Nike Vs. Reebok

Nike vs. Reebok

Questions

1. “The success of Nike was strictly fortuitous and had little to do with great decision making.” Evaluate this statement.

The important part of the success was due to the far-sight of Nike’s management team. Nike’s CEO, who was a marathoner and knew what runners wanted for their shoes, had made a very basic strategy work; “make the products that fit their consumers’ needs”. Examples of great decision making are:

• Diversifying products (into sports wears and others) was a smart move that had contributed to the current and growing success of Nike.

• Nike’s management’s bet on celebrities marketing. These athlete celebrities including Michael Jordan and Tiger Woods had introduced and placed Nike and its “swoosh” logo into people’s mind worldwide.

• Strategy planning on relationship with major customers is also another factor contributing to its success.

2. In recent years, Nike has moved strongly to develop markets for running shoes in the Far East, particularly in China. Discuss how Nike might go about stimulating such underdeveloped markets.

• As the world is getting smaller now, many sport events are broadcasted globally. This leads to a more effective and efficiency way of advertising internationally.

• Nike’s logos on athletes’ uniform, signs, stadiums and televisions have attacked consumers at their subliminal conscious. The “swoosh” then comes to consumers’ minds quickly when they are in a process of shopping for athletic goods.

• The market size of Chinese plus other Asians is tremendous and these people are affected by these international advertisements by Nike. Athlete footwear market in Asia has not been saturated and fully developed yet, compared to those in America and Europe.

• Most of Nike’s productions are based in Asian countries; therefore there will be less cost in transportation, which creates an opportunity for a more flexible and competitive pricing method.

• Some Chinese and Asians athletes have enter into international sport arena, for instance, Yeo Ming in NBA, Nomo in baseball, Nakata in soccer. These Asians athletes are potential brand ambassadors for Nike. These athletes significantly impact sport market in Asia.

• The Olympics Game is coming up, holding in China, Beijing 2008. This biggest sport event will become a vehicle for Major players, such as Nike and Adidas to compete and expand their market shares.

3. How could anyone criticize Fireman for signing up Shaquille O’Neal to a lucrative endorsement contract? Discuss.

The decision to use celebrity marketing by Reebok could also be viewed by consumers as just copycatting Nike, which would lower Reebok brand image instead of raising it. Moreover, selecting celebrity to be the brand ambassador is a double edge sword. Fireman’s process of choosing the celebrity was either in a rush or poorly managed, and resulted in a celebrity that did not reflect brand proposition. It is true that Shaquille was the greatest rookie for the NBA in that year. However, Shaq did not possess the charming and charismatic characters of Michael Jordan’s. Shaq has not been viewed as a “Role Model” for children as Michael Jordan was. Jordan was considered a talent basketball player with average height who has unlimited skills. In contrast, Shaq did not have the skills like Jordan does. He was just a strong basketball player with height advantage. Some even said that he didn’t know how to play basketball, but just knew how to dunk!

4. Do you think the swoosh logo has become too widespread, that it is turning off many people?

Absolutely not. The wider spread the logo is, the more penetrating the brand has become. This swoop logo goes beyond just selling Nike products, it has become a symbol of Nike-way attitude.

5. Given that all decision makers will sometimes make bad calls, how might the batting averages of correct decision be improved? Can it really be improved?

No one can really predict the future, but well-planned decision making could really improve the chances of making correct decisions or mitigating the effects when results are not as expected. The good decision making would need to start with

• Acquiring all relevant information and then thoroughly analyzing the information.

• Prepare a well-planned course of actions and backup contingencies in case of unexpected.

• Vigorously monitoring the situation and response