Nike Incorporation in the ‘Athleisure’ Market

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Nike Incorporation has been running on a league of its own for a long time, but emerging companies are challenging its dominance. Under Amour Incorporation, a sportswear company, forecasts a double on its revenue in the next three years to a massive $7.5 billion dollars. Nike’s closest rival Skechers has edged closer into second in making sporting outfits in the US market.

A record $30.6 billion in total sales in 2014 is a signal indicating that Nike is a huge global brand in producing sports outfit and footwear. The company’s earnings on the first quarter of this year indicate that its growth in sales is struggling compared to last year’s summer World cup. A report by FactSet forecasts a slight increase in revenue from $7.9 billion to $8.2billion this year as shares climb from $1.09 to $1.19 per share.

A report by CitiGroup shows that Nike is struggling in North America when first quarter of this year is observed. In 2014, Nike registered a 15% growth in expected orders from bulk buyers in North America; this indicates consumers want more of the company’s products. A report given by CitiGroup emphasized that Nike should grow by double digits in order to avoid slumping share prices. Nike has been the second best performer at the Dow Jones Industrial Average after UnitedHealth Group, with stocks rising to 19 percentage points.

Nike’s recent growth can be attributed to the athleisure phenomenon which is a big trend in fashion. However, it is facing stiff competition from Spandex-Infused styles that were popular at the New York Fashion Week indicating Nike’s growing competition that goes past sporting materials into luxury goods. NDP group reported that emergence of casual styles from rival company Skechers has closed the gap in the competition of footwear. Executives of Nike confirmed mid-price shoes were performing dismally in the market, although the sales recovered later in June.

Meanwhile, Under Amour has gained public attention from its sponsorship of former champions in various sports. Adidas is fighting to maintain its dwindling market share in the USA by sponsoring sports stars such as Jordan Spieth and Stephen Curry. Moreover, Adidas has promised to take over sportswear rights in the US Hockey league for two years. Nike has to deal with succession after its founder and chairman Phil Knight retires next year. The company has responded by appointing a holding company to manage his shares, and his son’s appointment to the board.

Factors that explain how Nike became so large and dominant in the athletic shoe market

Nike is recognized for sustainability policy such as recycling trainers for playground surfaces. The company policy has made it one of the largest manufacturers of sports footwear and sportswear. I learnt that Nike has developed a long term initiative of making its products using eco-friendly material and recyclable products.
Continuous research and innovation drives the development of new products. Recent products from Nike such as the ‘iPod controlling’ running shoe developed by the company, helps people to run while listening to music. The ‘Flywire’ training shoe which utilizes technology based on suspension principles is another successful innovation.
A good reason for Nike’s dominance and large size can be attributed to manufacturing its products in countries where labor practices are awful. However, Nike has modified its practices to mitigate the resulting international outrage of laborers in poor countries in order to protect the company’s image.

Recommendations for Nike to succeed in the ‘athleisure’ market

Nike needs to be innovative in technology. I recently noticed that a high quality fabric with odor control that retains no odor after long use was being developed by a sportswear company. Innovation and development of high quality material is essential for its customers comfort and sportiness.
An increase in fashion, innovation and lifestyle trends toward physical fitness is a proponent of growth in sport. Nike has a long history of producing sporting apparel and footwear that ensures high performance and comfort to its users.

Marketing research methods for Nike to help it stay abreast of changing consumer tastes

Online surveys

Online surveys are quick and efficient means in providing data from many correspondents covering a vast region. I recommend that Nike should utilize online surveys for the ease of research in worldwide market. Excellent information about consumers in the market can be obtained when Nike decides to use this method, and will help the company stay abreast of changing tastes of consumers.

Focus Group discussions

Focus groups provide a range of responses which provide a greater understanding of the attitudes, behaviors, opinions or perceptions of consumers. People from different backgrounds can give their views on the products that Nike rolls in the market. It is a convenient method for Nike as a global company with consumers spanning across the world.

Observation

Observation technique denotes a research method that involves gathering of information from respondent who are unaware and mainly focuses on non-verbal communication. Nike can use this method when observing athletes reacting to stimuli such as pain or discomfort while in the field.

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Nike Incorporation in the ‘Athleisure’ Market

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