Problem description:
Because I want to write a paper, I need to quote several practical cases about the five-force model in Porter's theory to prove the availability and practicability of Porter's principle. I really can't find such a case, so I ask questions here. Although I don't expect anyone to answer, I still have to try ~
Analysis:
Porter's Five Forces Analysis belongs to micro-environment analysis in external environment analysis, which is mainly used to analyze the competitive pattern of enterprises in this industry and the relationship between this industry and other industries. According to M.E.Porter, the competition of an industry is not only among the original competitors, but also has five basic competitive forces: potential new entrants, competition of substitutes, bargaining power of buyers, bargaining power of suppliers and competition among existing competitors. The situation and comprehensive intensity of these five basic competitive forces determine the intensity of competition in the industry, thus determining the ultimate profit potential and the degree of capital flow to the industry, and finally determining the ability of enterprises to maintain high returns. The following is a brief explanation:
1, potential new entrants to the industry: potential new entrants to the industry are an important force in industry competition. Most of these new entrants have new production capacity and some necessary resources and expect to establish a favorable market position. New entrants to the industry will bring about the expansion of production capacity and the demand for market share, which will inevitably lead to fierce competition with existing enterprises and the reduction of product prices; On the other hand, new entrants need resources for production, which may increase the production cost of the industry, both of which will lead to the decline of the profitability of the industry.
2. Threat of substitutes: One industry sometimes competes with enterprises in another industry, because the products of these enterprises have the nature of mutual substitution. If the price of substitute products is relatively low, the upper price limit of products in this industry can only be at a low level, which limits the income of this industry. The competition between this industry and other industries that produce substitute products often requires all enterprises in this industry to take the same measures and collective actions.
3. The bargaining power of the buyer: the buyer is the customer, and the competitiveness of the buyer needs to be determined according to the specific situation, but it is mainly determined by the following three factors: the number of products the buyer needs, the cost the buyer needs to buy other substitute products, and the goal the buyer pursues. Buyers may demand lower purchase prices, higher quality products and better services, which will lead to competition among competitors in the industry and lead to a decline in industry profits.
4. Bargaining power of suppliers: For an industry, the competitiveness of suppliers mainly depends on the market situation of the industry where the suppliers are located and the importance of the goods they provide. One of the threats of suppliers is to raise the supply price; The other is to reduce the quality of the corresponding products or services, thus reducing the profits of the next industry.
5. Competition among existing competitors: This kind of competitiveness is the most powerful force that enterprises face. These competitors use various means (price, quality, modeling, service, guarantee, advertising, sales network, innovation, etc.) according to their own plans. ) to try to occupy a favorable position in the market and compete for more consumers, which poses a great threat to the industry. Freeman, a management scientist, suggested adding "other stakeholders" to Porter's competition model. These stakeholders are * * *, trade unions, local communities, lenders, trade organizations, shareholders and special interest groups. * * * is the most powerful.
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Comprehensive Analysis of Nike and Adidas with Porter's "Five Forces" Model
I. Analysis Framework and Basic Market Situation
Michael. In his classic book Competitive Strategy, Porter proposed an industry structure analysis model, the so-called "five-force model". He believes that the five competitive driving forces of the industry, the bargaining power of suppliers, the bargaining power of customers, the threat of substitute products or services and the threat of new entrants determine the profitability of enterprises. Compare the functions of these five forces and analyze the competitive state of American sports shoes enterprises.
First of all, the entry threshold in this field is very high. American sports shoes industry is composed of famous brand companies that do not need factory production. Large companies have more cost advantages in advertising, product development, sales network and export. More importantly, brand personality and consumer loyalty set invisible barriers for potential entrants.
Secondly, the bargaining power of suppliers is weak. Because most of the investment in the sports shoes industry is homogeneous, especially after Nike launched the outsourcing wave, more than 90% of the production is concentrated in countries with low wages and far more labor than supply.
