Question

* Are there any threats of new competitors for Nike and what are the major entry barriers?

* Are there any substitute products for Nike and what are the advantages and disadvantages compared toNike products?

* How much bargaining power do suppliers have for Nike and what is its impact on Nike and the profits?

* Buyer power and impact?

* Describe Nike's makeup in terms of Monopolistic, Oligiolopolistic, many small players, or other.

Answer 1

Thanks for asking the question

1.Threats of New Competitors for Nike : Yes the threat of new competitor is certain for each and every company present in a market but the extent varies. In case of nike too the threat is always there but the degree or risk to nike will be less to low-moderate as Nike is performing in terms of sale. (reference as per quarterly data of June Nike reported 4% growth) moreover the distribution system and marketing like Nike is tough to create in less time and in time the distribution and reach of nike will only increase. Also presence of Nike is around the globe which also will be very difficult for the new entrant to achieve.

2. Major entry barrier for new competitors of Nike

a. Bargaining power of supplier : That would again depend on the entrant whether they have options or reach for many suppliers or specific suppliers. In case of Nike it has establishments in more than 40 companies so the Bargaining power of the suppliers is low

b. Bargaining Power of the customer : This would be high in case of new entrant as it is known that Nike never compromises on its quality so it has a loyal customer base moreover there are established brand like PUMA, Adidas, Reebok with great portfolio of products

c. Level of competition: the competition among this industry is also very high which would mean additional requirement of time and resources in a quick time which is hard to obtain.

3. The bargaining power of supplier is low to medium for Nike as Nike has establishment in more than forty countries so the suppliers base is quite large hence with less bargaining power

The impact of this low bargaining power has a positive impacts on the profits as the cost and resources both are saved.

4. Buyer Power and Impact

Buyer Power: With quality products from Nike the Buyer Power is also limited as customers get good durable products as per there need. Moreover with a distribution and Marketing strategies like Nike we can say that Buyer are associated and have positive minded for Nike's product

Impact: This has positive impact and leads to greater turnover resulting in higher profits .

5. Nike has a monopolistic approach as they have products with aspects that it has no competition so it can be said as a monopolistic makeup