NIKE BUSINESS WEAR

Nike Business Wear

Nike Business Wear

Presently Nike's corporate level strategy includes a moderate level of diversification. The operational relatedness between businesses is very high. They share most information and technology needed to succeed. Nike falls into the category of related constrained, since less than seventy percent of revenue comes from a dominant business and all businesses share product, technological and distribution linkages. Nike's diversification is related because the firm builds upon or extends its core competency and resources/capabilities to create value. Also, economies of scope are incorporated. (Anita Mack 2003)

Nike expects activity sharing among units to result in increased strategic competitiveness and improved financial returns, which it has seen. Moreover, intangible resources are difficult for competitors to imitate and/or understand. This allows the other businesses to gain an advantage immediately over competitors. It is said that Nike possesses a reputation comparable to those of McDonald's and Sony. Nike has outpaced its closest rivals. Moreover, this success is reflected by the stock price of the company. During 1994 and 1997, the stock price nearly quintupled.$100 invested in Nike stock ten years ago would have been worth $ 1,432 on May 31, investment in the S&P 500 Index would have been worth $ 527. (Anita Mack 2003)

The sharply increasing adulation of top athletes. The obsession with health and physical activity. The centrality of sports among teenagers' lives, The increased "fashionizing" of products. In fact that was these two factors only, rather than their manufacturing, that won them resounding success in the industry in recent times. Due to the reason, Nike adopted a multi-tier vendor strategy and almost completely did outsourcing of their manufacturing process. That was again a very courageous and innovative decision in the sense that the complete outsourcing of product might have brought in many small competitors against them in ...