Third, the end consumers of sports shoes care about the price and are more sensitive to the fashion trend, but it has no extremely negative impact on the company's profit rate. Because if the profit is reduced, it will be compensated by reducing production in developing countries. In addition, most brands are successful in product differentiation, which makes it impossible for buyers to associate brands with changing brand images.
Fourthly, there is no complete substitute for sports shoes because other shoes are not suitable for sports.
Fifth, the American sports shoes market is considered to be challenging and saturated, full of fierce competition and slow growth, so there is little room for new entrants. Nike, Adidas, Reebok, these major brands have seized more than half of the market share and remained relatively stable.
Through the analysis, we can see that, on the one hand, this is a mouth-watering market, but the barriers are high, the bargaining power of suppliers is low, the bargaining power of buyers is moderate, and there is no substitute product of famous brands, so it is difficult to squeeze out profits. On the other hand, when there is no monopoly power except a high degree of market concentration, the confrontation in the region is very fierce. Therefore, in this competitive environment, the persistence of extraordinary profits of independent companies depends largely on their strategies.
Second, the market position of Nike and Adidas.
(A) Nike's leading position
Nike originated from 1962 by Phil? Knight initiated, later named "Blue Ribbon Movement", and officially changed its name to Nike in 1970s. Initially surpassed Adidas to take the top spot in the sports shoes industry in the United States, and occupied about 50% of the American market share in 1980. Since then, Nike began to implement aggressive marketing activities, signed top athletes, and created the slogan of "just do it".
Nike positioned its sports shoes as high-quality products with innovative design and technology and high price. With its rich product types and excellent design, Nike occupied more than 39% of the American sports shoes market in 2000, almost twice the market share of Adidas.
Since 1970s, Nike has gradually changed from a product-oriented company to a market-oriented company. It operates on a global scale, designs high-tech and high-quality products within the company, produces them in low-cost countries, and then successfully establishes a brand as a symbol of youth subculture through marketing. Nike's unique resources include patented products and trademarks, brand reputation, corporate culture and unique talent assets.
In order to find out how Nike develops into a competitive advantage on the basis of its resources and strength, we will analyze their value chain from the following aspects: production, sales and marketing.
1. Since 1970s, Nike has outsourced its manufacturing process to many Asian countries. Outsourcing enables Nike to get cheap labor and get a lot of discounts from suppliers. In addition, outsourcing enables customers to obtain new products from the market more quickly and reduce the risk of capital investment.
2. In terms of sales, this "futures" ordering plan allows retailers to pre-set transportation guarantees five to six months in advance to ensure that 90% of orders will arrive at a specific price and time. This strategy successfully minimizes the inventory and shortens the inventory turnover time. Now, Nike has three sales channels: retailers, Nike City and e-commerce. Nike City was founded in 1990s, displaying Nike's latest or most creative product series and advertising on main roads. Nike City is not so much a sales channel as a marketing tool. E-commerce began in Nike in the 1990s, and Nike also allowed other Internet companies to sell their products. E-commerce strategy rekindled the direct relationship between Nike and consumers.
As one of Nike's core competitiveness, marketing is not only advertising, but also attracting and retaining customers. The marketing strategies adopted by Nike's marketing team always reflect public opinions. In the 1980s and 1990s, professional athletes were worshipped like heroes, so Nike invested a lot of money and invited successful and attractive famous athletes to speak for its products. Like, when Mike? Jordan 1984 joined the Nike team, and "like Mike" became the right choice for people. The slogan that Jordan admires. 1999 When Jordan retired, Nike couldn't find an athlete to take his place. Therefore, Nike turned to a new activity called "Nike Play", which consists of a series of short films that show personal achievements and encourage everyone to participate. We can see that the marketing strategy should change with consumers' preferences. Rapid response to market changes is a magic weapon for Nike to maintain its core competitiveness in the footwear market.
