Question

Previous week data:Nike’s general strategy for competitive advantage gives emphasis on product mix diversity. (Stratgey-formulation framework, 2009)Thus general plan refers to a process through which organization attains and preserves its competitiveness. However, Nike must ensure that its generic strategy and exhaustive growth policies are suitable for its present business circumstances.Nike’s cost leadership general strategy intends to maintain a competitive advantage customarily based on overhead expenses. However, in general, strategy process business attempts to lessen its operating expenses to maximize its profitability.A strategic objective based on the cost leadership general strategy is to develop the competitive business advantage through implementing the latest available technologies to lessen the operational expenditures. However, the financial objectives based on the general differentiation strategy is to make the most of Nike’s revenue margins.(Functions of Management 2009)However, the cost leadership generic competitive strategy facilitates Nike to penetrate markets based on ensuring availability of industrial products. A strategic objective connected to market penetration(Shethna, 2017) is to augment Nike’s market presence by increasing the official representatives in the market. However, the financial goal correlated with intensive growth strategy is to boost Nike’s trade earnings through the increase in sales in the present market.Diversification can sustain and preserve Nike’s generic competitive strategy of differentiation through novel business ideas that can ensure to provide stuff for product innovation. However, a strategic financial objective based on exhaustive growth policy intended towards improving Nike’s financial risk by entering into other diversified markets.

I need assisted with this question. I have provide and example. The company I used is Nike.

Use the QSPM tool to review the alternatives identified this week i(NIKE) to identify just ONE strategy to move forward (please include the QSPM in your response). Provide a detailed explanation of the ONE strategy identified using this tool and explain why that strategy is critical to the organizations future success; be sure to use the data from previous weeks to support your explanation.

An Example is below:

QSPM is the quantitative strategy planning matrix . It is the quantitative tool to analyze the best strategy for the particular industry/organization .

By using the QSPM organization identify the best strategy for future success because organization get the data for implement the most acceptable strategy .Each and every organization has limited resources to move forward the one strategies. By using this method organization can save the time , money and other resources to compete with the competitors and get the competitive advantage .

. Before analysis of QSPM ,organization design the internal and external factors such as strength ,weakness ,opportunities , threats . Now I am here taking the example of e commerce company Amazon for starting the delivery of grocery items to the consumers or not .

Weight = It is the assign value between 0 to 1 in each internal and external factors

Attractive Score (AS) = It is the score assign as per the preferences ( 1= not attractive , 2= somewhat attractive, 3 = reasonable attractive, 4 = Mostly attractive

Total Attractive Score(TAS) = Weight * Attractive Score

Total Attractive Score tells the best strategies .Here started the grocery item is the acceptable strategy for the Amazon because TAS score is 5.7

		Not started the delivery of grocery items		Started the delivery of grocery items
Key Factors	Weight	AS	TAS	AS	TAS
Opportunities
Due to lack of time. Most of buyers interested in internet shopping	0.05	1	0.05	2	0.1
Very large number of buyers associated in E commerce	0.1	2	0.2	3	0.3
Mobile Shopping increasing day by day	0.5	1	0.5	3	1.5
Threats
It is unorganized sectors . various competitors are coming in the same field	0.3	2	0.6	2	0.6
Government regulations and laws changing for the e commerce sector	0.1	1	0.1	1	0.1
Maintaining the quality standard of the inventory , Customer satisfaction	0.2	3	0.6	2	0.4
Strengths
It is very transparent process . Users can place the order through internet 24 by 7	0.1	2	0.2	4	0.4
Very fast process .Product will delivered at home in few hours	0.3	2	0.6	4	1.2
Cost effective process . User avail the various discounts time to time	0.2	1	0.2	3	0.6
Weakness
Physical examination of items are not possible in E commerce	0.3	2	0.6	1	0.3
On time delivery failure reduce the customer satisfaction	0.1	2	0.2	1	0.1
Sometime limited number of items available .	0.1	2	0.2	1	0.1
Total			4.05		5.7

Answer 1

The Blue Ocean Strategy that will be undertaken by Nike, with regard to reconstructing market boundaries stems from the paths of;

• Strategic Groups

• Complementary Product and Service Offering

• Functional-Emotional Orientation

• Time

Strategic Groups

• Much like Toyota’s strategic alteration to the Car industry, away from the luxury brands of BMW and Mercedes, Nike has the ability to harness the notion of products for the “everyday consumer”.

• Within the Industry, Nike can also adhere to the strategic ingenuity of MyProtein, a UK based Sports Nutrition Company that is witnessing huge growth due to its innovative consumer relationships. MyProtein has taken on an educational role within the industry, attempting to enlighten the consumer to the benefits of various elements of sports nutrition on their website and marketing. Furthermore, they have also attempted to capitalise on Sports Nutrition Forums as a platform for consumer-interaction, whilst also attempting to cut costs through

Complementary Product and Service Offering

• Whilst the majority of the Sports Nutrition Market produces complementary goods, such as Sports Beakers and Limited Clothing, on a small scale, Nike’s dominant model within the Sports Equipment and Accessories Industry allows them to sell their products as complements to their Sports Nutrition, and Vice Versa, on a mass-scale.

• Technologically, the Nike+ App, which allows its user to measure their exercise regime, presents the ability to reconstruct technological boundaries surround sports nutrition by promoting a virtual diet and lifestyle log. Whilst companies such as FitnessPal already offer such service, Nike is in a position to sell its virtual services as a partner in the consumer’s pursuit or health and fitness, by suggesting products and nutritional intake. Such a platform also presents a new possibility for marketing, in which consumers form close relationships with a variety of Nike Nutrition’s nutritional Products.

