Macro-environment
The key principles of macro-environmental analysis are involved in the PESTLE matrix. Hence, considering the environment of Nike in general and Air Force One, it should be emphasized that the environmental perspective of this production is far from perfect, however, the product is highly demanded. (Lorat, 7)
Political
Actually, there are at least two environments that may be analyzed: the environment of the CEO, and the environment of the manufacturing powers. CEO is operating in a favorable environment while manufacturing powers in Thailand are vulnerable to attacks of human rights protection associations.
Economic
The global economic tendencies presuppose significant competition, nevertheless, the company is subjected to effective economic development.
Social
In fact, the target audience of the company are active people who care about their comfort of walking and running. The social environment in Thailand presupposes the availability of a cheap unqualified working force for manufacturing needs. The aging population of the USA makes the company penetrate other regional markets, thus, getting involved in serious competition.
Technological
Improvement of technological background offered the company to decrease the manufacturing costs and improve the quality of the end product. New technologies and new researches in the sphere of polymers helped to improve the quality and durability of these sneakers, hence, the target audience was increased.
Ecological
This macro-economic aspect is somewhat a restricting factor for full-fledged development. On the one hand, it presupposes the constant expenses for improving the manufacturing forces, on the other hand, this improves safety for the end-user, as ecologically safe materials are attracting a wider audience.
Legal
The only factor then needs to be emphasized is the scandal associated with the violation of human rights in Thai factories. Mass media claimed that employees had to work overtime and in inhumane conditions.
Market Analysis
The market share of the company is close to 34%. (Mokhiber 73). The company is engaged in sportswear manufacturing, however, the key product is sports footwear. Hence, the company is acting as a sponsor of various sports teams and sports events, as numerous sportsmen trust the company for the offered comfort and safety of the production.
In spite of the fact that Nike has a monopoly on its brand “Air Force One” shoes, the company is still ready to compete with other organizations like Reebok (25%), Adidas (up to 30% of market share), or Puma (9%). In a monopoly, it seems to be difficult to get access and define its size and growth rate as this type of market is usually very costly. Still, it is evident that the size is counted in billions, and the growth rate is about 50%. Taking into consideration the results demonstrated by Nike, its growth is evident, this is why the size of Nike production increases considerably. It is stated that the growth rate is 42%.
Considering the competition principles, it should be emphasized that the company is engaged in a serious struggle with other companies that are not going to leave the struggle or weaken their positions. However, sports footwear is also positioned as casual wear, hence, it is popular not only for sportsmen. Though, Nike is not leading in this sphere, while Adidas and Reebok take advantage of manufacturing shoes for everyday wearing.
Target Market Profile
In fact, the existing direct target market does not presuppose highly effective growth. This market is represented by sportsmen and physically active people. The alternative target market is linked with those who wish to become the target audience of the company: obese, or simply inactive, and partially disabled. Considering the statement that Nike is not leading in the sphere of casual footwear (due to positioning of the production), the target market of the company presupposes the widening of the target audience. In general, the actual importance of this step is closely associated with keeping the leading position of the company on the global market, as competitors are not numerous, however, some of them perform aggressive market performance and competitive struggle. (Nike Partners with Napa to Kick into Summer Sports, 60)
The demographic aspect of market targeting is associated with hitting not only young and active audiences but also those who lead the passive way of life. The potential of the standard approach has already reached maximal effectiveness, hence, the company needs to get involved in a healthy way of life promotion. This should become a part of target market performance, as the company will be able to include everyone who wishes to improve their fitness. Actually, something like House MD: a partially disabled person wears sneakers, hence, emphasizing that it is comfortable and suitable for everyone, but only sportsmen. Such targeting and reorientation of the target market profile will provide additional attention to the brand, while the popularity of an active and healthy way of life will be promoted among the target audience.
Purchasing Behavior
First, it should be emphasized that consumer behavior is generally defined by four key factors: cultural, social, personal, and psychological factors. The cultural factor is one of the most powerful, however, it is one of the most vulnerable simultaneously. On the one hand, the wish and importance of living a healthy and active life are natural for people, on the other hand, the tempts of contemporary life distract people from being active, healthy, and fit. Hence, it is the product for those who wish to stay slim, and for those who want to start a new life. The consumer behavior of this audience is defined by the next factor – the social aspect. This defines the price category of the product selected. Everyone needs to be sure that he/she purchases high-quality goods, though the price of the sneakers selected ranges from $20 to $500 and higher. The social aspect defines the income level of the audience; hence, the purchasing behavior is defined in accordance with the price category available for the target audience. (Taylor and Weerapana 311)
Personal factor is closely linked with the psychological aspects of the target audience representatives. People have their own preferences and prejudices that are related to every particular trademark. Some may dislike the Swoosh, while others may be distracted by the Thai scandal with human rights violations. Some have principal persuasions in low quality of the manufacturer etc.
In general, the consuming behavior of the target audience is quite favorable for the company’s effective growth, as the forecasted growth rates are high enough. Nevertheless, the company needs to pay sufficient attention to the positioning strategy of the product.
Positioning and Competitive Advantage
Positioning of the product is partially analyzed target market profile assessment, however, it should be emphasized that regardless of possible failures in positioning itself like a casual footwear manufacturer, the company is leading in the sphere of sportswear positioning. It is claimed that the brand is created for sportsmen and by sportsmen, as the company pays essential attention to research and improvement of the existing manufacturing technology, as well as improving the materials used. This positioning strategy helps the company position itself as the best choice for those who can not imagine their life without constant moving and activity. However, it is still impossible to imagine someone different in these sneakers. Considering the fact that Air Force One was invented for basketball players, the target audience was comparatively narrow. However, when people realized that these sneakers are also comfortable for other athletic activities, as well as walking and hiking, the audience became wider. (Hines 45)
The competitive advantage of the trademark, as well as the Air Force One brand is linked with the opportunity of creating comfortable and ergonomic footwear for everyone who values comfort and safety. The company is engaged in the environmental protection campaign, hence, all the materials used are ecologically safe and electronically tested. Another competitive advantage is the wide range of models. However, considering the fact that the market of sports footwear is highly competitive, this may be regarded as a disadvantage as well, as the company has to spray its positioning, marketing, and technological efforts for maintaining the existing diversity. However, considering the fact that competitors sometimes try to imitate the existing brands, signifies the fact that Nike may be reasonably regarded as the market leader, and most of the competitive advantages of the company do not allow competitors to sleep well. Hence, a sustainable competitive advantage is achieved, however, essential efforts are required for maintaining these advantages and keeping leadership.
Works Cited
Hines, Tony, and Margaret Bruce. Fashion Marketing: Contemporary Issues. 2nd ed. Boston: Butterworth-Heinemann, 2007.
Lorat, Nicole. Market Audit and Analysis. Munchen: GRIN Verlag, 2009.
Mokhiber, Russell. “Nike’s Come-from-behind Win.” Multinational Monitor. 2009: 73
“Nike Partners with Nrpa to Kick into Summer Sports.” Parks & Recreation. 2007: 60
Taylor, John and Weerapana, Akila. Economics. New York: Cengage Learning, 2007.