(2) The challenger role played by Adidas
"Provide the best shoes for every athlete." Inspired by this simple and ambitious idea, Artie, who is in her twenties? Desler started making shoes, and finally set up a company called Adidas at 1948. The company produced a large number of high-quality sports shoes, and eventually became the leading supplier of sports shoes for all famous events in the world in the 1960s. In the late 1960s, Adidas occupied the top spot in the sports shoes industry. However, in the 1970s, Adidas didn't realize that civilian sports had become a trend, and it still focused on professional sports shoes. Due to the failure of sales expectations and underestimation of market competition, Adidas was challenged and eventually replaced by Nike in the late 1970s.
After 1997 merged with salmon, Adidas rebuilt its market share from 1998 to 2000, and maintained its second market position after Nike. However, in 2002, the company's market position fell to the third place, which was only 1 1.8% compared with Nike's market share of 40.6%, and it still maintained this position in 2003.
From the history of Adidas, it was 1 shoe enterprises that initiated production outsourcing. Their production companies are located in Chinese mainland, Viet Nam, Taiwan Province Province and Latin America. Now their supply chain uses three different types of suppliers, including contractors, subcontractors and local raw materials companies. Their outsourcing strategy is crucial to the success of the group and is imitated by the whole field. This strategy can transfer risks, reduce labor costs, and focus on Adidas' core strategy, marketing and research and development.
Marketing is one of the two core strategies of Adidas. 1997, adidas announced the acquisition of Salomon Company, becoming one of the world's leading sporting goods group companies with outstanding brand share. The two companies complement each other in product and geographical coordination. Solomon's performance in North America and Japan is particularly strong, which is very helpful for Adidas to increase its market share in the United States. They refocused and positioned the Adidas brand to fully tap its market potential, and integrated all products into three clear customer groups: eternal sports, originality and equipment. This department has formed a stronger market penetration among sports, sports and sports lifestyle customers. Adidas has always insisted on asking celebrities to be product spokespersons and sponsor sports leagues. Kobe. Brian, Anna. Kournikova and Beckham are extraordinary geniuses of Adidas. Adidas has always been one of the biggest sponsors of Barcelona Olympic Games, European Football Champions Cup, French Football World Cup, American Women's World Cup and so on.
Besides marketing, R&D is another core strategy of Adidas. They set up a new technological innovation team and put in at least one major innovation every year. In 2003, Adidas established a "mass customization" system, which can design special shoes according to customers' feet, personal preferences and requirements. The advantage of the leader makes Adidas in a leading position in this field.
Third, their respective market strategies.
(1) How does Adidas challenge the leaders?
Adidas has extraordinary capabilities in research and development, and what it needs is a more customer-oriented marketing strategy. Even though Adidas and Nike can imitate each other, they should strive to be different from each other in terms of effective execution and coordination. When Nike's marketing and R&D team paid more attention to the needs of North American consumers, Adidas took the initiative to shape its own market segmentation. Because from the overall performance of the two, Adidas ROA is very close to Nike, which means that in the long run, Adidas has full potential to compete with Nike.
1, product localization
As a German sports brand, Adidas should "Americanize" its footwear products in the American market. Products that Europeans like may not be to Americans' taste. Adidas should recruit and train talents who really understand and can predict this dynamic market. This is a resource that cannot be imitated. Then you can reshape your market segment according to the results of these predictions, on the one hand, to meet the needs of American consumers, on the other hand, to ensure that you have unique advantages in this market segment. Americans pay more attention to individuality, so in advertising, Adidas should make its image more personalized and reduce the use of stars.
2. Consolidate quality advantages and improve product categories.
What kind of strategic decision an enterprise chooses depends on its past path. From this point of view, because Adidas has long been famous for its strict quality control system, which ensures the high quality of Adidas products, this tradition should be maintained and further promoted. Also, driven by the strategic attempt to regain the global hegemony, Adidas should design a new strategy that can win the so-called "dynamic efficiency". Although Adidas has established its supplementary product market, they can surpass Nike by strengthening the "network effect". For example, they can design a full set of sportswear, hats, scarves and handbags to match their sports shoes.
