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... ion ships with these pure-play e-tailers are to provide global reach and coverage. Fogdog. com, Sports. com, and SportsLine.
com have the initial coverage in the US, UK and eventually in Asia. Nike and Adidas will also operate their traditional bricks and mortar establishments, while selling their specialty products on their e-commerce web sites. This business model is referred to as "bricks and clicks. " The primary goals of operating a bricks and click site is to increase sales, reduce cost, increase market reach, applying competitive pressure, promoting new products, improving customer service, and progress in addressing user concerns. Additionally, Nike and Adidas have included an affiliate link which allows consumers in varies regions to locate affiliated store locations such as Foot Locker and Champs. APPARENT EFFECTIVENESS OF E-BUSINESS Nike's ability to realize the potential of the Internet has placed them in the e-commerce leadership position among other sporting goods companies. Through its initiative to be the first to market with its e-commerce web site launch back in 1999, Nike was able to understand early on what its 14 million visitors demanded and enabled itself to become established while competitors scrambled to join, simultaneously creating a temporary competitive advantage as a result.
By continuously relying on innovative companies to redesign the site, Nike acquired the luxury of owning a site that's every bit as inspirational as it is informational, an important milestone for a market leader. Today, Nike's store enables online consumers to design key elements of the shoes they purchase. This program is the first time a company has offered such mass customization of footwear. All this online success has not come without a price. Significant amounts of money were involved and a constant chilled reaction was received from its channel partners like Footlocker and Sports Chek with each site redesign as latest design contained e-commerce - leaving some companies without Nike products to sell online. Adidas's approach to e-commerce was that of a follower since Nike was first.
As a result, Adidas relentlessly pursued innovation and refreshing content to differentiate itself from Nike. Adidas also realized that in order to be successful it has to be fully committed to this initiative. That's why it included adidas. com as part of its three pillar strategy along with pure play e-tailers, bricks and clicks.
The final result is a web site that successfully portrays Adidas's product portfolio in an interactive and informational manner. The e-commerce presence required Adidas to adjust internally to be able to fully support and commit to this initiative. With Nike being first to the punch there was no room for mistakes and experiments. The final product had to be attractive and able to compete. Also, just like Nike, Adidas had to consider the channel conflicts adidas. com created.
Nike and Adidas seem to follow similar online strategies but Adidas experienced a greater transformation from being a minor, insignificant player back in 1998 to the number two position in the athletic footwear and apparel industry. Part of this success is due to Adidas's ability to thoroughly leverage the Internet as a marketing and e-commerce medium, most of it at the expense of Reebok. In the Nike's case the online strategy ensured its strong leadership position in the intensely competitive market. Both Adidas's and Nike's strategy seem to be well ahead of their competition contributing to their e-commerce success. No other athletic footwear company is able to outshine these two firms when it comes to e-commerce, at least for now and in the near future as this task would involve large infrastructure investment and more importantly thorough commitment. PROGNOSIS Although both Nike and Adidas currently have a significant advantage over their rivals, chances are this will not last forever.
The Internet is a medium that is redefining competition and markets in sectors that previously did not embrace it. With time more firms that deal with athletic footwear and apparel will join the Internet rush providing customers with more choices. As more and more people engage in e-commerce it will become more relevant to show how and why a product is superior to the competition as opposed to more promotional e-commerce sites found today. Also, there will be an increased emphasis on customization and differentiation of products, something Nike already pioneered with the shoe with your name. At this point in time both Adidas and Nike are not slowing down with their continuous web site innovations setting a high standard for the rest of the industry. An interesting issue with such development is the increased channel conflict it presents.
As Nike and Adidas begin to significantly increase their online sales they might be reluctant to sell their products through smaller online retailers. Currently all retailers are already nervous of how this will affect their ability to sell Nike and Adidas products online. Nike holds a lot of leverage because of its significant market share and could choose to exclude certain retailers without suffering decreased sales. Adidas does not hold as favourable position as Nike but still has leverage over certain smaller retailers. But it is a fine balance as the larger retailers would not want to be eliminated and could combine efforts to ensure that they are not eradicated from selling athletic footwear form main firms. The future should prove to be interesting and full of developments.
It will be full of successes, failures and partnerships (between suppliers and retailers). LIST OF REFERENCES: Adidas, Annual Report 2002 Adidas, Annual Report 2001 Nike, Annual Report 2002 Nike, Annual Report 2001 Industry Sector Analysis of Sporting Goods, U. S. and Foreign Commercial Service, 1998 Multi Fundamentals / Professor Plus Company Report, Nike Inc. , October 2003 Shoe Stats 2002, AAFA, January 2003 web October 2003 web October 2003 web October 2003 web October 2003 web October 2003 web October 2003 web October 2003 web stories / nike . xml, October 2003 web October 2003 web October 2003 web October 2003 "Nike - Channel Conflict. " Graduate School of Business, Stanford University, February 2000 Belch & Belch. "Advertising and Promotion. " McGraw-Hill Irwin.
New York. 2001. p. 493 "Companies point fingers over Nike Web site hijacking. " Computerworld. June 30, 2000
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Research essay sample on Athletic Footwear Sporting Goods
