Nike has been recognized as a quality brand that encourages self-confidence as well as promoting athleticism among the youth. However, issues of an exploitative wage rate in their factories and severe labor conditions are just among the legal issues that the company faces in the international community. There have been previous movements in the labor markets wherein the company’s ethical practices have been in question among their overseas factories. Nike then addresses this through its redefinition of its labor stance as well as remaking the labor friendliness of the company.
It can be summarized as repositioning the company into an image of a responsible corporate citizen who strictly follows labor codes and guidelines (Gall). A lot of the negative labor impressions associated with the company are focused on the conditions of laborers in the general industries of fashion. The company was specifically emphasized after accusations of hiring child-laborers, the exodus of laborers into the third world countries as well as the environmental concerns that critics say the company neglected. Nike’s General Strategy
The company is on a current move to minimize its corporate dependence on just the Nike brand and instead resorting to the acquisition of smaller firms in the market (Gall). Over the past couple of years, Nike has already acquired small firms like Saucony and Street Cred which caters to the alternative clothing segment and targets the youth as well. This move aims to diversify Nike from within and gain a larger market share in most market segments of the industry. The company believes that a lot more other alternative brands will minimizes the company’s saturation of the market while establishing itself in the global arena further.
Nike did this through electing a new CEO, William Perez, which gained reputation in handling several brands in the past. Perez is then on a mission to modernize the company brands further and promoting them in the international business scene. This way, Nike would be able to restructure its current business portfolios to stay at par with international competition. Nowadays, Nike also is developing a stance to penetrate their marketing strategies with the current trends in technology and lets the public know it by making athlete stars wear their product (Gall).
The company is focusing on the opportunities in digital marketing schemes and e-commerce in further enhancing their financial capacities. For instance, NikeLab. com is among the online sites the company established in order to bring to the public their new product offerings as well as innovations on the products they previously released. Nike also maintains a strong communication with their customers which heavily influences their product development researches. The company’s loyal customers are the main factor why Nike constantly develops their products.
The company is aware of their significance in their clients as well as communicating with them through various media environments (Kotler, 2003). The company is also in a current effort to deviate from the common form of communication to the consumers by developing other alternative mediums that could further enhance the campaigns frequencies and reach of the company in the international sense. This strategy is brought about by the fragmenting tendency of the current advertising mediums by limiting the campaigns that companies employ (Kotler, 2003).
So what Nike, as well as other companies does is to delve away from the common television medium and tap other opportunities that technology offers. Nike finds other ways to present itself along with their product offerings into the current as well as new target markets. This is answered by the increasing number of online users which the company sees as a vital alternative form of communication channel. In their advertisements, Nike also studied the loss of the gray area in advertising wherein the message of the campaign as well as the presentation is overlapping.
The company tapped this opportunity also through NikeLab. com wherein Nike could further analyze the consumer behavior of their clients as well as the emerging opportunities if the Internet. They would then use this in formulating new and alternative advertisement campaigns that could well attract consumers into buying Nike products. This way, product and service differentiation is made through Nike’s benchmarking principles whereas they could address the needs and demands of their consumers. Nike also gains popularity from the various endorsements that they give out to athletes.
These athletes then give out compensation to the company through the exposure of the brand in every game they play. This strategy incorporates the establishment of Nike being associated with the success of the player that wears or use Nike products. This way, the company establishes a culture of athletic excellence by free-riding on the popularity of athletes. Fans of these athletes are then prompted to buy the same apparel that their idol uses, thereby crating a smart move for the company. In short: profits.