Friday, October 18, 2019
Nike Growth Strategy Essay Example | Topics and Well Written Essays - 1000 words
Nike Growth Strategy - Essay Example At the time of entering foreign markets such as Japan, Europe, and others Nike Inc used the strategy of opening flagship stores and franchise. Flagship stores proved quite successful for Nike Inc due to its strength of generating compelling products that might excite the target customers. Major befit of franchising is that the company does not have to take the total risk of foreign investment. The franchise owners take all possible risks and also finance the maximum percentage of start-up cost. On the other side, the company takes more than 50% of profit for from the franchisees as their brand value. This is one most cost-effective entry process of any business for foreign market entry. Along with franchising, the company also prefer opening of flagship stores in new markets as an effective entry mode. Though this mode is comparatively more cost and risk associated strategy the company can present strong market awareness and brand presence in the new market. Again, the flagship store mode of entry allows the company to enjoy 100% profit from sold goods in these stores. In 1992, the company under consideration decided to enter India in association with SIEPL or Siera Industrial Enterprise Private Limited. The objective of Nike was to tap the Indian market and to receive royalties. The WestEnd Store of the company is the resultant of partnership with Timera Group which is also a leader in the wholesale and retail manufacturing across the areas of U.S., Europe, and the Middle East.