Tue. Aug 4th, 2020

Discuss whether or not the retail strategy is being executed effectively by the retailer

3 min read

1. Discuss whether or not the retail strategy is being executed effectively by the retailer. Provide research support for your argument. Identify why they did or should expand globally. Nike effectively executes retail strategy. From analysis of research on the company’s strategy in the UK, the company operates same format retails stores across the UK. The retail stores are either operated as franchised retail outlets or company-owned retail outlets (Soni, 2014). In addition to the retail outlets the company also sells its products through ecommerce. In the recent past the company hired a new digital strategy manager (Giordan, 2016).
Nike expanded globally for a variety of reasons. Firstly, the company used the outsourcing strategy in its global expansion as a method of cutting on the cost of its products. Cost reduction enables Nike to compete effectively. Secondly, Nike expanded globally as a strategy for growth. It was through global expansion that Nike managed to become a leader the sportswear industry.
2. Conduct an analysis of the retailer’s global market entry modes. The company’s format transfer strategy is considered as the main mode of entry into the UK market. From the analysis of format transfer strategy as a market entry mode, the need to improve the firm’s competitive position was considered to be the main reason for the selection of the mode of entry (Martinez, Polo, & De Chernatony, 2008). This is because format transfer strategy gave the company more managerial control over the product and thus maintaining its competitive edge.
The second major mode of entry was through franchising and establishment of company owned retail outlets. Franchising stands out as one of the oldest market entry strategies (Agarwal & Ramaswami, n.d). The franchising model enables Nike to ride on the brand recognition of recognized sportswear sellers and hence quick and easy penetration. In some locations across the UK Nike used the direct entry approach of establishing retail outlets.
The other market entry mode is the sponsorship of accomplished athletes and teams both as a market strategy and as a market entry mode. Nike has sponsored United Kingdom’s athletes such as Tennis players and athletics players like Mo Farah. It has also sponsored football teams through kit wares, which include Manchester City and Chelsea. As a market entry mode, the sponsorship of athletes has helped the company to win contracts to supply sports kits to athletes and other players in the UK (Lu, Karpova & Fiore, 2011). This strategy is in wide application in the UK, especially with regard to Football that is popular in the UK. Notably, the strategy also helps the company in building its brand name as a premium sportswear supplier.
Acquisitions is another key market entry mode of Nike. In June 2008, Nike finished its acquisition of the Umbro. The acquisition made Nike to fully own operations of this brand in the United Kingdom market. The managers of the company welcomed this move since they said it would enable it to increase its leadership position as the supplier of football kits to the football teams in the country (BBC, 2007). Football is the most popular sport in the country and by building its brand as the chief kits supplier in the market, Nike is able to strengthen its brand.
Direct exports is another market entry strategy adopted by the company. Nike has many direct export outlets in the United Kingdom where consumers can access its products. Some of these outlets include Antrim Nike Outlet located in Junction One International Outlet shopping and Ashford Nike Outlet located in London (Outletsheet.com, 2016).

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