Function-Emotional Orientation

• With the Sport Nutrition Market veering away from the extreme Bodybuilding image, Nike has the opportunity to reconstruct the emotional hyper-masculinity associated with such products, and instead present a far more normalised and functional approach.

• This functional approach will manifest in providing everyday consumers with Food Bars, Nutritional Gels, Drinks and Supplements that can be incorporated into their everyday lives for a comparatively lower price than competitors.

• These tailored products, due to their personal differentiation, presents consumer with the ability to maintain a balanced and specialised nutritional diet, in a convenient and tasty fashion.

Time (Trends)

By penetrating the market at a time when both the market and global trends are shifting, Nike has the ability to cater to growing, and different demand.

• Healthy Eating - The “Healthy Eating” trend that is sweeping both the western and eastern work, further facilitates Nike’s functional approach to Sports Nutrition. The ability to educate the public, owing to its brand identity, will also enhance the ability to make the consumer associate Nike with a balanced nutritional lifestyle.

• Digitalisation - Nike’s experience within the technological segment of the sports industry, allows it to capitalise on the growing demand of the consumer to manage their diet through their smartphones.

• Distribution Channels - Nike’s expansive network of distribution and delivery will allow it to reconstruct the currently immature distribution channels of the Sports Nutrition Industry.

• Personalised Nutrition - The growing demand for an individual and tailored nutritional plan, allows Nike to reconstruct the market in a functional manner.

Stage 2: Extending Demand within The Sports Nutrition Industry

Nike Nutrition's competitive advantage and resultant market share will be fuelled by it's ability to appeal to those consumers previously unreachable

Tier 1: Dissatisfied Customers

Cause

• Within the sports supplements industry, the majority of dissatisfied customers stem from their unwillingness to pay the price placed on products, such as protein shakes and supplements.

• Companies such as Maximuscle and Optimum charge such high margins on their products, on the belief that consumers are willing pay a higher fixed price, owing to the general uncertainty regarding the quality of alternatives.

• This general satisfaction manifests in a lack of brand relationship within the industry, further aiding it’s fragmented nature, limiting any single company from gaining a substantial market share.

Nike Nutrition

• Nike Nutrition, owing to its significant brand identity and reputation of excellence, has the ability to undercut the market in this sense, due to economies of scale and its ability to offset overhead costs such as marketing and distribution over a larger scale of output.

• Furthermore, the majority of competitors such as Optimum and Muscle Foods incur a far greater distribution costs, such as delivery, due to their immature supply chain, and lack of relationships with courier services. These costs are then reflected in the price to consumers. Nike’s mature and expansive distribution network will result in a far smaller cost incurred, and thus a far smaller reflection in the price of the final product.

• Nike will be able to charge a far smaller margin on products owing to the dependable quality and mature distribution network that the company ensures; the result is that it will be able to undercut competitors and appear far more accessible to consumers.

Tier 2: Consumers Who Actively Use Substitutes

Causes

• Customers who attach themselves to substitutes, such as natural muesli bars, smoothies, and traditional nutrition such as chicken, do so due to a lack of education and understanding of sports nutrition and the array of benefits that such product offer.

• The appetite of such customers to adopt sports nutrition in their diet has been further inhibited due to the uncertainty of quality over various products, and perceived issues of “drug-like” supplements in end products.

Nike Nutrition

• Nike looks to overcome this is two ways. Firstly, via its educationally orientated marketing campaign it will seek to resurrect this preconceived ignorance, whilst also fostering the image amongst consumers of Nike Nutrition as an enlightening partner in their ambitions of health.

• Secondly, Nike Nutrition’s reconstruction of the previously narrow market for traditional bodybuilding towards a more all-encompassing approach to personalised nutrition, will allow such products to appear more accessible. The brand identity that Nike possess, and consumer base that it already possesses will no doubt overlap with those who use substitutes to Sports Nutrition. This will enhance Nike’s ability to penetrate Tier 2 consumers.

Tier 3: Unexplored Customers

Causes

• Customers that are not active in the sports nutrition industry have either been marginalised, owing to the lack of education on supplements and their benefits, and the focus within the industry on unattainable aesthetic within marketing. Marketing using hypermasculine material isolates and distances the "everyday user".

• A lack of interest in health, and an unawareness of the importance of balanced nutrition.

• Lack of engagement with Sports Nutrition.

Nike Nutrition

• Unlike its competitors, Nike has the marketing ability to reach such consumers, either through formal marketing channels, or through their affiliations with the NBA and NFL.

• As the most recognisable brand in US Sport, Nike already possesses a relationship with almost the entire Tier 3 consumer base; when coupled with Nike Nutrition's educational approach to marketing and reputation of excellence it possesses to ability to create and obtain a huge level of consumer demand, subsequently nullifying competitors.

• As the social trend of healthy eating promotes awareness of the importance of balanced nutrition, the Tier 3 consumers that were previously unaware are suddenly confronted by a sense of responsibility to adopt such lifestyle changes. The convenience of Nike Nutrition, when coupled with its cost leadership and reputation will place it perfectly to capture and benefit this new influx of demand

Stage 3: Getting The Sequence Right For Nike Nutrition

To illustrate the commercial viability of Nike Nutrition, the "Get The Sequence Right" framework outlines the manner in which the Blue Ocean Strategy adds value to the consumer, and thus is rationally adopted.