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Expanding into international markets is a strategic move that requires careful planning and analysis. In order to successfully enter new markets, a company must first identify potential target markets and analyze the external environments using models such as PEST analysis. This allows the company to understand the political, economic, social, and technological factors that may impact their business operations.
When expanding internationally, it is crucial for companies to identify their target customers and markets. Nike, for example, typically targets athletes, both men and women between the ages of 15-30. Their target market consists of individuals who are active and seek high-quality sporting goods and merchandise.
Nike's geographic expansion strategy covers all regions, ensuring a global reach for their products.
Under its Golf brand, Nike offers a range of products including golf balls, clubs, and apparel for both men and women.
By continuously developing innovative and stylish golf products, Nike can command premium prices in the market.
For instance, Nike Golf's SQ DyMo driver allows players to customize perimeter weighting for a specified ball-flight, showcasing the brand's commitment to quality and performance.
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By leveraging marketing relationships with renowned athletes like Tiger Woods, Nike can further enhance its brand image and attract more customers.
While the demand for superior goods may decline during economic downturns, Nike can mitigate this risk by focusing on product innovation and marketing initiatives. By offering a diverse range of products, including golf accessories and footwear, Nike can create additional revenue streams and maintain a competitive edge in the market.
As a global company based in the United States, Nike is subject to economic fluctuations that may impact its business operations.
Economic recessions, such as the one currently affecting the US economy, can lead to a decrease in consumer spending and demand for high-end products like golf equipment.
Additionally, factors such as currency fluctuations and rising production costs can affect Nike's profitability.
For example, Nike's golf market share has experienced a decline in recent years due to economic challenges. However, by focusing on product innovation and marketing strategies, Nike can regain its market share and drive growth in the long term.
Government policies and regulations can have a significant impact on a company's growth and operations. Nike has benefited from favorable policies in the US, such as low interest rates and stable currency conditions, which have enabled the company to advance its products and expand its market presence.
Social factors, such as changing lifestyles and increasing health awareness, can influence consumer preferences and demand for certain products. With a growing emphasis on health and fitness, there is a rising demand for sports products like golf equipment. Nike must align its product offerings with these changing trends to meet customer needs and preferences.
However, Nike also faces social challenges, such as the sweatshop problem, which can tarnish its brand image and lead to declining sales. To address this issue, Nike must prioritize social responsibility and ethical business practices to maintain a positive reputation among consumers.
Technology plays a crucial role in Nike's business operations, particularly in marketing and product development. By leveraging information technology systems effectively, Nike can enhance its marketing strategies, product innovation, and distribution channels. This allows the company to stay ahead of competitors and meet the evolving needs of customers in a digital age.
In conclusion, expanding into international markets requires a comprehensive analysis of target markets, external environments, and key factors that may impact business operations. By understanding the political, economic, social, and technological landscape, companies like Nike can develop strategies to navigate challenges and capitalize on opportunities for growth and success.
Navigating International Markets: A Strategic Analysis for Success. (2016, Sep 08). Retrieved from https://studymoose.com/pest-analysis-of-nike-essay
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