I need help, Here is the discussion post: Now is the time to select a strategy b
ID: 327479 • Letter: I
Question
I need help, Here is the discussion post: Now is the time to select a strategy but before you identify a specific strategy to implement, you have to create a few alternatives to choose from. During the previous week you identified the generic strategic direction for Nike. It is now time to / I need help with this: identify specific alternative strategies for implementation. Based on the strategic direction that you identified in Week 4, create 2-3 strategic alternatives, i.e., actual strategies that the organization should pursue. Keep in mind that these alternatives MUST fit under the umbrella strategic direction you identified last week. Be sure to fully explain each alternative and why its a good possibility including supporting rationale.
Here is what I did in week 4
Nike has strong market share and brand value in its respective segments all across the world(Yang, 2017). It has more in strength factor and has opportunity which is much more. The global foot ware market will be 100bn by 2020 and CAGR of Nike is around 19% since last 6 years.(Statistics on "Nike" , 2015).Though there are threat and weakness but Nike have cushion to deal with these challenges. In BCG matrix Nike can be placed in star category which is more market growth and more relative market share.
The BCG matrix is a strategic framework developed by the Boston Consulting Group to evaluate the strategic position of the business and its potential for the future(Business Knowledge Center, 2010).
The matrix evaluates the business performance on the basis of business scenario given in form of 4 quadrants, each depicting a situation of segment growth rate and market share of the organization. The perpendicular axes represent variation of market growth rate and company's market share respectively.(Jurevicius, 2013)
High business growth rate and High market share - This is the condition when the business should leverage on its position in a growing economy by putting in more investment.
High business growth rate and Low market share - It is the time to ponder and focusing on selective areas for managing healthy growth rate. The organization might think of divesting in some less lucrative prepositions.
Low business growth rate and High market share - It is the time to generate profits by leveraging on strategic market position of leadership by increasing sales. The investment should be low.
Low business growth rate and low market share - It is the time to divest because neither the segment nor the competitive position is favorable. The organization should look for other options.
Explanation / Answer
Since Nike has been identified as a star i.e it is a dominant player in a growing market, strategically Nike should make aggressive push to further increase its dominance. This can be done by following :
1. Inorganic growth - There are lot of players in this segment. Some of them are international brands like Reebok, Adidas, Pume, Sketchers etc and some are domestic brands of the different geographies. There is scope for consolidation by taking over some of these domestic brands or distressed international players. This will give them access to volumes, distribution channels & design and development capabilities
2. Organic Growth - If we look at the ANSOFF matrix, there are four quadrants. Existing product Existing market, New product Existing market, Existing product New market, New product New market. These are the opportunities to expland organically.
New products can be - Smart watches (since it is associated with sports and fitness), Gym Equipments, Kids apparel (To attract consumer from early age) etc.
New Markets can be - Developing nations, rural economies etc.
3. Going Online - From brick and mortar consider going online to reduce costs and improve customer satisfaction through timely delivery