Nike + iPod

Case presented by Jacob, Martin & Mads

A major player in the clothing and sports equipment industry

Founded in 1964 as Blue Ribbon Sports

Nike sponsors a large number of high profile athletes and sports teams around the world

Recognized by the “Just do it” slogan and Swoosh logo

IntroductionNike Apple

Designs and markets consumer electronics, computer software and personal computers

Founded in 1976

Best known for the Macintosh computer, iPod, iPhone and iPad

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The product: The Nike + iPod kit measures and records the distance

and pace of a walk or run, using a small chip embedded in a Nike shoe, which communicates with an iPod and other Apple software

The scene: Intelligent sportswear

The case - Nike+ iPod: Nike-Apple partnership Strategic opportunities/pitfalls Co-branding & decision-making process Adidas-Samsung vs. Nike + iPod

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Question 1Conduct an analysis of the Nike-Apple partnership, including a discussion of the strategic opportunities (and possible pitfalls) this collaboration presents for

each partner?

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Nike & Apple Both market leaders within their industry

Mutual interests

Same type of customers

Brand synergy - both ways Large joined customer base 75% of all runners already listen to music

(Enclosure 2) A Nike crisis affects Apple and vice versa

”The Nike/Apple co-branding ventures is successful because of its undeniable ability to add value to each other’s products, thereby creating something greater than the sum of their parts.” - The Duffy Agency.

 

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SWOT analysis (Nike-Apple)

S

The Apple & Nike brands

Innovative

Market leaders

Large loyal customer base

W

Product requirements

High priced

O

Brand synergy

Distribution channels

Expansion of technology

T

Expansion of technology

Potential harmful influences

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Strategic opportunitiesStrategic alliance

Product alliancePromotional alliance

Product development strategy (Ansoff)

Horizontal diversification strategy

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Question 2Describe and discuss the consumer decision-making process in

relation to purchasing Nike+ shoes and iPod Sport Kit or Sensor. How does the co-branding influence the decision-making process?

Consumer decision-making2 types of Nike + iPod buyers:

Dedicated and loyal customers Members of the “Nike community” “Apple-fans”

Contemplating customers

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Consumer buying process

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“Five-stage model” Kotler, p. 246

Co-branding influenceThe best of two strong brands

Brand equity influence

Collective pitfalls

Loyal customer base

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Question 3• Adidas and Samsung have developed a fitness

concept, the “miCoach system” (Enclosures 3 and 4), which bears resemblance to the Nike + iPod system.

• To which extent does the Adidas-Samsung partnership constitute a competitive threat to Nike

and Apple?• How may Nike and Apple respond to this?

Industry playersA differentiated oligopoly market

Few major playersNike-Apple, Adidas-Samsung, Garmin, Polar

Nike-Apple the market leader

Adidas-Samsung the market challengerSegmental flank attack on Nike-Apple

PhoneNike-Apple respond counter-offensive

defence strategy (iPhone)

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Adidas-Samsung threat

4 P’sDifference in:

PriceAdidas: $ 300-600 Nike-iPod: $ 180-230

Product No phone vs. Phone Nike shoes exclusively vs. all brands Adidas-Samsung: less music storage

PlaceAdidas-Samsung only sold in Europe

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Adidas-Samsung threatOperating within the same market a

threat

Differences in the 4 P’s softens the threat

Nike-Apple needs to keep an eye on the other market players

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ConclusionStrategic opportunities and pitfalls

Brand synergyCollective pitfalls

Decision-making processesCo-branding strengthsShared brand equity

Adidas-Samsung threatSame scene, different productNike-Apple response

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