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Nike Essay

529 words - 3 pages

Strategic Diversification By Nike This assessment presents the values Nike has developed throughout its functional business areas, how value creation is lacking in some business areas, and how the acquisition of The North Face would create additional value for Nike.Strategic Value Creation of Nike The table below illustrates significant strategies Nike has employed to create value for its customers, the actual value created, and barriers to the creation of value.VALUE CREATION STRATEGY HOW VALUE IS CREATED BARRIERS TO CREATING VALUE Brand/Image · Ability to charge premium price by establishing an "image" · Access to new/different markets · Premium product placement in retail leading to higher sales · Image and celebrity endorsements create hopes/dreams/emotional attachment to ...view middle of the document...

e. marketing, distribution) · Foreign currency risk · Language barriers creating difficulty to advertise effectively · International regulatory issues Innovation & Production · Innovation may be difficult for competitors to imitate · Difficult for competitors to compete with rate of innovation/production · Ability to capture market for different attitudes/values across cultures with product variety · Strong emphasis on R&D leads to continuous improvement in products · Significant resources required to support constant R&D/ innovation · Product development cycle typically long · Large number of products may create customer confusion and frustration · With presence in a number of market segments (i.e. shoes, apparel, watches) it may be difficult to constantly innovate Product Diversification · New products introduced by Nike will be more readily accepted by customers due to strong brand image · Reduced exposure to demand fluctuations · Significant resources required to support product diversification · Difficult to be "the best" in all product segments · Product processes vary (i.e. apparel making it difficult to implement constant innovation and improvement

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