3. Give full play to patent advantages
Nike and Adidas can also be said to be two rivals in a "patent competition". Adidas should be able to estimate Nike's investment in R&D. In addition, while paying attention to the European domestic market, because the United States is Adidas' overseas market, the company should introduce more personalized elements in future product design to promote the localization of products.
4. Learn Nike's ordering and distribution strategy.
Nike's future orders will help the company grow rapidly. Adidas should implement a similar ordering system with its retailers to imitate this strategy, so as to keep the inventory at the best level. But Adidas must also realize that the successful operation of this mechanism is based on many conditions, such as accurate sales forecast and strong market demand. Besides, compared with Nike, Adidas is not successful enough in the field of e-commerce. In order to win this crucial battle, Adidas must learn from Nike and authorize professional e-commerce enterprises to operate its online sales, which is very important.
(2) How does Nike maintain its dominant position?
1, to maintain competitiveness in the local market.
Adidas' operation in the American market is very challenging, but patriotic American consumers are likely to prefer domestic products to imported ones. Nike has advantages in local management practice, organizational structure, corporate governance and control of local capital market. If they can survive the fierce local competition, they will be more competitive in the international market. In order to maintain its dominant position in the American sports shoes market, Nike should continue to focus on its core competitiveness: marketing and research and development. On the basis of high customer loyalty, brand awareness and huge market share, they must constantly develop new products while maintaining quality standards and implement effective marketing plans to cope with market changes.
2. Isolation mechanism
Even if Adidas can imitate Nike's strategy, it can't simply copy Nike's unique competitive means, such as patents, brands and human capital. Nike can protect its human capital by offering generous salaries to retain key employees and improve their loyalty to the company. As for product imitation, Nike can take legal measures, such as relevant provisions on property rights, franchising and patents. However, they must also realize: "Protecting intellectual property rights does not mean modeling products, processes and technologies. In open competition, it is best to regard them as islands scattered in the sea (that is, only a corner is exposed). " Wouldn't it be safer if your secret didn't have a chance to be exposed to the environment that competitors might come into contact with? In addition, relying on the existing brand reputation and market size, Nike obviously has too many advantages over its competitors in obtaining resources and consumers. What's more, Nike's unique ability often contains some tacit knowledge, which is difficult for outsiders to understand. These things are accumulated from its unique enterprise history and rooted in the complex social change process.
This route keeps pace with the times.
Compared with Adidas, Nike has a much shorter history. It has customer-oriented marketing and products. Moreover, Adidas is now facing a decline in sales, and Nike just uses this leading edge to increase its investment in NikeID shoes. Due to the high expectations of consumers, coupled with its strong financial resources and capabilities, this market has a bright future. On the contrary, Adidas is in its second life cycle, and it is striving to increase its market share, followed by the coveted Reebok. Because of path dependence, Adidas inherited the previous product line and adapted to a broader market. Can this strategy really win a wider customer base for it? Without this strategy, would they do better? It's hard to say. Path dependence will constrain the strategic choice of enterprises and limit their opportunities. In fact, it is difficult for enterprises to change their routes quickly, but in order to survive in the competition and face the rapidly changing environment, their routes must also keep pace with the times. In a word, Nike, as a market leader, must avoid mediocrity and keep innovating in order to stay at the peak of competition forever.
In short:
At present, the travel shoe market in China is also full of fierce competition, and there are many kinds of brands at home and abroad, large and small, which obviously brings great pressure to domestic brands in the process of development and rise. In such a market environment, domestic brands should not only actively refine the core value of their own brands, but also formulate a clear market brand strategy. Only in this way can the marketing offensive be targeted and targeted. Unfortunately, at present, most domestic manufacturers of travel shoes are mainly advertising. Although this kind of celebrity endorsement advertisement can quickly improve sales performance in a short time, it is not conducive to the long-term development of the brand and to maintaining the market share in a short time. If domestic travel shoe brands want to truly establish their long-term development, it is necessary to learn from Nike and Adidas in the case and plan clear strategic goals.