. Nike defines its athletic shoes as performance products, and identifies the target market for these products as persons pursuing fitness regimes. There are indications that Nike may be misreading the
market. If the company is misreading the market, the Nike approach may cause the company to be highly vulnerable in periods of economic sluggishness or recession.
c. Competition. Nike somewhat disdainfully refers to the company most strongly challenging Nike's global market share leadership, Reebok, as a fashion oriented company whose products cannot compete against Nike's performance oriented products. There is danger for Nike in this attitude in two contexts. First, Reebok is as capable as is Nike of producing performance products. Second, Reebok...