Bargaining Power of Buyers 17 Nike deals with two types of buyers which are

Bargaining power of buyers 17 nike deals with two

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Bargaining Power of Buyers:17
Nike deals with two types of buyers which are retailers and end consumers. In case of retailers,bargaining power of buyer is high as most of the income is derived from selling into retailers.Retailers pressurize the organization to provide products on the rate that is being offered hencereducing the margin. End consumer is the second buyer with low barging power as they have astrong brand loyalty. Consumers do not compromise on high quality over price.Threat of Substitute Products:Even though Nike provides high quality products with comfort but still there are some otherbrand that are more medically comfortable which could help the consumers to tone their bodyand make them more active. Therefore, threats form substitutes is medium. Competitors aremanufacturing certain innovative products that provide maximum luxury to the consumers henceaffecting the market share of Nike.Threat of Competitors:Nike being the leading brand in sports industry has number of competitors in the global market.The organization creates useful and innovative products which help the organization to excel andearn the major market share. The company has a strong brand portfolio with several ownedsubsidiaries including Cole Hana, Converse, Hurley International, Nike Golf and Umbra. Thecompany operates in more than 160 countries around the world. Reebok, Adidas and many otherbrands in sports industry are the competitors of Nike but as the brand is globally recognized, ithas very low threat from competitors.SWOT analysisManaging the marketing function begins with a complete analysis of the company’s situation.The marketer should conduct a SWOT analysis, by which it evaluates the company’s overallstrength (S), weaknesses (W), opportunities (O), and threats (T). Strengths include internalcapabilities, resources, and positive situational factors that may help the company to serve itscustomers and achieve its objectives. Weaknesses include internal limitations and negative18
situational factors that may interfere with the company’s performance. Opportunities arefavorable factors or trends in the external environment that the company’s may be able to exploitto its advantage. And threats are unfavorable external factors or trends that may presentchallenges to performance. The single best way to get a good look at any company's overallrelevance in the market is through a SWOT analysis. By looking at Nike's strengths, weaknesses,opportunities, and threats, a clearer picture can be make of where it has come from andpotentially where it is headed. The remainder of this case analysis will be to outline this SWOTanalysis.StrengthsSponsorshipsNew productsLoyal customersSuitable geographic locationStrong ManagementStrong Distribution ChannelWeaknessHigh PricesConflicts with RetailersConflicts with labourLack of Corporate objectiveEmployees turnoverOpportunities E tailingFinancial recovery in overseasmarketCost cuttingInnovative DesignsThreatsMaturity Level

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